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The Tribunal had rejected an application by the appellant to grant him a protection visa after an earlier adverse decision of a delegate of the Minister. 2 In his notice of appeal the appellant refers to the failure of the Tribunal to take into account evidence given by him to the Tribunal about his position as an activist in the Jatiya Party in Bangladesh. 3 Other grounds of appeal take issue with the ultimate finding of the Tribunal that the appellant does not have a well-founded fear of persecution for a Convention reason, its finding that the appellant did not give credible evidence and its rejection of his claims. 4 Each of the matters referred to in the preceding paragraph were matters which the appellant submits should have been corrected before the Court below. 5 It is not clear from the reasons of the Federal Magistrate that any of the above matters were raised before him. Therefore, it is difficult to see how his Honour erred in his treatment of them. In any event, each of them seeks to traverse matters of merit or take issue in an unparticularised way with the ultimate question of fact for the Tribunal, that is, does the appellant have a well-founded fear of persecution for a Convention reason. 6 The only issue of substance which the appellant raises on appeal is that contained in the first appeal ground. The appellant contends that the Tribunal did not give him a reasonable opportunity to respond to independent evidence in its possession which supported the view that the appellant could return to Bangladesh without fear of persecution. 7 As the Tribunal's decision pre-dated the enactment of s 424A of the Migration Act 1958 (Cth), it is open to the appellant to submit that he was denied natural justice by not being given an opportunity to respond to the country information relied on by the Tribunal to reject his claim. 8 The Federal Magistrate dealt with and rejected the appellant's claim alleging a denial of procedural fairness. His Honour held the relevant material was raised with the appellant during the Tribunal hearing. He also held the material was the same information that was relied on by the delegate in his decision and notified to the appellant at that time. 9 In his decision the delegate said he considered certain documents, including some which would fit the description of 'independent evidence'. 12 The Federal Magistrate considered the Tribunal raised with the appellant the independent evidence it relied on in rejecting his claims during the hearing. It is not clear exactly what independent evidence the [appellant] is referring to. There was some independent evidence concerning the situation in Bangladesh as to its politics and the independence of the judiciary. Those matters were clearly raised with the [appellant] during the hearing. See, for example [CB 107]. The only matters raised with the appellant at that page preceded the discussion of the independent evidence. Those matters concerned political developments in Bangladesh but were not sourced in any particular independent evidence. There is no suggestion in the decision that the Tribunal put specific independent evidence to the appellant as material which specifically contradicted his claims. 14 The Federal Magistrate noted the appellant did not provide him with a copy of the transcript to make out his claim that the Tribunal did not raise the independent evidence with him. However, one would expect the Tribunal to note such a fact, if it had done so. In any event, the Minister, as a model litigant, has placed the transcript before me. 15 The transcript of the Tribunal hearing shows that the Tribunal did not put the country information referred at [10] above to the appellant for his comment. However, the question remains whether any practical injustice has been shown; see Re Minister for Immigration and Multicultural Affairs; ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1. Here, the appellant did not tell the Court below what response he would have made to the Tribunal if it had told him that it was going to rely on the country information referred to at [10] above to defeat his application. In the circumstances no breach of procedural fairness has occurred. The appeal must be dismissed with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | application for protection visa refused application to refugee review tribunal refused appeal to federal magistrates court dismissed appeal country information procedural fairness whether practical injustice no breach of procedural fairness migration |
In response to a challenge made by the respondent to the competence of its appeal, Citigroup filed a notice of motion for an order granting it leave to appeal from the judgment of the District Court or alternatively an order extending the time within which to file its notice of appeal. Mr Mason opposed the making of either of the orders sought by Citigroup. 2 On 26 February 2008, after receiving written submissions from the parties and hearing from counsel, I made certain orders which shortly thereafter I directed not be entered without leave of the Court. I requested supplementary written submissions from the parties on the significance of s 853(2) of the WR Act to the competence of the appeal. I have now had the benefit of those submissions and further brief oral submissions from the parties. 3 For the reasons set out below I have concluded that by filing the notice of appeal Citigroup instituted an appeal from a judgment of the District Court of New South Wales pronounced on 15 October 2007. In respect of that appeal Citigroup requires neither leave to appeal nor an extension of time within which to file its notice of appeal. Damages. 2. In the alternative to 1 above, an amount of $63,243.29 for annual leave entitlements pursuant to the Annual Holiday Act 1944 and the Workplace Relations Act 1966 . 3. A penalty pursuant to section 719 of the Workplace Relations Act 1996 . 4. Interest. 5. Costs. 6 It appears from the affidavit evidence before the Court that on 25 September 2007, Judge Toner SC of the District Court published written reasons for judgment in the District Court proceeding. The written reasons for judgment carry the heading "Judgment" and are dated 24 September 2007. In addition, he claims a penalty pursuant to s.719 of the Workplace Relations Act 1966 ('WR Act') together with interest and costs. I should note at the outset that I have indicated to the parties that should I make a determination which might render the defendant liable to a penalty pursuant to WR Act, I will reconvene the Court for a further hearing in relation to that aspect. If he is successful in the matter interest will be added to that sum, which will be a matter of separate calculation. 8 The Reasons disclose that Judge Toner accepted that Mr Mason had demonstrated that a further amount was payable to him as annual leave entitlements. I direct the parties to bring in a short minute to reflect the appropriate interest calculation. Unless there are further matters to be put the defendant is to pay the plaintiff's costs. The matter of any penalty to be paid by the defendant as claimed by the plaintiff is adjourned for hearing to [sic]. I've asked the parties to bring in a short minute in relation to it to do your calculation in interest for me. And I don't know whether I ought to make a formal order in relation to it just at the moment or when the short minute comes in on the basis that it was anticipated should there be a verdict for the plaintiff, there still remains the argument in relation to penalty if I found for the plaintiff on the basis that he had an entitlement based upon the Workplace Relations Act, as I have found. So the future conduct of this matter will be this --- firstly, could you prepare a short minute which will simply be a calculation of interest to today's date. And this is merely a matter of calculation of interest on the plaintiff's claim so that the judgment that will be entered in the plaintiff's favour will be for his claim plus interest to today's date. So they're short minutes simply to reflect that. 11 His Honour's reference to "the judgment that will be entered in the plaintiff's favour" makes clear, it seems to me, that his Honour did not consider that he had at that time formally pronounced judgment. Rather it demonstrates that his Honour intended formally to pronounce judgment in Mr Mason's favour on the second of his claims (ie the alternative claim for annual leave entitlement) when the precise sum to which Mr Mason was entitled had been agreed by the parties. 12 The transcript does not suggest that either party made submissions to his Honour on the question of costs. In particular it does not appear that his Honour's attention was drawn to s 824 of the WR Act which severely restricts the circumstances in which a party to a proceeding under that Act may be ordered to pay costs incurred by any other party to the proceeding. 14 The notice of appeal suggests that the matter came before Judge Toner again on 15 October 2007 and that orders were made on that day. However no copy of those orders has been provided to the Court. I assume that on that day Judge Toner made an order requiring Citigroup to pay Mr Mason an amount which reflected his agreed entitlement if successful in respect of his claim for annual leave entitlements plus the appropriate amount of interest to the date of the order. The evidence before me does not disclose whether his Honour made any order as to costs on that day. 15 When this matter came before me for a directions hearing on 11 December 2007 I asked to see a sealed copy of the judgment of the District Court the subject of the appeal. No copy of the judgment was then available. My request apparently stimulated Mr Mason's legal representatives to obtain a sealed judgment from the District Court on 12 December 2007. Verdict and judgment for the plaintiff. Defendant to pay the plaintiff's costs. Adjourn for mention to 15 October 2007 at 9.30am. In addition to the matter discussed in [11] above, his Honour's statement that "there will be a verdict and judgment for the plaintiff", his qualified reference to the plaintiff's costs and his request for minutes of order, tend to suggest that his Honour envisaged formal orders being made at a later time. In any event, subject to the order for costs, none of the orders set out in the sealed judgment gives rise to an obligation enforceable against Citigroup. The order of the District Court that requires Citigroup to pay Mr Mason the balance of his claimed annual leave entitlement plus interest thereon was apparently made on 15 October 2007. It is this order, which was made for the reasons published by Judge Toner on 25 September 2007, from which Citigroup wishes to appeal. 17 I interpolate that it will be necessary for a sealed copy of the orders made on 15 October 2007 to be included in the appeal papers (O 52 r 26 of the Federal Court Rules ). 5509 of 2006 on the following grounds. 19 It may be that the drafter of the notice of appeal overlooked that a judgment as defined by the Federal Court Act and the WR Act is an operative judicial act so that there is no appeal from reasons for judgment alone ( Hi-Fert Pty Ltd v Kiukiang Maritime Carriers Inc (No 3) (1998) 86 FCR 374). Nor does an appeal lie from a verdict alone prior to judgment being given ( Musgrove v McDonald [1905] HCA 50 ; (1905) 3 CLR 132 at 142). I conclude that the reference to "the orders made on 15 October 2007" is to be understood as, or including, a reference to the operative order of the District Court made on that day requiring Citigroup to pay Mr Mason the amount found to be owing to him in respect of annual leave entitlements and interest. Subsection (1A) of s 24 provides that an appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal. 21 Section 4 of the Act provides that in the Act, unless the contrary intention appears, judgment means "a judgment, decree or order, whether final or interlocutory, or a sentence. It requires an application to be supported by an affidavit showing various things including the reasons why leave should be granted (r 4(2)). It also requires the application to be filed within 21 days after the judgment was pronounced or a later date fixed for that purpose by the court or judge who pronounced the decision (r 5(2)). An order dispensing with compliance with the time limit may be sought by the application (r 5(3)). 23 Division 2 of O 52 is concerned with appeals. (2) It is not necessary to obtain the leave of the Court or the court appealed from in relation to an appeal under subsection (1). (3) An appeal does not lie to the High Court from a judgment from which an appeal may be made to the Court under subsection (1). Absent any legislative provision to the contrary, if the judgment of the District Court of New South Wales is an interlocutory judgment, the appeal could not be brought without leave (s 24(1A)). Was the Judgment Interlocutory? That question is answered by determining whether the legal effect of the judgment is final or not. If the legal effect of the judgment is final, it is a final order; otherwise, it is an interlocutory order. The order of Gleeson CJ refusing to grant leave to issue process was an interlocutory order. In that case their Honours characterised an order of a judge of the High Court dismissing an application for the removal of a cause pending in the Family Court into the High Court as an interlocutory order. 30 In the same case at 442 Windeyer J observed that "the distinction between final and interlocutory orders has in England caused much difficulty". It is never enough to ask simply does the order finally determine the actual application or matter out of which it arises; because, subject to the possibility of an appeal, every order does that, unless it be an order that is expressly declared to be subject to variation...The effect of such decisions as there are of this Court on the point seems to me to be that when an action has been commenced between parties then whether an order in that action is interlocutory depends on whether or not it results in a final determination of that action. I say of 'that action' because it appears that the question depends more upon the action actually brought by a writ than upon the cause of action upon which the writ was founded. 31 The action initiated by the filing of the Statement of Claim was not disposed of by the making of an order requiring Citigroup to pay Mr Mason an amount by way of annual leave entitlements plus interest. The claim for a penalty to be imposed on Citigroup remained to be determined. For the same reason, the dispute between the parties, which involved both Mr Mason's annual leave entitlements and the issue of whether a penalty should be imposed on Citigroup, was not finally resolved in the making of that order. Neither party submitted that the subsection should not be construed literally. So construed it discloses a legislative intention, in the specific case of the appeals for which s 853(1) provides, to override the general prohibition contained in s 24(1A) of the Federal Court Act on the bringing of appeals from interlocutory judgments without leave to appeal being granted. 33 I conclude that s 853(2) is to be construed literally. As a consequence I conclude that it is not necessary to obtain leave to appeal from an interlocutory judgment of a court of a State or Territory in a matter arising under the WR Act --- notwithstanding that it is necessary to obtain leave to appeal from an interlocutory judgment of the Court in a comparable matter. IS THE APPEAL INCOMPETENT? This contention is premised on the judgment the subject of the appeal having been pronounced on 25 September 2007. 35 For the reasons given above, I do not accept that judgment on Mr Mason's claim in respect of his asserted annual leave entitlement was pronounced on 25 September 2007. Rather, I infer from the evidence that judgment on that claim, and on Mr Mason's claim for interest, was pronounced on 15 October 2007. As the notice of appeal was filed within 21 days of 15 October 2007, I reject the contention that the appeal purportedly instituted thereby is incompetent. 36 Neither party addressed the Court on whether Judge Toner pronounced a costs order on 25 September 2007, or alternatively on 15 October 2007, or whether his Honour is still waiting to hear from the parties on the question of costs. Nor did either party address the Court on whether, if a costs order was pronounced by his Honour on 25 September 2007, the time within which an appeal could be instituted from the order commenced to run on that day. However, before making an order dismissing as unnecessary Citigroup's motion for an order granting it an extension of time within which to appeal, I will hear counsel on the costs order, if any, made by the District Court. 38 It will also be ordered that Citigroup have leave to amend its notice of appeal and that the appeal be included in the next Full Court call-over (s 25(1) of the Federal Court Act). Additionally, it will be ordered, pursuant to O 35 r 7(1) of the Federal Court Rules , that the unentered orders made by me on 26 February 2008 be set aside, including the order for costs made in reliance on s 824(2) of the WR Act. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. | proper construction of s 853(2) workplace relations act 1996 (cth) does s 853(2) obviate the requirement for leave to appeal from an interlocutory judgment where proposed appeal from a state court in a matter arising under the workplace relations act ? practice and procedure |
The area for which the declaration was sought is Alum Mountain. Mr Dates asserts that areas on the mountain, plants and trees on the mountain and, particularly the "Guardian Tree" and the "Healing Stream" are of significance as part of Aboriginal tradition within the meaning of the Protection Act. He asserts that they are important and of significance to the Worimi people. Mr Dates states in the application that he is an Aboriginal traditional owner and custodian over the area. The Roads and Traffic Authority of New South Wales ('the RTA') is presently carrying out works in the area of Alum Mountain as part of the Bulahdelah Upgrade Project ('the Project'), which includes the construction of about 8.5 kilometres of divided dual carriage highway ('the Bulahdelah Bypass'). Mr Dates seeks an interlocutory injunction restraining the RTA from undertaking activity in connection with the construction of the Bulahdelah Bypass and an order joining the RTA to the proceedings ('the notice of motion'). The RTA opposes the making of either order. The Minister has filed a notice of objection to the competency of the application and opposes the orders sought in the notice of motion. The objection to competency is on a basis relied upon in respect of the notice of motion. Mr Alan Oshlack appears for Mr Dates, by leave. Thus, s 9 provides for an emergency declaration. Section 10 of the Protection Act provides for a declaration by the Minister for a period to be specified in the declaration, after a formal process that includes a report concerning the area and its significance to Aboriginals. A person who engages in conduct that contravenes a provision of a declaration under s 9 or s 10 is guilty of an offence and liable to a fine, imprisonment, or both (s 22). The Protection Act provides for the grant of injunctions by the Federal Court. However, by s 26, such an application is to be made by the Minister and the court is to be satisfied that the conduct to be restrained relates to contravention of a provision of a declaration made under, relevantly, s 9 or s 10. That is, the provision for injunctive relief is conditional on the making of a declaration by the Minister. It is to be recalled that no such declaration has been made in this case. While Mr Dates' application refers to the refusal to make a declaration under s 9, the Minister has since refused to make a declaration under s 10. Mr Dates was granted leave to amend the application to make that decision the subject of the proceedings but has not done so. The parties have proceeded as if that amendment had been made. Section 13 of the Protection Act provides for the requirement that the Minister consult with the appropriate minister of the State and that the Minister can revoke a declaration if, subsequently, he or she is satisfied that the law of the State makes effective provision for the protection of an area. Mr Dates claims to be an aggrieved person as an Aboriginal traditional owner and custodian over the area that includes Alum Mountain and because he has " virtually exhausted all legal means pursuant to the laws of NSW to protect the specified area from destruction ". The grounds relied on by Mr Dates include a failure to consider relevant maters, a taking into account of irrelevant considerations, that the decision involved an error of law, denial of procedural fairness and manifest unreasonableness. The powers of the Federal Court under the ADJR Act are set out in s 16 of that Act. Section 16(1) provides that, on an application for an order for review of a decision, the Court may make certain orders. Subsections (a) to (c) relate to the decision itself, in this case a refusal to make a declaration. If that decision were set aside, it does not follow that the Court is empowered to substitute its own decision as to the making of a declaration for that of the Minster; it is not ( Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40 ; (1985-1986) 162 CLR 24 at 40 per Mason J). It was pointed out in Johns v Australian Securities Commission [1993] HCA 56 ; (1992) 178 CLR 408 by Brennan J at 433 that s 16(1)(d) does not enable the Court to make an order against a party in litigation where no ground for relief under the general law is established against that party. There must, his Honour said, be " legal reference points by which to steer ". The power is in addition to the power to quash or set aside an impugned decision ( Park Oh Ho v Minister for Immigration & Ethnic Affairs [1989] HCA 54 ; (1989) 167 CLR 637 at 644). It does not enable orders to be made against persons who were not in any way involved in the processes or procedures which led to the decision under review and who benefit from the decision, if at all, only indirectly; those persons are, in that sense, strangers to the decision ( Johns at 459 per Gaudron J). Johns was applied by Wilcox J in Williams v Minister for the Environment and Heritage (2003) 74 ALD 124 (' Williams No 1 ') to refuse relief by way of a restraining order against a joined third party under s 16(1)(d) of the ADJR Act, even after a refusal to make a s 9 declaration was declared invalid and set aside. His Honour concluded that such an order was beyond power. On the application for interlocutory relief following the decision of Wilcox J, Lindgren J expressed the view in Williams v Minister for the Environment and Heritage [2003] FCA 627 ; (2003) 199 ALR 352 (' Williams No 2 ') at [31] that there was not an arguable case that Wilcox J had erred in his view that Johns obliged him to refuse the interlocutory injunction. That is, Lindgren J expressed the view at [40] that a party seeking an injunction under s 16(1)(d) of the ADJR Act must establish a "right" to it under general law principles. Specifically, his Honour concluded at [44] that the general law does not recognise an Aboriginal person as having an interest in the specified area in an application under the Protection Act, protectable by injunctive relief. The right given by s 9 is to apply for a ministerial declaration and that does not constitute such an interest. On appeal in Williams , Gray J with whom Tamberlin J agreed, expressed the view, arguably in obiter dicta, that such power does exist ( Williams v Minister for the Environment and Heritage [2004] FCAFC 58 ; (2004) 132 LGERA 368 at [29] , [30] and [40]). Justice Ryan, in Carter v Minister for Aboriginal Affairs [2005] FCA 667 ; (2005) 143 FCR 383 at [39] - [41] , expressed the view that, as Wilcox and Lindgren JJ concluded, Johns compels the conclusion that such interlocutory relief against the third party is not available. In the present case, where the declaration has not been made and the Minister's decision has not been set aside, it is not necessary for me to consider that matter further. However, like Ryan J, I see much force in the reasoning of Wilcox and Lindgren JJ. Johns does not allow for the interlocutory order as sought. This would include the Protection Act. However, the limitation is that the matter must arise under that Act. The section does not itself confer jurisdiction. Where jurisdiction is conferred by an Act that provides an exhaustive code of available remedies or otherwise limits the power of the courts to grant relief, s 23 does not provide a basis for transcending that limitation. ( Thomson Australian Holdings Pty Ltd v the Trade Practices Commission [1981] HCA 48 ; (1980-1981) 148 CLR 150 at 161; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30 ; (1998) 195 CLR 1 at [27] - [28] ). Section 23 will not generally be read as giving power to grant additional remedies of a kind already specifically provided for in other legislation which is to be seen as a comprehensive statement of the remedies there available. This presents a difficulty to an applicant seeking broader orders than those provided in the ADJR Act: " the stream cannot rise higher than its source " ( Minister for Immigration, Local Government and Ethnic Affairs v Msilanga [1992] FCA 41 ; (1992) 34 FCR 169 at 177, 179 per Beaumont J, with whom Black CJ agreed). This includes the power to make an order directed to preserving the subject matter of litigation ( Williams No 2 at [16] per Lindgren J). That power exists independently of the power in s 23 ( Williams No 2 at [18]). Mr Dates contends that an injunction is necessary to preserve the subject matter of the litigation, namely the untouched parts of Alum Mountain asserted to be of Aboriginal cultural significance. The Minister and the RTA point out that such an order extends beyond that envisaged by the relevant statutes. If the Court were to grant such an injunction it would, as the RTA submits, usurp the decision of the Minister and make, in effect, a s 9 "emergency" declaration. Further, as the RTA observes, the Protection Act provides for injunctions that would preserve the subject matter of a declaration but the precondition is the making of a declaration. Thus, the statutory regime does not envisage an injunction pending the making of, or the determination of a challenge to a refusal to make, a declaration under s 9 or s 10. IS THE RTA A NECESSARY OR PROPER PARTY TO THE PROCEEDINGS? These proceedings concern judicial review of the Minister's decision under s 9 and, perhaps additionally, s 10 of the Protection Act. The RTA submits that it is not a necessary or proper party to those proceedings --- that the proceedings have nothing to do with the RTA. The RTA submits it is neither a proper contradictor, nor a person whose evidence will assist in the determination of whether the Minister's decisions to refuse to make the s 9 and s 10 declarations should be set aside. The RTA submits that it is, relevantly, a stranger to the Minister's decision under review. This is not affected, for the purposes of s 16(1)(d), by the fact that the RTA made submissions or submitted a report to the Minister which he took into account in making his decision. The question is whether Mr Dates is otherwise entitled to injunctive relief against the RTA, whether or not it is joined as a party ( Williams No 2 at [43] per Lindgren J). The right given by s 9 (or s 10) of the Protection Act to any Aboriginal person to apply for a ministerial declaration does not constitute a right to claim injunctive relief against a third party nor does the general law recognise an Aboriginal person as having an interest in the specified area protectable by injunctive relief. The right given to any Aboriginal person by s 9 of the Protection Act does not constitute such an interest. ( Williams No 2 at [44]). Joinder for the purpose of granting an interlocutory injunction to prevent the RTA from proceeding with the works would afford Mr Dates rights greater than those available under the Protection Act, which does not provide for injunctions per se and in the absence of a declaration. Joinder would also afford rights greater than those under the ADJR Act which, if Mr Dates were successful, could at its highest result in remittal to the Minister for redetermination of his decision. The Minister submits that the RTA may be proper but not a necessary party to the substantive proceedings but that it is not a proper or necessary party to the motion if there is no power in the Court to grant the injunctive relief sought in the notice of motion. The RTA is not a party to the Minister's decision and is not the maker of the decision the subject of review under the ADJR Act. No relief is sought against the RTA in the application. Section 16 of the ADJR Act does not assist Mr Dates to obtain injunctive relief against the RTA. This would be the case even if the RTA were joined to the proceedings ( Williams ); a fortiori where the RTA does not seek to be joined and opposes joinder. Section 39B of the Judiciary Act does not provide for relief as against the RTA or its officers. Where the general law does not provide for injunctive relief against a third party in proceedings brought under the ADJR Act and the Judiciary Act in respect of a decision under the Protection Act, s 23 of the Federal Court Act does not confer power to make the interlocutory order sought against the RTA. It follows that the RTA is not a necessary party to the proceedings or to the notice of motion. The application for joinder should be refused. The Minister has made a decision under s 10 but Mr Dates has not made that decision the subject of his application. In order to obtain an injunction, Mr Dates must show that there is a serious question to be tried ( Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 at [19] per Gleeson CJ and Crennan J) in the sense explained in O'Neill at [65] per Gummow and Hayne JJ and also address the balance of convenience, in the sense of competing inconvenience and injury. The evidence before me and the Minister's reasons relate to the application under s 9 of the Protection Act. In any event, I will consider whether there is a serious question to be tried in respect of the application to this Court concerning the s 9 decision. As to the significance of Alum Mountain as an Aboriginal area for the purposes of s 9 of the Protection Act, the Minister found that the upper slopes and ridge crest outcrops are significant as part of Aboriginal tradition within the meaning of the Protection Act because they are associated with men's business. That finding is not challenged. On the basis of the evidence provided, the Minister was not satisfied: Those findings are challenged. Mr Dates relies primarily on: The application to the Minister was in respect of the whole of Alum Mountain. The Minister was satisfied, on the whole of the evidence before him, that the upper parts of the mountain are significant as part of Aboriginal tradition. Mr Dates' attack on the Minister's reasons is, in effect, a complaint that the Minister did not accept the evidence going to the cultural significance of the lower slopes of Alum Mountain and that he was not satisfied that the evidence established such cultural significance. Section 9 provides for an application seeking preservation or protection of a specified area. The Minister must be satisfied that the area is a "significant Aboriginal area". That is a defined term that imports the characteristic of an area of particular significance to Aboriginals in accordance with Aboriginal tradition. The Protection Act requires the Minister to consider areas and objects of particular significance to Aboriginals in accordance with Aboriginal tradition. That consideration and conclusion do not necessarily equate with the entire area the subject of an application. The fact that the Minister concluded, on the evidence, that some areas qualified and some did not and differentiated between sites on the upper and lower parts of the mountain does not raise a serious question that the different state of satisfaction as to the upper and lower parts of Alum Mountain in the reasons amounts to an error of law. The Minister explained at [45] of his reasons that, while Mr Dates stated that the entire area of the mountain is very significant and that it is contrary to Aboriginal belief to treat the mountain as segmented, this evidence did not fit with the statements of other Aboriginal people. It is clear that Mr Dates is challenging the merits of the Minister's decision. His real complaint is that the Minister accepted evidence contrary to that provided in support of his s 9 application and that he reached the state of satisfaction, as required by s 9, on the basis of all of the evidence referred to in the reasons. Mr Dates says that the Minister failed to take into account relevant matters, being: The reasons disclose that the Minister took into account the evidence presented by Mr Dates, including the evidence as to the Guardian Tree, the Umwelt Report and matters referred to in it. The Minister referred in some detail to Mr Dates' evidence. There has been no elaboration of what is meant by "a number of archeological sites" as particularised in the application. Mr Dates says that the Minister took into account irrelevant considerations, specifically the evidence of a Mr Kelly who, Mr Dates says, was accepted by the Minister to be a Worimi elder when he was in fact a Dhunghatti person. The Minister took account of evidence of a number of persons. Section 9 provides that the Minister reach a state of satisfaction that an area is a significant Aboriginal area. On the evidence set out in the reasons, including the evidence adduced by Mr Dates, evidence from other Aboriginal persons and a number of reports produced over time, the Minister did not reach the required state of satisfaction as to the lower part of the mountain. Mr Dates' complaints go to the merits of the decision and the weight accorded by the Minister to evidence that contradicted the evidence he presented. His complaint is that the Minister came to the wrong conclusion but that does not amount to reviewable error. Not every consideration that a decision-maker is bound to take into account but fails to take into account will justify the court setting aside the impugned decision and ordering that the discretion be re-exercised according to law. A factor may not be significant and a failure to take it into account could be seen not to have materially affected the decision ( Peko-Wallsend at 40). I am not satisfied that, for example, the unspecified archeological sites, if not taken into account, could have materially affected the Minister's state of satisfaction in the light of the matters referred to in the reasons. The application asserts a denial of procedural fairness in the making of the decision and manifest unreasonableness. This was not elaborated on the hearing of the motion and I am not satisfied that the particularisation of those grounds in the application discloses a serious question of reviewable error. The Minister, in his reasons, explained why he was satisfied as to the upper parts of Alum Mountain but not satisfied as to the lower parts. To repeat, the Protection Act requires a positive state of satisfaction as to areas and objects of particular significance to Aboriginals in accordance with Aboriginal tradition. Even if there were power to make an order against the RTA as sought in the notice of motion to preserve the subject matter of the s 9 application, Mr Dates has not established, at a prima facie level, that the Minister's decision should be the subject of orders under s 16(1) of the ADJR Act. The RTA's evidence describes the works being carried out on the Bulahdelah Upgrade Project and the significance of that project. Some of the work presently being carried out is over an area that is an existing area containing transmission lines. As part of the environmental impact statement for the project, a cultural heritage assessment report was completed. A number of matters were identified, including the Healing Stream and the Guardian Tree. The proposed works will minimise the impact of the project on the Healing Stream. The Guardian Tree will not be affected by the present works but will be affected by the main construction works when they commence in early 2010. A condition imposed by the NSW Government in approving the project was that certain scarred trees would not be destroyed, modified or otherwise physically affected, or that impacts should be avoided or minimised. The Guardian Tree is to be relocated. I do not need to consider whether these actions will or will not address Mr Dates' concerns. I refer to them to illustrate the impact of the works on the sites the subject of his evidence on the s 9 application and, I assume, on the s 10 application. These sites are not presently affected or in immediate danger of being destroyed or desecrated. I do not need to consider an appropriate form of injunctive relief. Such an order is not available directly under the ADJR Act, s 39B of the Judiciary Act , s 26 of the Protection Act or s 23 of the Federal Court Act. Mr Dates has not established that the RTA should be joined to the proceedings. Further, Mr Dates has not established that there is a serious question to be tried in relation to his grounds for review of the Minister's decision. The notice of motion should be dismissed. The Minister has asked that the costs of the motion, insofar as the Minister is concerned, be the respondent's costs in the cause. Mr Dates does not object to that course. The RTA has asked that the question of costs insofar as the RTA is concerned be reserved, with leave given to the RTA to file and serve a notice of motion within 14 days if it wishes to re-agitate that reservation of costs. Mr Dates does not object to that course. The costs orders proposed by the Minister and the RTA should be made. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | primary proceedings concern application for judicial review of minister's decision not to make a declaration under s 9 of aboriginal and torres strait islander heritage protection act 1984 application for interlocutory injunction restraining third party (rta) from undertaking construction work in area over which applicant seeks a protection declaration whether the rta is a necessary or proper party to the proceedings whether the court has power to grant an interlocutory injunction against the rta under s 16(1)(d) of the administrative decisions (judicial review) act 1977 , s 23 of the federal court act 1976, s 39b of the judiciary act 1903 or its inherent power whether there is a serious question to be tried balance of convenience administrative law |
They claim to fear persecution for reason of political opinion and/or by reason of membership of a particular social group. 2 The appellants arrived in Australia on 30 December 1996. They originally applied for protection visas on 29 January 1997 but the documents contained no claims. The application was rejected and the appellants sought review by the Refugee Review Tribunal. The Tribunal affirmed the decision of the delegate on 15 April 1998. 3 On 15 July 2003 the appellants lodged a further application for a protection visa claiming that their original application was invalid and therefore that no prior application for a protection visa had been made. On 20 August 2003 a delegate of the Minister refused to grant the appellants a protection visa on the further application and on 24 September 2003 the appellants made an application to the Tribunal for review of that decision. The appellants attended the Tribunal hearing held on 19 January 2004. The Tribunal handed down its decision on 23 February 2004. The Tribunal found that the claims of the appellant wife depended entirely on the claims made by the appellant husband. That has not been challenged. I will refer to the husband as 'the appellant'. • From 1989 he was required by the police to take photographs of people who had died in police hands. He had been forced to do so in such a way as to make it appear that the people had died in an ' encounter ' with the police. He claimed that, in this way, the police could get away with what he described as ' acts of treacherous murder '. He claimed that he had been threatened with harm by the police if he did not obey them. • By the early 1990s the police had started to take him with them to isolated places and had shot people in front of him. He claimed that on one occasion he had been called upon to take photographs of a young Sikh lawyer, who was the son of one of his close friends and who had been killed. • He had handed a copy of those photographs to Mr Jaswant Singh Khalra, the Secretary of the Akali Dal human rights wing, in late 1994. Mr Khalra was subsequently arrested and had disappeared. Mr Khalra's abduction had been investigated and Punjabi police were found responsible. The appellant claimed that the police had started to harass him and that they knew that he had handed over the photographs. The appellant believed he was a target in order to eliminate police links with Mr Khalra's abduction. His home and studio were raided in July 1996. He did not return to his home thereafter. • He believed that he would be targeted by a number of police officers about whom he could give evidence in a future prosecution, that he would be seen by the police force in general as someone who had betrayed them by giving photographs to Mr Khalra and that the central government would attempt to silence him because evidence of the excesses of the police in Punjab would be embarrassing and politically harmful to them. The appellant was represented by solicitor and counsel before the Federal Magistrate. 6 The notice of appeal filed on 28 April 2005 contained two grounds. The matter was listed for hearing on 12 October 2005. The appellant filed written submissions on 4 October and supplementary written submissions on 21 October. The respondent filed written submissions on 5 October and supplementary written submissions on 31 October. The hearing continued on 9 November 2005. On that date the appellant sought leave to file an amended notice of appeal which, apart from asserting error on the part of the Federal Magistrate in failing to find jurisdictional error on the part of the Tribunal gave detailed particulars of error by reference only to the Tribunal decision. 7 Federal Magistrate Barnes, from whose decision this appeal is brought, gave very detailed reasons for her findings on each of the ten grounds before her. The notice of appeal and the amended notice of appeal make no reference to her Honour's reasons nor do they make any link between the case as argued before her Honour and the appeal now brought from her Honour's decision. Such a practice in an appeal from a Federal Magistrate is not to be supported. In this case, where the appellant has been legally represented at each stage and where the Federal Magistrate dealt exhaustively with the case as presented to her, the notice of appeal shows no regard for proper procedure and no respect for the decision from which the appeal is brought. This is in contrast to the respect shown by her Honour in the analysis she brought to each ground of appeal. The review by the Federal Magistrate might as well never have occurred so far as the appellant is concerned. It is unhelpful, to say the least. As stated by the Full Court in Sathiyanathan v Minister for Immigration and Multicultural Affairs [2000] FCA 210 at [10] this is not the occasion to reconsider the Tribunal's reasons as distinct from those of the Federal Magistrate. The Tribunal did not accept that the essential and significant reason for the persecution which the appellant fears was his membership of the particular social group for the purposes of the Convention constituted by his family. To the extent that the appellant fears that he will be targeted by the police or army officers, the Tribunal held that their motivation relate to his capacity to give evidence against them rather than to his membership of the particular social group constituted by his family. 9 The Tribunal did not accept that the essential and significant reason for the persecution the appellant fears was his real or imputed political opinion. The appellant's own evidence suggested that the police or army officers wish to eliminate him because of his capacity to testify against them. (3) The Tribunal erred in its analysis of the particular social group by looking to the acts of the appellant rather than ' on account of what he was '. • Despite limitations on the appellant's ability to give evidence in prosecutions of police he would be perceived as having the ability and thereby face a real chance of persecution should he return to India. • The appellant had revealed photographs of more than one incident. • The matters in the amended witness statement. It was contended that the Tribunal had failed to interpret the law correctly in relation to the requirement of a Convention nexus for persecution because it found, incorrectly, that the actions of the appellant could not be regarded as manifesting a political or an imputed political opinion. It was submitted that this constituted a constructive failure to exercise jurisdiction because the Tribunal's reasoning rejecting the possibility of this Convention ground was illogical. 13 The appellant submitted that his actions of ceasing to co-operate with the police and of providing photographs to a human rights activist were politically significant when viewed in the context of the oppression of Sikhs in the Punjab. On this basis, it was said that there was clearly a possibility that these actions would be perceived as politically motivated, that the Tribunal had rejected such a claim for an illogical reason and had thus failed to perform its statutory duty ( Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32 ; (2004) 207 ALR 12 at [38] ). The appellant contended that the Tribunal's findings in this respect were wrong as a matter of law Minister for Immigration and Multicultural Affairs v Y [1998] FCA 515 and also as a matter of logic. 14 Barnes FM analysed the Tribunal decision and noted the factual matters accepted and not accepted. A number of assertions were accepted by the Tribunal. Some of the factual matters not accepted are not of relevance in the appeal. 15 The Tribunal did accept that the appellant's home and shop were raided by the police in July 1996 but, as noted by Barnes FM at [14], found that it was apparent that the police were not acting in an official capacity and that the appellant was not wanted by police or army officers acting in official capacity. It did not accept that he was ever sought by police or army officers acting in a rogue capacity or that he was still being sought by rogue elements of the police or the army acting in an unofficial capacity. As noted by her Honour at [17], the Tribunal also considered the submission that it was not the evidence that the appellant could give that was important but the evidence that the police thought that he could give. 16 Having regard to the appellants' decision to remain in India after they obtained visas to travel to Thailand and wait until they obtained visas to travel to Australia, the Tribunal did not accept that the appellant and his wife genuinely held a subjective fear of being persecuted at the time that they left India. 17 The Federal Magistrate also considered at [20] the independent ground for the Tribunal decision, that the persecution feared was not for a Convention reason. The Tribunal did not accept that the essential and significant reason for the persecution feared was the appellant's membership of a particular social group of persons who could testify against corrupt practices of the police force. ' The Tribunal considered that if he could give such evidence or was so perceived it would be in his capacity or perceived capacity as an individual to do so which would motivate the officers in question to attempt to prevent him from giving evidence, not his membership of "any particular social group" for the purposes of the Convention '. Nor did the Tribunal accept the submission that the essential and significant reason for the feared persecution was membership of the particular social group constituted by the appellant's family. The Tribunal did not accept that the motivation of his persecutors was his real or imputed political opinion. That finding was based on the evidence of the appellant. 18 Barnes FM found jurisdictional error. This was in relation to the appellant's claim to fear rogue elements of the police or army acting in an unofficial capacity because he had witnessed torture and an illegal cremation and could give evidence about these events. Her Honour found that the Tribunal had failed to give consideration to the consequences of the appellant's claims of having witnessed torture by named police at designated police stations and an illegal cremation. That had ' repercussions ' (at [41]) in relation to his claim to fear rogue elements of the police because of his ability to give evidence and whether he was still being sought by them or the army. Her Honour concluded at [49] that it was the appellant's evidence and the absence of a course of conduct manifesting a political opinion to which the Tribunal had regard. She found that '[t] he Tribunal considered but rejected the possibility that the [appellant's] conduct would be perceived as politically motivated ' and, at [50], that the Tribunal reached its decision to uphold the decision of the delegate on the independent basis that any real or imputed political opinion was not the essential and significant reason for persecution under s 91R(1)(a) of the Migration Act 1958 (Cth) ('the Act'). As her Honour noted, that latter finding was not challenged. Barnes FM was not persuaded that the determination was irrational or illogical or that, if it were, it constituted jurisdictional error. 21 A ground based on the Tribunal's alleged misunderstanding of the number of photographs handed by the appellant to Mr Khalra was held by the Federal Magistrate to amount to factual error and not one that went to jurisdiction. 22 The appellant relied upon asserted error in the Tribunal's consideration of the particular social group. As set out by the Federal Magistrate at [56], the first aspect was that the Tribunal was said to have considered the acts of the appellant rather than as a member of a particular social group. The second aspect was an asserted failure to make a finding about whether the claimed social group existed and if so whether the appellant was a member of it. The appellant claimed that he was ' a member of a social group identified as "persons who can testify against corrupt practices in the police force" '. Her Honour at [59] characterised the Tribunal finding and said ' it was [the appellant's] capacity or perceived capacity as an individual to give evidence which would motivate police officers to attempt to prevent him from giving evidence, not his membership of any particular social group for the purposes of the Refugees Convention '. 23 Barnes FM examined the case presented by the appellant to the Tribunal. Her Honour concluded at [66] that the Tribunal had not failed to consider a broader social group raised on the material before it. There was nothing in the claims or material suggesting that it was necessary for the Tribunal to consider whether the appellant was a human rights activist. 24 It was not disputed that the Tribunal considered the particular social group constituted by the appellant's family and found that membership of that social group was not the essential and significant reason for persecution. There was no suggested error in that finding. Her Honour discussed the Tribunal's characterisation of the social group and the relationship between membership of that social group and the appellant's fear of persecution. She concluded at [71] that the Tribunal's finding was that, if the appellant's claims of his ability give evidence were accepted, it would be his capacity or perceived capacity as an individual to give evidence, not his membership of the social group. In other words that there was no particular social group found to exist in the manner contended for but if it did, it would not be membership of the social group which would be the reason for any feared persecution. There was no particular social group as claimed because it was only sought to be defined by what somebody had done or would do (at [72]). 25 In the alternative, the Tribunal had found that whatever the social group and whether or not the appellant was a member, the essential and significant reason for the persecution feared was not his membership of a particular social group. Accordingly, the Tribunal did not misunderstand the term "particular social group" or fail to consider the issue fully. There was no claim of ongoing or present problems of such a group or evidence of factors other than the potential action of the appellant. There was no evidence or claim to a social group based upon the nature of the members in contrast to their actions or a cognisable social group by virtue of common activity. 26 Barnes FM concluded that, in coming to its conclusion on Convention reason, the Tribunal finding was based on an acceptance of all of the appellant's claims. This amounted to an alternative basis to the one infected by jurisdictional error. Accordingly, her Honour dismissed the application for review. The Tribunal rejected this claim. The Federal Magistrates Court found that there was no jurisdictional error in the Tribunal decision on this point. The Federal Magistrates' Court erred in making this finding. The Tribunal rejected this claim. The Federal Magistrates' Court found that there was no jurisdictional error in the Tribunal decision on this point. The Federal Magistrates Court erred in making this finding. • The Tribunal failed to enquire why the police or army officers wanted to eliminate the appellant as their witness to their involvement in atrocities. • The Tribunal found that this case could be distinguished from V v Minister for Immigration and Multicultural and Indigenous Affairs (1999) 92 FCR 353. The Tribunal's failure to explain how the appellant's case differed from V v Minister for Immigration and Multicultural and Indigenous Affairs indicates that the Tribunal misunderstood the law or that its finding on this point was irrational, illogical and not based on findings or inferences of fact supported by logical grounds. • The Tribunal stated that the appellant had not engaged in a course of conduct which could be regarded as manifesting a political opinion. The Tribunal by requiring that there be a course of conduct in order for an applicant's conduct to manifest a political opinion, fell into jurisdictional error. Mr Zipser accepts that leave is required in relation this issue. Also raised in the supplementary submissions and amended notice of appeal, is the issue whether the appellant's conduct manifested a political opinion. Mr Zipser contends that this issue was raised before Barnes FM. He submits that the issue was part of the ground that the Tribunal erred in law and reasoned illogically with regard to the finding that the appellant could not be considered to have been manifesting a political or imputed political opinion. Mr Zipser points to the Federal Magistrate's decision at [49] where her Honour noted that the Tribunal had considered but rejected the possibility that the appellant's conduct would be perceived as politically motivated. In the alternative, he seeks leave to argue that issue in the appeal. 31 Mr Reilly, who appears for the Minister, objects to the new ground of appeal, which encompasses the motivation of the police and whether the appellant's conduct constitutes political opinion, being raised. Mr Reilly submits that neither issue comprising the ground of the amended notice of appeal were raised below. 32 In Gomez v Minister for Immigration and Multicultural Affairs (2002) 190 ALR 543 at [18], the Full Court referred to Iyer v Minister for Immigration and Multicultural Affairs [2000] FCA 1788 at [22] - [24] where Heerey, Moore and Goldberg JJ observed that full consideration of a proposed new ground not argued below would make the requirement of leave to raise that new ground meaningless. Their Honours expressed the view that it is sufficient to determine whether the grounds sought to be raised have a reasonable prospect of success. They added that it was a relevant consideration for the grant of leave whether the appellant had previously had the benefit of legal representation. 33 In VAAC v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 74 ; (2003) 129 FCR 168 at [26] the Full Court referred to some of the factors relevant to whether it is expedient in the interests of justice to allow a new ground to be argued and determined. They were the appellant's prospects of success on appeal on the new argument, the explanation given by the appellant for failing previously to raise the arguments, the prejudice to the respondent, the potentially serious consequences to the appellant if leave is refused and the integrity of the appellant process. 34 Mr Zipser has not dealt with these factors. No exceptional circumstance has been raised here for permitting new grounds to be argued on appeal. No explanation has been given or argument made as to why the appellant, who was represented by counsel and solicitor before the Federal Magistrate, should be given leave to raise new grounds now. To the contrary, the appellant has simply effectively ignored the decision of the Federal Magistrate. That is, in my view, an exceptional circumstance against permitting the new grounds to be argued where, as here, a detailed application was made to Barnes FM who, in turn, provided cogent and detailed analysis of the Tribunal decision and reasons for refusing the application. 35 In particular, he provides no explanation why the grounds were not relied on before Barnes FM. Indeed, he seems to submit that the onus is on the Minister to establish that the appellant made a tactical decision not to raise them. That proposition is clearly untenable. Further, while he maintains that some of the proposed grounds can be linked with matters raised before the Federal Magistrate (the only direct reference he makes to that decision), it is by no means clear to me that, as presently framed, they were so advanced. He concedes the ground based on the motivation of the police and army officers was not one of them. He does not suggest that there was any relevant change in the law since the decision of the Federal Magistrate. I will, however, give the appellant the benefit of the doubt and consider the Tribunal decision. 36 The Tribunal accepted that an attitude of resistance to systemic corruption in government authorities could amount to an expression of political opinion but found that there was nothing in the evidence to suggest that the persecutors were motivated by the appellant's real or imputed political opinion. With respect to the claim that he would be seen as having betrayed the police and that his behaviour would be seen as "politically unacceptable", the Tribunal concluded that there was nothing in the evidence to suggest that the persecutors were or are ' motivated in any way by any perception they may hold of the [appellant's] political opinion '. This finding was expressed more than once, for example ' there is nothing to suggest that the motivation of his persecutors is his real or imputed political opinion '. 37 Mr Zipser, who appears for the appellant, submits that the question of what may manifest or constitute political opinion is a question of fact and law. He contends that the finding ' is wrong '. 38 I agree, with respect, with Barnes FM. The Tribunal considered this claim and, on the basis of the evidence, rejected it. The Tribunal considered the motivation of the persecutors and, as a finding of fact ( Ramirez v Minister for Immigration and Multicultural Affairs (2000) 176 ALR 514 at [38]), determined that it was not for reasons of actual or imputed political opinion but because of his capacity to testify against them. The appellant is inviting merits review. 39 The appellant has not shown that the Tribunal failed to consider the totality of his actions in the setting in which they occurred and whether that was Convention related (cf Rajaratnam v Minister for Immigration and Multicultural and Indigenous Affairs (2000) 62 ALD 73 at [50]). 40 The appellant relies upon NACM v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1554 ; (2003) 134 FCR 550 at [50] and [63] per Madgwick J. While his Honour was of the view that it is not necessary to establish that the motivation of the persecutor is the claimant's actual or imputed political opinion, he did say that the political opinion has to be ' the true cause of his predicament ' at [50] and explained it further at [63] saying that the political opinion must ' account for the persecution ' that the claimant fears. In any event, his Honour recognised at [65] --- [66] that those views were at odds with prevailing authority, in particular Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225 at 240-242 per Dawson J, at 258 per McHugh J and at 284 per Gummow J. Dawson and Gummow JJ expressly approved Burchett J in Ram v Minister for Immigration (1995) 57 FCR 565 at 568, Dawson J making specific reference to the formulation in Ram of the "common thread" which links the expression "persecuted", "for reasons of" and "membership of a particular social group", namely motivation. 41 Mr Zipser also seeks to raise another issue based on the Tribunal's finding of the motivation of the persecutors. The appellant draws a distinction between the Tribunal's consideration of the appellant's ability to testify against the police or army officers and his willingness to do so. He submits that the claim went to both aspects and that the Tribunal considered only the appellant's ability but not his willingness. 42 As to the claim made by the appellant to the Tribunal, the Tribunal recognised that, with respect to Mr Khalra's disappearance, the appellant put himself forward as ' a person prepared to or who might be required to testify in Mr Khalra's case '. The Tribunal did not accept that the appellant might be required to give such evidence nor that he could be perceived by police or army officers as a person who might be prepared or required to give such evidence. 43 There are two other answers to the appellant's current characterisation of his claim. 44 The first is that, in my opinion, it cannot be said that there was a clearly articulated claim of ability and willingness to testify, as against ability only. To the contrary. When one looks to the claim as articulated in the written submissions of the appellant's representatives and as cited in the Tribunal decision, the appellant's claimed fear of persecution as a result of his imputed political opinion was ' against the police force and the authorities of the government and/or their activities, and his membership of one or more social groups being either persons who can testify against corrupt practices in the police force or his family ' . They also submitted to the Tribunal ' that there was a real chance that the [appellant] would be targeted by members of the police...against whom the [appellant] could testify ' (my emphasis). The Tribunal considered the claim raised and material advanced by the appellant (cf NAPU v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 193). 45 Secondly, when the Tribunal decision is read in its entirety and in context, it is implicit in the reasoning that the Tribunal took into account not only the appellant's ability to testify but also his actual or perceived willingness to do so. 46 The second issue raised in the ground of the amended notice of appeal challenges the Tribunal's approach concerning the manifestation of political opinion. While his submissions are not entirely clear, he accepts that the Tribunal recognised that an attitude of resistance to systemic corruption in government can amount to an expression of political opinion ( V v Minister for Immigration and Multicultural and Indigenous Affairs ). He seems to contend, however, that the Tribunal erred in limiting such possible manifestation to a course of conduct rather than the isolated event of handing the photographs to Mr Khalra and in failing to recognise that the actual or perceived holding of views antithetical to government is sufficient to constitute political opinion. 47 The Tribunal understood that the political opinion relied on by the appellant was within the principles of V v Minister for Immigration and Multicultural and Indigenous Affairs; Ranwalage v Minister for Immigration and Multicultural Affairs (1998) 90 FCR 173 and Minister for Immigration and Multicultural Affairs v Y , which it cited. The appellant has not shown that the Tribunal erred in its understanding of the meaning of political opinion. The Tribunal considered each of the factual matters presented to it, including the handing over of the photographs. When the Tribunal referred to a 'course of conduct', it was as part of its reasoning as to why there was, in its opinion, nothing to suggest that the motivation of the persecutors was the appellant's real or imputed political opinion. The Tribunal explained that factual finding by reference to the incident of the giving of evidence to Mr Khalra. It found no support from that the evidence concerning that incident alone or considered together with the refusal to photograph dead bodies after December 1994. I see no error in the Tribunal's approach. As Mr Reilly points out, the Tribunal's reference to 'course of conduct' when read fairly and in context is simply contrasting the factual circumstances of the appellant's case with those in the cases it had earlier cited, including V v Minister for Immigration and Multicultural and Indigenous Affairs . 48 If the proposed new grounds of appeal were raised before the Federal Magistrate, the appellant has failed to demonstrate any error in her Honour's reasons. If they were not so raised, the appellant has failed to establish that leave should be granted or that the proposed new grounds would have merit ( NAJT v MIMIA [2005] FCAFC 134 ; (2005) 147 FCR 51 at [163] ). I refuse leave to rely on the proposed amended notice of appeal. No error has been established in the decision of Barnes FM. 49 The appeal is dismissed with costs. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | whether the appellant's conduct manifested a political opinion whether motivation of the persecutors is a finding of fact no jurisdictional error affecting tribunal's exercise of power application for leave to raise new grounds of appeal not raised before federal magistrate detailed reasons of federal magistrate new grounds of appeal not refer to those reasons no explanation for failure to raise the grounds before the federal magistrate no regard for proper procedures on appeal proposed new grounds would fail no other alleged error on part of federal magistrate leave to rely on amended notice of appeal refused migration practice and procedure |
2 In respect to this decision, there has been filed both a Notice of Appeal and an Amended Application under s 476A of the Migration Act 1958 . The proceedings today have been confined to the amended application. 3 The Amended Application claims that this Court has jurisdiction pursuant to both s 476A of the 1958 Act and s 39B of the Judiciary Act 1903 (Cth). The Amended Application claims that there has been a denial of procedural fairness and the taking into account of an irrelevant consideration. Both grounds of review, it is considered, should be dismissed. 5 There are a number of answers to this ground of appeal. First, the ground of appeal particularises a number of extracts from identified texts. But the Tribunal's reasons do not disclose any reliance upon any of those texts. The texts particularised, it is understood, are not to be found in the Tribunal's reasons for decision in the present proceedings. 6 Two of the texts are referred to in the earlier decision of the Tribunal, referred to in paragraph 98 of its reasons, namely, Re Howard v Minister for Immigration and Multicultural Affairs [2006] AATA 474 at [104] ---[105]. In those paragraphs of the Tribunal decision in Re Howard , there is reference to two further decisions of the Tribunal, namely, Re Sorensen v Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 96 at [29] , and Re Azar v Minister for Immigration and Multicultural and Indigenous Affairs [2005] AATA 1061 at [37] . The further texts particularised in the present Amended Application are to be found in the reasons for decision in Re Sorensen and Re Azar . The Deputy President who constituted the Tribunal in the decision presently under review was also the Member who constituted the Tribunal in each of the other decisions referred to. 7 No denial of procedural fairness is made out simply because a decision-maker refers to evidence given in other proceedings in which he has been involved. A denial of procedural fairness may be made out if, for example, a decision-maker goes beyond simply referring to evidence in other proceedings and seeks to rely upon such evidence or conclusions previously reached without affording an affected party an opportunity to make submissions. But that is not the present case. A fair and balanced reading of the Tribunal decision reveals either that the Tribunal was distinguishing previous decisions or applying the Ministerial Direction to which it must have regard. That reasoning on the part of the Tribunal reinforces a conclusion that the Tribunal was focusing attention upon the facts of the present case. Whatever may have been the evidence in other proceedings in which the Tribunal member was involved, and whatever may have been the " experience " of the delegate which he had brought to bear when making his present decision, the Tribunal was confining its attention to those aspects of deterrence relevant to the decision presently under review. 8 The need for the appellant to address the general issue identified in the ministerial direction as " deterrence " was clearly recognised. The facts relevant to that issue had been canvassed and the parties given an opportunity to make submissions. While visa refusal is not intended as a punishment, paragraph 2.11 of the direction plainly contemplates that the prospect of it will operate to deter similar conduct in much the same way as the threat of punishment does. That includes deterring the use of corrupt agents who are prepared to lodge fraudulent applications. Granting a visa in the present case would send entirely the wrong message to those contemplating acts violating Australian migration law. It is not considered that para 102 of the Tribunal's reasons relies in any way upon the observations previously made by the Tribunal at para 98. 9 Second, and in the absence of the Tribunal relying upon evidence provided in other proceedings, the present allegation of a denial of procedural fairness is in substance a request to be involved in the evolving reasoning processes of a decision-maker. It is a request to have an opportunity to comment upon how the Tribunal is approaching the issues the subject of decision. There was no requirement imposed upon the Tribunal to disclose to the Applicant the particular decisions of either the Tribunal or the Courts upon which it was proposing to rely in its reasoning process in order to afford the Applicant a further opportunity to make submissions as to why those decisions were to be distinguished. 10 Procedural fairness does not require the disclosure to a party of the manner in which material may be used or disclosure of an evolving process of deliberation or decision-making. Procedural fairness does not generally require a decision-maker to disclose what he is minded to decide so that a party may have a further opportunity of criticising his mental processes before he reaches a decision: see Hoffman-La Roche v Secretary of State for Trade and Industry [1974] 2 All ER 1128 . If this were a rule of natural justice only the most talkative of judges would satisfy it and trial by jury would have to be abolished. See also Commissioner for Australian Capital Territory Revenue v Alphaone (1994) 49 FCR 576 at 591---2. In the circumstances of the present proceedings, there has accordingly been no denial of procedural fairness in not disclosing the various texts not referred to in the reasons of the Tribunal now under appeal but in the reasons of earlier Tribunal decisions. 11 Reliance by the Applicant upon VEAL v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 , 222 ALR 411 is misplaced. Procedural fairness had there been denied by the non-disclosure of a letter which had made serious allegations against the Applicant's husband. A statement by the Tribunal, that it had given the letter no weight, did not absolve it of the necessity to disclose the substance of the letter to enable submissions to be made. 12 In the present proceedings, the " evidence " referred to in the earlier decision of the Tribunal was not evidence personal to the present Applicant. It was more in the nature of accumulated knowledge or expertise and, to the extent that reference was made to that earlier knowledge or experience, it was referred to in a context where the Tribunal member was giving background to the incorporation of " deterrence " as part of Direction No 21. That direction was very much to the fore of the parties' consideration and was a matter in respect to which submissions were advanced. VEAL should not be construed as imposing any general requirement upon an administrator to disclose or comment upon all prior facts and knowledge of which he may be aware by reason of his having been involved in earlier cases. 13 Obvious care needs to be taken, however, by Tribunal members when referring to evidence given in other proceedings to which they have been involved. An issue that occasioned considerable debate at the time when a general administrative tribunal was being considered was the desirability that such a Tribunal have available to it persons with expertise: see Commonwealth, Administrative Review Committee at para 292, Parliamentary Paper No 144 of 1971 and Committee on Administrative Discretions at paras 148 to 152, Parliamentary Paper No 316 of 1973. When enacted, the Administrative Appeals Tribunal Act 1975 (Cth) recognised a qualification for appointment was " special knowledge or skill ": see s 7(2)(d). 14 After appointment it is inevitable that a Tribunal member will continue to accumulate expertise in particular areas and become familiar with vast amounts of materials relevant to decisions to be made. The accumulation of such expertise and knowledge should obviously not be discouraged as to do so could prejudice the ability of the Tribunal to make informed decisions. The issues arising from having available to the Tribunal such expertise and knowledge has to some extent been discussed by Katzen in 'Procedural Fairness and Specialist Members of the Administrative Appeals Tribunal' (1995) 2 Australian Journal of Administrative Law 169. The necessary qualification which must be expressed is that care should be taken to ensure that the proceedings before the Tribunal remain fair and permit all parties a reasonable opportunity to present their cases. So much is guaranteed by s 39 of the Administrative Appeals Tribunal Act 1975 (Cth) itself. 15 Difficult questions have arisen in circumstances where it is the accumulated expertise and skill of a Member which is being brought to bear upon a particular decision-making process. The present case is simpler. It is a clear submission by the Applicant that identifiable material has been relied upon but not disclosed. That case is largely answered by the conclusion that the identifiable material or publications have not been relied upon and that the decision of the Tribunal under appeal has been based upon facts disclosed to and debated by the parties. In the present case the opportunity to make submissions was extended to both parties and submissions made accordingly. 16 This ground of review is thus to be dismissed. TAKING INTO ACCOUNT AN IRRELEVANT CONSIDERATION. In relation to the protection of the Australian community the Tribunal is also required to consider the question of general deterrence, the likelihood that visa refusal would prevent or inhibit the commission of similar offences by other persons: see Direction No 21 paragraph 2.11. It is true that the deterrent effect of a particular decision is impossible to prove in advance. The concept is perhaps better expressed in a positive form by saying that if bad behaviour is rewarded there will be more of it. That is a principle well known to parents, teachers, managers and most other members of the community. 97. According to the delegate, Mr Heath, there are specific reasons for thinking that decisions in cases such as the present one may have incentive effects one way or the other. He notes that the Chinese community in Australia is relatively close knit with its own ethnic associations, newspapers and community networks and the outcome of decisions such as this one are passed around within segments of the community and also between some unscrupulous migration agents. 98. Evidence of the role of migration community networks in the operation of deterrents was referred to in Re Howard and Minister for Immigration and Multicultural Affairs [2006] AATA 474 at paragraph 104-105. 99. Current statistics indicate that the highest number of PV applications currently being lodged are made by Chinese nationals, many based on false or frivolous claims. This is a not uncommon pattern. In saying this I also note ... that Ms Chi's former husband and her adult son were granted spouse migration visas for Australia in 2005, sponsored by another person. Whether her former husband also took the " well trodden path" is not within the scope of this decision. The taking into account of the experience that a significant number of Chinese Applicants for protection visas marry and later divorce is said to be an irrelevant consideration. 18 The Applicant asserts that the marriage in the present case is not one of a kind referred to by the delegate. So much may be accepted. The Tribunal in the very next paragraph of its reasons stated that " While Mr Heath's conclusions have a relevance to the issue of general deterrence I do not suggest that the scenario he describes as typical is on all fours with the present case . " The Tribunal later accepted at para 109 that there was a " genuine marriage to an Australian citizen . " The Tribunal further noted at para 112 that " his commitment to [his wife] is genuine . " The reasons of the Tribunal simply recount the evidence being advanced before it and, for present purposes, the experience of the delegate. The Tribunal accepted the genuineness of the marriage. 19 No error is exposed with respect to this ground of appeal and it should be dismissed. THE NOTICE OF APPEAL. 21 Had that Notice of Appeal been relied upon, it would in any event have been dismissed for non-compliance with O 53 r 3(2) of the Federal Court Rules 1979 (Cth). This Court requires " strict compliance " with that rule: see Ibarchena v Secretary, Department of Family and Community Services [2001] FCA 453 at [2] per Finn J. It would not have been legitimate to have called in aid of the " grounds " purportedly set forth in the Notice of Appeal to in some manner rephrase the purported " questions " as presently drafted: see Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 524. The Notice of Appeal be dismissed. 2. The Amended Application be dismissed. 3. The Applicant to pay the costs of the First Respondent. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | requirements of procedural fairness procedural fairness does not require the disclosure to a party before an administrative tribunal of the manner in which particular material may be used procedural fairness does not require disclosure of the evolving process of deliberation or decision-making veal v minister for immigration and multicultural and indigenous affairs [2005] hca 72 does not impose any general requirement upon an administrative decision maker to disclose all prior facts and knowledge, of which he may be aware by reason of his having been involved in earlier cases, where relevant to the particular matters now at issue administrative law |
By that decision, the Tribunal affirmed the decision of a delegate of the Minister which had refused the applicant a protection visa. 2 By the applicant's proposed notice of appeal, the applicant seeks a declaration that s 424A(3) of the Migration Act 1958 (Cth) is ultra vires the Constitution , and relief is also sought upon the basis of alleged failure of the Tribunal to consider relevant country information. Though the applicant has filed written submissions in support of his application for leave to appeal, the same do not address the orders sought in his draft notice of appeal. Instead by those submissions, the applicant asserts that the decision of the Tribunal involved a 'jurisdictional error of law involving an incorrect interpretation of the applicable law to the fact ( sic ) of the case'. No legal basis or reasoning or at least adequate and plausible reasoning was purportedly provided for that assertion. 3 The applicant arrived in Australia on 7 February 1998. His application for a protection (class AZ) visa was refused by a delegate of the Minister on 23 March 1998. The applicant's subsequent application for review was addressed by the Tribunal with considerable thought and care, extending over some 17 pages. A subsequent application for prerogative relief filed with the High Court on 19 May 2003 led to the subsequent remission to the Federal Court of the haring of the order nisi thereby sought, which, as I have above stated, was unsuccessfully pursued before Bennett J. 4 In his oral address to the Court, the applicant was unable to distil any viable basis for reversing in whole or in part the reasons for judgment of Bennett J handed down on 4 November 2005, such as to justify the grant of leave to appeal. In particular no viable submission was made to me demonstrative of any error of law in her Honour's approach or reasoning, either in the applicant's written submissions filed on 3 March 2006 or otherwise in oral address. The written submissions constituted in substance or reality a rehearsal of complaints as to the Tribunal's findings upon the factual merits or otherwise of the Tribunal's findings. 5 The application for leave must therefore be dismissed with costs. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | application for leave to appeal judgment and orders made by single judge of the court no merit demonstrated by application relief refused migration |
The appellant is a Vietnamese businessman who was a part owner of a company which operated a Retravision, electrical goods, store at Cabramatta. Three bases are advanced to support the claim of error. 2 First, the Tribunal was not satisfied that the appellant was a person who, relevantly, maintained direct and continuous involvement in the management of that business from day-to-day or made decisions that affected the overall direction and performance of that business during the 12 months before he made the application for the visa; see cl 845.216 of Schedule 2 to the Migration Regulations ). He relied on a Certificate IV in Business Studies issued to him by New South Wales International College in July 2001. The Tribunal found that the appellant's English was at an appropriate level, given that he worked at Cabramatta and dealt largely with Vietnamese speakers but was not satisfied that the appellant had functional English. The Tribunal had earlier found that the appellant was not able, during the course of the proceedings before both the delegate and the Tribunal, to understand questions in English. 4 Last, the appellant contends that the Tribunal erred in the way in which it approached the assessment of his net assets by not being satisfied with the evidence with which he presented it. The Tribunal considered it was bound to apply the policy called 'Established Businesses in Australia' (PAM3:SCH2 Visa 485) in respect of its approach to cl 845.216. One was headed 'About Visa 485' and I was informed by counsel for the Minister that its provisions applied as the policy at the time at which the appellant made his original application for a visa. Unhelpfully, it did not set out criteria for the purposes of assessing whether cl 845.216, should be interpreted in any particular way, but, simply referred to another policy for those criteria. The policy in effect for the period 11 May 2005 to 15 June 2005, being the period in which the Tribunal's decision was given, was also produced. It set out, in par 8.1, criteria, for the purposes of cl 845.216, materially identical to those the subject of consideration by a Full Court of this Court in Lobo v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 168 ; (2003) 132 FCR 93 at 101-102 [30] . their skills have been fundamental to, or have exerted direct influence on, the operation of the main business(es). Rather, if an applicant satisfies this criterion in respect of a failed or declining business, this should be considered in assessing whether the applicant "has overall had a successful business career". The criterion requires satisfaction on the part of the Minister that the applicant for the visa as owner of and interested in a main business "maintain direct and continuous involvement in the management of that business or in those businesses from day to day and in making decisions that affected the overall direction and performance of that business or those businesses. " This did not import a requirement that could only be satisfied by demonstrating the exercise of responsibility within the business in terms of decision-making authority, responsibility for employees, and/or responsibility for expenditure. There is a variety of ways in which a person might maintain direct and continuous involvement in the management of a business and in making decisions affecting its overall direction and performance. It is the duty of the executive branch of government to obey the law as laid down by the Parliament and the Courts, even if the executive does not agree with those decisions ( The Commonwealth v New South Wales [1923] HCA 23 ; (1923) 32 CLR 200 at 214 per Isaacs, Rich and Starke JJ applying Eastern Trust Co v McKenzie, Mann & Co [1915] AC 750 at 759). 10 In this case, the Tribunal set out its findings in its reasons for decision. It noted that the appellant's letter of employment, which had been provided to the Department, described his role as floor manager, stating that he would be responsible for all stock, sales, delivery and personnel concerns. He had replaced a Ms Le, who became the buying manager. His duties included liaising with sales representatives for point of sale and training. As noted above, the Tribunal identified that the appellant had said in his evidence that he had started the business day, checked the shop, checked the delivery and collection of goods, placed orders, checked bank statements and made decisions on pricing. And again, the Tribunal noted that Mr Schultz's evidence showed that the appellant worked in the position of floor manager of the shop (which comprised the business) but this did not satisfy it that the appellant had met the criteria in cl 845.216. 13 Another employee of the business who was a sales assistant gave evidence to the Tribunal of his understanding that the appellant was an owner. The Tribunal said that whilst the appellant opened and closed the business premises and was considered to be an owner, that was '...not compelling evidence ...' that he satisfied the criterion of maintaining a direct and continuous involvement in the management of the business from day to day and in making decisions that affected its overall direction and performance. 14 The Tribunal, having set out those facts, or assessments, then concluded that after considering the legislation, policy considerations and all of the evidence cumulatively, it was not satisfied that the appellant had met the criteria in cl 845.216. 15 The Minister relied on remarks of McHugh J in Re Minister for Immigration and Multicultural Affairs Ex parte Durairajasingham [2000] HCA 1 ; (2000) 74 ALJR 405 (and in particular I apprehend at 412-413 [35]-[36] and 416-418 [60]-[70]) that in effect the Tribunal in stating its reasons for decision was entitled to make findings of fact and was not required to go through line by line each item of evidence, or each relevant matter and deal with it in turn, accepting or dismissing it. So much may be accepted. 16 The Minister also argued that the decision required under s 65 of the Migration Act 1958 (Cth) ('the Act') was whether or not the Tribunal, standing in the shoes of the Minister as the decision-maker, was satisfied of the matters set out in the Regulations for the purposes of granting the visa for which the appellant applied. She contended that findings along the way were not ones which went to jurisdiction. 17 I am of opinion that it was not open to the Tribunal, on the basis only of the findings it set out, to find that a person in a single business that consists of running one retail trading shop who makes decisions daily about placing orders and pricing of goods offered for sale, and had done so for over one year prior to his application without any suggestion of supervision or control, did not have direct and continuous involvement in the management of that business from day to day or in making decisions that affect the overall direction and performance of that business. The Tribunal did not express any finding or reason for that ultimate conclusion, except that it did not find the evidence compelling. 18 The Tribunal's findings of fact do not explain or support its conclusion that the appellant did not satisfy the criteria in cl 845.216. It found that he was a co-owner of the business, albeit not a majority shareholder, a director, a person who appeared to have and to exercise authority to place the shop's orders for its merchandise and he made decisions about the pricing of that merchandise. Those findings showed that the appellant was as involved directly and continuously in the management of the business from day to day as one could be, and he actually made, on a daily and continuing basis, decisions that affected the overall direction and performance of that business. For a retail shop, in essence, has as the core of its activities little more than buying and selling merchandise, necessitating the placing of orders for that merchandise and deciding on the price at which it is to be sold on a daily basis. The Tribunal found the appellant was a shop or floor manager of the only shop or floor of the business. 19 The trial judge adopted the submission of the Minister that the Tribunal's approach to this issue was not a misconstruction of the requirements of a statutory criterion for the granting of a visa by applying a policy which was narrower than the criterion in cl 845.216, in contrast to Lobo v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 168 ; (2003) 132 FCR 93. Rather, his Honour, in adopting the Minister's submission, found that it was clear from the Tribunal's decision that it had applied the very words of the enactment (in the passages at [30]-[33] to which I have referred) and that the case was no more than a merits review, as opposed to an error going to jurisdiction. 20 I do not agree. The Tribunal's obligation was to conduct a review of the decision of the delegate (s 348(1)). In performing that review it had power to exercise all of the powers and discretions that were conferred by the Act on the person who made the decision (s 349). There was nothing in the findings or other material set out in its reasons that enabled it to come to the conclusion that it could not be satisfied on the issue of the appellant's involvement in the business. 22 In Minister for Immigration v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 346 [69] McHugh, Gummow and Hayne JJ referred to s 430 of the Act, a cognate provision of s 368. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law. If the decision did display these defects, it will be no answer that the determination was reached in good faith ... However, inadequacy of the material before the decision-maker concerning the attainment of that satisfaction is insufficient in itself to establish jurisdictional error. 27 In Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 627 [44] per Gleeson CJ and McHugh J, 656-657 [144]-[147] per Gummow J, 672-673 [194] per Callinan J, the distinction between a decision which the court finds no reasonable decision-maker could have come to and one which the court considers simply to be unreasonable, was discussed. The latter characterization involves a broad spectrum at the extreme end of which may be found decisions of the former category in the sense of unreasonableness of the kind recognized in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1 ; [1948] 1 KB 223 at 230. The existence of that spectrum reminds the courts that between its extreme ends are many categories of decision with which courts might not agree or which they could regard as unreasonable but which a reasonable person could have made. The latter category of decision is immunized from judicial review because the legislature has confided to the decision-maker the task of forming the opinion or arriving at the state of satisfaction on the materials before him or her. 28 In Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 42 Mason J noted that the Court should proceed with caution in cases where it was suggested that a decision-maker had erred by giving too much or too little weight to particular considerations '... lest it exceed its supervisory role by reviewing the decision on its merits'. He said that a close analogy existed between the judicial review of administrative action and appellate review of a judicial discretion. He pointed to the fact that in cases of the latter kind appellate courts could review discretionary judgments that had failed to give proper weight to a particular matter, but were slow to do so because the mere preference for a different result was not sufficient to disturb the exercise of the discretion by the judge at first instance (162 CLR at 42). 29 Administrative decision-making, of its nature, involves the formation of value judgments as to such matters as credibility, the strength or compellingness of the particular case, the importance of consistency in decision-making and the simple formation of the relevant opinion which the statute prescribes as the occasion for the exercise of the power. Thus, s 65 of the Act requires the Minister, as the decision-maker, to be satisfied of particular matters if she is to grant a visa. Value judgments are ones in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right: cp Norbis v Norbis [1986] HCA 17 ; (1986) 161 CLR 513 at 518 per Mason and Deane JJ; 540-541 per Brennan J; see too at 535 per Wilson and Dawson JJ. As Brennan J said, there is no difference in principle between the review of a judicial discretion and the review of an administrative discretion (161 CLR at 540). He pointed out that if a discretionary power were exercised in a way which a reasonable repository of the power might exercise it, that exercise of power is supported by the statute which conferred it, whether the discretion be judicial or administrative in nature. 30 Brennan J went on to point out that appellate courts were more familiar with the usual confines within which judicial discretions might be exercised and were therefore more sensitive to an unreasonable exercise of such a discretion and more confident of their ability to detect error in its exercise. This a feature of the rule of law which forms a fundamental assumption upon which the Constitution is based: Australian Communist Party v The Commonwealth [1951] HCA 5 ; (1951) 83 CLR 1 at 193 per Dixon J; Plaintiff S157/2002 v The Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 at 513-514 [103] - [104] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. The recognition by the Parliament, in statutory provisions like ss 368 and 430 of the Migration Act 1958 (Cth), that administrative decision-makers should give reasons for their decision and set out their findings, is a reminder to administrative decision-makers of an important aspect of the rule of law: namely, that they must provide the justification, in the reasons required by the statute to be given, for the exercise of the power with which they have been entrusted. And, the requirement to provide reasons is a means of ensuring that courts, when exercising the power of judicial review, are not obliged to approach their consideration of the exercise of the discretion in the same speculative way as in a case like Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26 ; (1949) 78 CLR 353 at 360. 32 The Tribunal expressly said that it had considered policy in arriving at its lack of satisfaction that the appellant had met the criteria of cl 845.216. Here, the Tribunal appears to have been misled by its reliance on the unlawful constriction which par 8.1 of the policy sought to put on the proper interpretation of cl 845.216 as held in Lobo v Minister [2003] FCAFC 168 ; (2003) 132 FCR 93. As their Honours held, a want of satisfaction of the criteria set out in the policy would not equate to a want of satisfaction of the criterion in cl 845.216. And an assessment by the Tribunal in which, as it said, it was required to have regard to that policy and apply it unless there were cogent reasons for departing from it, involves jurisdictional error because the Tribunal applied the policy rather than the criteria in cl 845.216 (132 FCR at 112 [63]-[69]. 33 As McHugh J pointed out, in Minister for Immigration and Multicultural Affairs v Durairajasingham [2000] HCA 1 ; (2000) 74 ALJR 405 at 417 [70] the requirements of s 368 are that the Tribunal give a written but not lengthy explanation of the decision already made. 34 I am of opinion that there was an absence of any reason, factual finding or reference to facts expressed in the Tribunal's reasons that could show that a person who had the duties and performed the functions of the appellant in the business during the period which the Tribunal was considering, namely the year prior to his visa application being lodged, did not satisfy the criteria of cl 845.216. 35 Having regard to the Tribunal's expressed findings and reasons, its decision on this issue was so unreasonable that no reasonable decision-maker could have come to it on the basis expressed in those findings and reasons. That is not to say that another tribunal could not come to the same decision, but if it did so it would have to apply the law correctly, make findings and give reasons which were capable of supporting the decision. 36 The question then is whether the error that I have found in the Tribunal's decision amounts to first, a jurisdictional error, and even if it does, whether I should grant relief in respect of it. The Minister argued that the error is not a jurisdictional error because it does not go to the ultimate question under s 65(1) as to whether the Tribunal was satisfied that the criteria prescribed for the visa by the Act or regulations had been satisfied. 37 At the very least the Tribunal's conclusion that it was not satisfied that the appellant had met the criteria in cl 845.216 ensured that he could not be granted the visa because s 65(1) so provided. The Tribunal was required to conduct its review according to law. And a failure to do so is a failure to follow the requirements which the Tribunal had to follow in order to come to a decision that could be valid. The Tribunal had an imperative duty to consider the criteria which the Act and Regulations prescribed and to form a view on those criteria for the purposes of conducting its review: see Plaintiff S157/2002 v The Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 at 506 [76] . It did not do so and committed a jurisdictional error for the reasons I have given. 38 The Tribunal made an error of law in that it did not correctly understand and apply the criteria in cl 845.216. Nor did it give any reasons for its conclusion in that regard. Each was a failure to conduct that part of the review in accordance with law, being a requirement to decide whether or not the appellant met the criteria for cl 845.216. And, this was also a jurisdictional error ( Lobo v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 132 FCR at 112 [64]-[65]). Under that clause a notice in the Gazette can establish the number of points required for the 'business skills points test' to be satisfied. The notice, for present purposes, required 105 points. It is not in issue that the appellant was entitled to 10 points by reason if his age (being between 50 and 55 years) and was entitled to 60 points because the business with which he was involved, in the 12 months immediately preceding the making of his application, met the criteria specified (in Div 1.4 of Schedule 7 in cl 7170). Accordingly, he had 70 points from those two criteria. He needed another 35 points to satisfy the test in the notice in the Gazette. 40 The Tribunal assessed appellant as being of limited ability in English and gave him 10 points for that item. It then found that it was not satisfied with the estimates of value which the appellant had given for his assets and was not satisfied he had net assets of more than $1.5 million at the hearing, but was satisfied of him having at least $500,000 worth. Accordingly it gave him 5 points for that item. He was thus 20 points short of what he needed to meet the points test. There is no issue that that policy, in this instance, had any disharmony with the requirements of the Act and Regulations. However, the appellant contends that he should have been assessed as having a functional ability in English, thus earning 20 points, and that the Tribunal committed a jurisdictional error in coming to a contrary conclusion by assessing him at the lower level of having limited liability. 42 The policy requirements for functional ability in English were set out by the Tribunal. They included requiring an applicant to be able at the very least, to read and understand English texts about familiar topics, and despite some errors, to write English well enough to communicate ideas or information for a variety of purposes. An applicant was also required to understand spoken English about familiar topics and, despite some errors, to speak English well enough to handle everyday communication adequately. 43 The policy also provided that if a person had attained particular educational qualifications they could be regarded as having the relevant functional ability in English. The appellant did rely on a Certificate IV in Business Studies given to him on 27 July 2001 by the New South Wales International College which stated that the qualification certified was recognized within the Australian qualification framework. There was no evidence as to what the requirements of the course were or how they related to any requirements in the policy. The policy did provide that a person could be regarded as having functional ability in English if, as prescribed in Reg 5.17 for Schedule 6 purposes, they provided evidence of having completed, in Australia, at least one year full time study, equivalent part-time study, towards a tertiary qualification at educational institutions where instruction was in English. (This requirement appears to reflect item 6311A in column 1 of Pt 3 of Schedule 6 of the Regulations which is prescribed pursuant to Reg 5.17(a). ) The Tribunal found that there was no evidence before it that the appellant had achieved any of those educational milestones. 44 I was not taken to any evidence, other than being referred to the certificate itself which could show that the Tribunal's finding on the appellant's lack of requisite educational qualifications was legally or factually in error. The Tribunal undertook an assessment of the appellant's ability in light of the legislation, policy considerations and available evidence. The Tribunal, as I have noted, had said that it would apply policy unless there were cogent reasons to the contrary. I infer that that is what it did in regard to this item. However, if the communication involves a more complex conversation outside his usual business, he may have a problem with listening and speaking. At the hearing the [appellant] did not speak in English. Mr Schultz stated at the hearing that he dealt with the accountant because of, amongst other things, the [appellant's] level of English. Submissions indicate that the [appellant's] English is at an appropriate level given that he works at Cabramatta and deals largely with Vietnamese speakers. The Tribunal's reasons should be read with a 'beneficial construction' ( Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 271-272). It appears to have found, as a fact, that it accepted the above submission that the appellant's English was at an 'appropriate' level given his occupation in Australia and its requirements. 48 Next the Tribunal made an ultimate statement of a conclusion in its reasons that after considering the legislation, policy considerations and available evidence it was not satisfied that the appellant had '... better than functional or functional English'. It found he had limited ability in English. 49 At the hearing, I formed an impression that this conclusion involved the Tribunal applying a test that the appellant had to have 'better than functional English' in order to obtain the 20 points for 'functional English'. After reserving judgment and having reflected on the matter, I am satisfied that the Tribunal's reasons do not reveal that it misapprehended the tests which it was applying in that regard. Although the Tribunal's acceptance of the submissions of the appellant that his English was 'at an appropriate level' raised a question as to whether or not that satisfied the requirements for 'functional English' under the points test, having regard to the terms of the submission, it was open to the Tribunal to find that the appellant did not meet the requirements of the policy. The Tribunal did not make any finding to suggest that the appellant's ability to read and understand English texts about familiar topics had been established to any level before it. 50 It follows that the Tribunal's ultimate finding, that it was not satisfied that the appellant had functional English, was open to it on the material before it. I am unable to detect that a jurisdictional error was committed by the Tribunal in arriving at this finding. That is not to say that another decision-maker, on the same material, might not come to a different view. However, this reinforces the fact that the Court would enter, impermissibly, into the area of merits review were it to uphold this ground on the basis argued. The Tribunal indicated that in his visa application the appellant had identified a number of assets and net values. At the hearing he had told the Tribunal that those figures were not accurate. The appellant had made a submission in February 2003 that he had assets, including some savings, in Vietnam estimated to be valued at well over $2.5 million. 52 The Tribunal said that the estimates of the value of the appellant's property in Vietnam had been informally calculated in handwriting. The estimates had not been prepared by a formally qualified accountant or a recognised land business valuer. The Tribunal said that the informal estimates were not compelling evidence of the value of any property owned overseas by the appellant or his wife. Prior to the hearing the Tribunal had written to the appellant, pursuant to s 359 of the Act, requesting that he provide a detailed statement that listed his and his wife's net assets at the date of the application (23 February 2001). The statement provided in response to that invitation included a document which bore a date in March 1999 showing that the appellant had total assets of slightly more half a million dollars. At the hearing before the Tribunal the appellant stated he had net assets which totalled in excess of $2.5 million. 53 The Tribunal said that the estimates provided by the appellant had differed substantially over time and the documentary evidence concerning their value at the date of his application was not compelling. It did not accept the estimates. Accordingly, it arrived at the conclusion that he had net assets of not less than half a million dollars, but less than the equivalent of $1.5 million and granted him 5 points (pursuant to item 7403 in Schedule 7 of the Regulations). 54 The trial judge does not seem to have considered expressly an argument relating to the total assets, although he did set out and adopt the background submissions of the Minister relating to how the Tribunal arrived at its assessment of those assets' value. However, no objection was taken before me that the ground was not open to be argued, and I have therefore considered it. 55 I can see no error of approach in the way that the Tribunal dealt with this matter. It was entitled to form a view as to whether or not what had been put to it by the appellant satisfied it as to the value of his assets. This was, as McHugh J said in the Minister for Immigration and Multicultural Affairs v Durairajasingham ((2000) 74 ALJR at 417 [67]) a finding on, inter alia, credibility or establishment of facts which was the function of a primary decision-maker par excellence. I do not consider that the Tribunal has been shown to have erred or not performed its function of review of the application in this respect. 57 The Minister has raised an issue of some difficulty. She says that the Tribunal may have erred in the way in which I have found, but that nonetheless even if one accepts that result, the application would be rejected on reconsideration by the Tribunal. That is because, even if the Tribunal formed a more favourable view on, first, the issue under cl 845.216 and then, secondly, on the language issue and awarded the appellant 10 more points, he would still be 10 points short of the 105 required to satisfy the points. 58 This raises a tension between a consideration of the way in which a court must assess the impact of a jurisdictional error that is found and its bearing on the overall decision. There are several reasons why it may be a dangerous process. First, there is the notorious difficulty of disentangling findings of fact from conclusions about applicable legal principle. Secondly, assuming that those difficulties can be surmounted, the findings of fact which the Tribunal makes after hearing and assessing the body of material and submissions will necessarily reflect the Tribunal's conclusions about applicable legal principle and will be directed to the questions that those principles present. For it to take, as its starting point, findings that were made on that earlier review under a misapprehension of applicable legal principles, may, indeed often would, skew the second factual inquiry by the Tribunal. 60 The Tribunal's function here, as the Minister pointed out, involved consideration of the situation at two points of time for certain matters. Under cll 845.21 and 845.221 some criteria, such as those under cl 845.216, had to be satisfied at the times of both the application and the decision. Additionally, under cl 845.22 further criteria had to be satisfied at the time of the decision. Under cl 845.222(2)(b)(ii) the appellant's score on the business skills points test is calculated as the sum of his scores, for present purposes, at the time when the application for the visa was made. Under cl 845.222(2)(c) certain assets only are to be valued or assessed for value in determining whether an applicant meets the points criteria under Pt 4 of Schedule 7 of the Regulations (see items 7401-7404). 61 The question of how the review, if one is ordered, is to be further conducted, would be a matter for a member constituting the Tribunal for the purposes of that review. In a similar context, a Full Court of this court recently considered, when a matter was remitted by the court, what the Refugee Review Tribunal was required to do when further conducting the review, and whether it was obliged to start afresh or was entitled to take account of what had already been looked at by the Tribunal, differently constituted on the earlier occasion, whose decision had been set aside by a consent order made by the court: SZEPZ v Minister for Immigration and Multicultural Affairs [2006] FCAFC 107. 62 I am of opinion that when a matter is remitted (under Div 4 Pt 5 of the Act) to the Tribunal for further hearing and determination according to law, similar reasoning applies. The way in which that review is undertaken is similar to the task of the Refugee Review Tribunal in like circumstances see: Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11 ; (2003) 215 CLR 518 and SZEPZ v Minister for Immigration and Multicultural Affairs [2006] FCAFC 107 (see esp at [35]-[36]). 63 In SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at 265 [231] - [233] Allsop J, (with whom Weinberg J agreed on this point at 150 FCR 252 [155]) considered the consequences of failure to comply with the operation of s 424A of the Act. He held that if it could be shown that there was a basis for the Tribunal's decision which could be seen to be entirely independent of a failure to follow the requirements of procedural fairness mandated by s 424A , then by analogy with the reasons of Gaudron and Gummow JJ in Re Refugee Review Tribunal Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at 108-110 [57] - [62] and, in particular at 109 [58], the court could withhold constitutional or prerogative writ relief in the exercise of its discretion. 64 The reasoning to which Gaudron and Gummow JJ were referring invoked the proposition stated by Lord Wilberforce that the court 'does not act in vain' ( Malloch v Aberdeen Corporation [1971] 1 WLR 1578 at 1595). While the Tribunal found that, on the evidence before it, the appellant did not qualify for the 105 points he needed to score, nonetheless, if I were to send the matter back, it would be open to the Tribunal to look at the whole matter afresh and to increase, or for that matter reduce, his points score. 66 The fact that the appellant had not satisfied the points test in each criterion in a decision which is set aside would be a matter that the Tribunal could take into account, if it had to complete its review, although it would be able to review the question afresh, as Gummow and Hayne JJ pointed out in Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11 ; (2003) 215 CLR 518. Indeed, in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 222 ALR 411 Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ held that a decision of the Refugee Review Tribunal was affected by jurisdictional error where the tribunal had reached a decision to refuse a visa to an applicant and had said that it had given no weight to a confidential letter. The visa applicant was ignorant of the existence of the letter which contained credible, relevant and significant material which was adverse to the visa applicant. The relevant inquiry is: what procedures should have been followed? The relevant inquiry is neither what decision should the decision-maker have made, nor what reasons did the decision-maker give for the conclusion reached. That error consisted of the Tribunal failing to accord natural justice to the visa applicant by informing him of the substance of what was in the letter and seeking his response. (The case was decided on the law prior to the enactment of s 422B: see 222 ALR at 414 [10]. The Tribunal was able to put the information aside from consideration in its reasons only because it reached the conclusion, on other bases, that the appellant was not entitled to a visa. But that step, of putting the information in the letter aside from consideration, could not be taken before reaching the conclusion that the application should be refused. It follows that to conduct the review with procedural fairness, the appellant had at least to know the substance of what was said against him in the letter. 69 If I ordered that a writ of certiorari issue to quash the original decision and directed a writ of mandamus to issue to command the Tribunal to hear and determine the matter according to law, it would not be bound to adopt the findings on the points test which the first Tribunal reached. How the Tribunal would complete the review in accordance with law will be a matter for it to determine. Of course, that involves the proposition that in completing the review the Tribunal is entitled to consider further evidence and submissions on any aspect or aspects of the review it has conducted. It is entitled to reach different conclusions, if it were minded to do so on the material before it, about other matters that may have already been found in the appellant's favour. 70 In SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162 at 183-184 [80] , 211-212 [210]-[211] McHugh and Hayne JJ respectively considered whether and to what extent the court could withhold relief in cases where the jurisdictional error had been established. The decision to issue to constitutional writs or a writ of certiorari is, of course, discretionary. McHugh J pointed out, as the Minister put in her submissions, that discretionary relief may be refused if an applicant has in fact suffered no injustice because, for example, the statutory regime compelled a particular outcome (215 ALR at 184 [80]). 71 I am of opinion that there was some relationship between the Tribunal's findings about the appellant's degree of involvement in the business and his language skills. In particular the Tribunal referred to the difficulties he had in the interview with the Department, which was conducted without an interpreter, in considering both the issues under cl 845.216 and the language component of the points test. The Tribunal found that the appellant did not demonstrate to it that he understood and spoke English at a level which would have allowed him to understand questions in English, and therefore accepted that he had difficulties in understanding questions asked of him at the Departmental interview . As the trial judge observed '... the issue was not dealt with as clearly as one might like' in the reasons of the Tribunal even though there was no jurisdictional error established on this point. The rule of law requires no less. The sole question is whether the finding by the Tribunal that the appellant had not satisfied it as to the points test is such as mandates that any reconsideration by the Tribunal must result in the same ultimate decision to affirm the decision not to grant the visa. 74 I am of opinion that the Tribunal's findings on the points test issues are part of the merits which it can revisit or not as it sees appropriate, if it is ordered to conduct the review according to law. It would be for the Tribunal to make its own decision as to whether or not it was satisfied as to any such matters on a review, albeit that it may well feel that it does not wish to revisit the matter. Alternatively, it may feel that, having regard to the jurisdictional error that has been found, it ought to do so. The Court cannot compel the Tribunal to adhere in the future to any particular state of satisfaction which it expressed previously in its reasons. 75 The Tribunal did not conduct a review of the delegate's decision in accordance with law, albeit that the appellant did not satisfy the Tribunal, as then constituted, that he met the points test criterion. 76 Prima facie, if the matter were returned to the Tribunal it would be open to the Tribunal, for example, to adhere to its findings on the value of the appellant's assets but to award him 30 points for having a better than functional ability in English, and thereby granting him, in addition to the other points which the Tribunal may consider no longer remain in issue, 105 points. 77 After I had begun delivering lengthy ex tempore reasons at the conclusion of the hearing, I formed the opinion that I was not able to decide the appeal without further assistance. Accordingly, I reserved my decision. I withdraw any oral reasons. As I have noted above, I was then of the view that the Tribunal had made two jurisdictional errors, one in respect of cl 845.216, the other in respect of the appellant's English language. In that context I directed the parties to make any further submissions about whether the grant of relief would be futile because, even if the language issue were revisited the appellant had no realistic prospect of obtaining the 20 extra points he needed: cf: Kumaraperu v Minister for Immigration (1998) 88 FCR 381 at 396G per Weinberg J and Peng v Minister for Immigration [2000] FCA 1672 ; (2000) 105 FCR 63 at 67 [14] per Hely J. 78 Both parties put in supplementary written submissions indicating that on the above basis it would not be futile to remit the matter to the Tribunal because it was theoretically possible that, however improbable, the appellant could score the extra 20 points by satisfying the Tribunal that he had better than functional English. 79 If I remit the matter, notwithstanding the different opinion I have formed since reserving judgment concerning the Tribunal's approach to the language issue, it seems to me that in principle it is still theoretically possible for the Tribunal to revisit that finding having regard to the way in which the finding is susceptible of the criticisms above, although they do not amount to a jurisdictional error. And, for the reasons that I have given, I do not see that the Tribunal's consideration of the appellant's language abilities was undertaken entirely separately from the consideration of his involvement in the business under cl 845.216. 80 I am not satisfied that the appellant has suffered no injustice ( SAAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 215 ALR at 184 [80], 203 [170], 212 [211]) having regard to the jurisdictional error I have found and to the fact that on reconsideration he may be able to satisfy the Tribunal conducting the review in accordance with law of the matters which it had previously not been satisfied about under the points test. I am not confident that the jurisdictional error I have found could have had no bearing on the outcome and thus I should not refuse relief: Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141 at 145, 147. 81 In those circumstances I am of opinion that the appeal should be allowed. | migration judicial review determination of migration review tribunal refusal of grant of business skills visa whether determination by tribunal irrational, illogical or not based on findings or inferences of fact supported by logical grounds jurisdictional error vitiating decision discretion of courts and matters precluding relief remission to tribunal potential for futility review of decisions decision migration review tribunal refusal of grant of business skills visa visa grant criteria misconstruction or misapplication of, or failure to apply assessment according to departmental policy as assessment for the purposes of visa grant criteria policy narrower than visa grant criteria jurisdictional error vitiating decision migration regulations 1994 (cth) , sch 2, cl 845.216 application of business skills points test whether tribunal erred in application of points test migration regulations 1994 (cth) sch 2 cll 845.21 and 845.22 administrative law migration |
The Tribunal had affirmed a decision of a delegate of the first respondent, the Minister for Immigration and Citizenship who formed the view that the appellant is not a person to whom Australia has protection obligations under the Convention Relating to the Status of Refugees 1951 , amended by the Protocol Relating to the Status of Refugees 1967 (Convention) and accordingly refused to grant a protection visa on 23 June 2008. On 2 April 2008, the appellant lodged an application for a protection visa with the Department of Immigration and Citizenship. A delegate of the first respondent refused the application for a protection visa on 23 June 2008. On 23 July 2008, the appellant applied to the Tribunal for a review of that decision. The appellant claimed to fear persecution in China as a Christian who practised in an underground church. He came to Australia as an overseas student on 29 August 2004 but returned to China on 9 July 2007, due to the death of his grandfather. While he was in China he was notified that his Australian student visa had been cancelled. He claimed that this caused some pressure in his home town as the locals thought he had been sent back by the Australia government. He stated that he moved to another province where he worked as a construction labourer. Here, he became aware of the plight of AIDS sufferers through a co-worker and enlisted the help of volunteers from Fujian to collect donations for AIDS victims and to establish a bible study group. On 24 February 2008, the appellant and his volunteers were surrounded by the Police and accused of holding an illegal religious gathering. Five of the volunteers were arrested as well as about 10 locals; however, he was able to flee to another province where he hid for one month. He claimed that the police went to his home village three times to try to arrest him, and that he is wanted by the Police for spreading religious propaganda materials and being the founder and key member of an illegal religious organisation. In making this finding the Tribunal noted a number of significant inconsistencies in his evidence, including the number of volunteers that assisted him and the number of people that were arrested by the Police. The Tribunal also found that his travel between Hong Kong and another province prior to leaving China for Australia was inconsistent with his claimed fear of harm. The Tribunal further noted that the appellant's evidence that there were no churches in Henan was inconsistent with independent country information before it. The Tribunal was satisfied that the appellant was prepared to fabricate his material claims to invoke refugee protection obligations in Australia. Based on its adverse credibility finding, the Tribunal rejected all of the appellant's material claims, concluding that he did not have a well-founded fear of persecution. The hearing was conducted on 4 September 2007. On 3 October 2007, before the decision was made, the Tribunal gave particulars of information pursuant to s 424A of the Act. The letter outlined particulars of information that were inconsistent with the appellant's claims to the Tribunal. He included particulars of inconsistent evidence he provided to the Department, information (namely dates) from his various travel documents and independent country information that was at odds with his claims: AB 92-97, AB 127-130. On 16 October 2008, the appellant responded to that letter by providing a statutory declaration: AB 98-100, AB 130-132, [85] --- [93]. The Tribunal affirmed the delegate's decision on 8 December 2008 and made a number of findings, including material adverse credibility findings that it: The specific inconsistencies and deficiencies identified by the Tribunal in the appellant's evidence to support its adverse credibility finding included the following: Significant inconsistencies concerning the number of volunteers with whom he travelled, how many were arrested during the police incident (AB 137, [120] --- [122], and the number of the applicant's brothers suffering from AIDS: AB 139, [134]. The appellant's explanations for his travel prior to leaving China was 'not credible' and contained an inconsistency. Also, the fact that he did not depart China on his own passport when he had a valid visa for another country was 'inconsistent' with his claimed fear of harm in China: AB 137, [123] --- [124]. Accepted that the appellant had given evidence at his Departmental interview and at his Tribunal hearing that there were no churches in the city in question but did not accept his subsequent attempt to clarify this evidence. It found his evidence was neither credible nor consistent with independent information: AB 137 --- 138, [125] --- [130]. Found the appellant had given an untrue answer in his protection visa application when he stated he had trouble obtaining travel documents in China as he already held a passport in his own name and had travelled to Australia previously on that passport: AB 138, [131]. Did not accept the appellant's claimed nervousness as an explanation for the inconsistencies in his evidence: AB 138, [132]. (2) The Tribunal failed to comply with its obligations under s 424A(1) of the Act. (3) The Tribunal failed to consider my claims properly and fairly. The Tribunal's finding has included a reasonable apprehension of bias. 2. The Tribunal failed to comply with its obligations under s 424A(1) of the Act. 3. The Tribunal failed to consider my claims properly and fairly. It is relevant then to examine His Honour's reasoning in discussing each ground on this appeal. The Tribunal reaches no conclusion that it was for such a reason that the applicant obtained and used a fraudulent passport. However, the Tribunal is also not satisfied on the evidence that the fact that the applicant used a fraudulent passport means that it should accept at face value his claim that he did so because this was the only way that he could leave China. More generally, His Honour found (at [19]) that the Tribunal's decision record did not disclose material from which it could be concluded that a fair-minded lay observer properly informed as to the nature of the proceedings, the matters in issue and the conduct which is said to give rise to an apprehension of bias might reasonably apprehend that the Tribunal might not have brought an impartial and unprejudiced mind to the resolution of the question it was required to decide: Johnson v Johnson [2000] HCA 48 ; (2000) 201 CLR 488 and Re Refugee Review Tribunal; Ex parte H [2001] HCA 28 ; (2001) 179 ALR 425. Nor could it be concluded that the Tribunal approached the exercise of its jurisdiction with a state of mind so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments might have been presented: Minister for Immigration & Multicultural Affairs v Jia [2001] HCA 17 ; (2001) 205 CLR 507. I can detect no error in this reasoning of the Federal Magistrate. Nor can any other evidence of actual or apprehended bias be found in the decision-record of the Tribunal. The Tribunal's observation was open to it as part of its role as the sole arbiter of the facts. The Tribunal is not bound uncritically to accept any and all allegations made by an applicant (see Randhawa v Minister for Immigration, Local Government and Ethnic Affairs [1994] FCA 1253 ; (1994) 124 ALR 265 at 278). In any event, as the Federal Magistrate found correctly, this passage formed no part of the basis for the Tribunal's decision under review: AB 156, [18]. As such, it falls far short of the necessary requirement to establish an allegation of bias. Where credibility is in issue, the Tribunal member must test the evidence presented, sometimes vigorously (see Re Refugee Review Tribunal; Ex parte H [2001] HCA 28 ; (2001) 179 ALR 425 at 434 --- 435 at [30]). The requirements of procedural fairness will often require that an applicant be plainly confronted with matters that bear adversely on their credit or bring their account into question. Furthermore, the decision-maker's assessment of an applicant's credit will often depend on their demeanour and the manner in which they give evidence (see Re Refugee Review Tribunal; Ex parte H [2001] HCA 28 ; (2001) 179 ALR 425 at [34] ). To the extent that this ground is an allegation of actual bias, the appellant has not met the requirement that this serious allegation be firmly and distinctly made and clearly proven (see Minister for Immigration and Multicultural Affairs v Jia [2001] HCA 17 ; (2001) 205 CLR 507 at 531). In the absence of any evidence, such as a transcript of the Tribunal hearing, the ground cannot be established and the material before the Court failed to provide any foundation for a claim that the Tribunal approached the matter with a closed mind or did not conduct its review in good faith. In the circumstances, it was not unreasonable for the Tribunal member to have pressed the appellant as to whether his real reason for wanting to come to Australia was to be reunited with his parents. In response to this allegation, the Federal Magistrate firstly noted (at [23]) that, contrary to the appellant's claim, the Tribunal did consider material contained in his reply to its s 424A notice, which were summarised by the Tribunal at [90] of its decision record. Further, the Tribunal discussed this aspect of his evidence in its decision and reasons (see [112]-[116]). His Honour also found that, in any event, whether or not the Tribunal relied on particular information at its disposal was a matter for it as part of the reasoning process associated with making its decision. In this case, the matter complained of by the appellant related to the Tribunal's analysis of the evidence and the inconsistencies in that evidence - these were not matters which met the definition of "information" for the purposes of s 424A ( SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 ; (2007) 235 ALR 609) , and thus the Tribunal was not required to make its letter of 11 November 2008 comply with the requirements of s 424A. The particulars supporting the alleged breach of s 424A take issue with the fact that the appellant maintained to the Tribunal that he did not give evidence to the delegate that there were no churches in the city in question and he brought the church from another city to the city in question and that this evidence was the result of inadequate interpreter services. The particulars of the information the appellant was invited to comment upon were contained in the Tribunal's letter sent on 3 October 2008: AB 93 --- 97. The appellant responded to this letter in his statutory declaration of 16 October 2008 in which he maintained that he had never received a copy of the recording of his departmental interview: AB 101, 102. Although no request was made, the Tribunal decided to provide the appellant with copies of the CD's of the delegate's interview and to extend the time in which he could make comments in relation to the information given to him by the Tribunal's initial s 424A letter of 3 October 2008. The 11 November 2008 letter did not provide any particulars of any new information to the appellant about which it invited comments or a response. Instead, the letter referred to the information already given to the appellant by the Tribunal's letter of 3 October 2008. The Tribunal's letter of 11 November 2008 provided the appellant with an abundance of procedural fairness and no breach of any mandatory statutory requirements which attached to that letter was established by the appellant. Nor did the Federal Magistrate accept the appellant's claim in oral submissions (repeated before this Court) he never received a copy of the CD containing the recording of the Departmental interview. His Honour observed (at AB 159 , [26] --- [27]) that the particulars to the second ground of review confirmed that the appellant had "carefully listened to the recording of the Departmental interview" and annotations on the Tribunal's letter to the appellant's agent noted that the two CDs were enclosed: AB 105. In the light of these notations, this finding reveals no error. I can detect no error in the reasoning of the Federal Magistrate in relation to the alleged breach of s 424A(1) of the Act. The Federal Magistrate noted that the appellant had not led any evidence which could lead the Court to the conclusion that there was any deficiency in those services. In all the circumstances, His Honour was not satisfied that the appellant had demonstrated that there was any material inadequacy in the interpreter services provided to him at the Tribunal hearing. No error is apparent in the Federal Magistrate's findings. In the absence of evidence such as a transcript of the Tribunal hearing and in the face of direct evidence that the level of interpreter services was inadequate, none of which was before the Federal Magistrate or this Court, the appellant has failed to establish that: The Tribunal plainly considered the appellant's contention that he never gave the evidence in issue at this Departmental interview, but rejected this for the reasons it gave at AB 137 --- 138, [125] --- [130]. As to the other matters raised by the appellant's response to the Tribunal's s 424A notice of 3 October 2008, the Federal Magistrate found that this was merely an attempt by the appellant to seek merits, not judicial, review of the Tribunal's decision. His Honour found that the findings which the Tribunal made were open to it on the evidence, and as such, the Court was not empowered to review them. His Honour further noted that, in any event, it was apparent from the Tribunal's decision that it paid considerable regard to the evidence given by the appellant at various stages of his protection visa application process, including the material contained in his response to the s 424A notice. Consequently, it could not be concluded that the Tribunal did not undertake an adequate and impartial review. I agree with the observations of the Federal Magistrate in this regard and can detect no error in this reasoning in relation to the allegation that the Tribunal failed to consider his claims properly and fairly. Nor can any other error be detected in the decision of the Tribunal. The Tribunal identified with considerable particularity all of the appellant's claims and supporting material before it; explored his claims with him at a hearing; raised with the him the inconsistencies in his evidence and doubts over his claims (both at the hearing and in letters dated 3 October 2008 and 11 November 2008); made detailed findings based on the evidence and material before it; and applied the correct law to its findings in reaching its conclusion that it was not satisfied that the appellant was a person to whom Australia has protection obligations under the Convention. To the extent that the grounds of appeal seek to re-agitate the same complaints raised before the Federal Magistrate, they cannot succeed because the findings of the Federal Magistrate demonstrate no error for the reasons outlined above. As already noted, the Tribunal essentially took an adverse view of the appellant's credibility based on a number of the inconsistencies and deficiencies in his evidence identified above. While the appellant has implicitly sought to challenge those findings by asserting that the Tribunal was affected by apprehended bias, breached s 424A and failed to consider his claims properly and fairly, the findings remain. The Tribunal's conclusion that the appellant was not credible is a classical finding of fact (see Re Minister for Immigration and & Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407). It is also recognised that in determining whether an applicant has a "well-founded" fear of persecution, a tribunal may need to resolve questions of credit, attribute weight to particular evidence and consider the inherent improbability of events (see Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 281 --- 282). The Tribunal was not obliged to ask any particular question of the appellant, and the weight to be given to his claims was a matter for the Tribunal to assess as part of its fact-finding function. It is not for this Court to conduct a review of the merits of the Tribunal's decision (see Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; 185 CLR 259 at 272) and there is no error of law, let alone a jurisdictional error, in the Tribunal making a wrong finding of fact (see Abebe v Commonwealth (1999) 197 CLR 510). It is recognised that it is very difficult for an appellant whose basic credibility has been found wanting in tribunal proceedings to recover from that finding in subsequent reviews. However, it should be observed that in this case the Tribunal took special care to ensure the appellant had every opportunity to fully explain his position and his evidence. The Tribunal discussed with him at the hearing the doubts and concerns it had with his evidence and the credibility of his claims. It also sent a letter to the appellant after the hearing on 3 October 2008, outlining the matters that caused the Tribunal concern about the appellant's credibility and which it considered could be the reason or part of the reason for affirming the decision under review. Some of the matters contained in that letter were not strictly matters required by the operation of s 424A of the Act. However, the Tribunal may, out of an abundance of caution or concern for fairness, put a particular line of reasoning to an applicant in circumstances where s 424A has no application (see SZGIY v Minister for Immigration and Citizenship [2008] FCAFC 68 at [30] ). It is also clear from the appellant's response to the s 424A letter that he understood the Tribunal's concerns and took the opportunity to provide comments by his statutory declaration. The appeal should be dismissed with costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | appeal from federal magistrate no jurisdictional error appeal dismissed migration |
A Tribunal Member conducting the inquiry is not an adversarial cross-examiner, but an inquisitor obliged to be fair. In an application for review before the Tribunal, it is for the applicant to advance whatever evidence or argument he wishes to advance, and for the Tribunal to decide whether his claim has been made out. It is not part of the function of the Tribunal to seek to damage the credibility of an applicant's story in the manner a cross-examiner might seek to damage the credibility of a witness being cross-examined in adversarial litigation. 6 The Tribunal conducting an inquisitorial hearing is not obliged to prompt and stimulate an elaboration which an applicant chooses not to embark upon (see per Gummow and Heydon JJ in Re Ruddock (in his capacity as Minister for Immigration and Multicultural Affairs); Ex parte Applicant S154/2002 (2003) 201 ALR 437 at [57] --- [58]; see also SZFDE v Minister for Immigration and Citizenshi p (2007) 237 ALR 64 at [30]). 7 As was pointed out in Minister for Immigration and Multicultural and Indigenous Affairs v SCAR [2003] FCAFC 126 ; (2003) 128 FCR 553, the relevant provisions of the Act do not require that the Tribunal actively assist an applicant in putting his or her case, nor does it require the Tribunal to carry out an inquiry in order to identify what that case might be. 8 In relation to a hearing before the Tribunal, it is clear that the Tribunal should afford an opportunity to give evidence and present arguments relating to the issues arising in respect of the decision under review. Procedural fairness does not require the Tribunal to give an applicant a running commentary upon what it thinks about the evidence that is given. On the contrary, to adopt such a course would be likely to run a serious risk of conveying an impression of pre-judgment (per Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs ( 2006) [2006] HCA 63 ; 231 ALR 592 at [48] ). The use of the future conditional tense (would be) rather than the indicative strongly suggests that the operation of s 424A(1)(a) [was] to be determined in advance --- and independently --- of the tribunal's particular reasoning on the facts of the case. However broadly "information" be defined, its meaning in this context is related to the existence of evidentiary material or documentation, not the existence of doubts, inconsistencies or the absence of evidence. They pointed out that the appropriate criterion in respect of a protection visa was to be found in ' s 36(1) ' (sic) of the Act. The "reason, or a part of the reason, for affirming the decision that is under review" was therefore that the appellants were not persons to whom Australia owed protection obligations under the Convention. When viewed in that light , [the operation of s 424A(1)(a) having to be determined in advance --- and independently - of the tribunal's particular reasoning on the facts of the case] it is difficult to see why the relevant passages in the appellants' statutory declaration would itself be "information that the tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review". Those portions of the statutory declaration did not contain in their terms a rejection, denial or undermining of the appellants' claims to be persons to whom Australia owed protection obligations. He has been identified for the purposes of these proceedings as SZIVM. The application for a protection visa indicates that the appellant was born in Henan in the People's Republic of China on 29 September 1960. 14 On 28 February 2005 a passport was issued in the name of 'LGQ'. On or about 16 August 2005 a temporary business visa was issued by the Commonwealth of Australia, which was endorsed on that passport, allowing entry into Australia for a period of three months. On or about 24 August 2005, the passport was endorsed with a Hong Kong entry permit. 15 On 26 August 2005 the appellant arrived in Melbourne having travelled on the passport to which reference has been made. 16 The appellant's application for a Protection (Class XA) visa was lodged on 5 October 2005. On 23 November 2005 the Minister's delegate refused to grant a visa to the appellant. On 23 December 2005 he applied to the Tribunal for a review of that decision. He was invited to, and attended, a hearing before the Tribunal on 15 February 2006. 17 On or about 13 February 2006 the appellant forwarded a letter to the Tribunal by facsimile which included an assertion that the appellant's real name was not as indicated on the passport. It asserted that his real name was another name and that he was born on 20 August 1972. He provided names for his wife and asserted that he had a son bearing his surname and a daughter bearing his surname, that surname being a different name from that which was included in the passport and in the application for a protection visa. 18 On 17 March 2006 the Tribunal as then constituted decided to affirm the decision of the Minister's delegate to refuse the application for a protection visa. That decision was handed down on 6 April 2006. 19 On 21 September 2006 Lloyd-Jones FM made orders by consent quashing the decision of the Tribunal of 17 March 2006, and ordering that the Tribunal reconsider the matter according to law. 20 On 25 October 2006 an invitation was extended to the appellant to attend a hearing before the Tribunal on 7 December 2006. A further communication was sent to the Tribunal requesting a rescheduling of the hearing, and on 24 November 2006 the new hearing date of 22 December 2006 was fixed. 21 In the Tribunal's invitation of 25 October 2006, the Tribunal informed the appellant that it had considered the material before it in relation to his application, but was unable to make a decision in his favour on that information alone. He was invited to come to a hearing of the Tribunal 'to give oral evidence and present arguments in support of [his] claims'. He was also advised that he could ask the Tribunal to obtain oral evidence from another person or persons. 22 On 22 December 2006 the appellant attended a hearing before the Tribunal, which lasted from approximately 1:35 pm until 3:25 pm on that day. Thereafter, on 16 January 2007 the Tribunal decided to affirm the decision of the Minister's delegate to refuse the appellant's application for a protection visa. That decision was handed down on 27 February 2007. 23 An application for review of that decision was filed in the Federal Magistrates Court of Australia on 3 April 2007. It was heard by Driver FM on 8 August 2007, his Honour ordering that the application be dismissed and that the appellant pay the respondent Minister's costs in the amount of $5000. 24 On the hearing of the application in the Federal Magistrates Court of Australia, it would appear that an affidavit of S.M. Bragg was read, which attached a transcript of the hearing in the Tribunal on 22 December 2006. The transcript is, needless to say, expressed in the English language and during the course of the hearing of the appeal I have invited the interpreter to interpret large passages from that transcript to ensure that there was no misunderstanding in the mind of the appellant about what was there in relation to the alleged change of identity. 25 In the course of his oral submissions, the appellant said that he had asked the Tribunal to make further investigation about his true identity and the Tribunal said words to the effect, 'that is unnecessary'. I have been unable to find anything in the transcript to support the submission that the Tribunal said that further investigation concerning the appellant's true identity was 'unnecessary'. So I want to say when this passport was handed in for visa application in China the photo on it was not mine and you can even check that out on the web. 27 The grounds of appeal specified in the Notice of Appeal are two in number, and bear a strong resemblance to those specified in the application for Constitutional writ relief filed by the appellant in the Federal Magistrates Court of Australia. The applicant claims that he (sic) RRT acted capriciously and arbitrarily and formed its assessment of satisfaction on illogical reasoning. The current Tribunal repeated the error that the previous Tribunal made. The current Tribunal made an incorrect conclusion about the applicant's identity. The applicant claimed to be Mr [Z...Y...] but entered Australia using a fraudulent passport showing the name of [L... G...] . The Tribunal failed to accept the various documents the applicant has provided to support his true identity. The Tribunal failed to undertake further examination to verify the applicant's true identity despite the applicant has (sic) asked the Tribunal to do so. That finding was significantly influenced by the late provision to the earlier Tribunal hearing of the claim in respect of identity, to which reference has been made. The Tribunal found that the first claim of a different identity was one which was made two days before the earlier Tribunal hearing. Given that the Tribunal does not consider that the applicant is a truthful witness it finds that these documents are not reliable evidence of the facts in/portrayed in them. The Tribunal finds that he invented the claim about his identity to assist his application for protection in that it would serve to explain how he managed to leave China on the passport that he presented to the Tribunal in his own name. 30 It seems to me that it was entirely open to the Tribunal to reach the conclusion which it did with respect to the design of the appellant in relation to the submission of the claim in respect of substituted identity. 31 The appellant has not correctly summarised what transpired at the Tribunal hearing when he asserted that he had asked for further investigation to be made by the Tribunal about his true identity and about the Tribunal responding with words to the effect that that was unnecessary. 32 As has previously been pointed out in these reasons, it was not for the Tribunal to actively assist the appellant in putting his case, and it was for him to advance whatever evidence he wished to advance in support of his claim for a protection visa. It was no part of the Tribunal's role to undertake an investigation for him in the manner that he suggested. The applicant claims that The (sic) RRT failed to afford the applicant procedural fairness. The current Tribunal failed to give the applicant information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review and the Tribunal failed to invite the applicant to comment on it. By failing to do so the Tribunal breached the Section 424A(1) of the Migration Act 1958 . The current Tribunal rejected the applicant's claims about his second daughter who could not be registered in China. The Tribunal rejected this claims (sic) because the Tribunal thought it was a recent invention by the applicant to assist his application. The Tribunal failed to invite the applicant to comment why he had not made such claims earlier. It is also abundantly clear that doubts and concerns which the Tribunal may have had about the genuineness of the appellant's claim concerning his second daughter were not matters which came within the reach of s 424A(1) of the Act. 35 When I asked the appellant to address me on the second ground of appeal, he indicated that he was not familiar with Australian law. It was apparent to me that he had no knowledge whatsoever of s 424A(1) of the Act. His explanation for the ground appearing in the Notice of Appeal was simply that he asked a friend to have a look at it [referring to the second Tribunal decision] and his 'friend' said that the Tribunal had breached s 424A. I am satisfied that it did not breach that section. He told this Tribunal that he has told no one else this before. To the extent that the applicant is claiming that he/his family member is/was persecuted in China for this reason the Tribunal finds that this claim is recent invention to assist his application for protection. In the Tribunal's view if this claim were genuine he would have made it before this Tribunal hearing and his oral evidence to the Tribunal is that he did not. There is no plausible evidence before the Tribunal that the applicant has a second daughter as he claims. 38 The Tribunal concluded that it did not accept that the applicant left China and/or fears to return there for the reasons which he claimed. In his application for a protection visa, the applicant had essentially indicated that in about 1995 he became associated with the underground Christian group in China known as Hu Han Pai, also known as the 'Shouters' group. His claim had been that he had an involvement in that group for a period of perhaps one year, following which there was a long period when 'we did not practice because the local government kept monitoring us'. The appellant's case was that he had in 2004 re-organised a small group consisting of four people 'all from the company I worked for'. He gave them copies of his Bible and other publications. Two of us were detained. I and one other member were not in the office and we ran away after hearing the news. 40 Not only do the grounds of appeal fail, it seems clear that it was open to the Tribunal on the material before it to conclude that the appellant did not have a well-founded fear of persecution for reason of religion. 41 In my opinion the appeal should be dismissed with costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | tribunal's role and responsibilities limited scope of obligations under s 424a(1) of the act migration |
Various grounds have been raised in opposition by a number of the respondents. Most have been resolved. Ultimately the grounds of opposition that remain are quite limited. They are advanced only by the fifth, sixth and seventh respondents. 2 In addition to opposing the proposed amended statement of claim, the fifth, sixth and seventh respondents seek summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) (FCA). 3 Relevantly the claim by the applicant as trustee of the bankrupt's estate is that the first respondent (Mr Spencer) held certain property (the property) on trust for the bankrupt and that the beneficial ownership in the property has consequently vested in the applicant as trustee. (There are alternative claims but that is the only claim which is presently under attack). 4 These respondents have been joined as they claim to hold an interest in the property by way of a fixed charge. The applicant contends that the charge is void as being a transfer of the property at an undervalue under s 120(1) of the Bankruptcy Act 1966 (Cth) (BA). The expression 'transfer of property' is given an extended meaning by s 120(7)(b) BA. Accordingly a person 'who does something that results in another person becoming the owner of the property that did not previously exist is taken to have transferred the property to the other person'. The effect of that Deed was that Mr Spencer acknowledged that he was indebted to these respondents in the principal sum of $100,000 plus interest. 8 Essentially the arguments of these respondents is that given that it is pleaded that Ladell and thereafter Mr Spencer were the registered proprietors of the property, there is no basis on which it can be alleged that the bankrupt (as opposed to Ladell or Mr Spencer) transferred the property, that is, by creating the Paterson Charge. For the purposes of the argument, it is accepted that the bankrupt controlled Ladell so while no issue is taken for present purposes concerning the bankrupt's control of Ladell, the question is how Mr Spencer as registered proprietor at the relevant time could effect a transfer by the bankrupt. The argument raised is that even assuming for present purposes the correctness of this assertion, there is no basis at law upon which the bankrupt as beneficial owner of the property (under a bare trust) actually 'did something' that 'results' in the charge over that property within the meaning of s 120(7)(b) BA. 9 The applicant's answer is that it is pleaded that Mr Spencer not only held the property on trust for the bankrupt but that he also acted in relation to it, exclusively at the instruction and direction of the bankrupt. 10 Central to the applicant's claim against these respondents is the pleading that Mr Spencer at all times acted on the instructions and at the direction of the bankrupt. This is said to have taken place pursuant to the oral Front Man Agreement. Accordingly the applicant argues that all of the actions taken by Mr Spencer were taken for the bankrupt. It is said that Mr Spencer was a bare trustee acting in accordance with his direction and instruction. 12 There are slightly differing views in relation to the extent to which the Court should enquire into the merits of a matter in circumstances where a question of law will decide the issue. See for example the Full Court in Jefferson [2008] FCAFC 60 ; 167 FCR 372 at [23] per Finkelstein J and at [34] per Rares J compared with Gordon J at [128]-[131]. 13 The law on s 31A FCA has been exhaustively analysed. While there is no doubt that the bar has been lowered for summary dismissal, it is still a serious matter to dismiss a proceeding at an early stage. None of those cases would suggest otherwise. To those I would also adopt the observations of Graham J in J F Keir Pty Limited v Sparks [2008] FCA 611 at [9] - [15] and Gilmour J in Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955. It is clear that, despite the bar being lowered, the Court should approach the question of summary dismissal with considerable caution. For all the reasons expressed in these authorities, as I apprehend it, the lowering of the bar or relaxing of the standard was intended only to give a power which the Court may exercise in the more obvious instances. 14 The respondents submit that the transfer of the property must be 'by' the bankrupt. The transfer in this instance, they argue, was not by the bankrupt for two reasons. First, it was not owned by the bankrupt. Secondly, the act was carried out by Mr Spencer rather than by the bankrupt himself. 15 The respondents do accept that to give a charge over property is to 'transfer' property within the extended meaning of s 120(7)(b) BA: Peldan v Anderson [2006] HCA 48 ; (2006) 227 CLR 471 at [23] - [26] . However they stress that it must be the bankrupt who 'does something' that results in the charge. The respondents contend that as the bankrupt was not the owner of the property at the relevant time, there was not therefore even arguably a transfer of the property 'by' the bankrupt within the meaning of s 120(1) BA. 16 Of some importance in the argument advanced by the respondents is that Mr Spencer was not acting as an agent for the bankrupt but acting as his trustee. Counsel for the respondents accepted in argument that an agent could relevantly execute a transfer of a bankrupt's property for the purpose of s 120 BA. He contended, however, that the position of the trustee was different. 17 In my view that distinction is, with respect, one of some considerable subtlety for the purpose of a dismissal motion under s 31A FCA. Further, it is a subtle distinction on a statutory construction point in respect of which there seems to be no direct authority. Further, one needs to add to the trustee relationship, the ingredients of the Front Man Agreement, if it be established. 18 The respondents also argue that even if the bankrupt was the beneficial owner of the land at the relevant time when the Paterson Charge was granted and the Charge was granted at his instruction and direction, he did not 'do anything' that resulted in the charge over the property. For this submission, the respondents draw on a passage in Peldan [2006] HCA 48 ; 227 CLR 471 at [25] - [30] . Reliance is also placed on In the matter of Rose, a bankrupt; Whitton v Regis Towers Real Estate Pty Ltd (in administration) [2006] FCA 1553 at [156] - [161] upheld on appeal in Whitton v Regis Towers Real Estate Pty Ltd (in administration) (2007) 161 FCR 20 at [49]. 19 The emphasis in these authorities is on the significance (for the purpose of the sections concerned), on the bankrupt relevantly doing something which results in the transfer. 20 The applicant argues in this case that short of actually signing the Deed which he directed Mr Spencer to do, there was nothing more that the bankrupt could have done in transferring the property. As novel as the claim is, it seems to me that the risk of doing injustice by summarily dismissing it, is significantly greater than permitting the claim to stand. In my opinion, the minute should be permitted. The minute of proposed amended substituted statement of claim dated 18 September 2008 do stand as the amended substituted statement of claim. 2. The fifth, sixth and seventh respondents pay the applicant's costs of opposition to the minute to be taxed if not agreed. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | claim that property transferred under value should be void as against the trustee in bankruptcy motion for dismissal transferor was not the subsequent bankrupt but an entity allegedly acting on his instruction and direction property said to be held on bare trust on behalf of the bankrupt whether trustee or agent novel point not obviously without reasonable prospects not dismissed bankruptcy and insolvency |
He brought an action in the District Court of New South Wales which was settled for $285,000 including costs. Subsequently costs of $47,500 were deducted by his solicitor and Mr Barrington received the balance. 2 Under the Social Security Act 1991 (Cth) (the Act) Mr Barrington's settlement created a "lump sum preclusion period": s 1169. During this period Mr Barrington was not entitled to receive certain benefits under the Act including, relevantly for the present case, a Newstart Allowance. The rationale is that a person receiving the benefit of a compensation payment for a disability should not also receive payments out of public funds for the same disability until the compensation payment is exhausted. The lump sum preclusion period is calculated by taking 50 per cent of the compensation payment (s 17(3)) and dividing it by the "income cut-out amount" (s 17(8)). In Mr Barrington's case the lump sum preclusion period calculated in accordance with the Act commenced on 17 September 2002 and extends to 23 April 2007. 3 However, under s 1184K(1) of the Act the Secretary of the Department of Employment and Workplace Relations may treat the whole or part of a compensation payment as not having been made if the Secretary "thinks it is appropriate to do so in the special circumstances of the case". 4 The Administrative Appeals Tribunal constituted by the Hon R J Groom, Deputy President, varied a decision of the Secretary refusing an order under s 1184K(1). The Tribunal directed that $60,000 of Mr Barrington's compensation payment be treated as not having been made: Barrington and Secretary, Department of Employment and Workplace Relations [2005] AATA 1050. 5 On appeal to this Court the Secretary accepts that the decision of the Tribunal was open on the evidence. On that day he settled an action for damages for $285,000 inclusive of legal costs. He received the net amount of $237,500 after deduction of legal costs. Mr Barrington said in evidence that he actually paid $55,000 in legal fees. The Tribunal thought it possible that he was required to pay a further $7,500 out of the net amount, but was satisfied he paid at least $47,500. 7 On 20 September 2002 Centrelink advised Mr Barrington's solicitor that he would be subject to a compensation preclusion period from 17 September 2002 to 23 April 2007. 8 Mr Barrington was aware from the outset that he was subject to a preclusion period and would have no entitlement to social security payments during that time. 9 Mr Barrington had lived in Wagga Wagga for most of his life, but after receiving the lump sum payment he moved to Tasmania. He did so mainly because housing was cheaper there and he believed that there was an opportunity to buy a house and renovate it. His intention was to then sell that house and buy another one for renovation. 10 Mr Barrington purchased a modest house in Somerset (a suburb of Burnie) for $68,000 and spent $3,500 on legal costs and stamp duty. He took possession at Easter 2003. He spent a further $50,000 on renovations and furniture. Estimates of the house's value in its partly renovated condition at the time of the hearing ranged from $125,000 to $140,000. 11 Mr Barrington also spent money on motor vehicles, on the cost of moving to Tasmania and in maintaining himself since September 2002. 12 Apart from his initial purchase of a fairly expensive motor vehicle for $39,000, Mr Barrington appeared to have lived modestly and acted prudently. 13 Mr Barrington continued to have serious problems with his shoulders and was receiving treatment from an oncologist and a skin specialist. He believed his health problems limited him to working three days a week. 14 Mr Barrington was a qualified mechanic with specialist experience on Mercedes Benz vehicles and had undertaken other work in Wagga Wagga. He was adamant that he did not wish to work again as a mechanic, but would prefer a part-time position in information technology. He had attempted to find part-time work in the Burnie area, but without success . He owed $4,500 on credit cards but had no other debts. He had traded down from his earlier vehicle purchase and now had a 1987 Subaru purchased for $3,000. If he sold his current vehicle and used the proceeds to reduce his credit card debt, he would still owe $1,500. His only other assets were some kitchen fittings worth possibly $800 to $1,000 if he could sell them. His attempts to borrow money on the security of the house had been unsuccessful. 16 On 15 October 2004 Mr Barrington applied for Newstart Allowance. His application was refused because of the preclusion period. In order to properly exercise the discretion there must be special elements in the case which "stand apart from the usual or the ordinary". 18 It found Mr Barrington to be "very open and honest in his evidence". His health problems, including pain in both shoulders, and in his lower back and kidney, meant his capacity to undertake work was now significantly reduced. 19 The Tribunal was satisfied that Mr Barrington believed, when he moved to Tasmania, that if at any time in the future he needed income, he would be able to find work readily. He had not then fully understood that his general state of health and the local employment market would together significantly limit his work opportunities. 20 While it was established that under the Act "compensation" included legal costs, the Tribunal said it was nevertheless reasonable to consider the legal costs component of the lump sum settlement in deciding whether "special circumstances" existed. The Tribunal noted Mr Barrington's evidence that "I actually didn't even realise that there was a payment to be taken out..." and "I didn't believe that the price would be that high...". 21 The Tribunal discussed in some detail the Secretary's argument that Mr Barrington's circumstances "did not go beyond straitened". It had been submitted that he could sell his house, buy an even more modest one and live for the rest of the preclusion period on the net proceeds. The Tribunal noted, however, that the house was only partly renovated and because of that may take time to sell. The applicant had been told by an estate agent that it might take 6-12 months to sell in its current condition. After deducting legal costs, stamp duty and agent's commission, unless the house purchased was extremely inexpensive, there would be very little money left to sustain Mr Barrington for the rest of the preclusion period. It was purchased for only $68,000 and has appreciated in value because of an improvement in market conditions and also because of the renovations undertaken. Future renovations will see the property increase further in value. The ownership of this property provides a special opportunity for the applicant to secure his financial future avoiding total dependence on government for future housing and income. The ideal for him would be to retain his house and obtain some part-time work so that he could live a relatively secure and independent future. The alternative is to continue to sell assets until he has nothing left. Then his complete long term dependence on social welfare would be almost inevitable. In agreeing to this settlement figure and also when informed about the preclusion period he did not fully appreciate the size and significance of the legal costs he would have to pay. After weighing up the special circumstances already referred to and Mr Barrington's precarious financial position it concluded that $60,000 of his compensation payment should be treated as not having been made. This meant that the preclusion period would be calculated on 50 per cent of the new gross amount of $225,000. He said that if the asset, the house, were unrealisable "there may very well be an argument the Guide would say that there are special circumstances" and that "were it to be established that were the case [scil. that the house was not realisable] then the circumstances could be quite different". At the time of that decision s 43(2) was in substantially the same terms as the present subs (2B). Not every failure by the Administrative Appeals Tribunal to mention a contention advanced on behalf of a party will amount to a failure to comply with the requirements of s 43(2) of the Administrative Appeals Tribunal Act 1975 , or demonstrate that the contention was not considered in deciding the matter before the tribunal. But this submission concerning the ascertainment of profit was worthy of serious consideration and was seriously advanced to the tribunal. It ought, therefore, to be inferred that the submission was inadvertently overlooked by the tribunal either when the reference was being decided or when the reasons for the decision were being committed to writing (cf Sullivan v Department of Transport (1978) 20 ALR 323 at 353). In either event there has been, in my opinion, an error of law by the tribunal, so that the power of this court which s 44(1) of the Administrative Appeals Tribunal Act 1975 confers to decide the appeal "on a question of law" is available. The failure of the tribunal to carry out the duty to consider and determine each question of law and fact relevant to the determination of the reference to it of the respondent's decision, or the failure to carry out the duty imposed by s 43(2) of that Act, as the case may be, has brought about a miscarriage of justice by preventing this Court from affording the parties a determination whether the tribunal's decision was vitiated by error of law: see Pettit v Dunkley [1971] 1 NSWLR 376. However, it may be doubted whether this line of authority is consistent with the later decision of the High Court in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323. The RRT affirmed the refusal of a protection visa without expressing any finding about the alleged attack on the husband. The High Court reversed the Federal Court's decision that the RRT had failed to comply with s 430(1). 31 The High Court held that s 430(1)(c) only required the RRT to set out the findings which it did make and which it considered material to the decision to be made; the section did not oblige the setting out of findings which the Tribunal had not in fact made: per Gleeson CJ at [10], per McHugh, Gummow and Hayne JJ at [68]. A failure to make a finding may reveal another error, such as failure to take account of relevant considerations: [73]-[75], but that is a distinct and different ground. 32 In the present case the argument said to be left unconsidered would not be a relevant consideration in the sense expounded in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 39, that is to say a consideration the Tribunal was bound by the Social Security Act to take into account. On the appeal to this Court senior counsel for the Secretary did not so contend. At best, Mr Barrington's purchase of the house after awareness of the preclusion period was a part of the factual matrix of this particular case, the setting in which s 1184K(1) had to be applied. The reasoning in Yusuf rather suggests the Tribunal made no legal error simply by failing to refer to one argument advanced, so long as it otherwise complied with s 43(2B) of the Administrative Appeals Tribunal Act . 33 However, on the assumption that Dennis Wilcox is still good law, the principle for which that case stands is not applicable here. Mr Barrington's being aware of the preclusion period before he purchased the Burnie house was not in dispute. It was not a discrete legal or factual issue standing apart from the rest of the case as discussed in the Tribunal's reasons. It was a part of the larger narrative which also included Mr Barrington's plans and expectations when he bought the house, and how illness and lack of employment opportunities thwarted them. The omission by the Tribunal of any reference to a particular element of that narrative does not of itself lead to the conclusion that such element was ignored or overlooked: cf Kentucky Fried Chicken Pty Ltd v Gantidis [1979] HCA 20 ; (1979) 140 CLR 675 at 680, 684. If a fact is not in itself disputed, that may be a reason why it is not mentioned. The bare fact of spending compensation money on an asset after becoming aware of a preclusion period would often tell against a finding of special circumstances, as the Guide points out. But in the present case what really opened up the possibility of a special circumstances finding is what happened after the purchase, including Mr Barrington's health and employment problems. 34 In particular, the point about purchase of an asset after awareness of the preclusion period was bound up in the present case with the question of the realisability of that asset. On the Secretary's express concession, this could make a critical difference. The Tribunal dealt with this aspect, pointing out that because the house was only partially renovated it might take time to sell --- on the evidence possibly 6-12 months. To hold Mr Barrington's purchase against him, like Antonio's bond, so that he had to sell the house and probably face a lifetime on total government dependence, would be both unconscionably harsh and, as the Tribunal perceptively pointed out, would inevitably create a much greater drain on the public purse in the long run. Certainly, sir. Yes, in fact the deed of agreement said that each party was to carry their own costs. But if I could explain the compensation preclusion provisions in the legislation it may become more apparent why that particular point is not entirely relevant. And if I could just do that, sir? And that is the result of the operation of the provisions in the Act. But if I could explain the provisions, sir, it may make more sense, or it may not. Much has been said about the arbitrariness of the compensation preclusion period provisions and there are many cases that go to the fairness of the provision. But in terms of setting the preclusion period, the length the preclusion period, the Act is quite clear. And if I could just explain those provisions, sir? In relation to the lump sum preclusion period. Now, compensation is defined in section 17(2) of the Act and effectively it means in this case that, because Mr Barrington received a compensation lump sum payment and because that included an economic loss component, then that is defined as compensation in terms of the Social Security Act . Now, s 1170 (4) provides the formula for calculating the preclusion period. And this may go to the point that you are relating, sir. That is the amount of money that the preclusion period provisions take as the compensation sum to use in calculating the length of the preclusion period. It should not be because the legislation is quite clear; it refers to the gross sum received. And it may very be that if, for example, the payment was $100,000 and $80,000 represented legal costs then it would be appropriate to disregard a good proportion of the $80,000 . We don't know. And as I say the reason is that it is an arbitrary system that was meant to address a mischief that was obvious to the Government. It has done so - in doing so it may have created some mischievous - mischief, but there is no way, sir, in our submission that you can get around the fact that you take the gross amount received, divide it by one half. And indeed, sir, we do say in the statement of facts and contentions that the amount that is used to divide or divide into that compensation part of the lump sum is a fairly generous amount. So that was the amount of money that we were saying you have been given to live on and the amount that we are taking into account is one half of the total payment, we are going to divide 592.50 into that and that will give a number of weeks and that is the compensation preclusion period, sir. And in this case it meant that the preclusion period was 240 weeks. First, whether as a matter of construction of the Act they should be included in the "lump sum compensation payment" and, secondly, whether the amount of the costs could be a relevant factor in assessing whether or not "special circumstances" existed. Counsel for the Secretary correctly pointed out that the answer to the first question was yes. This was understood and accepted by the Tribunal. 37 As to the second question, counsel for the Secretary, again correctly, accepted that the amount of the costs could be relevant. The Tribunal plainly signaled that this was an issue. It noted that the costs were a "lot of money", as did the Secretary's counsel, who observed it was a "large reduction". In fact the costs were not far short of a year's income for someone on average weekly earnings (currently $53,508). It was a matter for the forensic judgment of the Secretary's counsel as to how much he should say on the topic, for example whether he should provide details of the cases that he referred to in passing. (It may be doubted anyway that much would be gained by analysis of other Tribunal decisions where costs components of varying proportions to the gross compensation figure either did or did not result in a finding of special circumstances; each case must turn on an assessment of all its own facts and circumstances. Having raised the issue of Mr Barrington's costs, and given counsel the opportunity to submit anything he wished on the two questions mentioned, the Tribunal declined the offer of more detailed submissions. This case is a far cry from Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141 which senior counsel for the Secretary relied on in the present appeal. There the trial judge told counsel that he did not accept the evidence of an expert witness on a particular issue, leading counsel to make no further submissions, and then decided the case by relying on the same witness. | social security lump sum preclusion period compensation sum included legal costs purchase of house after awareness of preclusion period held: administrative appeals tribunal did not (i) err in not mentioning submission as to relevance of purchase (ii) fail to give natural justice in relation to relevance of legal costs administrative law |
The Tribunal affirmed a decision of the Delegate of the first respondent, made pursuant to reg 572.212 of the Migration Regulations 1994 (Cth) ('the Regulations') (then in force), to refuse to grant the appellant a further (temporary) student visa. Regulation 572.212 required the appellant to have "complied substantially" with the conditions to which the visa last held by him was subject. Condition 8202 required the appellant to satisfy each of a number of conditions, one of which was to achieve an academic result that was ' certified by the education provider to be at least satisfactory ' (Item 8202(3)(b) in Sch 8 of the Regulations). There was no such certification. 2 Fundamental to the Tribunal's decision was its understanding that the relevant test of "substantial compliance" was as discussed in Baidakova v Minister for Immigration & Multicultural Affairs [1998] FCA 1436 at 6. The Tribunal applied the "substantial compliance" test to Condition 8202(3)(b). However, the requirement in Condition 8202(3)(b) to provide a certificate cannot, logically, be satisfied by substantial compliance. Either Condition 8202(3)(b) is satisfied or it is not; either there is a certificate of an "at least satisfactory" academic result or there is not ( Jayasekara v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCAFC 167 ; (2006) 156 FCR 199 per Heerey and Sundberg JJ). It is not in dispute that the education provider, the University of Sydney ('the University') had not provided the necessary certificate. There was no compliance with Condition 8202(3)(b). There is ' no scope for operation of the distinction between strict compliance and substantial compliance ' in determining whether Item 8202(3)(b) of Sch 8 of the Regulations is satisfied ( Weerasinghe v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 261 at [10] , cited in Jayasekara at [5]). 3 The appellant did not meet the requirements of Condition 8202. 4 The appellant sought judicial review of the Tribunal's decision in the Federal Magistrates Court. His application was dismissed: Jiang v Minister for Immigration & Anor [2007] FMCA 215. • If so, what are the consequences of that error? • If the Tribunal decision is infected with jurisdictional error, should the matter be remitted to the Tribunal or is it futile to do so? The Tribunal relied on the number of subjects failed (22 out of 27) to find a failure to ' substantially comply ' with Condition 8202 instead of ascertaining whether the necessary certificate had or had not been provided. 7 The appellant also submits that the Tribunal failed to comply with s 359A of the Migration Act 1958 (Cth) ('the Act'). The factual circumstances which give rise to that allegation are as follows. 8 The Department of Immigration and Multicultural and Indigenous Affairs (as it then was) received a facsimile dated 7 July 2004 from an officer at the University, where the appellant had been enrolled. That facsimile was before the Tribunal as part of the Departmental file. The Tribunal summarised the facsimile in its decision as stating that ' the visa applicant was excluded from the Bachelor of Commerce degree at [the University] in February 2004 for failing to meet course requirements in semesters 1 and 2 of 2003 '. In fact, the facsimile from the University further stated that '[a] s [the appellant] has been Excluded his academic performance can be certified as ' not satisfactory ' for both Semester 1 & 2, 2003 ' (original emphasis). 9 The Tribunal wrote to the appellant by letter dated 12 January 2005 ('the s 359A letter'). It referred to Condition 8202 as relevantly requiring that the appellant's academic results be certified by his education provider as being satisfactory. It explained that, as the University had found that he did not achieve academic results that it considered to be at least satisfactory, the Tribunal ' may find you were in breach of condition 8202 ' (emphasis added). 11 In its decision at [20], the Tribunal stated that the s 359A letter informed the appellant that he ' did not comply with condition 8202 '. That is not the case. The letter stated that certification was required and that, as the University had found that the appellant did not achieve results that it considered to be at least satisfactory, the Tribunal may find that he was in breach of the condition. 12 The appellant, through his advisor, relevantly replied by facsimile on 13 April 2005 (erroneously dated 13 February 2005). That facsimile addressed the appellant's academic results. It stated that the appellant ' does not agree with the information provided by the Education provider that accademic (sic) results were not considered at 'least satisfactory ' and that the appellant ' would like an explanation for this conclusion drawn by the Education provider. It might be possible for the Tribunal to investigate this point '. The appellant stated that he accepted that he might have failed some subjects but had passed some and that '[t] his in itself does not necessarily mean that he has failed course requirements, as he did apply himself to the course of study '. The [appellant] when enrolled in the Bachelor of Commerce degree at the University of Sydney on a student visa issued on 19 February 2001, indicates that [the appellant] failed 22 out of 27 subjects in 2001, 2002 and 2003 (sic) . As a result of this the [appellant] was excluded from the course and he then went about exhausting the university's exclusion appeal mechanisms without success. The evidence before the Tribunal indicates that [the appellant] has failed to substantially comply with the conditions to which the last visa held by him was subject, namely condition 8202. The [appellant] accordingly fails to meet the requirements of regulation 572.212 [of the Regulations, then in force] . For example, the s 359A letter made no reference to the number of subjects that the appellant had failed or the fact that he had exhausted appeal mechanisms. Even reading the whole of the letter, it cannot be said that the appellant was directed to the information that formed the basis for the Tribunal decision. The Tribunal in its decision considered that the appellant's academic results (failing subjects) was the key issue rather than the concept of results "considered" at least satisfactory by the education provider, as indicated in the s 359A letter. 15 Neither the specific matter the subject of the invitation to comment nor the s 359A letter as a whole were directed to the absence of the necessary certificate from the education provider. That is understandable, as in applying the wrong test, the Tribunal did not directly address the consequences of the lack of certification. 16 It follows that the Tribunal failed to comply with s 359A(1) of the Act. This constitutes jurisdictional error ( SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162). Even if it could be said that the test applied by the Tribunal assumed the lack of certification and hence failure to comply with Condition 8202, so that the application of the incorrect test did not matter, s 359A(1) of the Act required that the appellant be invited to comment on information that did form the reason or part of the reason for the Tribunal's decision. That did not happen. 17 The Federal Magistrate concluded at [29] that it was not necessary for the Tribunal to advise the appellant in the s 359A letter that the University had not provided a certificate. To the extent that the Tribunal decision was not based upon the absence of a certificate simpliciter , his Honour was not in error. However, I cannot agree with his Honour that the s 359A letter clearly set out particulars of the information which formed the reason or part of the reason for the Tribunal's decision (s 359A(1)(a)) or that it ensured, as far as was reasonably practicable, that the appellant understood why it was relevant to the review (s 359A(1)(b)). I also do not, with respect, agree with the learned Federal Magistrate that the reason for the affirmation by the Tribunal of the Delegate's decision was ' ultimately ' the absence of certification of a satisfactory academic result (at [30]). While the absence of certification was a fact before the Tribunal, the decision was not based upon that fact, nor did it form the basis for the s 359A letter. 18 Accordingly, in failing to apply the correct test and in failing to comply with s 359A of the Act, the Tribunal committed jurisdictional error. Is it futile to remit the matter to the Tribunal? • The appellant had failed 22 out of 27 subjects in 2001, 2002 and 2003. • The appellant had been excluded from the course that he had been studying. • The reason for the exclusion was that he failed to meet course requirements. • The University described his academic performance in terms of it being certified as not satisfactory. • The appellant had exhausted the University's appeal mechanisms without success. • The University had informed the Department that, as at 7 July 2004, the appellant was no longer enrolled at the University. • The University also informed the Department that the appellant was not permitted to re-enrol for a period of two years. • The Tribunal decision is dated 9 May 2005. While I accept that it is not for the Court to evaluate possible outcomes and hypothetical scenarios, in the circumstances of this case I do not accept that it would have been even possible for the appellant to have complied with Condition 8202. I do not accept that the appellant could have obtained a certificate of at least satisfactory academic results when he had, after appeals, been excluded from enrolment for two years due to his failure to meet course requirements. In any event, at the relevant time, the necessary condition imposed on the visa by Condition 8202 was not satisfied. Even if the appellant could have attempted to persuade the University to reconsider, there is nothing in the language of Condition 8202 that invites a consideration of the internal processes of the education provider which led to a refusal to certify a satisfactory academic result. The Tribunal could not take that into account ( Cheng v Minister for Immigration & Multicultural & Indigenous Affairs [2007] FCAFC 71 at [35] ---[36]). Questions of academic progress should be left to the judgment of the education provider ( Jayasekara at [16]). 21 In Re Refugee Review Tribunal; Ex Parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at [56] , Gaudron and Gummow JJ approved the observation of Latham CJ, Rich, Dixon, McTiernan and Webb JJ in R v Commonwealth Court of Conciliation and Arbitration ; Ex parte Ozone Theatres (Aust) Ltd [1949] HCA 33 ; (1949) 78 CLR 389 at 400 to the effect that a writ may not be granted if no useful result could ensue. Their Honours observed at [58] that, consistent with the principle that '[t] he court does not act in vain ', the decision-maker may have been bound by the governing statute to refuse the administrative determination applied for, or ' the prosecutor's complaint may be the refusal by the decision-maker of an opportunity to make submissions on a point of law which must clearly have been answered unfavourably to the prosecutor '. 22 The requirement of procedural fairness is concerned with ' observance of fair decision -making procedures rather than with the character of the decision which emerges from the observance of those procedures ' ( Aala at [59]). Where there is a failure to observe fair decision-making procedures and the decision is invalid for want of procedural fairness, there is no reason to withhold discretionary relief in the absence of conduct on the part of the appellant warranting the refusal to exercise discretion ( SAAP at [83]---[84] per McHugh J). There is no such conduct in this case. 23 In SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at [231] , Allsop J construed this as referring to a consideration of whether the breach of that duty to accord procedural fairness was or was not trivial; in the operation of the principles of procedural fairness (and the statutory provisions providing it) adherence to the mandated process and procedure is vital. It is not a proper basis, in the exercise of discretion, to refuse relief for failure to comply with s 359A of the Act simply because no injustice had resulted or ' because to do so would be in the opinion of the Court futile or that the case is so weak that it does not warrant appellate intervention ' ( SZGPB v Minister for Immigration & Multicultural & Indigenous Affairs (No 2) [2006] FCA 587 at [56] per Rares J). 24 However, relief may be withheld if there is a basis, otherwise unimpeached, upon which the decision was reached, unaffected by the failure to accord procedural fairness or to comply with the required statutory procedure. Aala and SAAP leave open a refusal of relief if it is shown that the decision-maker was bound by the governing statute to refuse the application ( SZEEU at [232] per Allsop J). In those circumstances, the grant of relief would lack utility. 25 The circumstances in Wang v Minister for Immigration and Citizenship [2007] FCA 488 are similar to those in this case. Ms Wang did not make satisfactory progress and failed a number of subjects. She was excluded by the relevant Faculty for unsatisfactory academic progress. A delegate of the Minister decided that there had been a breach of Condition 8202 and concluded that the decision to cancel the student visa was mandatory. Ms Wang applied to the Tribunal for review. The Tribunal sent her a letter in purported compliance with s 359A of the Act. Justice Besanko concluded that the letter did not comply with s 359A(1)(b) of the Act. The Minister did not dispute that such failure constituted jurisdictional error (at [29] to [30]). His Honour considered the finding of the Federal Magistrate that it would, in any event, be futile to grant relief. The Federal Magistrate had based this conclusion on the fact that the appellant had not sought to adduce any material to indicate that the academic performance could or should have been altered. The appellant had submitted that, as long as there was a theoretical possibility that relief would not be futile, the discretion should not be exercised to refuse relief (at [31]). 26 Justice Besanko observed at [32] that the only way in which a cancellation of the student visa could be avoided was if the university's decision not to certify the appellant's academic results as satisfactory was altered. There, as here, the decision by the university to exclude the appellant had been taken some two to three years ago. There, as here, it was not suggested that, since the Delegate's decision, the university had been approached to alter its decision or that there were any proceedings on foot to achieve that result. His Honour held at [32] that ' at a practical level, the inevitable result of a rehearing would be a cancellation of the appellant's student visa '. 27 In Wang , as here, futility is not to be judged by asking what decision the Tribunal would have made even if it had complied with s 359A of the Act or by asking if a decision by the Tribunal in the future to refuse the application were inevitable because there has been no relevant change of circumstances. Justice Besanko was of the view, consistent with Allsop J in SZEEU , that relief may be refused if, irrespective of any question of procedural fairness or individual merits, the decision-maker was bound by the governing statute to refuse the application (at [32]). In the present case, as in Wang , the Tribunal was so bound and it was not possible that the Tribunal would reach a different result (cf Tran v Minister for Immigration and Multicultural Affairs [2006] FCA 1229 ; (2006) 154 FCR 536). I agree, with respect, with the reasoning of Besanko J. 28 As Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ said in SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [29] , '[t] he present is a case in which no useful result could ensue from the grant of the relief desired by [the appellant] . This is so because...the decision-maker was bound by the governing statute to refuse [the appellant's case]' (see also [87] per Kirby J and [91] per Hayne J). It follows that relief should be refused. The s 359A letter was referable to the Tribunal decision which was based not upon compliance with Condition 8202(3)(b) but upon whether there had been "substantial" compliance with that condition. That constituted jurisdictional error. However, Condition 8202 had not and could not have been complied with. The appellant submits that there is a theoretical possibility that, had he been informed in accordance with s 359A of the Act that the reason for the Tribunal decision was the lack of certification of at least satisfactory academic performance, he might have approached the University and requested that it provide the necessary certification. As in Wang , at a practical level, this had not been achieved, would not have been achieved and could not have been achieved. The inevitable result of a rehearing is a finding of lack of compliance with Condition 8202 in respect of the visa and a consequent refusal of the appellant's application for a further student visa. 30 Federal Magistrate Lucev was not in error in finding that to remit the matter to the Tribunal for further hearing would be ' an exercise in futility '. The appeal should be dismissed. The appellant should pay the first respondent's costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | student visa failure to comply with condition 8202(3)(b) migration review tribunal applied the wrong test by asking whether condition was "substantially" complied with correct test was whether academic results had been certified by education provider to be "at least satisfactory" tribunal wrote to the appellant and invited him to comment on information invitation to comment did not correspond with information in the departmental file which formed a part of the tribunal's reason for affirming the decision under review or explain why that information was relevant failure by the tribunal to comply with s 359a of the migration act 1958 (cth) futility tribunal bound to affirm the decision under review in the absence of a certificate grant of relief would lack utility appeal dismissed migration |
The originating process was filed on 18 June 2008. 2 The Commissioner's application was supported by an affidavit of Kevin William O'Farrell, made on 23 April 2008, and other affidavits. Mr O'Farrell is employed by the ATO as a Tax Technical Leader, National Client Group, in the Large Business & International Business Line. In his affidavit, Mr O'Farrell makes reference to various records and documents obtained by the Commissioner. 3 The originating process named JHAF as a defendant. In my opinion, it should not have done so because upon deregistration JHAF ceased to exist: see s 601AD(1) of the Corporations Act . I have ordered that the title of the proceeding be amended by deleting the name of JHAF as defendant. The former shareholders, directors, secretary and liquidator of a deregistered company are a different matter, and their position is considered below. 4 The Australian Securities and Investments Commission (ASIC) has been served and has indicated that subject to certain conditions it does not wish to be heard in opposition to the application. In so far as those conditions could be satisfied by now, they have been satisfied. 5 JHAF was the subject of a members' voluntary winding up pursuant to a special resolution passed on 16 September 2003. Mr Green was appointed liquidator on that date and he remained liquidator until 17 May 2005, which was the date of the final meeting of members convened by Mr Green pursuant to s 509 of the Corporations Act . 6 Section 509(5) of the Corporations Act provided that ASIC must deregister a company at the end of a period three months after the liquidator lodges with ASIC a return of the holding of the final meeting. Mr Green filed that return on 23 May 2005. ASIC deregistered JHAF on 23 August 2005. As noted earlier, upon deregistration JHAF ceased to exist. Clearly, Mr Green is no longer in office as its liquidator. It is therefore not quite appropriate to speak of his being "replaced". Although I reached this view before becoming aware of Stone J's decision in JP Morgan Portfolio Services Ltd v Deloitte Touche Tohmatsu [2008] FCA 433 ; (2008) 167 FCR 212 , I note that it is totally in conformity with her Honour's. 7 Section 601AH(5) provides expressly that upon a reinstatement, a person who was a director immediately before the reinstatement "becomes a director again as from the time when ASIC or the Court reinstates the company". The existence of this provision suggests, first, that in the absence of such a provision persons in office at the time of deregistration are not automatically reinstated, and, second, that all that is at issue is whether a person should be appointed to an office as from the time of the reinstatement . 8 Mr Green, who has been served, consents to such orders as the Court may make save as to costs, and does not wish to be heard on the application. 9 At the time of the deregistration, the directors of JHAF were Phillip Graham Morley and Alan Thornton Kneeshaw. Mr Kneeshaw subsequently died on 10 January 2008. Henry Davis York (HDY) accepted service on behalf of Mr Morley, and advised that their client's intention was not to appear or to seek to be heard on the present application. 10 At the time of the deregistration, the secretaries of JHAF were Mr Kneeshaw and Joanne Marchione. Mallesons Stephen Jaques (Mallesons) accepted service on behalf of Ms Marchione. At the time of the deregistration, the immediate holding company of JHAF was James Hardie International Finance BV (JHIFBV) and the ultimate holding company of JHAF and JHIFBV was James Hardie Industries NV (JHINV). JHIFBV and JHINV were both incorporated in the Netherlands. As will be seen later, JHIFBV became the sole shareholder in JHAF in place of another Netherlands company and JHINV subsidiary, James Hardie Finance BV (JHFBV), as a result of one of the events which the Commissioner wishes to have investigated by a liquidator. 11 Mallesons acts for JHIFBV. By letter dated 16 July 2008, Mallesons advised the ATO that JHIFBV did not consent to the Commissioner's application, and asked that their letter be drawn to the Court's attention. In that letter they asserted, with detailed particulars: (1) that the Commissioner had known of the deregistration at an earlier time than that referred to in the affidavits served on them; and (2) that if JHAF's registration were to be reinstated there would be substantial prejudice to JHAF and, potentially, to others. I will refer to these two matters further below. 12 No person sought to be joined as a defendant and upon the proceeding being called on for hearing, no person apart from the Commissioner appeared. Section 601AH: is the Commissioner a person aggrieved by the deregistration of JHAF? According to s 601AH(2)(b) , it is a condition of the enlivening of the Court's power to order reinstatement that the Court be "satisfied that it is just that the company's registration be reinstated". The Court has a residual discretion whether to make an order. These three matters will need to be considered. 14 It has been said that the expression "a person aggrieved by the deregistration" should not be narrowly construed: see Re Proserpine Pty Ltd and the Companies Act [1980] 1 NSWLR 745 at 749 [15]; Pacanowski v Australian Securities Commission (1995) 57 FCR 173 at 175. It does not matter that the person's interest in the decision to deregister arose after the deregistration: Proserpine at 749 [15]. 15 The Commissioner is charged with the responsibility of administering, relevantly, the Income Tax Assessment Act 1936 (Cth) (ITAA 1936). The Commissioner wishes to make a determination under s 177F of the ITAA 1936, and, consequentially, to make an amended assessment of the amount of JHAF's taxable income and of the tax payable on it under ss 166 and 170 of that Act in respect of the year ended 31 March 2002. The Commissioner wishes to do so as a result of his investigation consequent upon his receipt of information from an overseas regulatory authority. The Commissioner considers that he may not be in a position to act as proposed while JHAF is deregistered. I agree that he cannot do so because, as noted earlier, upon deregistration of a company it ceases to exist . The public responsibilities of the Commissioner can be compared with those of the Australian Competition and Consumer Commission, which was acknowledged to have standing to apply for a reinstatement under s 601AH in Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316 ; (2000) 174 ALR 688. 2. Section 601AH: is it "just" that the registration of JHAF be reinstated? These three transactions, most significantly the first two in 2001, involved a denuding of the company of its assets. The Commissioner wishes to have all three investigated by a liquidator with a view to the possible replenishment of JHAF's coffers to enable it to pay tax. 18 JHAF was incorporated by registration on 17 September 1999. One share in its capital was issued to its parent company upon incorporation and a further 742,611 shares were issued to its parent on 23 February 2000. All 742,612 shares were of $1,000 each and were issued as having been fully paid in cash. The immediate parent company which held all of the shares was JHFBV, to which I referred at [10] above. 19 As at 31 March 2000 (JHAF's financial year ended on 31 March), JHAF had a total shareholders' equity of $743,682,000 and as at 31 March 2001, a total shareholders' equity of $740,709,000. 20 On 1 and 2 November 2001, a related series of steps were taken. 21 The first of the three transactions of particular present interest was a reduction of share capital. The resolution was that the issued capital of JHAF be reduced without the cancellation of any shares by the payment of $735,000,227 (or $989.75 per share) to its shareholder, JHFBV, on the date of the passing of the resolution. The directors resolved upon the reduction on 1 November 2001 and shareholder approval was given by resolution passed by JHFBV on 2 November 2001. After the reduction, JHAF was left with a paid up share capital of $7,609,773. 22 At the directors' meeting on 1 November 2001, it was also resolved that JHAF pay an unfranked dividend of $316,500,000 on 2 November 2001, and that payment be effected by the issue of a promissory note. 23 Financial records of JHAF confirm that a dividend of $316,500,000 was paid at some time in the year ended 31 March 2002. Those records also show that JHAF received a dividend of $346,269,149 at some time in that year. 24 A file memorandum made by Stephen Harman of James Hardie Inc (of the USA) dated 7 November 2001 asserts that on 2 November 2001, JHAF paid a dividend and made a capital return to its then parent, JHFBV. The memorandum states that on 2 November 2001, JHAF paid a dividend of $316,500,000 and reduced its share capital without cancellation of shares by a payment of $735,000,227 or $989.75 per share, to JHFBV. In other words, on 2 November 2001 JHAF paid a total of $1,051,500,227 to JHFBV. 25 According to the same memorandum, on 2 November 2001 JHFBV "contribute[d]" all of its assets and liabilities to JHIFBV. Shares which JHFBV already held in JHIFBV were excepted. The consideration was stated by Mr Harman in his file memorandum to have been "US $632,710,000, as described in description of contribution in kind attached to share deed". 26 As a result of the transfer, JHIFBV became the sole shareholder in JHAF, in place of JHFBV. So it was that JHIFBV was the sole shareholder at the time of the deregistration of JHAF on 23 August 2005. 27 The financial statements of JHIFBV for the year ended 31 March 2002 show that JHIFBV was a wholly owned subsidiary of JHFBV, and that the ultimate parent company of both was JHINV. The statements claim that on 1 November 2001, JHAF "transferred all its assets and liabilities" to JHIFBV, and that "[c]onsequently on 02 November, 2001 [JHFBV] contributed all its assets and liabilities to [JHIFBV], the consideration being the issue of 10,000 shares". 28 The statement that on November 1 JHAF transferred its assets to JHIFBV is difficult to reconcile with other evidence. The evidence to which I referred at [24] above, was that the return of capital and payment of the unfranked dividend totalling $1,051,500,227 were in favour of JHAF's then sole shareholder, JHFBV, not JHIFBV. 29 According to the same financial statements, in November 2001 due to the transfer of assets and liabilities from JHFBV, JHIFBV acquired 100% of the shares in JHAF "which was equal to USD 5,000 at historical costs". The statements indicate that "the net asset value as per March 31, 2002 is USD 4,359, therefore a provision of USD 641 occurred". 30 Mr O'Farrell's affidavit shows that the Commissioner conducts comprehensive reviews of corporate groups in order to develop an understanding of a taxpayer's business operations, and to identify and assess potential taxation risks. This process is known as a "Client Risk Review" (CRR). By a letter dated 19 May 2002, the Commissioner advised the James Hardie Group that he was commencing a CRR in relation to it for the income year ended 31 March 2002. 31 On 1 April 2003, the ATO wrote to the James Hardie Industries Group requesting information on certain transactions, including some involving JHAF. There followed correspondence between the ATO and the James Hardie Industries Group. By letter dated 28 August 2003, the ATO advised that the CRR process had been completed and that certain taxation risks had been identified which might be the subject of further action. 32 In September 2003, the third transaction (and the second reduction of capital) to which I referred took place. On 15 September 2003, the members of JHAF resolved that its issued share capital be reduced without the cancellation of shares by the payment of $7,608,773 or $10.24596 per share. It will be recalled that by now the sole shareholder of JHAF was JHIFBV. The result of the reduction was that the share capital of JHAF was reduced to $1,000. 33 The financial statements of JHIFBV for the year ended 31 March 2004 stated that "[a]t 15 September 2003", JHAF had been put into voluntary liquidation. As noted at [35] below, that date seems to be wrong. The further statement was made that the "liquidation proceeds" totalled USD 5,514,742, of which USD 4,901,612 had been applied as a capital return to the shareholder, and USD 552,397 had been paid out as an unfranked interim dividend. It was also stated that USD 33,000 was outstanding on loans and USD 28,650 was outstanding on current accounts between JHAF and JHIFBV. 34 A "Notification of Resolution" filed by JHAF with ASIC on 16 September 2003 shows that on 16 September 2003, the members of JHAF (no doubt a reference to JHIFBV) resolved by special resolution that JHAF be wound up voluntarily and by ordinary resolution that Mr Green, having consented to act as liquidator, be appointed liquidator. 35 The sequence seems to be, therefore, that the special resolution for the second reduction of share capital was passed on 15 September 2003, and the resolution for the winding up was passed on the following day, 16 September 2003. 36 On 11 November 2003, the Commissioner wrote a letter to Don Salter of James Hardie Industries Ltd in Sydney advising that an audit would be conducted in relation to the particular risks that had been identified in the ATO's letter of 28 August 2003. The James Hardie Industries Group responded on 27 February 2004. 38 On 23 May 2005, Mr Green filed with ASIC a notice that he had convened the final meeting of members and creditors of JHAF on 17 May 2005 and that no quorum had been present. According to his account of the winding up dated 12 April 2005, Mr Green had received no creditors' claims against JHAF, and JHAF's assets had been distributed to its shareholders "in accordance with the resolution passed at the meeting on 19 September 2003". This is a further error. The special resolution for winding up of 16 September 2003 had referred to the division of JHAF's assets among its members, but the evidence does not disclose any resolution passed on 19 September 2003. Indeed, by that date the company was in liquidation. Mr Green's report also stated that the declaration of solvency had disclosed assets with an estimated realisable value of $1,000. 39 On 3 June 2005, by way of what Mr O'Farrell describes as a "spontaneous exchange of information" from the United States Internal Revenue Service (IRS) to the ATO, the audit team was made aware of the existence of certain documents that pertained to a cross-border master repurchase agreement or "REPO arrangement" involving James Hardie entities in the United States, Holland and Australia, including JHAF. The audit team in the ATO sought particular documents from the IRS and on 8 February 2006 received further information from the IRS in relation to the REPO arrangement. 40 Mr O'Farrell states that following the receipt of the information from the United States and the analysis of it by the audit team, the ATO formed the view that the transactions being investigated occurred as a result of the REPO arrangement. Mr O'Farrell states that the James Hardie Industries Group had not advised the ATO of this fact. On 25 August 2006, the ATO sent the first of several letters to the James Hardie Industries Group requesting further information about the REPO arrangement. 41 There was a course of correspondence and meetings between the ATO and the James Hardie Industries Group extending to September 2007. 42 According to Mr O'Farrell's affidavit, by September 2007 the ATO formed the view that Part IVA of the ITAA 1936 might apply to the REPO arrangement, and that accordingly JHAF had a potential liability for income tax for the year ended 31 March 2002. 43 On 12 September 2007 the ATO wrote to Sarah Carter of the James Hardie Industries Group enclosing a summary statement of its understanding of factual matters touching the REPO arrangement in order to facilitate discussion with James Hardie officers at a meeting that was scheduled to occur on 25 September 2007. The letter asked that Ms Carter advise the ATO of any errors in the summary. 44 On 21 September 2007, Ms Carter replied, noting that the ATO had previously been requested to provide details of any tax benefits the ATO believed may have arisen in relation to the transactions comprising the REPO arrangement, but the details had never been provided. Ms Carter requested that the meeting scheduled for 25 September 2007 be postponed until the ATO identified "the potentially liable entity" and, if that was one of the deregistered entities, until the implications of the deregistration were considered. 45 A company search conducted by the Commissioner in relation to JHFBV reveals that JHFBV was deregistered on 31 October 2004 and, prior to going into liquidation, James Hardie NV was its sole shareholder. A company search in relation to JHIFBV reveals that JHIFBV is a wholly owned subsidiary of James Hardie International Holdings BV, and the sole shareholder of James Hardie International Holdings BV is JHINV. Mark Warren Beacom, who is employed by the ATO as a Tax Technical Leader, National Client Group, in the Large Business & International Business Line, estimates that the tax and shortfall penalties (but excluding shortfall interest) would exceed $150,000,000. 47 According to Mr O'Farrell's affidavit, the Deputy Chief Tax Counsel examining the REPO arrangement has advised the audit team that Part IVA applies. Mr O'Farrell states that the Commissioner has completed his internal processes relating to the application of Part IVA. Mr O'Farrell states that it is believed that a determination should be made on the basis that a "tax benefit" has been obtained pursuant to a "scheme" within the meaning of Part IVA , and that an assessment should be issued to JHAF once the Part IVA determination is made. 48 The evidentiary position is clarified by an affidavit of Mr Beacom, who has the authority to make determinations under Part IVA and to cause assessments to issue. Mr Beacom states that he has decided to make the determination and issue the amended assessment to JHAF. 49 There is in evidence a draft of the proposed determination. It refers to a "tax benefit" of $346,271,148. Mr Beacom states that the only reason he has deferred acting is uncertainty on his part as to whether he can make a determination while JHAF is deregistered. As I indicated earlier, his uncertainty is well founded --- in my view the Commissioner cannot determine that an amount be included in the assessable income of a taxpayer that has gone out of existence under s 177F of the ITAA 1936. 50 Mr Beacom states that in accordance with the usual business practice of the ATO, a notice of assessment would issue to JHAF within about three weeks of the making of the determination. Mr O'Farrell has spoken to an officer in the Strategic Recovery Advice section of the ATO in relation to the possible funding of a liquidator and has been advised that the Commissioner is prepared to consider favourably the funding of a liquidator, subject to the liquidator's views and "the amounts involved". Although JHIFBV did not apply to become a party to the present application, on 16 July 2008 Mallesons wrote to the Australian Government Solicitor on behalf of JHIFBV, requesting that the Commissioner draw the following two matters to the Court's attention: (1) that (according to Mallesons' letter) the ATO knew of the deregistration of JHAF much earlier than appeared from the affidavit evidence served; and (2) that there would be substantial prejudice to JHAF and, potentially, to others, arising from a reinstatement of its registration. 53 Regarding the ATO's knowledge of the deregistration, Mallesons' letter makes several observations. Mallesons states that the ATO "appears to assert" that it first learned of the deregistration on 21 September 2007 from Ms Carter. Mallesons states, however, that "this is clearly not correct". Mallesons draws attention to a form that was submitted to the ATO as early as 17 January 2006 signed by Mr Kneeshaw, advising that JHAF should be removed from the tax consolidated group as of 23 August 2005, on the basis that JHAF had been deregistered. By a letter dated 30 January 2006, the ATO acknowledged receipt of that notification and confirmed the change to the tax consolidated group without raising any concern over the deregistration. Mallesons points out that documents in the exhibit to Mr O'Farrell's affidavit show that an ATO officer created a diary note even earlier on 27 June 2005, recording that the liquidation of JHAF was finalised on 17 May 2005. 54 Mallesons concludes that the ATO knew at least from January 2006 (20 months earlier than alleged), if not earlier, that JHAF had been deregistered on 23 August 2005, and did not, so far as Mallesons is aware, object. According to Mallesons' letter, the ATO also knew of the finalisation of the liquidation as early as 27 June 2005 --- three years ago --- and must have known that ASIC would automatically deregister the company. 55 Mallesons refers to other circumstances which they say support their contention of delay on the part of the Commissioner. For example, Mr Green as liquidator of JHAF called for proofs of debt from creditors on 24 January 2004, yet the Commissioner did not lodge any proof of debt. 56 Mallesons asserts that the Commissioner failed in his obligation under s 260 - 45 (3) in Schedule 1 of the Taxation Administration Act 1953 (Cth) (TA Act) to notify Mr Green of the amount that he considered enough to discharge any outstanding tax liability "as soon as practicable". Mallesons states that "[t]here is no explanation offered for this delay of almost 5 years". 57 Mallesons points out that Mr Green as liquidator gave notice of the final meeting of JHAF pursuant to s 509 of the Corporations Act , and no explanation has been given for the ATO's failure to respond. 58 There are other circumstances mentioned in Mallesons' letter which I need not recount in detail. 59 The answer made on behalf of the Commissioner is that it was not until he received information from the IRS in 2005 and 2006 that he became aware of the possibility of making a determination under Part IVA of the ITAA 1936. Moreover, he submits, the Commissioner has not yet become a creditor and will not do so until the Part IVA determination is made and the amended assessment is issued. 60 Ultimately, I am not persuaded by Mallesons' delay argument. It is difficult to conclude that there has been undue delay, in view of the complexity of JHAF's affairs. In arriving at the decision to make a s 177F determination, the Commissioner must take care to make a thorough investigation. The evidence does not reveal the detail of the investigations conducted by the ATO in relation to the REPO arrangement, and the deliberations that have taken place from early 2006 to July 2008, but I infer from the complexity involved that they have been extensive. 61 The evidence does establish that as late as September 2007, the Commissioner was corresponding with Ms Carter of the James Hardie Industries Group. It seems that communication between the ATO and the James Hardie Industries Group in relation to the REPO arrangement then came to a halt. 62 After making all due allowances, I infer that there has been some delay in the sense that the present proceeding could, and perhaps should, have been brought earlier, but I cannot, with confidence, quantify that delay. I am certainly not persuaded to think that it is necessarily to be equated with the entire period from early 2006 to June 2008. It may be that the present application should have been brought in late 2007 or early 2008, when communications with the James Hardie Group appear to have come to an end, but I do not see why a delay from then to 18 June 2008, when the originating process was filed, should deprive the Commissioner of the remedy he seeks. 63 In the circumstances referred to above, I am not persuaded to conclude that there has been disqualifying delay. It is that if JHAF's registration is reinstated, the delay referred to above will cause JHAF substantial prejudice and will, potentially, cause others substantial prejudice too. Mallesons argues that the course which the Commissioner proposes to follow would "result in unfairness to JHAF and a serious failure of due process". Mallesons contends that on the evidence, the Commissioner proposes, immediately and without giving JHAF an opportunity to be heard, to make a determination under Part IVA and to issue an amended assessment. Mallesons correctly points out that a notice of the amended assessment will be conclusive evidence of the due making of the assessment, subject to any review or appeal under Part IVC of the TA Act: see s 177 of the ITAA 1936. 65 Mallesons also complains that any disadvantage to JHAF is compounded because the ATO does not propose to provide funding to the liquidator to enable him to consider the question of whether a determination under s 177F of the ITAA 1936 has any foundation. Mallesons also refers to the 60 day time limit for the lodging of an objection by JHAF to an assessment: see s 14ZW of the TA Act. 66 Mallesons asserts that the ATO usually follows a different procedure to that proposed in the present case. I do not know if this is true. 67 Mallesons does not submit that the Commissioner is obliged to accord a reregistered JHAF an opportunity to be heard before making a determination under Pt IVA. Mallesons' argument is that the absence of a further opportunity to be heard emphasises the harm with which JHAF is now threatened. 68 It is not clear on the evidence that the ATO will not allow a reregistered JHAF an opportunity to be heard. But even if it does not propose to do so, it will be possible for JHAF to challenge the amended assessment in review or appeal proceedings. Moreover, there is the possibility of an extension of the 60 day time limit: see s 14ZX(4) of the TA Act. 69 I am not persuaded by this ground either to decline to reinstate registration. 71 Mr Green, as liquidator, was subject to an obligation imposed by s 260-45 in Schedule 1 to the TA Act. The effect of that section is that a liquidator must not, without the Commissioner's permission, part with any of the company's assets before receiving a "tax clearance certificate" from the Commissioner. The facts in relation to the liquidator's failure to obtain a tax clearance certificate are established by the affidavit of Mr O'Farrell. He deposes to the following facts as revealed by ATO records which he identifies. • On 26 September 2001, an operator in the "Debt Collections" area of the ATO noted that the LB&I (Large Business & International) area in the ATO had contacted "Debt Collections" to ask if any request had been received from JHAF or its parent company for a tax clearance. The note concluded, "[i]t is very important that no insolvency tax clearance be granted ... without prior contact with LBI". • On 8 January 2004, an operator in the "Insolvencies" area noted correspondence dated 2 December 2003, advising that Mr Green had been appointed liquidator of JHAF on 22 May 2003 (the date was wrong), and that he was seeking a s 260 clearance. • On 12 January 2004, an operator in Insolvencies noted that Greg Dick (Gregory Craig Dickson, of LB&I, who made an affidavit in the proceeding) had telephoned advising that no clearance was to be issued, and that LB&I needed to be contacted if there were any further requests from the liquidator. • On 2 February 2004, an operator in Insolvencies recorded that Mr Dick had advised that no clearance was to issue "as the James Hardie Group [is] currently undertaking a large business audit and significant revenue risks are perceived". The operator recorded that the liquidator had asked for a clearance. • On 2 February 2004, an operator in Insolvencies noted that a second request for a tax clearance had been received from Mr Green dated 20 January 2004, the request had been referred to Mr Dick, and Insolvencies was awaiting a response from Mr Dick. • On 20 July 2005, an operator in the "Audit" area noted that the James Hardie Group was being audited and that JHAF "has particular interest for the audit". Mr Green asserted that JHAF's income tax return for the year ended 30 September 2002 had been recently lodged and that no tax was payable. He therefore sought a clearance pursuant to s 260-45(4) of the TA Act to enable the winding up and distribution of the property of JHAF to be completed. • Not having received a response, Mr Green again wrote to the ATO on 20 January 2004 seeking a clearance certificate. • On 2 February 2004, the ATO wrote to Mr Green advising that a proof of debt might be lodged when the Business Activity Statement (BAS) for the October to December 2003 period was lodged. The letter added that a tax clearance pursuant to s 260-45(4) of the TA Act could not be issued until the BAS was lodged. • On 19 March 2004, the ATO wrote to Mr Green in relation to his request for a tax clearance in respect of, inter alia, "James Hardie Australia Pty Ltd", advising that the ATO could not provide the tax clearance at that time. • On 5 April 2004 and again on 28 September 2004, Mr Green lodged a "Presentation of Accounts and Statement by Liquidator" with ASIC, which indicated that the only cause that might delay termination of the winding up was "tax clearance". • On 15 April 2005, Mr Green lodged a "Presentation of Accounts and Statement by Liquidator" with ASIC, indicating that the only cause that might delay the termination of the winding up was a "final meeting". • On 2 February 2004, Mr Dick advised the Insolvency section within the ATO that there was to be no tax clearance granted for, relevantly, JHAF. Mr O'Farrell states in his affidavit that given that there is no record of Mr Dick's having authorised a tax clearance for JHAF, he believes that Mr Dick did not subsequently authorise one. Mr Dick's own affidavit confirms that Mr Dick gave instructions that no tax clearance was to be given for JHAF. • On 29 November 2007, the ATO wrote to Mr Green enclosing a notice under para 264(1)(b) of the ITAA 1936 requiring production of documents relating to any application for a tax clearance certificate under s 260-45 of the TA Act in relation to JHAF and any document relating to a grant or refusal of such a certificate. Mr O'Farrell states that no such document has been produced. 72 I accept that on the evidence summarised above, in December 2003 and January 2004 Mr Green applied for a tax clearance certificate which would permit him to part with JHAF's assets, and that none was ever issued to him. The company should never have been deregistered. It is appropriate to replace Mr Green with another liquidator. 75 Section 509 of the Corporations Act obliged Mr Green to make up an account, convene a meeting of the company and lodge a return with ASIC. Once Mr Green performed those statutory obligations, s 509(5) obliged ASIC to deregister JHAF after the passing of a certain period of time. Section 601AD(2) of the Corporations Act had the effect that upon deregistration, JHAF's property vested in ASIC. On the evidence, at the time of deregistration, and indeed throughout the winding up, JHAF had no property except some $1,000 or $2,000 (both figures occur in the evidence) that covered Mr Green's fees as liquidator. 76 It is true, as the Commissioner submits, that if JHAF had not been deregistered, the present application would not have been necessary. But it was ASIC that deregistered JHAF, and ASIC did so as s 509(5) of the Corporations Act required it to do. Similarly, when Mr Green lodged his return with ASIC on 23 May 2003, he was doing what s 509 of the Corporations Act required him to do. The Commissioner does not submit that Mr Green should not have accepted appointment as liquidator in the first place, or should not have obeyed the Corporations Act . 77 In sum, the evidence and the submissions relating to tax clearance are beside the point. One can only speculate as to the reason why Mr Green sought the tax clearance certificate. 78 On the evidence before the Court, I am not persuaded that Mr Green has contravened s 260-45 in Schedule 1 to the TA Act. Nor do I think, on the evidence before the Court, that Mr Green's failure to obtain the tax clearance certificate is any reason why he should not be reappointed as liquidator. 79 This does not, however, have a material effect on the Commissioner's case. As I see it, he wishes to make a determination and an amended assessment in an amount exceeding $150,000,000, and has set out in some detail his reasons for wishing to do so. Subject to what follows, I think that he should have the opportunity of doing so. The Commissioner wishes to have a liquidator carry out investigations in relation to potential recoveries. Mr Green does not oppose the appointment of Mr Donnelly as liquidator, and, subject to what follows, it is appropriate that he be appointed (see [89]-[92] below). His Honour noted that in Re Steelmaster Pty Ltd (in liq ) (1992) 6 ACSR 494, the Court made an order, albeit by consent, for the applicant for reinstatement to pay the costs and disbursements of the liquidator incurred as a result of the reinstatement, including the costs of any further proceedings under s 509 of the Corporations Law. The second return of capital, that of September 2003, was to JHIFBV, a company which, so far as the evidence shows, still exists. The second return of capital, however, was in a sum of only $7,608,773 --- a small fraction of the amount exceeding $150,000,000 which is expected to be the amount of the tax and shortfall penalties (see [46] above). 83 The Commissioner refers to the fact that the two capital reductions divested JHAF of all of its assets, and that the second of them took place in contemplation of the winding up which was resolved upon the following day. He submits that these steps were taken in the knowledge of the Commissioner's interest in the transactions in which JHAF had previously participated, and that "[t]here is ample room to investigate the validity of those transactions". 84 It may be that in respect of the substantial payments by JHAF of November 2001, a liquidator of JHAF will have a right of recovery against persons or entities other than the then parent and payee, JHFBV. 85 The making of the proposed determination and amended assessment may prove fruitless. The liquidator to be appointed may advise against any attempt to recover the money that JHAF paid away. The Commissioner may decide not to fund the liquidator to that end. 86 The Commissioner should, however, have the opportunity of moving to the next stage of making the determination and amended assessment, and entering into discussions with the liquidator to be appointed. 87 In my opinion, it is appropriate to reinstate the registration of JHAF in order to allow the Commissioner to make a determination under s 177F and to make an amended assessment. Of course, it will be necessary for the Commissioner to put the liquidator in funds to consider the means of recovery. The Commissioner has indicated that he is prepared to consider funding the liquidator to that end, and submits that the appropriate course is for the level of funding to be determined between the Commissioner and the liquidator. I agree. 3. Section 601AH: how should the residual discretion of the Court be exercised? Who should be appointed as liquidator? Mr Donnelly has signed the required Consent of Liquidator. It should be noted that Mr Green's task was simple and straightforward (his fees amounted to only $2,000). It is not as if Mr Green had conducted extensive investigations into the affairs of JHAF, in which case it would have to be considered whether there would be a saving in costs in appointing him. He has not been undertaking any activity as liquidator for three years. 90 Mr Green has indicated that he consents to an order appointing Mr Donnelly as liquidator, and has not himself signed a Consent of Liquidator or otherwise put himself forward for appointment. 91 On the basis referred to in the preceding two paragraphs, Mr Donnelly should be appointed. 93 Being non-existent, JHAF has not been heard on the question of costs. There will be an order giving the Commissioner leave to apply within two months for an order that the reinstated JHAF pay the costs of this proceeding. 94 There will be orders accordingly. I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | application for reinstatement of registration of company to enable deputy commissioner of taxation (commissioner) to make a determination under part iva of the income tax assessment act 1936 (cth) and to issue amended assessment of taxable income of, and of tax payable by, former company commissioner's desire to have liquidator again in place to investigate recoverability of assets disposed of by company to enable recovery of tax whether commissioner "a person aggrieved by the deregistration" within meaning of s 601ah of corporations act 2001 (cth) whether it was "just" that registration be reinstated whether court should exercise its discretion to order reinstatement whether former liquidator, or a different person, should be appointed as liquidator. corporations |
The principal concern of the applicant is whether the Tribunal applied the correct test in determining whether the applicant should be entitled to pension at the special rate, pursuant to s 24 of the VE Act, on the basis that incapacity from war-caused diseases alone prevented him from continuing to undertake remunerative work that he had been undertaking, and thereby caused him to suffer a loss of salary or wages that he would not be suffering if he were free of that incapacity. By s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"), the appeal is limited to questions of law. The applicant was born on 1 November 1946. He was conscripted into the Army in 1967 and rendered operational service in Vietnam between 15 March 1968 and 2 April 1969. Subsequently, the Repatriation Commission ("the Commission"), the respondent to this appeal, accepted as war-caused a number of medical conditions from which the applicant suffered: bilateral sensorineural hearing loss; bilateral tinnitus; hypertension; non melanotic malignant neoplasms of the skin; post traumatic stress disorder; impotence; and alcohol dependence. Originally, the Commission granted the applicant a disability pension at 90% of the general rate. On 19 May 2005, by decision of the Commission, this was increased to 100% of the general rate. On 7 June 2005, the applicant applied to the Veterans' Review Board to review that decision, claiming he was eligible for pension at the special rate. This application was rejected and the applicant sought review of the decision of the Veterans' Review Board by the Tribunal. The Tribunal's decision and reasons for decision were published on 20 March 2008. The Tribunal affirmed the decision of the Veterans' Review Board that the applicant was not entitled to pension at the special rate. By s 14(1), a veteran may make a claim for a pension. By s 15(1), a veteran who is in receipt of a pension may apply for an increase in the rate of the pension on the ground that the veteran's incapacity has increased since the rate of the pension was assessed or last assessed. Section 19 deals with the manner in which the Commission is to determine claims and applications. Section 22 prescribes the general rate of pension and the extreme disablement adjustment. Section 23 prescribes the intermediate rate of pension. Section 24 deals with the circumstances in which the special rate of pension is applicable, and prescribes that rate. After reviewing the vague and contradictory evidence of the applicant's work history, reciting the history of his claims and applications, and summarising the legislative scheme, the Tribunal expressed a finding about the remunerative work that the applicant was undertaking after his military service. The requirement to consider "remunerative work that the veteran was undertaking" does not mean a particular job with a particular employer but the substantive remunerative work that the veteran had undertaken in the past. He was then employed by Haden Engineering installing air-conditioning units and ducting in commercial and industrial premises. The applicant has a plumbing certificate from RMIT. The Tribunal found that the relevant remunerative work which the applicant was undertaking was that of an air-conditioning plumber or installer. That task involved significant manual work, including the lifting of heavy items and work in confined spaces and awkward positions. The Tribunal then addressed the cause of the applicant's incapacity for work, particularly the application of the "alone" test, found in s 24(1)(b) and (c) of the VE Act. The Tribunal also reminded itself of the provisions of s 24(2) of the VE Act. The Tribunal discussed the evidence at length, including a substantial amount of expert medical evidence. In addition to that, he has now been out of the workforce for some seven years and, with his limited education, he is unlikely to be able to retrain so that he could undertake alternative employment. Coupled with his age, these factors also play a part in his inability to continue to undertake remunerative work. Clearly, in my opinion, Mr Baljas does not meet the alone test set out in s 24 of the Act. That is to say, the Tribunal had to determine whether the applicant was, by reason of his war-caused incapacity alone, prevented from continuing to undertake remunerative work that he had been undertaking. This was the issue the Tribunal had to determine by reference to s 24(1)(c) of the VE Act. For the purpose of this determination, s 24(2)(a) made it clear that, if the applicant had ceased to engage in remunerative work for reasons other than the war-caused incapacity, or was incapacitated or prevented from engaging in remunerative work for some reason other than the war-caused incapacity, the "alone" test would not be satisfied. In [47] of its reasons for decision, the Tribunal made a clear finding that the injury to the applicant's shoulders, coupled with the other factors it identified that were not war-caused, played a part in preventing him from continuing to undertake the remunerative work that he was previously undertaking. On this basis, he was unable to satisfy the "alone" test. Counsel for the applicant advanced in this appeal various arguments to the effect that the Tribunal had failed to apply s 24(1)(c) and (2)(a) correctly in reaching this finding. Some of these arguments were disguised attempts to invite the Court to revisit the Tribunal's findings of fact, including its ultimate finding as to the effect of the injury to the applicant's shoulders. It is necessary to identify and examine each of the arguments advanced. Counsel for the applicant took issue with the Tribunal's characterisation of its task in [28] of its reasons for decision. In that paragraph, the Tribunal said that "if any factors other than [the applicant's] accepted medical conditions prevent him from continuing to undertake the remunerative work that he was undertaking, he will not be eligible for a pension at the special rate. " The contention was that this was a misstatement of the test as to whether the applicant's disabilities alone prevented him from continuing to undertake remunerative work that he was undertaking, thereby causing a loss of income he would otherwise be receiving. The contention was that the Tribunal applied a test more onerous than it should have. I am unable to discern the difference between the statement of the test by the applicant's counsel and the statement of the test by the Tribunal in [28] of its reasons for decision. As a shorthand method of stating the test laid down in s 24(1)(c) and (2)(a) of the VE Act, what the Tribunal said in [28] was perfectly adequate. In any event, what the Tribunal actually did in [47] of its reasons for decision was to apply that test correctly. Its clear finding of fact that the injury to the applicant's shoulders played a part in preventing the applicant from continuing to undertake the remunerative work that he was previously undertaking was decisive in the determination that the applicant did not meet the "alone" test. There was undoubtedly evidence on which the Tribunal could properly have made, and did make, this finding of fact. Counsel for the applicant contended that the Tribunal took the wrong approach to determining what was the remunerative work that the applicant was prevented from continuing to undertake. It was said that the correct approach was to determine, as a matter of hypothetical fact, an assessment of what the applicant "probably would have done if he had none of his service disabilities": Repatriation Commission v Smith (1987) 15 FCR 327 at 337 per Beaumont J, with whom Northrop and Spender JJ concurred. Further, the phrase "remunerative work which the respondent was undertaking" in s 24(1)(c) must be "read as a reference to the type of work which the member previously undertook and not to any particular job": Banovich v Repatriation Commission (1986) 69 ALR 395 at 402. The argument was that the Tribunal had restricted itself to a consideration of the actual job that the applicant had been employed to perform by Haden Engineering, and had not considered either the nature of his work in general, or other work that he might have performed but for his war-caused incapacity. These contentions are unfounded. At [24] of its reasons for decision, the Tribunal identified the relevant remunerative work as that of "an air-conditioning plumber/installer", involving significant manual work, including the lifting of heavy items and work in confined spaces and awkward positions. This was the type of work that the applicant had been doing for some 24 years before the injury to his shoulders. The applicant did not give to the Tribunal any evidence suggesting that he would have been able to undertake work of some other type. In the course of re-examining him before the Tribunal, counsel for the applicant asked the applicant what he thought he would be doing at that time if he did not have his war-caused conditions. The applicant responded "There's a lot of things. " Counsel for the applicant did not follow up this answer by asking for any specification of the kinds of things the applicant contemplated. Instead, he asked, "Would you still be with the firm that you were with originally? " The applicant replied "Well, it's quite possible. " There was no evidence to support the submission, made by counsel for the applicant at the hearing of this appeal, that the Tribunal should have considered other forms of plumbing work that the applicant might have undertaken. In any event, the Tribunal did make other relevant findings of fact at [47] of its reasons for decision. It found that the applicant had been out of the workforce for some seven years and, with his limited education, was unlikely to be able to retrain so that he could undertake alternative employment. Coupled with the applicant's age, these factors played a part in his inability to continue to undertake remunerative work. In other words, they were factors contributing to the applicant's inability to meet the "alone" test. Counsel for the applicant attempted to argue that the Tribunal had wrongly applied s 24(2)(a) by focussing on the time when the applicant first suffered his shoulder injuries, and failing to take into account the repair of his shoulders by surgery, his return to work and the effect of his war-caused disabilities in preventing him from availing himself of an offer of an office job with his former employer. The Tribunal was far from falling into any such error. The applicant's return to work on light duties is the subject of references in [13], [30] and [35]. It is impossible to imagine that the Tribunal did not take into account the period of return to work on light duties. In any event, the Tribunal found that the applicant did not meet the "alone" test in s 24(1)(c) of the VE Act during the relevant assessment period, a finding that was fatal to the applicant's case, whatever was the date on which he was found to have ceased work. Finally, counsel for the applicant contended that the Tribunal did not take account of the applicant's evidence that the injury to his shoulders in 2000 was not the reason he had not been able to undertake his work as a plumber, but after his return to work he ceased work again because of his war-caused conditions. In fact, the Tribunal rejected this proposition, partly because of the view it took of the medical evidence. It had ample basis for doing so. Its conclusion was one of fact, and cannot be challenged in an appeal of this nature, which is limited to questions of law. The applicant has failed to establish that the Tribunal did not apply s 24(1)(c) and (2)(a) of the VE Act correctly. Relying on Sheehy v Repatriation Commission (1996) 66 FCR 569 at 573-574, counsel contended that the applicant's remunerative activity had ceased on his suffering of the injury to his shoulders. After that, he became a person "who has not been engaged in remunerative work". The Tribunal should have seen his return to work on light duties as not engaging in remunerative work, because the attempt was unsuccessful, but should have seen that attempt as evidence that the applicant "has been genuinely seeking to engage in remunerative work". In Giesen v Repatriation Commission [2005] FCA 846 (2005) 87 ALD 347 at [19] - [26] , I set out the reasoning that led me to the view that s 24(2)(b) is not construed properly as an ameliorating provision in a case such as the present. Section 24(1)(c) of the VE Act deals with a person who has been "prevented from continuing to undertake remunerative work that the veteran was undertaking", ie with someone who has worked. The purpose of s 24(2)(b) is to enable a person who cannot fit into this category, because of never having worked since his or her relevant war service, to claim pension at the special rate if he or she can satisfy the requirements of s 24(2)(b). For the reasons I gave in Giesen , I remain of the view that s 24(2)(b) has no application to the present case. In Giesen at [27], however, I indicated that I was prepared to consider the application of s 24(2)(b), on the basis that both parties took the view that it was applicable. In the present case, both parties also expressed the view that s 24(2)(b) is an ameliorating provision, applicable even where a veteran has ceased to engage in remunerative work. The attempt to rely on Sheehy , and to argue that the period of light duties undertaken by the applicant after he had suffered the injury to his shoulders was not itself engaging in remunerative work, appears to be a device adopted by counsel for the applicant to overcome the fact that there was no evidence at all that the applicant had been genuinely seeking to engage in remunerative work, or would have been so seeking but for his war-caused incapacity. In Sheehy , the Full Court held that a veteran could not be said to "undertake" remunerative work, or to have been "undertaking" such work unless he or she had managed to perform such work, to undertake it successfully or effectively. In that case, it had become apparent within a week of the return to work that the veteran concerned was unable to cope with his duties. In the present case, the return to work persisted for three months, according to the applicant's evidence. His evidence was that he started off doing all light duties and "then all of a sudden we're back to normal. " He indicated that he was carrying heavy items and doing work of a kind he had done usually. At least for that period, it was clear that the applicant's own evidence was that he was undertaking that work. There was no occasion for the Tribunal to make a finding that the three-month period of return to work should have been disregarded in the determination of what remunerative work the applicant had been undertaking. The result of this analysis is that there was no evidence that the applicant had been seeking to engage in remunerative work, or would have been so seeking but for his war-caused incapacity. He declined an approach by his former employer to be retrained for an office job. There were suggestions in cross-examination that he was reluctant to engage in employment, because there were no jobs within a reasonable distance of his home, and because he had responsibility for caring for young children at his home. On the evidence, no occasion arose for the Tribunal to consider the application of s 24(2)(b). Any finding that the applicant had been seeking to engage in remunerative work, or would have done so but for his war-caused incapacity, would have been perverse. This was said to have been demonstrated by the Tribunal in a number of ways. One was simply noting conflicting evidence, without attempting to resolve the conflicts and particularly without asking the applicant or his counsel to clarify the situation. Another was the Tribunal finding that the applicant had stopped work due to bilateral arm pain, and allegedly ignoring his evidence that he was not able to cope with work because of the medication he was taking for other conditions. Yet another was the Tribunal improperly restricting the nature of remunerative work that it considered, but considering only the particular job that the applicant had been performing prior to his injury. Another was failing to identify the type of work that the applicant was capable of doing and trained to perform, which allegedly led the Tribunal to fail properly to identify the effect of the accepted war-caused disabilities on the applicant's ability to continue with or resume remunerative employment. Finally, it was suggested that the Tribunal failed to determine whether the accepted disabilities were the substantial cause of the applicant's inability to obtain work. The last of these submissions was an attempt to put the s 24(2)(b) argument in another guise. The remaining ones were attempts to persuade this Court to intervene in the fact-finding process of the Tribunal. Neither the beneficial nature of the legislation, nor any aspect of s 119 of the VE Act, extends to overriding the express provisions of the VE Act. The Tribunal was applying s 24(1)(c) of the VE Act. As I have held, it applied it correctly as a matter of law. There was ample evidence on which the Tribunal could reach the factual conclusions it reached. Section 43(2B) requires the Tribunal to include in its reasons findings on material questions of fact and a reference to the evidence or other material on which those findings were based. The alleged inadequacy of the reasons was never particularised. I have read the Tribunal's reasons carefully and am unable to fault them. The evidence was summarised appropriately and the process of reasoning of the Tribunal is apparent. Based on the evidence, the Tribunal made a crucial finding adverse to the applicant, which meant that he was unable to satisfy the "alone" test in s 24(1)(c) of the VE Act. As I have said, the finding that there were factors other than the war-caused disabilities that prevented the applicant from continuing to engage in remunerative work that he had been undertaking was fatal to the applicant's case. Again, counsel for the applicant cannot invite this Court to intervene in the fact-finding process under the guise of attacking the adequacy of the Tribunal's reasons. The appeal must be dismissed. No reason was advanced, and none appears from the nature of the case, why the usual rule, that costs follow the event, should not be followed. Accordingly, the applicant will be ordered to pay the Commission's costs of the appeal. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | pension special rate "alone" test whether applicant's war-caused incapacity alone prevented him from continuing to undertake remunerative work he had been undertaking whether administrative appeals tribunal applied wrong test whether tribunal misstated its task whether tribunal took wrong approach to determining what was remunerative work that applicant was prevented from continuing to undertake whether tribunal focused on wrong time whether tribunal failed to take into account applicant's evidence whether tribunal required to apply provision applying to a veteran who "has not worked" whether tribunal failed to take account of beneficial nature of legislation and provisions requiring lenient approach whether tribunal's reasons inadequate veterans' affairs |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs made on 24 July 1999 to refuse to grant a protection visa to the appellant. He claims to be a Sikh whose family was active in the early 1980's for an independent Sikh state. The appellant claims that his father was a member of the Khalistan freedom movement and Khalistan Commando Force (KCF) and that the appellant himself was a member of the Sikh Students Federation and KCF. His claims involved his uncle and father being killed by the police (in 1986 and 1994 respectively), that the police harassed and threatened his family, and that the appellant was arrested in 1996. The Tribunal stated that the appellant's evidence was internally inconsistent and unconvincing, and found most implausible the details of persecution by the police. It found his evidence regarding adverse interest by the authorities was implausible as country information indicated that the Khalistan movement was no longer active in Punjab and that Sikhs did not constitute a persecuted group and members of groups that were targeted were now in general terms safe. He gave inconsistent and unconvincing evidence...on key aspects of his claims. The Tribunal considered the Applicant readily resorted without justification to blaming a poor memory, trauma, the poor English of a friend who filled out his applications, or other reasons, to explain inconsistencies in his evidence or other unsatisfactory aspects in the presentation of his claims. He showed no conviction in the truth of what he told the Tribunal. Much of his evidence was implausible and unconvincing. The Tribunal noted that the warrant was issued two years after the appellant's departure from India to Australia and concerned matters in 1994, that there was no prior mention of the outstanding warrant of arrest to the Tribunal before submission of the document and that the appellant was able to depart India without difficulties. The Tribunal also did not place weight on other documents and correspondence submitted by the appellant due to inconsistencies between those documents and the oral evidence given by the appellant at the hearing. 5 The Tribunal found that neither the appellant nor his family were actively involved in the Sikh Khalistan movement or were at risk of persecution for their actual or perceived political role. The Tribunal found the appellant was a completely unreliable witness to the truth about all the core aspects of his claims and was not satisfied the appellant had a well-founded fear of persecution for a Convention reason. That application was dismissed by Barnes FM pursuant to r 13.03A(c) of the Federal Magistrate Court Rules 2001 due to the appellant's non-appearance at the hearing on 4 April 2006. Those orders of 4 April 2006 were set aside by Barnes FM on 26 April 2006 pursuant to application made on 5 April 2006 and the matter was adjourned for further hearing on 22 May 2006. 7 By amended application filed on 29 September 2004, the appellant effectively raised two grounds of review, namely that the Tribunal failed to consider the appellant's claim by reference to his association with the Khalistan revolution or movement in Punjab, and that the Tribunal's decision overall was not based upon reasoning which was rational or logical. 8 In relation to the first ground, her Honour held at [14] of her reasons for judgment that the Tribunal did consider the appellant's claim that he was associated with the Khalistan revolution or movement in Punjab and rejected those claims due to its findings in relation to the appellant's credibility. 9 In relation to the second ground, her Honour held at [15] of her reasons for judgment that the Tribunal's reasons were comprehensive, addressed all of the aspects of the appellant's claims and set out detailed reasons for its findings. Her Honour found that no lack of logic or rationality was apparent, let alone a lack of logic or rationality such as to evidence a jurisdictional error. 10 Her Honour went on to consider further grounds of contention raised by counsel for the first respondent as warranting consideration but in relation to which it was submitted no jurisdictional error was apparent. Her Honour first considered in detail whether there was any lack of procedural fairness in relation to the Tribunal's failure to put to the appellant its views about the appellant's documents. Her Honour, in my view correctly, proceeded on the basis that the common law principles applied: see WAEJ v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 76 ALD 597 at [36] to [40]. On the contrary they were in some respect inconsistent with his claims. As the Tribunal observed, in the applicant's oral evidence he stated that his father was dead and that he had been killed in 1994 which was two years before the applicant claimed to have been detained (in 1996 for a few hours). Yet the documents included and referred to an affidavit sworn in 2001, purportedly by the applicant's father and one claimed the applicant and his father were arrested and detained together. In one respect the documents made fresh claims. The applicant had told the Tribunal that he knew nothing about a warrant of arrest being issued. The copy of the document described as a warrant of arrest was dated 19 April 2001, which was after the second Tribunal hearing, made a fresh claim that a warrant of arrest had been issued (in addition to the earlier oral claims of the applicant that the police were looking for him and if they found him he would be in trouble). The weight to be given to particular items of evidence is a matter for the Tribunal and the Tribunal was not obliged to put its thought processes or reasoning to the applicant in relation to such inconsistencies. It cannot be said that the Tribunal's conclusions in relation to the weight to be given to documents making such inconsistent claims would not "obviously be open on the known material" (See Commissioner for Australian Capital Territory v Alphaone (1994) FCR 573 at 591 --- 592). These findings were, in fact, sufficient to address the documents provided by the applicant. In this sense, the Tribunal's view that the documents were fabricated to assist the applicant's claims was not the basis for its decision. Therefore, her Honour reasoned, this was not a case in which the authenticity (or lack thereof) of the documents was a critical step in the reasoning of the Tribunal in relation to the claims of the appellant. 13 Insofar as the documents made fresh claims, the Tribunal had rejected this material as fabricated to assist the appellant's case. In this regard, her Honour noted that the basis of this finding of fabrication was the Tribunal's adverse credibility finding about the appellant and the inconsistencies between the material and the appellant's oral claims as well as country information. Her Honour found that such finding was open to it on the evidence before it. Nor was it based on independent information about document fraud which it may have been necessary to put to the applicant...[T]here was evidence to support the Tribunal's finding in this respect. It was not a "bare assertion" of fabrication...[A]s the Tribunal had made an assessment that the evidence was not to be relied on, it was a "logical conclusion" that the documents were fabricated. 15 Her Honour then considered whether there had been a breach of s 424A of the Migration Act 1958 (Cth) ('the Act') because the Tribunal used the inconsistencies between the appellant's oral claims and claims in the appellant's statutory declaration attached to his protection visa application to find that the appellant was not an impressive witness. Her Honour found that these inconsistencies were information for the purposes of s 424A(1) and that these inconsistencies had formed part of the reason for the Tribunal rejecting the appellant's credibility. Nevertheless, her Honour found that since the appellant had given the information in his statutory declaration to the Tribunal, it fell within the exception provided in s 424A(3)(b). Accordingly, she found that the appellant had adopted or republished his statutory declaration for the purpose of his review application. 18 As no jurisdictional error was established, the Federal Magistrate dismissed the application. The Federal Magistrate failed to find the Tribunal did not consider all the evidence given by the appellant. 2. The Federal Magistrate erred by 'endorsing the Tribunal errors'; specifically that her Honour erred by failing to pronounce judgment in favour of the appellant despite finding that the Tribunal had erred with regard to the inconsistencies in evidence it had relied upon. 3. The Federal Magistrate failed to find the Tribunal's 'implausibility of evidence to test' was contrary to law because the Tribunal accepted that the appellant was arrested once by the police, and should have applied Chan Yee Kin v Minister for Immigration & Ethnic Affairs [1989] HCA 62 ; (1989) 169 CLR 379 where it is incumbent on a decision-maker to evaluate whether the appellant's past experiences produced a well-founded fear of being persecuted. The Federal Magistrate considered the appellant's claims, as particularised by the appellant in his application for judicial review, and found that the Tribunal had considered but rejected the appellant's claim. The appellant's disagreement with this conclusion does not establish any appealable error and accordingly this ground of appeal must fail. 21 The second claim for review must also fail. This claim and the particulars given by the appellant misstates her Federal Magistrate's findings. Her Honour did not find that the Tribunal had erred but in fact found that the Tribunal was not required to put the inconsistencies to the appellant due to the operation of s 424A(3)(b). 22 Further, I accept her Honour's finding that the applicant had adopted or republished his original claims in his statutory declaration in the application for review. Such a finding is consistent with the reasoning of Rares J in SZGGT . It was open to her Honour to read the appellant's application for review as incorporating the substantive claims made in the appellant's statutory declaration which supported his application for a protection visa. 23 The final ground asserted by the appellant was not raised before the Federal Magistrate and so ought not to be raised for the first time on appeal: see H v Minister for Immigration & Multicultural Affairs (2000) 63 ALD 43. The claim and particulars given by the appellant again misstates the Tribunal's findings. The Tribunal did not accept that the appellant had been arrested at all but instead found the appellant's evidence in this regard to be implausible and manufactured. These findings were open to the Tribunal on the evidence before it and no error is revealed. Accordingly even if I were to allow this new ground, it would fail. Therefore, I would not grant leave to the appellant to raise a new ground where the ground of appeal is hopeless and bound to fail. | appeal from federal magistrate's review of a decision of the refugee review tribunal procedural fairness whether principles of procedural fairness require tribunal to put its views to the appellant on the appellant's document rejection of documents not based on credibility of appellant migration |
The plaintiff, Mervyn Malcolm Posner was appointed liquidator. Mr Posner now applies for the winding up to be terminated as the company is solvent and all creditors support the termination of the winding up. The company is now trading very profitably in providing conventional real estate agency services in rural Western Australia. Such an application may be made by a liquidator of the company. 4 But first, before I come to the specific issues there are some general considerations. The court may have regard to a range of factors. The granting of a stay is a discretionary matter, and there is a clear onus on the applicant to make out a positive case for a stay: In Re: Calgary and Edmonton Land Co Ltd (In liq) (1975) 1 WLR 355 at pp 358-359 per Megarry J. See also sec. 243 of the Act [i.e, Companies Act 1961 ]. There must be service of notice of the application for a stay on all creditors and contributories, and proof of this; Re South Barrule Slate Quarry Co (1869) 8 Eq 688; Re Bank of Queensland Ltd (1870) 2 QSCR 113. The nature and extent of the creditors must be shown, and whether or not all debts have been or will be discharged: Krextile Holdings Pty Ltd v Widdows (supra) [[1974] VR 689]; Re Data Homes Pty Ltd (supra) [1971] 1 NSWLR 338], Law of Company Liquidation (supra) at p 395. The attitude of creditors, contributories and the liquidator is a relevant consideration: sec. 243(1), Calgary and Edmonton Land Co Ltd (supra). The current trading position and general solvency of the company should be demonstrated. Solvency is of significance when a stay of proceedings in the winding-up is sought: In re a Private Company (1935) NZLR 120; Re Mascot Home Furnishers Pty Ltd (1970) VR 593 at p 598. If there has been non-compliance by directors with their statutory duties as to the giving of information or furnishing a statement of affairs, a full explanation of the reasons and circumstances should be given: Re Telescriptor Syndicate Ltd (supra) [[1903] 2 Ch 174]. The general background and circumstances which led to the winding-up order should be explained: Krextile Holdings Pty Ltd v Widdows (supra). The nature of the business carried on by the company should be demonstrated, and whether or not the conduct of the company was in any way contrary to 'commercial morality' or the 'public interest': Krextile Holdings Pty Ltd v Widdows (supra). 6 As to more specific matters, as future creditors are concerned, an important consideration arises if the proposal for termination of the winding up preserves existing debt. If that is so, it is necessary to ascertain what arrangements exist and whether those arrangements are binding for the subordination of claimants of such debt to newly incurred debts and/or whether there is any proposal to capitalise debts: see Re Data Homes [1972] 2 NSWLR 22 at 27 and Re Nardell [2004] NSWSC 281 ; 182 FLR 290 at 78. In this application, there are two possible debts requiring consideration of this nature. 7 In circumstances where the winding up is sought after creditors have approved a Deed of Company Arrangement, (DOCA) as they have here, the object of Pt 5.3A CA are relevant matters and may be of considerable importance. Mere optimism as to trading having improved will not suffice. That requirement is illustrated by a case where the threshold on this point was not reached. In any application under s.482 for an order terminating winding up, the onus is on the applicant to make out a positive case for termination: Re Calgary & Edmonton Land Co Ltd [1975] 1 WLR 355 at pp.358-9. Where the ground for winding up was insolvency, an indispensable part of the applicant's task is to prove solvency. As a matter of public policy or commercial morality, the court will not countenance the return of an insolvent company to the mainstream of commercial life: see, for example, Re Mascot Home Furnishers Pty Ltd [1970] VR 593; Re Denistone Real Estate Pty Ltd [1970] 3 NSWR 327; Re Data Homes Pty Ltd [1971] 1 NSWLR 338. Upon an application of the present kind, as in the case of defence to a winding up summons where the presumption of insolvency operates, the party bearing the onus of proof must lead the "fullest and best" evidence of the financial position: Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 477. And as was pointed out in Expile Pty Ltd v Jabb's Excavations Pty Ltd (2003) 45 ACSR 711 by Santow JA (with whom Meagher and Handley JJA agreed), "proper verification of assets and liabilities is critical to rebut the presumption of insolvency". Upon applications such as the present, the court will not act on unsubstantiated evidence of such a person: Deputy Commissioner of Taxation v Sydney Concrete Steel Fixing Pty Ltd (1999) 17 ACLC 972. That does not engender confidence in his assessment of the assets and liabilities of the company. To some extent his evidence is corroborated by the liquidator. However, the liquidator says that he has only undertaken very limited investigations into the affairs of the defendant. Before I could act on the liquidator's evidence I would need to know what investigations the liquidator has made so as to understand the basis upon which he has satisfied himself of the accuracy of the Report as to Affairs. [25] There is another possibility which may provide additional support to the liquidator's evidence, namely, for there to be evidence from the external accountant, Mr Holliday, as to the company's financial position. Sometimes, the liquidator can verify financial facts sufficiently to express an opinion that the company is solvent or, at least, to put before the court critically assessed information which assists it in coming to such a conclusion. Sometimes an external accountant can do these things. The court is receptive to that kind of evidence, provided that it sufficiently demonstrates the basis for the opinion that the company is solvent and reflects investigations and verification beyond the mere say-so of the company's controller. No such evidence has been led here. On 12 September 2006 he appointed Mr Giovanni Carrello as administrator of the company pursuant to s 436B(1) (CA). A second meeting of creditors was held on 10 October 2006 pursuant s 439A CA. At that meeting the creditors who were present voted unanimously in favour of the company entering into a DOCA. As a result, such a deed was entered into on 17 October 2006. The DOCA has been produced in evidence by Mr Carrello. 10 A subsequent meeting of creditors was also held under s 445F CA. The creditors unanimously voted in favour of the company entering into a further deed which varied the DOCA. That occurred and the Deed of Variation was duly executed on 24 October 2007. Under the terms and authority of the varied DOCA, Mr Carrello as administrator has prepared the application which is now made by Mr Posner as official liquidator of the company. 11 The liquidator and the deed administrator are professional experts. They have sworn to their opinion that the company is solvent. Likewise, the director of the company, Colin Maxwell King has so sworn. Each of them has gone into substantial detail in relation to current and historical liquidity, cash receipts, expenditure, forecasts and expectations based on current contracts. Without recording all that evidence, I am persuaded and so find that the company is solvent and is likely to remain so for a reasonable period of time. 12 The evidence is that Mr Carrello, the deed administrator, currently has clearly more than sufficient funds for payment of all outstanding fees, costs, expenses and liabilities which it incurred during the administration of the DOCA and during liquidation. Both Mr Posner and the deed administrator will retain sufficient funds in trust to ensure that any such expenditure is protected. 13 Both the liquidator and the deed administrator expressed the view that the company is profitable and it is likely to continue to be solvent and profitable for the foreseeable future. In support of that conclusion the evidence is that there is available cash of hundreds of thousand of dollars. Further, during the course of the administration the company has received revenue of about $2.2 million, its ordinary operating expenses are less than $30,000 a month and it is expecting to continue to receive substantial income between now and July 2008. 14 The original applicant for the winding up order was the Australian Taxation Office. The ATO was present with other creditors at the second meeting of creditors on 10 October 2006 when all creditors unanimously voted in favour of the DOCA on the understanding that its purpose was that the company would apply to have the winding up terminated. 15 There is only one undisputed debt outstanding on the evidence. That is a debt owing to Fort Ross Nominees. That company is controlled by Elaine Helen King who had also sworn an affidavit strongly supporting the termination of the winding up. Mrs King is the wife of Colin Maxwell King. Each of them presently owns 50% of the issued shares in the company. Mr King is the sole director and secretary of the company. All creditors involved and all persons appointed to positions in relation to the affairs of the company have agreed to the proposal that the remaining debt paid to Fort Ross Nominees will be converted into 51,524 ordinary shares in the company to be issued to Fort Ross Nominees in full satisfaction of its debt. This satisfaction of the debt, having been approved as a mechanism by all involved is in my view consistent with the principles as discussed in Re Data Homes [1972] 2 NSWLR 22 at 27. 16 One other outstanding contingent but disputed debt arises in relation to proceedings brought in the Supreme Court of Western Australia by one Kevin Lawless. I am told that these proceedings pertain to a property acquired by Mr Lawless in the course of the standard real estate business of the company. The company has been joined as a party in those proceedings. However, once again the issue has been addressed by obtaining confirmation from the company's insurer that it will indemnify the company for liability, if any, in those proceedings. Mr Lawless in turn has accepted the indemnity of the insurer to the extent it is available as a complete answer, should the company be liable. Mr Lawless is aware of this application to terminate the winding up. The terms of the Deed of Variation were negotiated with Mr Lawless on the basis that they would enable the company to make this application. 17 Finally, in relation to the circumstances giving rise to the original winding up, the evidence from Mr King was that the company was wound up partly by virtue of 'human error'. This was said to take the form of an external advisor misunderstanding the correct return date for the original application. The result was that the winding up application was heard before the company had made arrangements to pay or otherwise resolve the claims of the ATO. Although the deed administrator, Mr Carrello has also expressed the view that the management systems needed to be improved with a better administration structure, that, he says, has now been implemented. On the other hand he has not refuted Mr King's statement that the company in fact had the capacity (albeit by borrowing) to meet the payments due to the ATO. (In fact at no time has the company ever had an overdraft account). It would be a concern if the arrangements for addressing responsibility for such indebtedness had not been addressed quite specifically as it would not be in the public interest or consistent with commercial morality to allow loose arrangements in handling of the company's financial responsibilities to place future creditors at risk once again. The change in personnel and procedures was explained to me and Mr Carrello is satisfied that those arrangements present a considerable improvement. I accept that evidence. As against that, the termination continuing is likely to be disadvantageous to all those parties. Creditors will be paid 100 cents in the dollar and the company on the evidence put before me is solvent and profitable. Terminating the winding up would appear to support the objects of Pt 5.3A CA to which I referred above and has unanimous support by all interested parties. 20 I therefore made the orders sought on the return of the application, indicating that I would publish brief reasons shortly. These are those reasons for making the orders sought. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | termination of winding up of company quality of evidence on solvency and profitability source of support for termination capitalisation of debt assessment of cause of winding up corporations |
The second defendant, Corynne Lee McArthur, was and is the sole director of Meribal. The third and fourth defendants are the Deed Administrators of the DOCA. The DOCA is dated 21 August 2007. There is a threshold question as to the form of it. The copy registered with the Australian Securities and Investments Commission (ASIC) did not include a paragraph 38 but it is included in the copy produced by the defendants. I will proceed on the basis that that paragraph is included. 2 Some history should be sketched before the DOCA is analysed. Meribal was incorporated on 7 February 2001 and took over a business which had been commenced in around 2000 in high rise construction specialising in Hebel (aerated concrete panels), plasterboard and carpentry. In August 2005 Meribal had a major dispute with Vatera in relation to payment for work done by Meribal for Vatera at premises 30---36 Albany Street St Leonards. Meribal ceased trading on 18 December 2005. Meribal had had an annual turnover in the millions of dollars. Meribal had been run by George McArthur, and Dean McArthur and his wife, Karen McArthur, were employees. Dean McArthur and Corynne McArthur are the son and daughter respectively of George McArthur. After cessation of trading, Corynne McArthur became the sole director of Meribal. Corynne McArthur's major focus was on pursuing Meribal's claims against Vatera. Meribal made an adjudication application under the Building and Construction Industry Security of Payment Act 1999 (NSW) on or about 5 September 2006. A determination was handed down on 16 September 2006 awarding $174,205 to Meribal plus interest and costs. That amount has been paid. Meribal made a further adjudication application on or about 30 November 2006 in relation to a further claim. The second adjudication determination was handed down on 22 December 2006 awarding $103,109.60 to Meribal plus interest and costs. 3 As Vatera did not pay the amount of the second adjudication determination, Meribal entered judgment for that sum in the Liverpool Registry of the District Court on or about 8 February 2007. Shortly thereafter, Vatera commenced proceedings against Meribal in the Sydney Registry of the District Court challenging the second adjudication determination and part of the first adjudication determination. There were some interlocutory proceedings including a directions hearing on 1 May 2007 which provided for Meribal to file and serve a cross-claim by 12 June 2007. Meribal was to assert claims for the difference between the sum sought under the second adjudication application and the amount awarded to it by the second adjudication determination, and for delay and consequential loss in relation to Meribal's work at the St Leonards premises. That direction was not complied with. 4 Corynne McArthur was concerned about the financial position of Meribal. It owed substantial sums to trade creditors. She saw the claim against Vatera as being its principal asset but she was concerned as to how that could be pursued. An officer of the Australian Taxation Office suggested the idea of a DOCA. She rang a Mr Barrett, a friend of hers who had been providing consulting services, who introduced her to Riad Tayeh of the firm de Vries Tayeh who she met on or about 29 June 2007. The meeting was chaired by Randall Joubert from de Vries Tayeh and Corynne McArthur was present in person. Five creditors, including George McArthur, were present by proxy. Robina Bhola from de Vries Tayeh was also present. No committee of inspection was appointed and no alternative administrators were nominated. 7 The second meeting of creditors was held on 1 August 2007. Riad Tayeh chaired the meeting. The Chairman held three proxies. Two creditors plus Corynne McArthur attended in person --- one of those being Mr Barrett who moved the substantive motions. (Now annexed to these minutes) That the remuneration of the Administrators for the period from 4 July 2007 to 1 August 2007 in the amount of $25,000 exclusive of GST is hereby approved for payment. That the remuneration of the Administrators for the period from 1 August 2007 to commencement of the Deed shall be a sum equal to the cost of time spent by the Administrators and their staff, calculated at their firm's standard rates per hour for such work, up to an amount of $5,000, exclusive of GST. 9 The Administrators' report pursuant to s 439A recommended that it was in the creditors' best interests to accept the DOCA which had been proposed by the director of Meribal. This amount is calculated based upon the assumption that the legal proceedings brought by the company against has merit and is successful and an amount of $600,000 is awarded in damages. This would include up to an amount of $5,000 for the period from the date of the second meeting of creditors when the DOCA is passed to the execution of the DOCA up to a period of 21 days following the meeting and an amount of $25,000 for administering the DOCA including the calling for proof of debts, the adjudication of the same and the distribution of a dividend. Upon the execution of the Deed, the Administrators would cease to be the Administrators of the company and have no further right to act in relation to the company. All powers and duties will accordingly revert to the director. The company shall remain active (trade) subject to the Deed of Company Arrangement until the Deed is fulfilled. The Deed Administrator will have to call for creditors to prove their debts and advertise in accordance with the Act and Regulations. After allowing for the statutory period to formally call for outstanding proof of debts and subsequent adjudication upon creditors' claims, we expect that the likely timing of the dividend to the company's unsecured creditors would be within 12---15 months. The Company funds a legal action for claims against Vatera Pty Ltd; 3. An amount of $600,000 to be received from the successful legal action brought by the company against a developer within 12 to 15 months. 5. The company is to be released of all debts upon making the final payment to participating creditors. 7. Pro-forma provisions of Schedule 8A of the Corporations Act will be included in the Deed, except for the requirement to lodge accounts with the Australian Securities & Investments Commission. 8. Riad Tayeh and Antony de Vries are to be appointed to act as Joint Deed Administrators. 9. Any surplus funds from the Administration and Deed of Company Arrangement periods will be repaid to the company. It is further my understanding that the charge was satisfied and the NAB paid out in full prior to our appointment. The position of Meribal depended substantially upon the director's Report as to Affairs. The Report as to Affairs claimed receivables of $357,000. The Administrators had not sighted the invoices nor debtors' aged ledger nor any financial statements and, accordingly, discounted the estimated realisable value by 100% as unrecoverable for the purposes of assessing values on liquidation. 12 There are a number of serious problems with that report and recommendation. The first is that Meribal's legal counsel had not certified as claimed. Indeed, at that time the cross-claim, which sought the amount in question, had not been filed. That was only one part of a fundamental problem. The report gave a quite misleading comparison between liquidation, on the one hand, and approving the DOCA on the other. Given the insolvency of Meribal, ultimate return of the company to the directors to trade was not a serious possibility. In the case of the DOCA, the claim against Vatera was valued in the amount of $600,000 with no deduction for costs whereas, for the purposes of liquidation, it was valued at $60,000. There was no explanation as to how the action would be carried on if the DOCA were approved. Meribal simply did not have the resources to do so. In other words, there is no explanation as to how Meribal, under the DOCA, could pursue the claim but that the claim could not be pursued by a liquidator. Then, far from the National Australia Bank (NAB) having been paid out, it was owed something in the order of $100,000 which was secured. Also, the complete write off of the receivables is surprising. No reference was made to the priority to be given to George McArthur or the basis for it. 13 No satisfactory explanation has been given about any of those matters. Tayeh says that his view was that a liquidator would not pursue the claim against Vatera because there would be no funds to do so. That, however, would depend upon the attitude of the other creditors, the director and the availability of external litigation funding. If the premise of the report was that the director would, herself, pursue the action, there is no disclosure as to that, or how it was to be effected. Furthermore, there is no explanation given as to why she could not have made an arrangement with the liquidator along the same lines. 14 In relation to the absence of the lawyer's certificate, it is said that that is of no remaining significance as the cross-claim was filed by a solicitor on behalf of Meribal, thus, carrying with it the same assurance. Such a serious misstatement can hardly be swept aside in that fashion but, in any event, there is no explanation as to how, on the basis of the normal solicitor's assurance, a claim could be valued fully without discount to reflect the chances of failure and for costs ( KGL Health Pty Ltd v Mechtler [2007] FCA 1410). Counsel for Vatera points out that the only particularised claim at that time was $270,000. 15 In addition to the difficulties with the report, the DOCA is in an unsatisfactory form. It appears to be a boilerplate that is not well adapted for the particular proposal plus a home grown addition. The result is not acceptable. Upon execution of the DOCA, control of Meribal (including its assets and business) reverted to the director (cl 8.1). Trading is not prohibited. Meribal and the directors undertook to pay all taxes and statutory obligations due for payment by the company thereafter. There is no committee of creditors. There is a moratorium during the term of the DOCA in relation to any action by a creditor. A creditor is any person having a claim against Meribal whose claim is admitted by the Administrators. The Corporations Act procedures for making claims to liquidators are incorporated by reference. The DOCA bars creditors who do not prove. However, the assets and business are returned to the control of the director. There are no subordinated claims and no provision of funding by any party who had proposed the DOCA. PAYMENTS TO CREDITORS UNDER THE DEED OF COMPANY ARRANGMENT. The legal case will be determined within 6-12 months, this time frame is specifically determined by the Courts and cannot be determined exactly. As the Company is not trading, there are no overheads, employee expenses or ongoing costs, all funds secured be Meribal Interiors NSW Pty Ltd will be allocated to the Deed Administrators for distribution. As detailed in the Report from The Administrators the payments to creditors will be made in the following order. i. Any disputes in amounts owed will mean that payment will be made on agreed amounts only. 19 Another clause entitles the Deed Administrators to draw upon the Deed Fund for their costs fixed in the sum of $30,000 plus GST plus disbursements (cl 5). There is no explanation that would provide any prima facie justification of that amount in view of the minor role of the Deed Administrators. 20 It will be observed that there is no provision dealing with the conduct of the case against Vatera and no obligation imposed in relation to conduct of the case. There is no provision dealing with costs incurred in connection with it nor with the liabilities for costs potentially incurred to Vatera. 21 The evidence from the director was that she is now in a financial position to pursue the claim against Vatera. It was pointed out to counsel for the first and second defendants that the deficiencies of the DOCA and of the Administrators' report in relation to the litigation alone were such as to make it very likely that an order setting aside the DOCA would be made in the absence of a clear and concrete proposal for amendment to cure the deficiencies. Whilst that course was initially foreshadowed by counsel for the first and second defendants, no such proposal emerged after an adjournment overnight. 22 Vatera relies upon what it contends to be a failure by the director to disclose all creditors to the Administrators. This caused a deficiency in information about those creditors and led to a failure to notify all creditors of the meetings. The evidence indicates that at least Vatera and four other persons claiming to be creditors, including two preferential creditors, did not receive any notice of the meetings. That appears to be an irregularity in relation to the meetings. There appears to be substance to Vatera's complaint that only friendly creditors were given notice. That may have been due to deficiencies in the supply of information to the Administrators, rather than fault on their part. The evidence given by the director indicates that she took a very narrow view as to classification as a creditor. In any event, the misleading nature of the Administrators' report could well have resulted in creditors not attending the meeting or otherwise responding if they were persuaded by the recommendation. It is not possible to do a notional recount. 23 Counsel for the first and second defendants has referred me to a number of authorities which recognise that the time pressures imposed by the Act in relation to administration make it inevitable that investigations and reports by administrators will be less than complete. They also support the proposition that deeds are not to be lightly set aside, stressing the need for materiality of misleading statements in the sense outlined in s 445D(1)(a)(ii) --- Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2005) 226 ALR 510 ; Khoury v Zambena Pty Ltd (1997) 23 ACSR 344 ; (1997) 15 ACLC 620 affirmed in Joseph Khoury & Sons v Zambena Pty Ltd [1999] NSWCA 402 ; (1999) 217 ALR 527 ; Deputy Commissioner of Taxation v Comcorp Australia Ltd (1996) 70 FCR 356 ; Deputy Commissioner of Taxation v Pddam Pty Ltd (1996) 19 ACSR 498 ; (1996) 14 ACLC 659 ; and Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99 ; (2000) 156 FLR 453; (2000) 34 ACSR 391. 24 Giving full weight to those authorities, in my opinion, each of the following grounds for termination of the DOCA has been satisfied: s 445D(1)(a) , (b), (c) and (f)(ii), together with (g), that reason being the inappropriate terms of the DOCA itself. Is there any proper reason for not making the order? 25 Vatera has standing to bring the proceeding, as a creditor or, in any event, as another interested person, being the other party to the litigation which looms large in this case. However, it must be recognised that the interests of Vatera are not the interests of the general creditors of Meribal. It is here to protect its own interests in relation to the litigation. However, it is not irrelevant that it may well be subject to a moratorium or a barring of its claim and yet have to face a claim brought by a company which is insolvent. 26 The fundamental reason for making the order in the present case is that the form of the DOCA is inappropriate and Meribal is plainly insolvent. Meribal should not be placed under the control of directors without much greater safeguards than exist under this DOCA. Furthermore, it cannot be assumed that a liquidator would decline to pursue the claim against Vatera if satisfactory arrangements are proposed by the director and/or one or more of the creditors. No ground is shown for orders validating the DOCA as sought by the cross-claim. 27 The DOCA should be terminated. Meribal should be wound up. One of the Administrators should not be appointed as liquidator. Leaving aside the criticism of the Administrators made on behalf of Vatera, Tayeh devised the steps which were taken that led to the DOCA. Furthermore, it is also clear that the Administrators have little actual knowledge of the affairs of Meribal. However, in my view it is important that the liquidator be at arm's length from Vatera. Vatera has proposed a recognised liquidator who would be appropriate for appointment on the assumption that there has been no relevant association between he and Vatera. The matter will stand over so that I can be satisfied of that, consider the formal orders to be made and hear the parties about costs. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | insolvency and administration deed of company arrangement application seeking termination of deed cross-claim seeking declaration of validity of deed false or misleading information contained in administrator's report to meeting of creditors deficiency in notice of meeting to creditors terms of deed in unsatisfactory form whether any proper reason for not making order for termination of deed and winding up of company corporations law |
2 Mr Brock was previously extradited from The Netherlands to Australia to face prosecution for an offence relating to conspiracy to import cannabis into Australia. On that charge he was found guilty and sentenced to 12 years' imprisonment. He was released on parole on 17 March 2005. 3 On the same day, namely 17 March 2005, he was arrested by the Australian Federal Police pursuant to a provisional arrest warrant under s 12 of the Extradition Act 1988 (Cth). 4 On 9 May 2005 the United States presented a formal request to Australia for the extradition of the Applicant. The then Minister for Justice and Customs issued a " notice of receipt of extradition request ", pursuant to s 16 of the Act, on 12 May 2005. 5 A magistrate ordered the Applicant be committed to prison pursuant to s 19(9) of the Act on 24 November 2005. 6 In addition to the present proceedings, there have been other proceedings instituted by Mr Brock in respect of both the issue of the notice under s 16 and the decision taken under s 19(9) of the 1988 Act. Those other proceedings have been resolved against Mr Brock. 8 On 24 November 2005 a magistrate of the New South Wales Central Local Court conducted a hearing pursuant to s 19. That hearing before the magistrate preceded the hearing of the proceedings commenced on 7 September 2005. Those proceedings were dismissed by consent by Justice Wilcox on 25 November 2005. 9 The magistrate's order under s 19(9) of the 1988 Act was in turn the subject of further proceedings commenced in this Court under s 21 of that Act on 8 December 2005. Those proceedings were dismissed on 9 May 2006: Brock v United States of America [2006] FCA 496. The Applicant was there represented by counsel appearing pro bono . 10 An appeal from that decision was dismissed: Brock v United States of America [2007] FCAFC 3 , 157 FCR 121. The Appellant was again represented by counsel on the hearing of the appeal. Further, special leave to appeal to the High Court was dismissed on 31 August 2007 : Brock v United States of America [2007] HCA Trans 487. The proceedings seeking to challenge the action taken pursuant to ss 22 and 23 have been resolved. The Minister has consented to an order in the nature of certiorari setting aside his decision. 13 Presently before the Court is a Notice of Motion seeking to have the Application filed on 3 October 2007 summarily dismissed because it is barred " by reason of the doctrines of issue estoppel and/or Anshun estoppel ". The Motion alternatively seeks dismissal of the proceedings pursuant to O 20 r 5 of the Federal Court Rules 1976 (Cth). The proceedings, the Notice of Motion maintains, are either " frivolous or vexatious " or an " abuse of process . The Court is greatly appreciative of the assistance of both Mr Lancaster and Ms Younan for appearing on behalf of the Applicant. 15 The matter has been heard and determined as a matter of urgency. The hearing of the Motion was originally expedited due to the prospect that action might be taken to implement the surrender warrant issued under s 23. The making of consent orders in respect of the warrant has, however, removed the reason for expedition. The Motion nevertheless was heard as it was considered by all that it should be resolved as expeditiously as possible. 16 Notwithstanding the shortness of time within which to consider the issues posed for resolution, it is considered that the result is clear. The proceedings should be dismissed. 17 It is understood that the Minister contends that there are two issues which have been resolved against Mr Brock such that the continuation of his present proceedings constitutes an abuse of process. The latter contention, however, is upheld. 18 An understanding as to the manner in which the Motion is to be resolved requires a brief overview of the Extradition Act 1988 (Cth) and the manner in which a request for extradition is dealt with under that Act. It should further be noted at the outset that the name of the Respondent Minister has recently changed to Minister for Home Affairs. An order changing the name of the Respondent will, accordingly, be made. In summary form, the scheme is as follows: The commencement of proceedings is by the issue of a provisional warrant under s 12(1) or by the giving of a notice under s 16(1). Once arrested, the person is required by s 15 to be taken before a magistrate and remanded in custody or on bail for such period as may be necessary for eligibility proceedings to be taken under s 19. Where a person is on remand under s 15 and the Attorney-General has given a notice under s 16(1), provision is made under s 19 for a magistrate to conduct proceedings to determine whether the person is eligible for surrender. If eligibility is so determined by the magistrate, provision is made by s 22 for the Attorney-General to decide whether the person is to be surrendered. 22 The interrelationship of sections 16 and 19 is central to that contention. Section 16 provides for the issue of a notice by the Attorney-General if the requirements of that section are met. The repository of the power conferred by s 16 is the Attorney-General, or in this case, the Minister. 23 Section 19 provides for a warrant to be issued by a magistrate for the surrender of a person, again if the requirements of that section are met. One of those requirements is that a notice under s 16(1) must have been given. The repository of that power is a magistrate. 24 Section 22 thereafter provides for a determination to be made by the Attorney-General as to whether a person is to be surrendered and s 23 provides for the issue of a surrender warrant. 25 The powers conferred upon the Attorney-General by s 16 and upon the magistrate by s 19 are to be exercised independently. It is thus no part of the function of the magistrate to review the materials before the Attorney-General; nor does the Attorney-General when making a determination under s 22 review the magistrate's state of satisfaction. But the power of a s 19 magistrate does not extend to the reviewing of the satisfaction of the original magistrate or of the opinion of the Attorney-General as to whether the person is an extraditable person. The powers conferred by the Act, other than those conferred on a Court by s 21, are administrative in nature. They are exercisable by different repositories in sequence, but none of them authorises the repository of a power to review the exercise of a power by another repository earlier in the sequence. Of course, the same issue or similar issues may arise for independent determination by the respective repositories of powers where the same issue or a similar issue conditions the exercise in sequence of their respective powers. Thus, if the Attorney-General forms an opinion when considering the issue of a s 16 notice that there is an extradition objection, he has no power to issue the notice; if the s 19 magistrate is satisfied that there are substantial grounds for believing that there is an extradition objection, the magistrate must order the person to be released; and unless the Attorney-General in making a determination under s 22 is satisfied that there is no extradition objection, he cannot issue a warrant for the person's surrender under s 23. But the s19 magistrate does not review the Attorney-General's non-formation of an opinion under s 16; nor does the Attorney-General review the s 19 magistrate's state of non-satisfaction. The existence or possible existence of extradition objections fall for consideration by the Attorney-General under s 16, by the s 19 magistrate and again by the Attorney-General under s 22 but on each occasion the repository of the relevant power makes an independent determination of the issue on which the existence of that power depends. The state of mind which is formed on that issue by those officers is not reviewable by a s 19 magistrate. Of course, prohibition or mandamus may go to an officer of the Commonwealth who exercises power under the Act but the amenability of decisions under s 12(1) and s 16 to judicial review does not expose those decisions to review by a magistrate who conducts administrative proceedings under s 19. Nor does subs (2)(a) in conjunction with subs (3)(a) of s 19 make the accusation of the person whose surrender is sought a condition affecting any power conferred by that section. The s 19 magistrate is neither required nor authorised to determine the issue whether that person is an extraditable person. Unlike the prior administrative determinations which may be made by the Minister or the Attorney-General or a magistrate, a decision made pursuant to s 21 is a judicial resolution of the issues there presented for resolution. 29 Section 21(2) provides that a Court, upon such an application being made, may confirm the order or quash the order. Section 21(6) provides that when conducting such a review, the Court " shall have regard only to the material that was before the magistrate . 31 The nature of the " review " process undertaken by a court pursuant to s 21 is the subject of some uncertainty. Where the " review " concerns an issue arising under s 19(2), there is no uncertainty and that that review is undertaken by way of a " rehearing ": Republic of South Africa v Dutton (1997) 77 FCR 128. It is a rehearing in which the court undertaking the review is authorised to reach its own conclusions on eligibility for surrender, but a rehearing which is limited statutorily to the material before the magistrate. 32 But there is some uncertainty as to the nature of the " review " undertaken if the issue is one arising under s 19(1). Non-compliance with s 19(1)(d) has been said to be non-compliance with a " necessary precondition or jurisdictional fact ": Knauder v Moore [2002] FCAFC 404 at [51] per Allsop J. See also Mansfield J at [1] and Conti J at [40]. Nevertheless, according to the Full Court in Knauder , if s 19(1)(d) has not been complied with the Court must release the appellant pursuant to s 21(2)(b)(i) of the Act, with the consequence that the country would have to begin extradition proceedings afresh (assuming it was in a position to do so): see Knauder at 343-4 per Conti J. The inconvenience of this result suggests that the jurisdictional precondition provided for by s 19(1)(d) should not be treated as a jurisdictional fact, subject to review by way of rehearing; that is, absent an error of law, the magistrate's decision, or her 'consideration' under s 19(1)(d), should be final: see Australian Heritage Commission v Mount Isa Mines Limited (1995) 60 FCR 456 at 466 per Black CJ; Australian Heritage Commission v Mount Isa Mines Limited [1997] HCA 10 ; (1997) 187 CLR 297; Timbarra Protection Coalition v Ross Mining NL [1999] NSWCA 8 ; (1999) 46 NSWLR 55 at 64 per Spigelman CJ (Mason P and Meagher JA agreeing). (For a discussion about the distinction between a jurisdictional precondition and a jurisdictional fact see M Aronson, B Dyer and M Groves Judicial Review of Administrative Action , 3 rd ed, Lawbook Co, Sydney, 2004 at 227-9). Even if, as Rares J suggests, the correct approach is to remit the matter to the magistrate for further hearing, considerable inconvenience to all concerned would remain. As Spigelman CJ explained in Timbarra , statutes are construed on the assumption that the legislature does not intend to cause inconvenience. This presumption applies strongly in relation to this Act, which is evidently intended to provide an expeditious and straightforward process, free from duplicitous review procedures: see Commonwealth, Parliamentary Debates , House of Representatives, 28 October 1987, 1615, (Lionel Bowen, Attorney General). In particular s 21(1) confines the relevant review to a review of the order, in this case under s 19(9), by warrant to commit Mr Brock to prison to await surrender. The question then arises of whether the review under s 21 encompasses consideration of the issues raised in s 19(1)(a)-(d). [82] The United States argued that s 21(1) did not extend the review to the question of the satisfaction of the conditions in s 19(1) which authorised the Magistrate to conduct the proceedings. However, such a construction of s 2(1) would allow what the Act does not expressly authorise. It would treat the failure to satisfy the conditions in s 19(1) as never having occurred. Obviously, the existence of such a notice is an objective fact which the section requires to be in existence. What gives the Magistrate power to conduct the proceedings under s 19(1) is the satisfaction of each of the jurisdictional conditions in s 19(1)(a)-(d). It is the satisfaction of those conditions which gives the Magistrate the authority of the enactment to make a decision under s 19(9) or (10) in proceedings which are conducted under the Act. [84] An administrative decision which involves jurisdictional error is regarded in law as no decision at all: Plaintiff S157/2002 v The Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 at 506 per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. Their Honours held that if there had been jurisdictional error because, for example, of a failure to discharge imperative duties, or to observe 'inviolable limitations or restraints', the decision in question could not properly be described as having been made under the Act there in question. While, of course, each statute must be construed having regard to its own terms, it is the purpose of s 19(1) to define the circumstances in which the Magistrate may conduct the proceeding it authorises with the ultimate consequences provided in s 19(9) or 19(10). 35 The power to make the orders as sought in that Motion is not disputed, nor are the principles upon which such a discretionary power is to be exercised. The power exists, but is to be " exercised sparingly ". As Lord Hoffman said in Arthur JS Hall & Co v Simons [2000] UKHL 38 ; [2000] 3 WLR 543 at 572, the underlying policies are that a defendant should not be troubled twice for the same reason and that there is 'a general public interest in the same issue not being litigated over again'. Lord Hoffman observed that the second rationale could be used to justify the extension of the rules of issue estoppel to cases in which the parties are not the same but the circumstances are such as to bring the parties within the spirit of the rule. In that regard he referred to Reichel v Magrath and Hunter v Chief Constable of the West Midland Police. ABUSE OF PROCESS --- THE RE-LITIGATION OF AN ISSUE RESOLVED ? " Williams " concerns an extradition request from the USA where "Williams" with the help of a highly qualified legal team attacked the s 16 notice right after it was issued. As I understand it " Williams " fundamentally changed the procedure by the Attorney-General's department in relation to s 16 of the Act. I had also studied the situation in relation to my s 16 notice (before " Williams " came out) but found that based on; Foster v Attorney-General (1997) 97 A Crim R 560; 158 ALR 394, everything in my s 16 notice seemed to be done in accordance with the law. However, in " Williams " it was submitted that "Foster" was wrong and it was not followed. 10. The errors in relation to the s 16 notice in my case and in " Williams " seems to be very similar, and almost identical. However, the biggest difference between these two cases is not in the s 16 notice (or the procedure that leas to the s 16 notice), but in the time that lapsed before an application attacking the notice was filed. In my case its been more than two years since the notice was given. However, as I have submitted above, the notice in my case was never viewed by a qualified lawyer. Even though the relevant material has been before me for two years I simply was not capable of identifying errors in the s 16 notice before " Williams ". 38 The difference between the decisions in Foster and Williams centred on the role of the Attorney-General in making a decision pursuant to s 16. The question was whether, before forming an opinion pursuant to s 16(2)(a)(ii), the Attorney-General needed to have knowledge of the actual conduct alleged as a matter of fact rather than simply as a statement of the offences charged. The approach in Foste r was that the Minister's opinion was protected from challenge unless apparently perverse, even though there was no information before him about the acts and omissions said to constitute the relevant conduct. 39 The importance of the safeguards provided for in the Extradition Act 1988 (Cth) and s 16 in particular was reinforced by Williams. The Attorney-General's (or responsible Minister's) role in s 16 is an important stage at the commencement of a process which may see a person involuntarily removed from Australia to face criminal proceedings. Oftentimes the person will be incarcerated in Australia during the life of the process. The Attorney-General (or responsible Minister) is called on by s 16(2)(a)(ii) to come to an opinion about the acts or omissions by virtue of which the offence is alleged to have been committed, if they had occurred in Australia. Given the importance the Extradition Act places on the difference between such conduct and the offence itself, and the clear requirement for the opinion of the Attorney-General (or responsible Minister) to be that of himself or herself, s 16 should be understood as requiring the Attorney-General (or responsible Minister) to know what the conduct is said to be before forming the opinion called for by s 16(2)(a)(ii). If this were not required then (as here) it would be sufficient for the Attorney-General (or responsible Minister) to say: whatever might be the conduct, of which I am unaware, if my advisers say s 16(2)(a)(ii) is satisfied, I will rely on that. That is not the formation of a relevant opinion about the conduct, because the conduct is not known. 41 Section 16(2)(a)(ii) , in summary form, requires the Attorney-General to be of the opinion that the conduct of the person constituting the extradition offence, for which extradition is sought, would have constituted an extradition offence in relation to Australia. The " opinion " to be formed is that of the Attorney-General. That requirement, however, is substantially duplicated in s 19(2)(c) , albeit the requirement there having to be met to the " satisfaction " of a magistrate. 42 The Minister places considerable reliance upon the fact that there has been a judicial resolution of the question as to whether the requirements of s 19(2)(c) have been met. That resolution, the Minister points out, has been adverse to the Applicant. The appellant is accused of participating in a criminal enterprise which imported more than 600 000 pounds of marijuana into the United States on barges, over a five year period between 1982 and 1987. Specifically, and among other acts, the appellant is alleged to have captained tugs that brought barges loaded with marijuana into United States ports and supervised their unloading. He allegedly received a share of the profits of the sale of the marijuana in the United States. There is no doubt that equivalent conduct would have been, at all relevant times, an offence against the law in force in New South Wales with a maximum penalty exceeding 12 months imprisonment: see the definition of 'extradition offence' in s 5 of the Act. As such, the requirements of s 19(2)(c) have been met. See also Rares J at [116]---[123]. 43 Sections 16(2)(a)(ii) and 19 (2)(c) are to be given the same construction: Williams v Minister for Justice and Customs [2007] FCAFC 33 , 157 FCR 286. In particular, there is no basis for construing 'the conduct of the person' any differently. Those words in s 16(2)(a)(ii) and s 19(2)(c) are to be read in accordance with s 10(2). Section 10(3) expressly applies to both s 16(2)(a)(ii) and s 19(2)(c). In connection with s 19(2)(c) , it is well established that a bare description or definition of the offence will not suffice. The statement of the conduct must be such as to permit the magistrate to form the requisite opinion. (See Griffiths v United States of America [2005] FCAFC 34 ; (2005) 143 FCR 182 at [50] ---[55]). Both are directed to forming a view as to whether there was a statement as to the conduct of Mr Brock as opposed to a mere statement of the charges against him. 45 But for the alternative basis upon which the Minister presents his Motion , it is considered that Mr Brock would have been entitled to pursue his challenge to the s 16 notice and a conclusion reached that the present proceedings should not be summarily terminated. It is the difference between s 16 and s 19 , and not the commonality of those provisions, which would have led to that conclusion. 46 It is the legislative regime which ascribes the importance to there being before the Attorney-General (or the Minister) a statement which satisfies the requirements of s 16(2)(a)(ii). Left to one side for present purposes is the question as to whether or not the statement of the charge before the Minister can satisfy the requirements of that provision. If there was no such statement before the Minister, it matters not that there could have been -- or was -- such a requisite statement before a magistrate or that the requirements of s 19(2)(c) have been met. 47 Each of the four stages for extradition set forth in the Act set safeguards for an individual. Each must be respected and complied with. A finding that there was a sufficient statement of the conduct of Mr Brock before the magistrate says nothing as to whether the requirements of s 16(2)(a)(ii) have been satisfied. 48 But for the s 21 " review ", the consequences flowing from the nature of the statement as was before the Minister and whether any such statement complied with s 16(2)(a)(ii) would have been a matter appropriate for the final hearing. The entitlement of the Applicant to have had his present case finally heard and resolved is an entitlement which should not be summarily terminated by reason of a judicial resolution that there has been compliance with s 19(2)(c). 49 The lawfulness of a notice issued under s 16 is of fundamental importance to the administration of the Act. The limited opportunities to challenge the lawfulness of such a notice only reinforces a conclusion that proceedings seeking to do so should not be summarily terminated unless an abuse of process or an estoppel is clearly made out. On any view of the interpretation of the Act, the issue of a notice under s 16(1) is a condition precedent to a hearing by a magistrate: s 19(1)(a). For present purposes, it matters not whether the requirements of s.16 are to be characterised as a jurisdictional fact or simply a condition to be satisfied before a hearing may be held. 50 As noted, it is no part of the magistrate's function under s 19 to revisit the administrative decision made by the Attorney-General or the Minister under s 16. A court conducting a review pursuant to s 21 is confined to having regard " only to the material that was before the magistrate . That is what Mr Brock sought to do when he first instituted proceedings in September 2005 and that is what he is now seeking to do in the present proceedings. 52 It is considered that neither the commencement and dismissal of the earlier proceedings seeking to challenge the issue of the same s 16(1) notice, nor the fact that there has been a judicial resolution of compliance with s 19(2)(c) , would of themselves have precluded Mr Brock from seeking to challenge the validity of the s 16 notice by reason of (for example) non-compliance with s 16(2)(a)(ii). 53 What relief may ultimately have been ordered at the conclusion of those proceedings is now a matter for speculation. It might be that ultimate relief may have been refused as a matter of discretion. It might be that the materials as were before the Minister may have been sufficient to have satisfied the requirements of s 16(2)(a)(ii). Those materials were in the nature of a statement of the charges against Mr Brock as opposed to a statement in the nature of the conduct and the facts engaged in by Mr Brock which gave rise to those charges. 54 But even the statement of the charges revealed a great deal as to his conduct and the facts in which it is alleged he had engaged. Brock is wanted for prosecution in the USA state of Illinois for offences relating to drug distribution and importation between March 1980 and February 1987, contrary to Title 21 of the United States Code. This language substantially duplicates the language later used in the surrender warrant issued under s 23. Some information as to the conduct said to have been engaged in is there set forth; what is left (perhaps significantly) unexplained is what is meant by the phrase " principal administrator . " Section 848 of Title 21 of the United States Code refers to a person as " the principal administrator, organizer, or leader of the enterprise ..." Had the issue proceeded to hearing, it may have been that the conduct of Mr Brock should have been explained to give content to his role as a " principal administrator . 56 It is not considered that Mr Brock is seeking to re-litigate an issue previously determined. Compliance with s 19(2)(c) has been resolved; compliance with s 16(2)(a)(ii) has not been resolved. 57 Nor would any Anshun estoppel have precluded the continued pursuit of the proceedings. Anshun estoppel arises where the issue now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding. In essence, where the issue was so relevant to the subject matter of the earlier action that it would be unreasonable not to have raised it at that time, it is an abuse of process to endeavour to raise that issue for the first time in a subsequent proceeding between the parties: Anshun supra at p 602. 58 The Minister contends that the adequacy of the material relied upon when giving a s 16 notice was " an issue that was clearly relevant to the subject matter of the first s.16 proceedings and accordingly, the Anshun estoppel test is met . " Unlike res judicata and issue estoppel which " apply independently of any exercise of discretion ", the Minister correctly accepts that there is a discretionary element to the application of Anshun estoppel. There is an exception to the application of such an estoppel where there are " special circumstances ", comprehending " broad discretionary considerations relating to notions of justice " : Bryant v Commonwealth Bank of Australia , (1995) 57 FCR 287 at 296 per Beaumont, Wilcox and Moore JJ. 59 Mr Brock did not raise the argument now sought to be relied upon in the " first s.16 proceedings . " At that time, however, the decision of the Full Court in Williams had not been given. That decision was only published in March 2007 and Mr Brock did not become aware of it until August 2007. Moreover, an affidavit as filed by the Applicant deposes to the difficulties he confronts both by reason of his imprisonment and his classification as an ' extremely high risk prisoner' . Those difficulties cannot be underestimated. In such circumstances it is considered that it was " not unreasonable not to have raised " the argument at the time of the first s16 proceedings. 61 It is, of course, the magistrate who makes the determination as to whether a person is " eligible for surrender . " That is the task entrusted to the magistrate by s 19. 62 A determination that Mr. Brock is " eligible for surrender " has been made pursuant to s 19(9). That determination is an administrative determination. There has been an application to the Federal Court for review of that determination. That application came before the Federal Court and was resolved. That is a judicial determination. 63 Had there been judicial resolution of the validity of the s 16 notice prior to the resolution of the s.21 review, the invalidity of that notice would have been " fatal to the proceedings before the magistrate " : Williams v Minister for Justice and Customs [2007] FCAFC 33 at [53] , 157 FCR 286. But that is not the sequence of events in the present proceedings. There have been s 21 proceedings (being the proceedings which ultimately were unsuccessful upon an application for special leave to appeal to the High Court) and no prior resolution of the s 16 notice other than the earlier dismissal by consent of proceedings. 64 It is not considered that any issue estoppel should arise out of the consent orders made in November 2005 as there was there no resolution of any " issue ". Rather, an unrepresented applicant accepted an alternative forensic course explained to him by the trial judge. The far more useful thing for you is to forget the challenge to the section 16 certificate, which would get you nowhere. And put in an application for review under section 19. I'm not going to say you should or you shouldn't, that's up to you, but if you do want to resist it I suggest you put in an application for review under section 19 of the Act and forget the section 16. It's just a distraction and a nuisance. 65 The principles of res judicata and issue estoppel apply where earlier proceedings are in the nature of an application for judicial review, including the " review " undertaken pursuant to s 21. In the alternative, that is to say, if I am not so bound, I have concluded that even on the present motions for summary dismissal, there is a course of decision in the Court to the effect mentioned, which I should follow unless convinced it is clearly wrong, and I am not so convinced. [42] In support of the applicability of res judicata and issue estoppel where the earlier proceeding was in the nature of an application for judicial review of an administrative decision, as well as of the non-discretionary nature of those doctrines, the Minister relies on the Full Court decision of this Court in Taylor v Ansett Transport Industries Ltd (1987) 18 FCR 342 (' Taylor v Ansett ') at 354---6 per Fisher J, 365 per Ryan J, and on the judgments of Merkel J in Somanader v Minister for Immigration & Multicultural Affairs (2000) 178 ALR 677 (' Somanader '); Sackville J in BC v Minister for Immigration & Multicultural Affairs (2001) 67 ALD 60 (' BC '); Heerey J in Re Ruddock; Ex parte LX [2003] FCA 561 (' LX '), and Merkel J in Thayananthan v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1054 (' Thayananthan '). [43] I need not discuss res judicata or issue estoppel at length. (The expression ' res judicata ' is sometimes used to include issue estoppel as one form, and merger of cause of action in judgment as a different form, but, consistently with the cases to be discussed below, I will use it here to refer to the form of estoppel which arises from the establishment, or failure to establish, a cause of action, by reason of a judgment. [44] For issue estoppel to apply, an issue of fact or law which is raised for decision in the later proceeding must necessarily have been determined by reason of the final judgment in the earlier proceeding, and, again, except where the prior judgment was in rem , there must be identity of parties: Spencer Bower, Turner and Handley , chs 8, 9; Campbell at 22---23, and cases cited in both works. [45] In Blair v Curran [1939] HCA 23 ; (1939) 62 CLR 464, Dixon J distinguished between res judicata and issue estoppel on the basis that in the case of res judicata the cause of action itself has 'passed into judgment, so that it is merged and has no longer has an independent existence', whereas, in the case of issue estoppel, 'for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order' (at 532 --- the passage was adopted in Anshun by Gibbs CJ, Mason and Aickin JJ at 597). The lawful discharge of the functions conferred by s 16 " must necessarily have been determined " in reaching the conclusion that Mr Brock was eligible for surrender. 67 It is considered unnecessary to resolve the question as to the extent of -- or the nature of -- the review which is permitted under s 21 as to whether the requirements of s 19(1) have been satisfied. Justice Gyles has very recently queried whether the requirements of s 19(1) could be considered in a review pursuant to s 21 and whether challenges to those requirements were to be made by way of separate proceedings based on administrative law grounds: Tervonen v Finland [2007] FCA 2067 at [4] . His Honour, however, also there referred to Knauder v Moore [2002] FCAFC 404 ; (2002) 127 FCR 327 and Brock v United States of America [2007] FCAFC 3 ; (2007) 157 FCR 121 as providing a basis for the " current practice " that some form of review was permissible. 68 For present purposes it is sufficient to note that there was no challenge in the s 21 review to whether or not there had been compliance with s 16(2)(a)(ii) and to note that there was no outstanding collateral challenge to the s 16 notice prior to the s 21 review being concluded. Whether compliance with s 16(2)(a)(ii) was a jurisdictional fact or a condition precedent to the exercise by the magistrate of his power under s 19, there was no challenge to the lawfulness of the notice. 69 The Respondent to the proceedings dismissed by Wilcox J was the Minister for Justice and Customs; the Respondents to the s 21 proceedings were the United States of America and the magistrate who conducted the s 19 hearing. For issue estoppel to operate there must be -- as noted by Lindgren J -- an identity of parties, except where the proceedings are in rem . 70 The s 21 proceedings do not derive " from any private arrangement but from the decision of a public authority exercising the statutory powers conferred upon it " and concern the status of the Applicant and are, accordingly proceedings in rem : P E Bakers v Yehuda (1988) 15 NSWLR 437 at 445 per Hope JA (appl'd: Wiks Peoples v State of Queensland (1994) 49 FCR 1 at 5 per Drummond J). The distinction between judgments in personam and judgments in rem , particularly in public law litigation, has been described as " unfortunate ", but a judgment in rem includes a judgment " on the validity of decisions affecting a person's status under citizenship or migration legislation" : Campbell, 'Relitigation in Government Cases : A Study of the Use of Estoppel Principles in Public Law Litigation' (1994) 20 Monash University Law Review 21 at 65. The s 21 decision involving the Extradition Act 1988 (Cth) is in no different position. 71 In reaching the present conclusion the terms of s 21(6)(d) have not been ignored. For the purposes of the s 21 review, the proceedings were conducted upon the basis that the requirements of s 19(1)(b) had been complied with. The determination of the s 21 proceedings conclusively resolves the entitlements of Mr Brock as well as whether he is eligible for surrender. The resolution of those proceedings has resolved whether the decision of the magistrate under s 19(9) was " erroneous in some respect ". It is not in issue that a decision of a magistrate under s 19 of the Act is an administrative decision. When a court is required to review an administrative decision, it is required, at the very least, to determine whether or not that decision is erroneous in some respect that renders the rights or liabilities of the person to whom it relates other than as set out in that decision. In so doing, the court declares and enforces the law and, thus, exercises judicial power. [17] In the case of review under s 21 of the Act, the Federal Court is required, if the magistrate's decision was erroneous, to determine what order should have been made by the magistrate. So much follows from ss 21(2)(b) and 21 (6) of the Act. The latter sub-section relevantly requires that the Federal Court "have regard only to the material that was before the magistrate". And s 21(2)(b) empowers that Court, if it does not confirm the magistrate's order, to quash that order and direct the magistrate either to release the person or to order that he or she be committed to prison to await surrender. [18] Although there may be little difference in practical effect, the function of the Federal Court under s 21 of the Act is different in nature from that of a magistrate under s 19 of the Act. The magistrate is required to determine administratively whether a person is eligible for surrender to an extradition country. The Federal Court is required to determine whether that decision was right or wrong and, if wrong, what decision should have been made by the magistrate, thereby determining the rights and liabilities of the parties to the review proceedings and, thus, exercising judicial power. He had previously abandoned the proceedings in respect to s 16 at an earlier time -- for whatever reason does not matter. To now permit Mr Brock to again commence separate proceedings in respect to the validity of the s 16 notice would certainly not promote finality in litigation and would only encourage a fragmentation of the avenues by which litigants can seek review of each of the four stages of extradition. 73 The power of this Court, and other superior courts, to stay proceedings in such circumstances is well recognised: Walton v Gardiner [1992] HCA 12 ; (1993) 177 CLR 378. Thus, it has long been established that, regardless of the propriety of the purpose of the person responsible for their institution and maintenance, proceedings will constitute an abuse of process if they can be clearly seen to be foredoomed to fail. Again, proceedings within the jurisdiction of a Court will be unjustifiably oppressive and vexatious of an objecting defendant, and will constitute an abuse of process, if that Court is, in all the circumstances of the particular case, a clearly inappropriate forum to entertain them. Consenting to the dismissal of the first s 16 proceedings in 2005 may well have been understandable. But that which should not now be permitted is to allow the Applicant to conduct s 21 proceedings through to ultimate conclusion and, upon being met with failure, to thereafter fragment the extradition process by going back to the position he first sought to litigate in September 2005. He should not be permitted to " litigate anew " the manner in which the extradition process has been undertaken. The name of the Respondent be amended to read "Minister for Home Affairs". The Application be dismissed. 3. The Applicant to pay the costs of the Respondent. I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | issue of notice under s 16 by attorney-general magistrate's decision under s 19(9) independent administrative functions nature of section 21 review by federal court nature of 'review' subsequent challenge to s 16 notice estoppel/abuse of process extradition act 1988 (cth) |
The date for trial fixed by the Court be vacated in accordance with Order 30 rule 7 of the Federal Court Rules . The Court dispense with the requirements of service of this Notice as set out in Order 19 rule 3 in accordance with Order 19 rule 2 of the Federal Court Rules . Costs of this application and the adjourned trial be reserved to the trial judge. Any further order or other order as to this Honourable Court seems appropriate. Accordingly, there is some urgency attendant on a decision as to whether those hearing dates be vacated. 3 In summary, the applicants in the substantive proceedings seek to recover alleged shortfalls in respect of profit guarantees which were the subject of a covenant in a Share Sale Agreement executed on 17 December 1997. The covenant relates to profit guarantees for the second applicant for the 1997, 1998 and 1999 calendar years. 2. a claim for $1,691,284 which is alleged to be the profit shortfall in respect of the 1999 calendar year. In relation to this claim, the applicants have placed reliance on two reports prepared by Ernst & Young and a report produced by Deloitte Touche Tohmatsu. 5 In relation to these claims the respondents have previously sought source financial documentation of the second applicant, and any working papers that might exist in relation to the report of Deloitte Touche Tohmatsu, so as to obtain expert evidence to meet and answer the reports relied upon by the applicants. Similarly, the affidavits of the respondents previously filed have been directed towards the substantive correctness of the second applicant's profit result for each of the 1998 and 1999 calendar years. Deloitte Touche Tohmatsu had not retained its working papers in relation to the report of Deloitte Touche Tohmatsu. 6 On 12 September 2007 the respondents filed a notice of motion for a stay of the substantive proceedings pursuant to Order 20 rule 2 Federal Court Rules . 7 The notice of motion filed 12 September 2007 was heard by Tracey J on 26 September 2007. 8 During the course of the hearing of 26 September 2007 his Honour queried the terms of the amended statement of claim, in light of the manner in which the applicants were proposing to put their case at trial (transcript 26 September 2007 page 33 lines 33-36). His Honour asked Counsel for the applicants whether he should have leave to amend the pleadings such that it made plain the case the applicants were proposing to run. (transcript 26 September 2007 page 34 lines 6-9). After considering comments of his Honour, Counsel submitted that there was no need to amend the amended statement of claim further. 9 In light of submissions by Counsel for the applicants, Counsel for the respondents accepted that it was not necessary to press the stay application. His Honour observed that the hearing had been useful in defining the issues between the parties, but also observed that the trial judge would hold the applicants to what their Counsel had said in relation to the way in which their case would be run, and adjourned the notice of motion seeking a stay to the date fixed for trial. 11 The first affidavit is that sworn yesterday by Mr Mark Dillman, a solicitor with bci duells lawyers. Both affidavits annex correspondence evidencing the extensive inquiries made by the respondents in relation to source documentation for financial information in relation to the trial, and the applicants' endeavours to supply that information. No blame ought to visit on the respondents on account of the fact that they are not now ready for trial, as that circumstance stems primarily from the late revelation of the applicants' true case. 2. Prior to the revelation of the applicants' true case, the applicants had engaged in lengthy correspondence for nearly a year between late 2006 and September 2007 in relation to the disclosure of the second applicant's financial records. Not once in the course of that correspondence did the applicants ever suggest that the financial records were simply irrelevant. On the contrary, the applicants apparently made genuine efforts to locate such records and provide them to the respondents, thereby plainly conceding that such documents were relevant. This submission is further supported by the fact that Mr Kiat, a key witness for the applicants, provided an affidavit deposing to his lack of knowledge of the whereabouts of those documents. 3. Even if it were to be accepted that the applicants had made their true case plain in their amended statement of claim, at most it might be submitted that the respondents will not be ready for trial because of the failure of the respondents' previous solicitors to ascertain the true nature of the applicants' case. This not a circumstance for which the respondents should be penalised by the refusal of an adjournment. 4. There is no assertion on the part of the applicants that they will suffer any serious or significant prejudice. This is to be contrasted with the substantial prejudice the respondents will suffer unless the trial dates are adjourned. 5. Costs should be reserved. The invitation by Tracey J to the applicants to amend their statement of claim at the hearing of 26 September 2007 should not be taken out of context. 2. A plain reading of the pleadings demonstrated that the applicants were relying on the relevant audited profits. 4. The solicitors for the applicants had previously contacted Grant Lawyers suggesting that there was a potential conflict of interest and that Grant Lawyers withdraw from acting for the respondents. 5. A decision to brief new Counsel to appear for the respondents was not a reason to vacate a hearing listed to commence next week. 6. Costs of the applicants thrown away by the adjournment should be paid by the respondents forthwith. In that case, the trial judge accepted an explanation by the respondents to the substantive proceedings for the delay in making application for leave to amend the defence, however refused the application to amend the defence on the basis, inter alia , that the amendments would jeopardise the hearing dates, and would have the result that the matter would be unlikely to be relisted until the following year. However, nothing in that case suggests that those principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. Departures from a court ordered timetable, whilst relevant, are not decisive. Such orders are servants of justice. They are designed to enhance its achievement in a way that an inflexible application of rigid rules could prevent. Efficiency in the dispatch of court lists can sometimes be purchased at too high a price...." (at 169-170). In Jarrett v Westpac Banking Corporation [1999] FCA 425 , the Full Court held that the withdrawal of, or change of, legal representation shortly before a hearing will not necessarily or routinely give rise to a situation where the Court should permit the trial dates to be vacated (particularly Mansfield J at [87]). His Honour ordered that the existing trial dates be vacated and a new trial date be fixed. Indeed Counsel before me this morning agreed that the likely length of the trial had reduced from five days to three days. The respondents claim that this misunderstanding, which prompted the notice of motion heard by his Honour, was due to the conduct of the applicants. Indeed, it appears that there has been considerable correspondence between solicitors for both parties involving requests by the respondents for source financial documentation and working papers as discussed earlier in this judgment. 21 The respondents also on 5 February 2007 sought and obtained an order for third party discovery of all documents in the possession of Deloitte Touche Tohmatsu relating to the financial affairs of the second applicant concerning the 1997, 1998 and 1999 calendar years. The respondents now complain that it is clear (following the hearing of 26 September 2007) that such documentation is of minimal (if any) relevance to the substantive proceedings, that as a result of the clarification of issues following the hearing before Tracey J their solicitor now must withdraw because of a conflict of interest, and their new solicitors require time to amend their defence and put on further evidence. 22 However, it does not appear to be in dispute that the amended statement of claim as filed 31 March 2006 actually represents the case the applicants are prosecuting and have been prosecuting since last year, and that it represents the case the respondents are required to meet, notwithstanding the apparent narrowing of issues in light of the hearing before Tracey J. While it is true that the respondents appear to have been under a serious misapprehension as to the case of the applicants, which has now lead to the solicitor for the respondents withdrawing due to conflict of interest, it is difficult to identify any fault of the applicants which has lead to this state of affairs other than a failure of the applicants to inform the respondents that the documents the respondents sought were of minimal (or possibly, no) relevance to the case. As Mr Jones said in Court this morning, if the respondents needed clarification of the applicants' case, they could have sought an order for further and better particulars. 23 In addition, the fact remains that, in view of the involvement of Mr Grant in negotiations leading up to the execution of the relevant Share Sale Agreements, there has always been the risk that Mr Grant could a witness in these proceedings. Mr Tucker in court before me this morning was, for good reason, unable to refute this suggestion. 24 While I understand that the parties have been in correspondence since earlier this month with respect to a possible vacation of the hearing dates, the notice of motion to vacate the trial dates was only filed and served yesterday. As I have already found, it is in the interests of justice that the hearing dates be vacated and the trial relisted at a subsequent time. It is not, however, the fault of the applicant that the notice of motion before me was only filed yesterday, in relation to a trial to commence on Monday. Mr Jones adverted to costs which have been incurred in preparation for the hearing. 25 In my view it is fair that the respondents should pay the costs of the applicants thrown away by this late adjournment. The date for trial fixed by the Court be vacated in accordance with Order 30 rule 7 of the Federal Court Rules . 2 The Court dispense with the requirements of service of this Notice of Motion as set out in the Order 19 rule 3 in accordance with Order 19 rule 2 of the Federal Court Rules . 3. The respondents in the substantive proceedings pay the costs thrown away by the applicants in the substantive proceedings as a result of the order in paragraph 1, to be taxed if not otherwise agreed. 4. The costs of and incidental to this Notice of Motion incurred by the applicants in the substantive proceedings be paid by the respondents in the substantive proceedings, to be taxed if not otherwise agreed. | application to vacate trial dates recent summary dismissal application revealed that respondents misconstrued applicant's case respondents now seek time to put on further evidence and file a second further amended defence respondents' previous solicitor now required to appear as a witness respondents engaged new solicitors one week ago whether applicants prejudiced by adjournment application. whether applicants are entitled to costs thrown away by virtue of the adjournment. practice and procedure costs |
He appears to have studied for and taken a degree in Botany at the National University. 2 He obtained a Bangladeshi passport in August 2006 and travelled extensively on that passport in 2006 and 2007. I am unable to comprehensively deal with the movements which were recorded in the passport, but it would appear that the appellant first left Bangladesh on 25 September 2006. He travelled to various places in Asia, passing through Singapore, Hong Kong, Singapore again, Malaysia and Singapore again, before returning to Bangladesh on or about 18 October 2006. Thereafter, he visited India, Nepal and India again, leaving Bangladesh for the second time on or about 3 November 2006. He then returned once again to Bangladesh and departed from Bangladesh on a third occasion on or about 3 December 2006. After departing Bangladesh on the third occasion, the appellant travelled to Singapore, Indonesia, Malaysia, Thailand and ultimately Australia, arriving in Australia on 24 July 2007. 3 The appellant applied for a Protection (Class XA) visa on 6 August 2007. His application referred to a charge against him in relation to 'abuse of power during my party was in government. ' It was supported by an attachment which narrated the story of the appellant's involvement with the Bangladesh Nationalist Party (BNP), the fact that the BNP was in government for a period of time, the fact that the government was replaced by a caretaker government and that the appellant was scared about the possibility that at a future election the Awami League would seize power. Since January the Awami League started heavy demonstration against the BNP government and declared the BNP government as corrupted. International Agency also blamed the BNP government as a failure government. In fact some of our leaders's corruption had been affected to all of the BNP members from roots to top. I was one of the victimised of the Awami League demonstration. In July 2006 the Awami League had declared me as a stranger in Lowhajong area. I became very scar[ed] that our party, the BNP would not come into power again in the next parliament election. For this fear, I started looking for overseas option so that I can avoid any charge or conviction in case of the BNP government had fail. As I was declared stranger in Lowhajong I relocated to Satkhira and obtained a passport from Khulna. I exited from Bangladesh on 25 September 2006. I travelled Singapore, Honkong, China and Malyasia (sic). I went back to Bangladesh, as I had not found any opportunity of these countries. ... Because of this incident [a threat to the appellant's grandfather] I exited from Bangladesh on 3 November 2006 and went to India and Nepal. As I did not get any opportunity there, I went back to Bangladesh again. 5 On 19 October 2007, a delegate of the Minister wrote to the appellant informing him that his application for a Protection (Class XA) visa had been refused. Thereupon, the appellant lodged an Application for Review with the Refugee Review Tribunal on 16 November 2007. 6 In support of his Application for Review, he submitted a letter to the Refugee Review Tribunal dated 15 December 2007 which was accompanied by a newspaper report, a letter, a reference letter, two further newspaper reports, a report from a magazine to which I will return in a moment, and a report from another newspaper. 8 By letter dated 19 December, 2007 the appellant was invited to appear at a hearing before the Tribunal on 30 January 2008. He responded, indicating that he wished to attend the hearing, and that he wished to have evidence taken from a witness whom he identified. As it transpired, a hearing before the Tribunal took place on 30 January 2008, at which the appellant appeared but the intended witness did not. The hearing lasted from approximately 9:30am until 12:53pm. 9 By letter dated 11 February 2008, the appellant was invited to attend a hearing before the Tribunal at which the decision of the Tribunal was to be handed down. That decision, dated 8 February 2008, was handed down on 4 March 2008. The appellant was advised that the Tribunal had decided that he was not entitled to a protection visa. 10 The appellant filed an Application in the Federal Magistrates Court of Australia on 28 March 2008 seeking constitutional writ relief in respect of the decision of the Tribunal. That Application was superseded by an Amended Application dated 30 July 2008, which was heard by a Federal Magistrate on 4 August 2008. 11 The Federal Magistrate delivered her Reasons for Judgment on 9 September 2008, ordering that the Application filed 28 March 2008 and the Amended Application filed on 30 July 2008 be dismissed. Her Honour ordered that the appellant pay the respondent Minister's costs, fixed in the sum of $6,500. From that decision, the appellant has appealed to this Court. Her Honour erred in law in finding that there was no jurisdictional error in the Tribunal failing to inquire about the authenticity of the magazine article published in Singapore (the "Singapore article"). The account of an incident that occurred on 10 September 2006 that was mentioned in the Singapore article but not in the appellant's protection visa application was centrally relevant to the appellant's claim to fear persecution as the Tribunal said that by reason of that omission "it could infer he was not involved in this incident and that the documents he had submitted alleging that he attacked an Awami League office on that day ... were not genuine". The learned Federal Magistrate's findings of plausible justifications for the Tribunal's failure to make further inquiries are misconceived in circumstances where they apply either circular logic or take into account irrelevant considerations --- e.g., "document fraud is a common phenomenon in Bangladesh". Her Honour further erred in finding the Tribunal did not commit jurisdictional error in failing to take into account a relevant consideration. The appellant repeats and relies on particulars to Ground 1 above. The Singapore article was contained within a magazine of some 30 or 40 pages or thereabouts, which was specifically mentioned by the Tribunal in its Reasons for Decision. It referred to the Singapore article as one of a number of documents submitted to the Tribunal that had been written in Bengali and which had relevantly been translated. ... Of the magazine from Singapore, he said his brother had sent that to him as well. He claimed that he had been trying to get asylum in Singapore, but there was no provision for this there, then the editor of the magazine asked him for his story and published it. It commenced with an identification of SZMCE's true name and described him as 'A youth, Victim of malicious Politics is out of the country'. The article then proceeded to recount information about events in 2006 and then started speaking of a different person who shared one name with the appellant but had a different second name. Whilst mention was again made of the appellant by his true name, further information was then provided in some detail about the person bearing the other name. The second page of the translation referred to an event said to have occurred on 10 September which mentioned the Awami League involving this person with the second name in a 'political case', and then referred to 'the threat of life by the terrorists' and an 'arrest warrant' which is said to have caused the person with the second name to leave the country at the beginning of November 2006. 15 The so called Singapore article was published in the 'Banglar Kantha' magazine, which on its editorial page identified the fact that it was published by a company based in Singapore, but printed by a business located in Dhaka, in Bangladesh. On the editorial page the magazine was described as the 'Only Bengali News Magazine Published from Singapore for Southeast Asia'. It was described as 'The voice of Bengal' and its price was indicated as 'BD Tk.15 Only'. The Tribunal has expressed its considerable concern above about the truthfulness of his claims to have been an activist within the BNP. This, coupled with the fact that many of the documents he has submitted refer to him as having played this role, that some of those documents name the party incorrectly, and that such documents can be readily obtained fraudulently, leaves the Tribunal unable to be satisfied that the supporting documents submitted by [SZMCE], attesting to his being a BNP member, office holder or activist, are genuine. He said that this was not the case. There had been a peace rally. However, he and other BNP people had been at the Mughapara BNP office and were heading for another BNP office. Their route took them by an Awami League office, whose occupants came out and assaulted them with weapons. He told the Tribunal he thought these people had planned this attack. ... ... As to why he had not mentioned his involvement in the 10 September 2006 incident in his submissions to the Department, he said that he had had no help or advice when he came to Australia. The Tribunal suggested to him that this incident would have been sufficiently significant to him that he would not have needed any advice in order to mention it. He responded that several people had helped write his statement in English, and that maybe they had not included it. The Tribunal told him that it could infer he was not involved in this incident and that the documents he had submitted alleging that he attacked an Awami League office on that day, which he claimed gave rise to false charges against him, were not genuine. He responded that the incident occurred, that the documents he had submitted proved it, and that he had told the person who wrote his statement about it. It seems clear to me that when the Tribunal said, 'some of those documents name the party incorrectly', it was in fact referring to the Singapore article where the two different names were used, but from a fair reading of the translation of the article, it seems clear that they were intended to relate to the one person, who was said to be SZMCE. 19 The important matter to note in respect of the alleged failure of the Tribunal to have regard to the claimed incidents on 10 September 2006 is that the appellant, after leaving Bangladesh on 25 September 2006, chose to return, not just once, but twice in 2006, after a second departure. The Tribunal made particular mention of these returns in the Findings and Reasons section of its decision. 20 The appellant has submitted that the Tribunal erred in not having regard to the Singapore magazine article in a manner favourable to the appellant. He also submitted that the Tribunal failed to afford the appellant a fair hearing by reason of the Tribunal's failure to inquire into the authenticity of the Singapore article, given its potential to corroborate the appellant's claim and given the great lengths the Tribunal went to in discrediting the authenticity of all other documents emanating from Bangladesh, predominantly because of high incidences of document fraud and forgery. The appellant submitted that by not doing so it may be inferred that the Tribunal considered the Singapore article a fabrication and of no value because it detailed incidents which were found independently by the Tribunal not to have occurred which, in turn, implies that the appellant was involved in some sort of elaborate forgery or scam in being involved in, or responsible for, the creation of the article. 21 The appellant drew the Court's attention to ss 424(1) and 427 (1)(d) of the Migration Act 1958 (Cth) ('the Act'). However, if the Tribunal gets such information, the Tribunal must have regard to that information in making the decision on the review. A Tribunal member conducting the inquiry is not an adversarial cross-examiner but an inquisitor obliged to be fair. In an application for a review before the Tribunal, it is for the applicant to advance whatever evidence or argument he wishes to advance, and for the Tribunal to decide whether his claim has been made out; it is not part of the function of the Tribunal to seek to damage the credibility of an applicant's story in the manner a cross-examiner might seek to damage the credibility of a witness being cross-examined in adversarial litigation. 23 The Tribunal, in conducting an inquisitorial hearing, is not obliged to prompt and stimulate an elaboration which an applicant chooses not to embark on (see per Gummow and Heydon JJ in Re RUDDOCK (in his capacity as Minister for Immigration and Multicultural Affairs); Ex parte APPLICANT S154/2002 [2003] HCA 60 ; (2003) 201 ALR 437 ; see also SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 153 at [47] and Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53 ; (2006) 231 CLR 1 at [40] ). 24 Decisions upon the grant or refusal of protection visas are made, in the first instance, by the Minister, his or her powers normally being exercised by one or other of the Minister's delegates for the purposes of s 65 of the Act. Her Honour referred to the abundant authority, to some of which reference has already been made, which established that the Tribunal has no general obligation to initiate inquiries or to make an applicant's case for him or her. Her Honour also referred to the limited proposition that in certain rare or exceptional circumstances, the Tribunal's failure to inquire may ground a finding of jurisdictional error because the failure may render the ensuing decision manifestly unreasonable in the sense used in Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223. 29 The circumstances of the case before her Honour were that reliance had been placed upon a transcript of a five and a half hour interview which had been recorded on seven only pages of notes. Her Honour referred to the fact that there had been a mistranslation which meant that the significance of the primary decision-maker's decision record and the typed notes of interview were doubtful or uncertain in a number of critical respects. The mistranslation raised several uncertainties. 30 It seems to me that the circumstances recounted by her Honour in Le work, if anything, against the submissions of the appellant in this case. He could not possibly assert that this case was rare or exceptional in relation to the consideration of the Singapore article in the context where, after the events recounted in the Singapore article are said to have occurred, the appellant, on two separate occasions, chose to return to the country where he claimed to have a well-founded fear of persecution were he to remain. 31 It is useful to also note a judgment of Allsop J, as his Honour then was, in SZJBA v Minister for Immigration and Citizenship [2007] FCA 1592 ; (2007) 164 FCR 14 , to which reference was helpfully made by counsel for the appellant. In that case, a cover sheet together with a five page submission had apparently been forwarded by facsimile to the Tribunal in response to a s 424A letter inviting comment on certain information, but only the cover sheet was received. Plainly, it was a case where the Tribunal needed to see, and should have inquired about the absence of, the missing five page submission. 32 It is also important to have regard to the observations of French, Sackville and Hely JJ in Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 ; (2003) 75 ALD 630 at 641 where their Honours observed that it was plainly not necessary for a Tribunal to refer to every piece of evidence and every contention made by an applicant in its written reasons. It may be that some evidence is irrelevant to the criteria and some contentions misconceived. ... [the Tribunal] is an administrative body and not a court and its reasons are not to be scrutinised "with an eye keenly attuned to error". Nor is it necessarily required to provide reasons of the kind that might be expected of a court of law. [47] The inference that the tribunal has failed to consider an issue may be drawn from its failure to expressly deal with that issue in its reasons. But that is an inference not too readily to be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point. It may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality or because there is a factual premise upon which a contention rests which has been rejected. Certain of his claims were considered to be implausible or highly implausible. The Tribunal did not accept that the appellant was an office holder within the BNP or that he played any leading role within it. The Tribunal had considerable doubt about the allegations made by the appellant because he was a supporter of the BNP. The Tribunal did not consider it plausible and did not accept that the appellant was a popular and influential leader or even a member of the BNP as he claimed. 34 Apart from the references to his return to Bangladesh on two occasions, reference was also made to the fact that after his first return, he proceeded to live at an address until his final departure, which was one where he was, in effect, at risk, were he a person who was being sought. Further attention was drawn to the fact that in his numerous visits overseas, he did not make any real attempt to seek asylum until he arrived in Australia almost two years later. 35 The Tribunal found that the appellant did not have a well-founded fear of being persecuted in Bangladesh for the Convention reason of political opinion. Accordingly, the Tribunal affirmed the decision of the Minister's delegate not to grant the appellant a Protection (Class XA) visa. 36 I am unable to discern any jurisdictional error on the part of the Tribunal such as has been alleged. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | reliance on a magazine article to establish the genuineness of claims made by the appellant in respect of his alleged involvement in an incident tribunal unable to be satisfied as to genuineness of magazine account alleged failure by tribunal to inquire into the authenticity of the article and consequential denial of a fair hearing consideration of what constitutes rare and exceptional circumstances where further inquiry may be appropriate migration |
On that date, the primary Judge, Graham J, answered a number of questions separately and before any other questions in the proceeding. According to the application, the extension of time is required because the notice of appeal was not filed and served within the time limited by O 52 r 15 of the Federal Court Rules . Order 52 r 15 provides, relevantly, that a notice of appeal must be filed and served within 21 days after the date when the judgment appealed from was pronounced. In its written submissions, Eden states that its application is for "leave to appeal out of time". There is no right of appeal from an interlocutory judgment unless the Court or a Judge gives leave to appeal: see s 24(1)A of the Federal Court of Australia Act 1976 (Cth). 2 On 8 June 2007, his Honour made an order dismissing the proceeding and reserving the question of costs for argument. Subsequently, on 20 June 2007, his Honour ordered that Eden pay the costs of the respondent (the State): see Eden Construction Pty Ltd v State of New South Wales (No 3) [2007] FCA 946. 3 Eden has not sought either an extension of time or leave to appeal in relation to anything other than the answering of the separate questions on 9 May 2007 (the draft notice of appeal would also seek a setting aside of the order as to costs). It seems clear that the present application is deficient in that it seeks an extension of time in which to appeal from an interlocutory judgment and does not seek an extension of time in which to appeal from the final judgment. 4 Since I have come to the view for the reasons given below that no arguable question of law warranting the attention of a Full Court has been raised, and this would be a sufficient ground on which to dismiss any application for either an extension of time or leave to appeal, I will not discuss the deficiencies mentioned any further but will simply dismiss the application. 5 Unless otherwise specified, my references to the primary Judge's reasons are a reference to his Honour's reasons in Eden Construction Pty Ltd v State of New South Wales (No 2) (2007) ATPR 42. The proceeding at first instance related, relevantly, to the Moruya Heads Sewerage project (Moruya Heads Project) and the Kremur Street Pumping Station project (Kremur Street Project). Both projects are also relevant to the present application. The "Principal" in the case of the Moruya Heads Project was the Eurobodalla Shire Council and in the case of the Kremur Street Project was the Albury City Council. In both cases the State's Department of Public Works and Services (DPWS) was the project manager. Apparently Eden did so and on the basis of Eden's quote, Allied tendered to the DPWS for the job. 9 Eden had previously been contracted to undertake construction and associated mechanical electrical work on the Kremur Street Project. The contract for that Project was between the Albury City Council and Eden, and the performance of the contract was managed on behalf of the Council by the DPWS. In connection with the Kremur Street Project, "Contractor Performance Reports" had been made within the DPWS which were in some respects adverse to Eden in terms of its management and quality of work. • General performance at Albury unsatisfactory with unsatisfactory performance in 6 of 7 categories. • Previous dispute with Eurobodalla Shire Council. DPWS would need to talk council around. But not "barring" them at this stage. Info given is strictly confidential. They went through various questions in relation to our tender and asked me who our subcontractor would be for pipelaying. I told them that we had considered a number of contractors but were currently considering Eden. DPWS said they were very unhappy with Eden and that the Eurobodalla Shire Council in particular would be very unhappy if we used Eden. Maher: I suggest that you meet Eden and get to the bottom of it. I met with their Managing Director and he said to me that they don't take crap from anyone and would litigate if they had to. I gained the impression that Eden are very litigious. We have subsequently negotiated with other appropriate subcontractors. Should this increase not be acceptable then we have no option but to withdraw our Tender. It is with great regret and significant concern that we notify you of this increase. We ask that you take into account the fact that we have never before in our long association with DPWS, been forced to take such action. We trust that you will accept that we cannot proceed with a Contract based on the originally Tendered Sum as we would concede a huge loss to this Company. With reference to those actions that are required resulting from our meeting of 27 July 1999 we confirm that a full response will be forwarded separately later today. We again sincerely apologise for this late and significant revision. Allied's tender was accepted, notwithstanding a higher price (see [370] of his Honour's reasons). 15 It is necessary to refer back to the earlier Kremur Street Project. Performance assessment reports, including substantiated reports of unsatisfactory performance, can be taken into account by NSW government departments and agencies and may result in future opportunities for NSW government work being restricted or lost. By tendering for this Contract, the Tenderer authorises the Principal to make available on request to any NSW government department or agency information including, but not limited to, information dealing with the Tenderer's performance. Such information may be used by the recipients for NSW government purposes including assessment of suitability for registration, pre-qualification, selective tender lists or the award of a contract. The provision of information by the Principal to any other NSW government department or agency is agreed by the Tenderer to be a communication falling within Section 22(i) of the Defamation Act 1974 (NSW), and the Tenderer shall have no claim against the Principal or the State of NSW in respect of any matter arising out of the provision or receipt of such information, including any claim for loss to the Tenderer arising out of the communication. In the evaluation of tenders, the Principal may take into account any information about the Tenderer which the Principal receives from any source. Such information may include, but is not limited to, any information provided by the Contractor to the Principal and any information relating to the Contractor's performance under the Contract. The Contractor acknowledges that any information about the Contractor from any source, including substantiated reports of unsatisfactory performance may be taken into account by NSW government departments and agencies in considering whether to offer the Contractor future opportunities for NSW government work. The Contractor acknowledges and agrees that the communication of such information by the Principal to any NSW government department or agency is a communication falling within Section 22(i) of the Defamation Act 1974 (NSW). The Contractor releases and indemnifies the Principal and the State of NSW from and against any claim in respect of any matter arising out of such communications. Without limitation of the above, the Contractor releases the Principal and the State of NSW from any claim it may otherwise have for any loss to the Contractor arising out of the Contractor's performance under the Contract by the Principal, the communication of information relating to such assessment to any NSW government department or agency, or the use of such information by the recipient. 18 Eden had been invited to comment on the various adverse Contractor Performance Reports (referred to at [9] above) but had failed to do so. In fact, the DPWS issued such an invitation to Eden in connection with its Contractor Performance Reports by letters dated 19 May 1998, 17 August 1998, 23 November 1998 and 15 February 1999. Eden did write to the DPWS on 3 June 1999, but only to demand that all of the Contractor Performance Reports be withdrawn unconditionally on the basis that they were "flawed and not representative of the Contractors [sic] effort". The signatory, Mr Filardo, stated that the sole purpose of them was to disadvantage him and Eden. 19 The DPWS replied on 11 June 1999, declining to withdraw any of the Contractor Performance Reports. The letter stated that at a meeting on 16 February 1999 on site, Mr Filardo had asserted to the writer (Kevin Ellison, Contracts Superintended Riverina/Western Region) that "the problems identified with time, safety and quality would be addressed immediately" yet the latest Contractor Performance Report dated 7 May 1999 did not reflect improvements in performance. 20 It will be recalled that Allied's invitation to Eden to tender was issued on 31 May 1999 and that by September 1999 Allied had decided not to accept Eden's tender on the Moruya Heads Project. 21 There were further adverse Contractor Performance Reports on Eden on the Kremur Street Project. So did the questions that his Honour ordered be separately determined. Only one of those questions now remains relevant, namely, question number 5. When I say that only question number 5 remains relevant, that was not so at the time of the commencement of the hearing before me. During the course of that hearing, Senior Counsel who appeared for Eden (he had not appeared for Eden previously and had been briefed only very shortly prior to the commencement of the hearing) indicated that he would wish to prepare amended grounds of appeal. While this represented the last of numerous changes of position by Eden, I allowed him to proceed on the basis that the only grounds of appeal pressed were those in a proposed amended notice of appeal document which he handed up on the hearing. A. No. Graham J erred in failing to hold on the facts as found by him that the elements of the tort of interference with contractual relations was made out in relation to the process contract between the Appellant and Allied Constructions. 3. The reasons for decision delivered by Graham J in relation to the issue of the tort of interference with contractual relations were inadequate and failed to disclose any reasoning process sufficient to justify his decision. Eden contends that there was a "process contract" between Eden and Allied, and that the State unlawfully interfered with that contract. 26 Eden refers to Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 ( Hughes ) and Cubic Transportation Systems Inc v State of New South Wales [2002] NSWSC 656 ( Cubic Transportation ). The facts of Hughes were vastly different from those of the present case. In Hughes , there were two competing tenderers, the applicant in the proceeding being the unsuccessful one. Finn J held that in the circumstances of the case, there was an implied contract that might be called a "process contract", according to which Airservices Australia incurred implied contractual obligations in favour of the tenderers, including an implied obligation to conduct its evaluation fairly and in a manner that would ensure equal opportunity as between them. Cubic Transportation also concerned competing tenderers. 27 Eden's case as now presented is that there was a process contract between Allied and Eden, and that the DPWS induced Allied to breach that contract by not accepting Eden's tender. Eden has not referred to evidence of any competing tenderer on the scene. Indeed, Eden has not referred to any evidence of the terms on which it tendered to Allied. So far as I know, the circumstances were simply that Eden tendered; Allied was disposed but not bound to accept Eden's tender; and Allied decided not to do so for the reasons mentioned. 28 The first reason why Eden's present application fails is that Eden did not make the present claim at trial. Notwithstanding the attempt by Senior Counsel for Eden to suggest otherwise, the fact is that the relevant parts of Eden's amended points of claim alleged only that DPWS made representations to Allied and that as a result Allied did not engage Eden as its subcontractor on the Moruya Heads Project. Eden did not make submissions to his Honour in support of the existence of a tender process contract. A Full Court would not permit Eden to raise an entirely new case for the first time at the appellate level. 29 Secondly, Eden has not pointed to any circumstances giving rise to the supposed implied tender process contract or suggested what the content of the implied contract would be. These two matters are closely interrelated. On the hearing, I raised the following question: what was the implied contractual obligation that DPWS is said to have induced Allied to breach? However, in its post-hearing written submissions, Eden has not attempted to identify that obligation. 30 The evidence showed that Allied had heard bad things about Eden from the DPWS, and that Allied itself had become concerned over the attitude of Eden's managing director, and so had ceased to be of a mind to accept Eden's tender. So, perhaps it might be suggested that the implied contractual obligation was that Allied would not pay any attention to anything damaging to Eden that it heard or decline to accept Eden's tender on the basis of that information without giving Eden an opportunity to be heard, while remaining free to decline to accept it for other reasons. I do not accept that the relationship of principal and tenderer gives rise as a matter of law to such an implied obligation, including in circumstances where a job is tendered for and the principal's conduct evinces a present intention to accept the tender. 31 Thirdly, if we assume that the implied contractual obligation was of the kind that I have outlined, the State did not induce Allied to breach the supposed process contract. Rather, the State merely provided the substratum on which Allied's contractual obligation was enlivened. Indeed, the implied contractual obligation, formulated as I have suggested, would assume as its starting point that Eden had been "bad mouthed" by someone. The State would have had to do something further to induce Allied to breach the supposed process contract. 32 Fourthly, it is clear that Eden had consented to the DPWS's use of the information that it had gained from the Contractor Performance Reports in the way in which the DPWS apparently used that information. Although the primary Judge did not have to deal with this point, it is plain that his Honour would have held that the standard clauses set out at [15] and [16] above provided a complete answer to Eden's claim. 33 In addition to the above reasons, there are discretionary reasons why an appeal by Eden should not be permitted to proceed. 34 First, the present application is not Eden's first attempt to obtain an extension of time in which to file and serve notice of an appeal. On or about 4 July 2007, Eden made a similar application to the present one, and on 22 August 2007, Stone J dismissed that application and ordered that Eden pay the State's costs of that proceeding: see Eden Construction Pty Ltd v State of New South Wales [2007] FCA 1317. Eden did not raise the process contract argument before her Honour. Stone J permitted Eden to appear by its managing director, Mr Filardo. Eden applied for an adjournment of the hearing of its application on the ground that its impecunious situation had not permitted it to engage legal representation (see [35] ff below). Although it is understandable that the present process contract argument was not raised by Mr Filardo, the fact remains that it was not raised, and that the State incurred the costs associated with resisting Eden's application on that occasion. 35 Secondly, there is evidence suggesting that Eden is insolvent, or, at least, would not be able to satisfy a costs order made against it on the appeal, or to provide security for the State's costs of an appeal. 36 On 26 April 2006, Graham J ordered Eden to pay the State's costs of Eden's motion to file further amended points of claim. His Honour also ordered that such costs might be taxed and should be payable forthwith: see Eden Construction Pty Ltd v State of New South Wales [2006] FCA 476. 37 The State prepared and filed a party/party bill of costs pursuant to that order on 29 June 2006. Eden attempted to file a notice of objection but it was rejected by the Court because Eden had not lodged security for the costs of taxation in accordance with O 62 r 46(3)(d) of the Federal Court Rules . The amount that Eden was required to pay as security but did not was only $1,250. On 12 September 2006, the Court certified the State's party/party costs on the above motion to be $14,200. 38 On 22 September 2006, the State's solicitors wrote to the then solicitors of Eden, Johninfo Lawyers, enclosing a copy of the certificate of taxation and demanding payment, but there was no response. In the absence of a response, on 10 November 2006, the State obtained and had entered an order by the Court that Eden pay the State $14,200. 39 On 1 February 2008, the State's solicitors sent to Eden by prepaid post a statutory demand under s 459E of the Corporations Act 2001 (Cth) requiring payment in accordance with the Court's order of 10 November 2006. 40 Payment in accordance with the statutory demand has not been made by Eden, nor has Eden applied to set aside the statutory demand. There has been email correspondence between Bartier Perry, the solicitors for the State, and Erlington Boardman Allport, the present solicitors for Eden, in relation to the statutory demand, but these have not led to any kind of resolution. 41 In all the circumstances, even if I had thought that there was an arguable ground of appeal, I would nonetheless have dismissed the present application on the discretionary grounds that Eden did not raise the present point before Stone J, and would be unable to meet any order for costs if it should fail in the appeal or provide security for the State's costs of the appeal. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | inducing breach of contract principal intending to accept tender hears adverse comments from informant on tenderer's past performance whether principal owes tenderer implied contractual obligation not to decline to accept tender without first giving tenderer opportunity to be heard whether informant induces principal to breach an implied contractual obligation owed by principal to tenderer held : no implied obligation made out. inducing breach of contract principal intending to accept tender hears adverse comments from informant on tenderer's past performance whether principal owes tenderer implied contractual obligation not to decline to accept tender without first giving tenderer opportunity to be heard whether informant induces principal to breach an implied contractual obligation owed by principal to tenderer held : no implied obligation made out. contract tort |
The AAT affirmed a decision of a delegate of the Minister to cancel the applicant's visa on the ground that he did not satisfy the character test set out in s 501 of the Migration Act 1958 (Cth) (' Migration Act '). The Minister's motion is brought pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (' Federal Court Act '). He is unrepresented in these proceedings. His case for resisting the Minister's motion is set out in an affidavit he filed shortly before the hearing. He left Vietnam by boat in 1990, apparently unaccompanied, and reached Thailand. He was sponsored to migrate to Australia and arrived in this country on 25 August 1995 as the holder of a refugee visa subclass BA200. 4 Shortly after the applicant's arrival in Australia, he began using and supplying heroin. On 27 December 1996, the applicant attacked a 49 year old woman in Cabramatta in the course of attempting to steal her handbag. Unfortunately, the victim sustained brain injuries and subsequently died. 5 The applicant ultimately pleaded guilty to manslaughter and, on 17 June 1998, was sentenced in the Supreme Court of New South Wales to ten years imprisonment, with a non-parole period expiring on 7 January 2004. The sentencing Judge, Grove J, took into account a number of other offences committed by the applicant, including an armed robbery carried out in December 1996. 6 The precise date the applicant was released from prison does not appear in the material before me, but he seems to have been released in the first half of 2004. On 29 September 2004, the then Minister notified the applicant of her intention to consider cancellation of the applicant's visa. Apparently the Minister took no further action in respect of this notification. However, on 7 July 2006, the Minister notified the applicant a second time of her intention to cancel the visa. 7 On 20 March 2007, the Minister's delegate cancelled the applicant's visa and shortly thereafter the applicant was taken into immigration detention. The applicant applied on 10 April 2007 to the AAT for review of the delegate's decision. As noted, the AAT affirmed the delegate's decision on 25 June 2007. 8 On 19 July 2007, the applicant filed a ' notice of appeal ' against the decision of the AAT. The notice of appeal did not identify any error of law or any jurisdictional error on the part of the AAT but merely asserted that the applicant ' had mended his ways and take[n] responsibility for his family '. 9 On 11 September 2007, the applicant filed an application seeking an extension of time in which to file and serve a notice of appeal. It is not clear why this document was filed but, in any event, it, too, did not identify any error of law or jurisdictional error on the part of the AAT. 10 The Minister filed the motion for summary dismissal on 17 September 2007. The motion was set down for hearing on 17 October 2007. Shortly before the hearing, the applicant filed an affidavit which sets out some factual material and refers to the consequences he and others would suffer if he were to be deported to Vietnam. Section 44 of the Administrative Appeals Tribunal Act 1975 (Cth), which provides for an appeal on a question of law from a decision of the AAT, does not apply to a privative clause decision or to a ' purported privative clause decision ': Migration Act , ss 483 , 5E (definition of ' purported privative clause decision '). Insofar as the applicant's notice of appeal is intended to invoke the jurisdiction of the Federal Court to hear and determine an appeal from the AAT on a question of law, it is misplaced. I do not think it appropriate, however, to deal with the Minister's motion on the basis of procedural errors committed by an unrepresented applicant who is in immigration detention. Had the applicant filed an application for judicial review in proper form, the Court would have had jurisdiction to entertain the application under s 476A(1)(b) of the Migration Act , since the notice of appeal was filed within the time limit specified in s 477A(1) of the Migration Act . Where the Court has jurisdiction pursuant to s 476A(1)(b) of the Migration Act , its jurisdiction is the same as that of the High Court under s 75(v) of the Constitution : s 476A(2). Even so, the applicant cannot succeed in any application for judicial review of the AAT's decision unless he can establish a jurisdictional error on the part of the AAT: Migration Act , s 474(1) ; Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 ; Bodruddaza v Minister for Immigration and Multicultural and Indigenous Affairs [2007] HCA 14 ; (2007) 234 ALR 114 , at [53], per Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ. In the present case, the AAT considered the circumstances of the applicant at some length. In particular, the AAT addressed the applicant's claim that he had been in a de facto relationship with a Ms Tran and that he had acted as a father to Ms Tran's three children. Ms Tran gave evidence to the AAT that, in her childhood, she had been fostered in Vietnam by the applicant's mother and had sought out the applicant following his release from gaol. There are too many inconsistencies, implausibilities and changes of story'. Nor is the relationship with Ms Tran or the children of long duration'. The AAT therefore concluded that, while the children would suffer some temporary hardship if the applicant were removed to Vietnam, their best interests did not weight heavily against cancellation of the applicant's visa. 17 The only claim made by the applicant that might possibly suggest jurisdictional error on the part of the AAT is his assertion that the AAT failed to take into account his relationship with Ms Tran and her children. A reading of the AAT's reasons shows that, on the contrary, the AAT gave close consideration to the alleged relationships between the applicant and Ms Tran and her children. It made findings of fact concerning those relationships. The applicant's challenge to the findings made by the AAT is no more than an attempt to re-agitate the merits of the AAT's decision. Accordingly, no arguable case of jurisdictional error has been made out. 18 In these circumstances, the Minister has satisfied me that the applicant has no reasonable prospect of successfully prosecuting his claim for judicial review of the AAT's decision, even putting to one side the procedural issues I have identified. The ' appeal ' must therefore be dismissed, with costs. I certify that the preceding eighteen (18) numbered Paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. | application for summary dismissal of application to review a decision of the administrative appeals tribunal whether any reasonable prospect of prosecuting the claim migration |
6 ('Project 6') registered by the Australian Securities and Investments Commission ('ASIC') for the purposes of Chapter 5C of the Corporations Act 2001 (Cth) ('the Act'). Australian Olives Limited ('AOL') is the responsible entity for the scheme. This scheme is one of six managed investment olive schemes of which AOL is the responsible entity. Issues in relation to Australian Olives Project No. 4 ('Project 4') and Australia Olives Project No. 5 ('Project 5') are the subject of orders and reasons for judgment in Australian Olives Limited v Stout [2007] FCA 1958. 2 Project 6, like Projects 4 and 5, was established to manage the cultivation of olive trees and in consequence olive production at Yallamundi, a property located in the Darling Downs region of south western Queensland. Project 6 was established throughout 2004 and 2005. The project involves an area under cultivation of 137.1 hectares; a tree density per hectare of 353 trees; an investment term of 19 years; and the production of nine olive varieties. Project 6 has a Product Ruling from the Australian Taxation Office of PR2004/7. 3 Each project comprises a number of 'groves' and each grove represents one interest in the scheme. There are 914 groves in Project 6. The project is structured in this way. Members in the project hold one or more interests in the project as well as a proportional share in the company which owns the land on which Project 6 operates, called Collective Olives Groves Limited ('COGL'). Each member enters into two agreements relating to the operation of Project 6, a Licence Agreement and a Management Agreement both of which are conditional upon each other being entered into. The Licence Agreement is made between COGL and a member pursuant to which COGL grants a licence to each member to use and occupy a specific allotment of land for the purpose of growing olives for commercial gain. The Management Agreement entered into between AOL and each member appoints AOL to manage each member's olive growing activity on the licensed allotment. AOL charges each member a management fee pursuant to the Management Agreement. Some members of Project 6 have entered into loan agreements with a financier, Collinsville Finance Pty Limited ('Collinsville Finance') to assist members to pay monies owing by them to COGL and AOL. Nominations will be accepted on the floor of the meeting and a member will be elected to chair the meeting from those nominations. The Managing Director of Primary Securities Ltd will make himself available to chair the meeting if the members do not select any other chair. 224107 of Primary Securities Limited ABN 96 089 812 635 to permit it to operate the project, the current responsible entity of the Project Australian Olives Limited ACN 078 885 042 be removed as responsible entity of the Project and that Primary Securities Limited be appointed as the new responsible entity of the project. The notice recites that the attached list of members of Project 6 hold interests in the project constituting 639 groves out of a total of 914 groves representing 70% of the votes that may be cast at a meeting of the project's members. The notice also attached a document identifying three specific issues said to have been taken up with AOL, namely, a contended conflict of interest between the commercial interests of AOL and the interests of the members; a question concerning management fees payable by members under the prevailing arrangements governing Project 6; and a proposed restructure of the scheme. 6 During the course of October 2007, exchanges took place between AOL and the proposed new responsible entity, Pacific Securities Limited ('PSL') and between AOL and members. In those exchanges, AOL contended that certain defects in the Notice of Meeting raised the question of whether the meeting could properly proceed. On 25 October 2007, AOL commenced proceedings against those members of the Project 6 calling the meeting and sought a declaration that the Notice of Meeting did not comply with the Act in a number of respects and related relief. That application was the subject of a number of Orders made on 29 October 2007 by which, upon the mutual undertakings of the parties to preserve the status quo with respect to voting rights, ownership of each member's interest and other matters, the Application was adjourned to a date to be fixed. The meeting scheduled to occur at Fremantle on 30 October 2007 at 10.00am be adjourned until Wednesday 7 November 2007 at 10.00am at the offices of Piper Alderman, Level 23, Governor Macquarie Tower, 1 Farrar Place, Sydney in the State of New South Wales. 8 Those Orders made with the consent of the parties speak for themselves. However, although there was no 'hearing' on 29 October 2007, the spirit of the Consent Orders seems to have been that material was to be exchanged within confined limits between AOL, members of Project 6 and the respondent members to the proceeding addressing commercial issues alive between the participants so as to inform consideration of the proposed resolutions with the meeting of members being adjourned to 10.00am on Wednesday, 7 November 2007. 9 That meeting took place on the nominated date and commenced at 10.30am. Mr Anthony Johnston and Mr Blake Ammit, Directors of AOL attended the meeting. Mr Robert Garton-Smith the Managing Director of PSL also attended the meeting. Mr Graham Steer, a Project 6 member, attended as did Mr Adam Stoker of Piper Alderman Solicitors, the solicitors for the respondent members and Mr Nathan Shaw, Solicitor, of McMahon Clarke Legal, the solicitors for AOL. Mr Stoker in his affidavit filed 13 November 2007 deposes to the number of votes that were eligible to be cast at the meeting as 488 made up of 416 votes by proxy in favour of Mr Garton-Smith in support of the resolution; nine votes by proxy in favour of the chairman of the meeting in support of the resolution; 21 votes by proxy in favour of the chairman of the meeting against the resolution and 42 votes against the resolution by members of Project 6 who were present and in person made up of five votes by Mr Steer and 37 votes held by Collinsville Finance. 10 Although Mr Garton-Smith held 416 votes by proxy which he sought to cast in electing the chairman of the meeting, s 252S(3) of the Act provides that the members present at a meeting called under s 252D must 'elect a member present to chair the meeting'. Mr Ammit, Mr Johnston and Mr Steer as members present resolved in favour of Mr Johnston chairing the meeting. Paragraphs 53 to 67 of the affidavit of Mr Stoker describe the discussion that took place during the course of the meeting. Mr Stoker says that as chairman of the meeting, Mr Johnston said he was 'concerned that Primary Securities does not have a financial services licence authorising it to conduct this scheme. I do not believe that the resolution can be put to the meeting. Does Primary Securities have a licence? ' Mr Garton-Smith said that ASIC does not generally grant a licence to operate a scheme until after the members have resolved the replacement of the responsible entity and that ASIC does not issue more than one licence authorisation for one scheme. Mr Johnston said that the resolution could not be put to the meeting and that the resolution could not be passed as it was subject to PSL becoming appropriately licensed. Mr Johnston said that he was concerned that because PSL did not have a licence, the scheme would be 'left in limbo and that is not in the best interests of the members. The resolution cannot be put to the meeting because it is subject to PSL having a licence'. Mr Stoker says that debate took place between Mr Garton-Smith and Mr Stoker about the construction and interpretation of the proposed resolution; the nature of PSL's general licence; and ASIC's attitude towards granting licences to a company to act as a responsible entity of a managed investment scheme. At paras 59 and 60 of Mr Stoker's affidavit, he describes these events. Mr Garton-Smith, notwithstanding the chairman's refusal to put the resolution to the meeting, read the proposed resolution and said that he cast his 425 votes in favour of the resolution. Mr Garton-Smith called upon the chairman to put the resolution. The chairman refused. Mr Garton-Smith moved a motion that the resolution be put. The chairman refused and opened the meeting to further general discussion. Mr Garton-Smith then put the resolution to the meeting and said 'I now vote upon that resolution and cast 425 votes in favour of the resolution. I now declare that the resolution is carried'. The chairman, Mr Johnston, said that Mr Garton-Smith could not do that. The chairman refused to recognise the casting of the votes as the resolution had not been put to the meeting. Mr Johnston opened the meeting to further general discussion. Mr Stoker says that Mr Johnston read s 601FJ(2) of the Act (prohibiting a change of the scheme's responsible entity unless in accordance with Division 2 of Pt 5C.2) to the meeting and expressed the view that PSL could not become the responsible entity as it was not licensed to act as a responsible entity of Project 6 by ASIC. Mr Garton-Smith continued to call for the resolution to be put. The chairman refused to do so and closed the meeting without adjourning the meeting to another date. 11 Mr Johnston in his affidavit sworn 20 November 2007 accepts aspects of Mr Stoker's version of the conduct of the meeting, rejects aspects of the contended exchanges between Mr Johnson and Mr Garton-Smith and deposes to additional contextual considerations he says he raised concerning PSL's licence status. Mr Johnston says his concern was to avoid a possible breach of the Act and contended that a meeting might be called once PSL secured a licence. Mr Johnston says he observed 'what possible downside is there in adjourning the meeting until such time as they have a licence, given that we have obligations to all projects and all members, I believe that on balance this is the most appropriate course'. At para 18, Mr Johnston says that his refusal to put the proposed resolution to the meeting was based upon a concern that doing so would involve a contravention of ss 601FK and 601FA of the Act; the resolution if passed could not be effective having regard to its conditional nature; a resolution appointing an unlicensed responsible entity was inappropriate; and advice given to him during the course of the meeting by the two members present at the meeting. Mr Johnston ultimately decided that there was 'no real disadvantage to members' in deciding that the resolution was unable to be put to the meeting. 12 The interlocutory application filed by the respondents in the proceeding on 15 November 2007 was amended on 10 December 2007. The applicant respondents initially sought an Order pursuant to s 601FN and s 601FP of the Act that AOL be removed as the responsible entity of Project 6; an Order pursuant to s 601FP of the Act that PSL be appointed as the new responsible entity of Project 6; an Order pursuant to s 601FN and s 601FP of the Act that PSL be appointed a temporary responsible entity of Project 6 for a period of three months within which PSL would continue to prosecute its application for a licence to act as the responsible entity of Project 6; and in the alternative an Order pursuant to s 252E of the Act for the convening of a meeting of scheme members of Project 6 on 29 November 2007 to vote upon resolutions to remove AOL and appoint PSL with notices exchanged with relevant participants by particular dates. A declaration that at the meeting of the members of the managed investment scheme known as Australian Olives Project No. 6 ... held 7 November 2007, the chairman failed to put and adjourn the motion. Pursuant to s 1322 of the Corporations Act 2001 , the court make an order confirming the passing of the resolutions moved through Mr Rob Garton-Smith at the meeting of members held 7 November 2007. Alternatively, pursuant to s 252E(1) of the Corporations Act 2001 , meetings of the members of Australian Olives Project No. 6 ... including a copy of these orders and the period of notice fixed by Section 252F of the ... Act ... shall to that extent be abridged. The members present at the meeting shall elect a member present to chair the meeting. AOL says the essence of its position is that it was proper to do so. There is no utility or purpose served in making a declaration as to that matter which, in any event, is not in controversy between the parties. 15 As to para 2, the applicant respondents in written submissions gave immediate emphasis to that part of the Application seeking an Order pursuant to s 252E(1) to convene a meeting of scheme members. That emphasis suggested that Order 2 was no longer pressed. However, after a brief adjournment to take instructions, counsel for the applicant respondents pressed Order 2 relying upon ss 1332(1) , 1332 (2) and 1332 (4) to support the Order. The contention is this. AOL has an interest in maintaining its position as a responsible entity of Project 6 thus preserving its management revenue. That interest is in conflict with the interests of members who by reference to lodged proxies, sought to remove AOL. The conduct of Mr Johnston at the meeting on 7 November 2007, as a director of AOL, in acting as chairman of the meeting and refusing to put the motion to the meeting was the expression of that conflict. The conduct of Mr Ammit, as a director of AOL, advising Mr Johnston in that course was the expression of a conflict on his part. Such conduct, so the argument goes, is a contravention of s 601FC(1)(c) on the part of AOL and s 601FD(1)(c) on the part of Johnston and Ammit. Mr Garton-Smith's election to put the motion to the meeting, cast the votes and pass the resolution was an attempt to remedy or cure the breach of duty by AOL and its directors. In substance and effect, it is said, the resolution was put and properly voted upon resulting in the removal of AOL and the appointment of PSL. Accordingly, the applicant respondents seek an Order pursuant to s 1332 of the Act confirming the passage of the resolutions. 16 The immediate difficulty is this. 17 Substantially into the course of his argument, counsel for the applicant respondents said that PSL no longer consents to act as responsible entity for Project 6. The company now proposed as the new responsible entity should AOL be removed, is Huntley Management Limited ('Huntley'). There is simply no purpose to be served in making an Order or a declaration to the effect that the events of 7 November 2007 resulted in the passing of a resolution to remove AOL and conditionally appoint a company to act as responsible entity that will not act as responsible entity. That result is further compounded by recognising that pursuant to s 601FM(2) of the Act, AOL in such a case, would be required within two business days to notify ASIC of the resolution and request ASIC to record PSL as the new responsible entity notwithstanding that it refuses to accept the appointment. 18 There are two further matters. 19 First, the Order sought by para 2 is not one falling within the scope of ss 1332(1) , 1332 (2). The matter sought to be remedied by the Order is not a procedural irregularity for the purposes of ss 1332(1) and (2). Secondly, AOL contends that the meeting on 7 November 2007 was properly convened; the members present, properly elected Mr Johnston as chairman; the conduct of the meeting fell within the authority and control of the chairman of the meeting and Mr Johnston was entitled to decide that the motion ought not to be put to the meeting. AOL relies upon a number of authorities for the proposition that the question of whether a motion ought to be put to the meeting is one for the chairman to decide and the Court will not readily intervene in a supervisory review of the exercise of the chairman's discretion unless the Court is satisfied that the discretion was exercised in bad faith. The relevant principles are these. The acts of the chairman must be demonstrated to be other than bona fide or at least neglectful. ( Corpique (No. 20) Pty Ltd v East Court Ltd (1989) 15 ACLR 586 per Cohen J). The chairman 'as a matter of law has a wide discretion with which the Court will not interfere unless the exercise of the discretion can be shown to be invalid, e.g. on the ground that it was exercised in bad faith' ( Re Direct Acceptance Corporation Ltd (1987) 5 ACLC 1037, per McLelland J, at 1041). Some questions must be determined by the chairman that are characterised as 'emergent questions', ie, 'questions of fact which have to be decided then and there and as to which there is the general presumption, in the absence of fraud, that they were duly and properly decided. It rests, therefore, upon the side impeaching such a decision to overturn it by evidence showing that it was without foundation, that the fact was wrongly decided, or that there was some legal requisite not observed' ( McLean Bros & Rigg Ltd v Grice (1906) 4 (Pt 1) CLR 835 at 860 and 861, per Barton J; Re Indian Zoedone Company (1884) 26 Ch. D 70 at p 77, per the Earl of Selbourne LC). The chairman must act in good faith, in accordance with any relevant law, and on reasonable grounds. If there is insufficient material available to the chairman to enable him or her properly to make such a determination in a particular case, the chairman should not purport to do so. However, if the chairman does do so the Court will treat the determination as correct unless it is shown that it was not made in good faith or that there were no reasonable grounds to support it or that on the evidence before the Court the determination was incorrect in point of substance (see Re Triden Contractors Ltd (1992) 30 NSWLR 615 at pp 616 and 617 per McLelland J). 20 In Byng v London Life Association Ltd [1990] Ch 170, a decision of the English Court of Appeal, the Vice-Chancellor suggested at 189 that a broader test might apply observing that 'the chairman's decision will not be declared invalid unless on the facts which he knew or ought to have known he failed to take into account all the relevant factors, took into account irrelevant factors or reached a conclusion which no reasonable chairman, properly directing himself to his duties, could have reached, i.e. the test is the same as that applicable on judicial review in accordance with the principles of Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1 ; [1948] 1 K.B. 223'. Woolf LJ seemed to adopt a similar approach in Byng at p 194 and Mustill LJ did not differ in his reasons as to those matters. The Court of Appeal of Victoria in Link Agricultural Pty Ltd v Shanahan [1998] VSCA 3 ; [1999] 1 VR 466 per Kenny JA with whom Batt and Buchanan JJ.A agreed, elected not to decide the question of whether the formulation of the test in Byng is precisely the proper formulation for Australian Courts. In Link , the validity of the chairman's ruling depended upon whether the ruling facilitated the purpose of the power pursuant to which it was made. In this case, the applicant respondents assert as a ground of invalidity, a want of good faith on the part of the chairman. That want of good faith is also said to be an expression of a conflict of interest for the purposes of ss 601FC(1)(c) and 601FD (1)(c). The applicant respondents seek to remedy the invalidity of Mr Garton-Smith putting the resolution to the meeting, passing it and declaring it carried (rather than the chairman putting the resolution to the meeting) on the ground that the Court under s 1332(4) of the Act may make an Order 'declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution or the corporation'. 21 As to s 1332(4) , in order to exercise the power conferred by that section to cure the invalidity as contended, the Court would need to be satisfied that an invalidity arose by reason of the chairman's refusal to put the resolution to the meeting. It seems to me that the meeting of 7 November 2007 might properly have considered the proposed resolution. Had the resolution been carried, the question would inevitably have arisen as to whether PSL's appointment as responsible entity was made in contravention of Chapter 5C of the Act. 22 I do not propose to consider in any further detail the scope of the authority, powers or discretion conferred upon the chairman of the meeting or the principles upon which a Court will review the exercise of the chairman's discretion as it seems to me that there is no purpose served by making any Order in terms of Order 2 especially as an expression of declaratory relief having regard to the position that PSL will simply not act and does not seek to act as a responsible entity for Project 6. The applicant respondents now concede that approach to be appropriate. 23 As to para 3, counsel for the applicant respondents now seeks an Order that a meeting of members of Project 6 be held on 28 February 2008 at the offices of Frenkel Partners in Melbourne at 12 noon on that date to vote upon a resolution that AOL be removed and Huntley be appointed as responsible entity. The applicant respondents say that the intervention of the Court is necessary in order to ensure that a meeting is convened and that the proposed resolutions are put to the meeting and voted upon. The applicant respondents say that in the absence of an Order of the Court, a meeting might be convened by members pursuant to s 601FM(1) consistent with action taken under Division 1 of Pt 2G.4 of the Act, however, there is a real possibility, it is said, that AOL will take steps to ensure that the proposed resolutions are not put to the meeting. In other words, the members will again be deprived of an opportunity to actually vote on the proposed resolutions notwithstanding that 70% of the members of Project 6 support by proxy the proposed resolutions. Counsel for the applicant respondents says that the conduct of officers of AOL in acting in a conflict of interest and in causing Collinsville Finance to write letters to members asserting that a vote in favour of the resolution to remove AOL would place members so voting in breach of the terms of financing agreements between members and the company, all give rise to an inference that AOL, by its officers, will seek to obfuscate the orderly resolution of the matter and prevent the putting of the proposed resolutions to any meeting. Accordingly, the applicant respondents seek the supervisory intervention of the Court in making an Order for the convening of the meeting and the putting of the resolutions. The Order is said to be necessary to protect the interests of the members of Project 6. 24 Counsel for the applicant respondents initially suggested that the meeting would not necessarily consider and does not need to consider an Order for the appointment of a new responsible entity and may simply seek to confine the proposed resolution to the removal of AOL. Accordingly, counsel suggested that the applicant respondents would not press para 3(b) of the amended application which provides that any meeting convened pursuant to the Order consider a resolution to appoint a new responsible entity. Counsel for the applicant respondents says that a resolution limited to the removal of AOL would not create any hiatus in the affairs of Project 6 because s 601FJ(1) of the Act provides that even if AOL is removed as responsible entity by resolution, AOL would continue to be the registered responsible entity for Project 6 until the registration details maintained by ASIC are altered to reflect the appointment of a new responsible entity. Those details would be changed promptly upon the appointment of a new responsible entity. However, in the course of further argument, counsel for the applicant respondents continued to press for an Order convening a meeting to consider both a resolution to remove AOL as responsible entity and a resolution to appoint Huntley as the new responsible entity. 25 Counsel for the applicant respondents presses the elements of para 3 on the footing that the conduct of AOL and its officers gives rise to real apprehension that any meeting convened by the members would miscarry. Therefore, an Order of the Court together with the intervention of the Court's supervision in convening the meeting and making Orders that the resolution be put, will enable the members to properly consider and vote upon the proposed resolutions. 26 The difficulty is this. 27 Section 252E(1) of the Act is in these terms. Division 1 provides for the calling of a meeting of scheme members by the responsible entity. Section 252B provides that a responsible entity must call and arrange to hold a meeting of scheme members to consider and vote on a proposed special or extraordinary resolution on the request of members with at least 5% of the votes that may be cast on the resolution or at least 100 members who are entitled to vote on the resolution. Section 252C(1) provides that 'members with more than 50% of the votes carried by interests held by the members who make a request under s 252B may call and arrange to hold a meeting of the scheme's members if the responsible entity does not do so within 21 days after the request is given to the responsible entity'. Section 252D provides a mechanism by which members may call a meeting. It provides that members of a registered scheme who hold interests carrying at least 5% of the votes that may be cast at a meeting of the scheme's members may call and arrange to hold a meeting of the scheme's members to consider and vote on a proposed special or extraordinary resolution and the members calling the meeting must pay the expenses of calling and holding the meeting. Division 2 deals with the procedural mechanism by which a meeting might be called. At least 21 days notice must be given of a meeting subject to the scheme's constitution (s 252F). Written notice of a meeting must be given to each member of the scheme entitled to vote at the meeting, each director of the responsible entity, the auditor of the scheme and the auditor of the scheme compliance plan (s 252G(1)). A Notice of Meeting must set out the place, date and time for the meeting; state the general nature of the meeting's business; if a special or extraordinary resolution is to be proposed at the meeting, set out an intention to propose the resolution; and, the notice must contain a statement informing each member of a right to appoint a proxy; advise the member that the proxy need not be in favour of a member of the scheme; and advise that if a member appoints two proxies the member may specify the proportion or number of votes the proxy is appointed to exercise (s 252J). 29 Members reflecting a threshold of 5% of the votes that may be cast on the resolution (or at least 100 members entitled to vote at a meeting) may give the responsible entity notice of a resolution that they propose to move at a meeting of the scheme members (s 252L(1)). Sections 252M and 252N set out responsibilities cast upon the responsible entity once notice is given pursuant to s 252L. As to the meeting itself, it must be held at a reasonable time and place (s 252P). A quorum for a meeting is two members and the quorum must be present at all times during the meeting (s 252R(2)). Proxies are to be taken into account for determining a quorum (s 252R(3)). If the meeting is convened by members under s 252D of the Act, the members present must elect a member present to chair the meeting (s 252S(3)). This provision does not apply if the meeting is convened by order of the Court under s 252E and the Court has directed otherwise under s 1319 of the Act. The auditor of a registered scheme and the auditor of the compliance plan are entitled to attend any meeting of the scheme's members. Division 5 deals with the appointment of a person to act as a proxy for a member to attend and vote at a meeting, the rights of proxies, the mechanism for appointing a proxy, dealing with proxy documents, the validity of a proxy vote and the appointment by a body corporate of an individual to act as its representative at a meeting of scheme members. Division 6 deals with voting at meetings of members. 30 Section 253K(1) of the Act provides that a poll may be demanded on any resolution although the registered scheme's constitution may provide that a poll cannot be demanded on any resolution concerning the election of the chair of a meeting (s 253K(2)(a)). An extraordinary resolution put to a vote at a meeting of scheme members must be decided on a poll (s 253J(1)). At a meeting of scheme members, a poll may be demanded by at least five members present entitled to vote on the resolution or by members present with at least 5% of the votes that may be cast on the resolution of a poll, or by the chair of the meeting (s 253L). The scheme's constitution may provide that fewer members or members with a lesser percentage of votes may demand a poll (s 253L(2)). A poll may be demanded before a vote is taken, or before the voting results on a show of hands are declared, or immediately after the voting results are declared on a show of hands (s 253L(3)). 31 Accordingly, there is nothing in the material that suggests that it would not be possible or practicable for members of the scheme who hold interests carrying at least 5% of the vote that may be cast at a meeting of the scheme's members to call and arrange to hold a meeting of scheme members to consider and vote on a proposed special or extraordinary resolution, pursuant to s 252D(1), in accordance with the method set out in Division 2 of Pt 2G.4 of the Act. Alternatively, members with at least 5% of the votes that may be cast on a proposed resolution or at least 100 members who are entitled to vote on the resolution may request the responsible entity to call and arrange to hold a meeting and upon such request the responsible entity must do so pursuant to s 252B of the Act. The material demonstrates that the procedural steps and general arrangements for convening the meetings of members and formulating and issuing the Notices of Meetings in relation to a number of the schemes including Project 6 have been undertaken by Stantins Accountants and advisers of Hawthorn in Victoria. Mr Spyridon Livadaras is a partner in Stantins and says that he is personally the adviser to a number of the respondent members convening meetings for each project. Mr Livadaras has taken steps to obtain consents from members seeking to issue Notices of Meetings including the meeting of Project 6. It seems that Mr Livadaras is intimately familiar with each of the registered olive schemes and is familiar with the requirements of the Act in order to convene a meeting. 32 I am not satisfied on the material that it is impracticable to call a meeting of scheme members for Project 6 by 28 February 2008 which is over two months away, in any way other than by means of a Court Order for the calling of a meeting. 33 The applicant respondents say, in effect, that impracticability for the purposes of s 252E of the Act must be determined having regard to all the circumstances including the contentions going to the conduct of Johnston and Ammit and through them AOL arising out of the refusal to put the resolution at the 7 November 2007 meeting; the conduct of Johnston in seeking advice at the meeting from persons said to have a conflict of interest with the members' interests; the conduct of Collinsville Finance in threatening to call up loans made to members should they vote in favour of the resolutions (on the basis of a contended breach of the loan agreements in so doing); the failure to honour the Order of the Court made on 29 October 2007 adjourning the meeting called for 30 October 2007 to 7 November 2007; and the likelihood, it is said, that another meeting convened by the members in accordance with Pt 2G.4 will produce the same result as that which occurred at the meeting on 7 November 2007. For all these reasons, it is impracticable, it is said, to call the meeting other than by Court Order to enable the members to consider and vote on the proposed extraordinary resolution. 34 The applicant respondents propose a meeting for 28 February 2008. That meeting would be a new meeting to be convened in a way which would give proper notice of the business to be conducted, the resolutions and information going to those resolutions. The proposed Order would direct the meeting convened on 28 February 2008 to consider and vote upon the proposed resolutions to remove AOL and appoint Huntley. Steps can be taken by those seeking to call a meeting supported by Mr Livadaras and his staff at Stantins in sufficient time to convene a meeting for 28 February 2008 in any event. The provisions of Pt 2G.4 are clear. Those members concerned to call a meeting will no doubt take steps to inform other members of their concerns and encourage members to attend in person or by proxy. No doubt those members calling the meeting will take steps to ensure that a sufficient number of like-minded members are present to consider and vote upon a resolution to appoint a chairman of the meeting. Having regard to the provisions of the Act discussed at [28] to [30] and the material filed by the applicant respondents upon which they rely, I am not satisfied that it is impracticable to call a meeting in any way other than by Order of the Court. 35 The particular consideration which warrants close attention is the conduct of Mr Johnston in refusing to put the proposed resolution to the meeting having regard to the Order of the Court made on 29 October 2007. That Order ([6] of these reasons) provided for the adjournment of the meeting from Fremantle on 30 October 2007 to premises in Sydney on 7 November 2007. The consequential Orders provided for exchanges of material. A textual examination of the Orders, as I have indicated, seems to suggest that the spirit of the consent Orders seems to have been that material would be exchanged, within limits, so as to enable members to consider the proposed resolutions and vote upon them. The Order of 29 October 2007 was not made after any deliberative process on the part of the Court. In textual terms, the Order provides for an adjournment of the meeting. The Order did not make provision for any supervisory conduct of the meeting or direct the putting of motions or proposed resolutions to the meeting. The conduct of the meeting so adjourned fell, consistent with orthodoxy, to the chairman of the meeting elected by members present consistent with the provisions of the Act. In textual terms, there was no failure to comply with the Order. I am not satisfied that a failure to realise the expectation underlying the consent Order (if it be so) is a matter which renders the convening of a meeting in 65 days time by members, impracticable by any means other than by Order of the Court. At that meeting, the members can consider the proposed resolutions to be put to the meeting. Those resolutions might reflect both resolutions identified by the applicant respondents in this application, ie the removal of AOL and the appointment of Huntley or variations upon those proposed resolutions supported by relevant information. 36 By Order 4, the applicant respondents seek matters consequential upon the making of an Order pursuant to s 252E(1) of the Act. Those matters are strictly in terms of aspects of s 1319 in any event. However, I am not satisfied that an Order ought to be made for the convening of a meeting and accordingly no Order ought to be made pursuant to para 4 of the Amended Application. 37 Having regard to all of these matters, the Amended Application is to be dismissed with costs including reserved costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application by members of a managed investment scheme registered under the provisions of the corporations act 2001 (cth) for orders for the convening of a meeting of scheme members pursuant to s 252e(1) of the act consideration of whether a declaration ought to be made as to a chairman's failure to put a motion to an earlier meeting of scheme members consideration of whether an order in relation to the earlier meeting ought to be made pursuant to s 1332 of the act corporations law |
The first plaintiff, John Tosich, was the investor. Tosich was a client of the first defendant, Tasman Investment Management Limited, formerly Warne Investment Management Limited, ("Tasman Investment") that carried on business as a financial planner. The second defendant, Colin Warne, was managing director of Tasman Investment and was personally involved in its dealings with Tosich. Warne recommended the investment in the Queen Victoria Project to Tosich. It was a failure. Tosich sues Tasman Investment and Warne for his loss. All Saints Investments Pty Limited ("All Saints") claims to be an assignee of Tosich's cause of action against Tasman Investment and Warne. American Home Assurance Company ("AIG") is an insurer and issued an Investment Managers Insurance Policy 85550 that Tasman Investment and Warne claim will indemnify them in relation to claims arising out of the failure of the Queen Victoria Project. Aon Risk Services Australia Limited ("Aon") was an insurance broker and acted as such for Tasman Investment. If the AIG policy does not provide cover, then the defendants sue Aon. These relationships have given rise to a plethora of claims and cross-claims that need to be examined with some care. The parties have agreed on a chronology of events that fleshes out the issues to be determined. In order to better match issues with events I have edited and split the chronology under the following headings: history related to Warne entities; Queen Victoria Project; dealings between Tosich and Warne; dealings between Warne entities and Aon; dealings between Aon and AIG; and dealings between Warne entities and AIG. The split is somewhat arbitrary and there is some overlap. The chronology so organised is the first schedule to this judgment. The second schedule is a dramatis personae. 2 The fundamental transaction was the purchase of a site of some 404 ha at Tableland Road, Wentworth Falls in the New South Wales Blue Mountains area, the registered proprietor of which was the Wentworth Area Health Service, a branch of the New South Wales Health Department. It was the site of the former Queen Victoria Hospital. The site was zoned part Bushland Conservation (No Subdivision) (Hospital), part Bushland Conservation (No Subdivision) and part Environmental Protection under the City of Blue Mountains LEP 1991. Longevity Management Systems Pty Ltd (LMS) was interested in acquiring the site to develop a retirement village. The project was introduced to Warne. 3 On 10 May 2000 Tasman Investment (by Warne) provided LMS with a written commitment to provide the funds required for acquisition of the property by 28 June 2000 based on a bid price of $1.52 million. That letter was provided to the Department of Public Works --- Services, which was handling the sale on behalf of the vendor, with the bid by LMS. A further offer of $2,012,000 was made on 25 May 2000 and accepted on 29 May 2000 with settlement on or before 28 June 2000. Settlement occurred on 27 June 2000. Tasman Investment provided the funds and LMS took title. Please read it and arrange an appointment with Sandra, Laurie or Peter to discuss the suitability of this investment. As a consequence, investment in Property Development should only play a role in a portfolio where risk exposure is consciously accepted. (Refer risk analysis) Property Development, while carrying risk, can still be a fundamentally sound investment, provided costs are adequately controlled and confidence exists in the particular investment. This project provides a unique opportunity to participate in the strongly growing aged accommodation industry. (approximately $10,000 per unit with a construction cost of approximately $100,000 per unit). If for unforeseen reasons we decided to terminate the investment and sell all units at cost I believe we should recover our capital. I believe the site is quite exceptional as the mountains provide limited opportunities for this type of investment. Cheques should be made payable to Longevity Management Systems Pty Ltd. I will be in Canada from Friday 2 nd June returning to work Tuesday 27 th June. Please contact Laurie, Sandra or Peter in my absence to discuss this project. The seminar will be led by Executive Directors of Longevity Management Systems Pty Ltd Mr Peter Barnes and Mr Tim Brennan. As a result, Tosich invested $125,000 on or about 6 November 2000. 7 Leaving aside matters of detail (important as they may have been) and the commercial merits of the proposal, there were two fundamental problems with the proposal that were never solved --- zoning of the land and the legal structure of the investment. 8 The proposal was presented as a retirement village, with individual units available for sale. There is no doubt that the zoning of the land did not permit that use. It is clear that there was never any chance of obtaining approval of the scheme as proposed to investors. Considerable later modification of the proposal to seek to qualify as a "hospital" did not overcome the difficulties that were spelt out by the Blue Mountains City Council in its letter of 17 April 2002. Even when radical amendments, including the removal of all independent living/low care cottages, were proposed, Council officers maintained objections. The directors of Tasman Investment accepted by 13 August 2002 that the project as had been proposed to investors was not a permissible use. 9 By 22 August 2000 LMS had received advice from Chris Lonergan & Associates of significant concerns as to permissibility of the development. The only valuation of the site in the possession of LMS in evidence was $500,000---$1,000,000 on an "as is" basis. At no time before the end of 2000 the defendants neither obtained an independent valuation of the property nor sighted any valuation that LMS had obtained. Before the end of 2000 the defendants did not obtain any independent town planning advice as to the permissibility of a retirement village on the property and did not ascertain the attitude of Blue Mountains City Council to such a development. The defendants also did not prepare any cash flow statements to ascertain whether the capital invested into the project could be returned if development approval was not granted. The defendants simply accepted and passed on to Tosich what had been put by LMS without any independent verification. 10 The other problem was the inchoate basis of the investment of the funds as put forward in the Initial Offer Proposal, with no material change before the funds were paid and received in November. It is simply not possible to ascertain what rights were to be acquired and from whom. That situation was never satisfactorily resolved. It is not necessary to trace the tortuous path of the negotiations between the defendants and LMS as to that. It is then alleged that the project described was a managed investment scheme within the meaning of s 9 of the Corporations Law (as it then applied) and the project had to be registered on or before 1 July 2000 in the manner prescribed in Ch 5C of the Corporations Law as required by s 601ED of the Corporations Law and had to be operated by a responsible entity by the same time (s 601FB), but that it was neither registered nor operated by a responsible entity as required. It is alleged that Tasman Investment was required to provide Tosich with an offer information statement within the meaning of s 715 of the Corporations Law and lodge a copy with the Australian Securities and Investments Commission (ASIC), but did not do so as the Initial Offer Letter did not comply as it omitted material information. The non-compliance was materially adverse from the point of view of Tosich such that s 724(1) applied. 13 It is alleged that representations were made by Tasman Investment in the Initial Offer Letter, the Initial Offer Proposal and at a meeting between Tosich and Warne in September 2000. It is alleged that each of the representations was made in, or in connection with, a dealing in securities and/or the making of a securities recommendation within the meaning of s 851 of the Corporations Law and that certain of them were with respect to future matters within the meaning of s 765(1) of the Corporations Law . Reliance, by investing $125,000, is pleaded, together with related allegations. The misleading and deceptive nature of the various representations is pleaded and causation related to that is pleaded. 14 Negligence consisting of breach of the duty set out in para 11 above causing loss or damage is alleged. Various contraventions of the Corporations Law are alleged --- breach of Ch 5C, contravention of Pt 7.11 , contravention of s 728(1) and s 851. Damage, being the investment of $125,000 less a first and final dividend of $25,608.38, is claimed. 15 To summarise, Tosich relies upon a claim in negligence and upon various breaches of the Corporations Law . 16 All Saints pleads the acquisition of all the rights of Tosich as against the defendants by virtue of a deed of assignment dated 16 June 2005 and pleads all facts and matters pleaded by Tosich. 17 Tasman Investment and Warne make a number of admissions in their defence to the claim but deny any liability. They also ultimately relied upon certain grounds of defence that are pleaded by Aon, it having been joined in order that those grounds be taken. The first of those grounds puts in issue the enforceability of the assignment of the causes of action whilst purporting to admit the assignment. (2) The chose in action was not annexed to a right of property assigned at the same time as the assignment. (3) Neither the statutory causes of action nor the cause of action in tort was capable of being assigned. The second ground is that, for present purposes, Tosich only became a plaintiff on 18 May 2007 by which time all causes of action were statute barred. That was inevitable in view of the history of the relationship between Warne and Tasman Investment and Tosich. They do not admit breach of that duty of care. 19 The defendants admit that had they been aware in June 2000 that a retirement village was not going to be possible for the property, they would not have advised Tosich to make the investment. They also admit that had they been made aware of the concerns expressed by Lonergan in August 2000, they would not have encouraged Tosich to make the investment. The advice given was misleading. The lack of proper investigation of the project prior to recommending investment to clients was a serious breach of the duty of care and skill owed by a financial planner. The commitment by Warne to LMS to provide substantial funds was undoubtedly a major factor in the imprudent advice to clients. However, I am satisfied that Warne was convinced of the merits of the proposal, and invested some of his own money. He did not consciously mislead Tosich. Recommending and receiving an investment with no fixed and appropriate structure was also a serious breach of duty. To recommend such an investment was negligent. 20 The next problem was the failure to comply with the requirements of the Corporations Law applicable at the time. The proposal was undoubtedly a "managed investment scheme" as defined in s 9 of the Corporations Law . Whilst this case has concentrated upon three investors, more than 20 investors contributed approximately $4 million in total. Prima facie, registration was required (s 601ED(1)). It could not be established that all of the issues of interests did not need disclosure to investors under Pt 6D.2 when made (see s 706 and s 708). Registration would have required the production to ASIC of documents that did not exist and a responsible entity to operate the scheme being a public company that held a dealer's licence to operate a managed investment scheme. The responsible entity would be subject to a number of statutory obligations. There was no responsible entity. These breaches were admitted in collateral proceedings in the Supreme Court of New South Wales and formed the basis of orders made in those proceedings ( Australian Securities and Investments Commission v Tasman Investment Management Ltd (2004) 183 FLR 294; Australian Securities and Investment Commission v Tasman Investment Management Ltd (2006) 202 FLR 343). It follows that Tosich had none of the protections provided for by the Corporations Law flowing from registration and the existence of a responsible entity. The proposal should not have been made to Tosich (or others) at all by a responsible financial planner. 21 In addition, the provisions relating to disclosure to investors about securities (Pt 6D.2) were ignored by the defendants. They required provision of an offer information statement in the circumstances of this case (s 709(4)). This subsection does not limit the meaning of a reference to a misleading statement or a statement that is misleading in a material particular. 24 I am satisfied that all of the pleaded statutory contraventions are established. I am satisfied that there is a remedy sounding in damages for the contraventions save for the failure to register the scheme pursuant to Ch 5C and the failure to have the scheme operated by a responsible entity. Those contraventions are relevant to the claim in negligence, but I cannot find a basis for a direct claim for damages. 25 There can be no doubt that there was a causal connection between the negligence and each of the identified statutory breaches, and the loss making investment by Tosich. Each cause of action is established against Tasman Investments. There is no doubt about Warne's personal liability for all causes of action so established. He was the moving force for Tasman Investments in all respects relevant to the investment in the Queen Victoria Project and is responsible for all acts and omissions giving rise to the liability of the company ( Houghton v Arms [2006] HCA 59 ; (2006) 225 CLR 553). At that time this proceeding was on foot, and a receiver had been appointed to the Queen Victoria Project by the Supreme Court of New South Wales in proceedings brought by ASIC. The assignee will pay to the assignors by bank or trust account cheque the sum of One-Hundred and Fifty Thousand Dollars ($150,000) on the exchange of this Deed. The first is that the defendants Tasman Investment and Warne were each party to the deed and gave joint and several warranties as to the financial position of the assignee and Warne. They also (together with the assignee) indemnified the assignors against future legal costs and expenses in the proceeding, and covenant that they will not seek costs or expenses from the assignors in relation to this proceeding. If the receiver declares and pays a dividend in respect of the Queen Victoria Project prior to the conclusion of the Tosich proceedings and the connected proceedings, that dividend will be paid to the assignors once the Tosich proceedings and the connected proceedings have been finally concluded. If the receiver declares and pays a dividend in respect of the Queen Victoria Project once the Tosich proceedings and the connected proceedings have been finally concluded, that dividend will be paid to the assignors forthwith. It is submitted that each of the causes of actions is personal to Tosich (and any other like investor) and is not capable of assignment. The plaintiffs submit that each cause of action is incidental to a property right viz the interest in the project and also that there was a genuine commercial interest in the enforcement of the claim by All Saints. 29 This area of the law is controversial. Choses in action in general are assignable (eg s 12 Conveyancing Act 1919 (NSW)). However, a bare right to litigate requires special consideration. Although maintenance was referred to in this context, no submissions were directed to the effect of the Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) (cf Campbell J in Mid-City Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569 at [194]). It is convenient to discuss the cause of action in negligence first. There is no reason why such a cause of action could not include tort in an appropriate case eg detinue or conversion. However, based upon the submissions in this case, examples of the practical application of the principle are sparse. Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 was cited but the decision turned on what was held to be the assignment of a debt (37 FCR at 394---395). In Monk v Australian and New Zealand Banking Group Ltd (1994) 34 NSWLR 148 there had been no assignment of the cheques that would have constituted the necessary property. In that case, Cohen J referred to the decision of Gault J in First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 where it was held (at 757) that the assignment of a debenture by a parent company to a subsidiary included an assignment of causes of action in tort against a receiver of the company that issued the debenture and that the causes of action in tort were ancillary to the assignment of the debenture and so valid. The effect of that decision is somewhat clouded by the subsequent appellate history of the case ( First City Corporation Ltd v Downsview Nominees Ltd [1990] 3 NZLR 265; Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295) although the appeals did not turn upon the point in issue here. 31 The decision of Finkelstein J in TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444 may be seen as an example of the category of connection with property. There, the assignment of a cause of action for breach of confidential information, connected with or relating to rights of property that were assigned, was upheld (see particularly 158 FCR 444 at [79]---[81]). However, that decision, and others since 1982, have been influenced by dicta of Lord Wilberforce and Lord Roskill in Trendtex [1982] AC 679 indicating another basis for exception from the general rule --- whether the assignee has a "genuine and substantial interest in the success of the ... litigation" (per Lord Wilberforce at 694D) or has a "genuine commercial interest in the enforcement of the claim of another" (per Lord Roskill at 703D). 32 There have been varied opinions as to whether that basis can be applied by Australian courts without the High Court qualifying Poulton 89 CLR 540. As it happens, most negative opinions have been expressed by judges of this Court, eg Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1994] FCA 814 ; National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 ; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474 ; and Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146. A number of those and other authorities are analysed by McDougall J, who took the wider view, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267. 33 Finkelstein J took the wider view in TS & B Retail Systems Pty Ltd 158 FCR 444 and suggested that the High Court in Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386 had approved the effect of the statements by Lords Wilberforce and Roskill in Trendtex [1982] AC 679. The precise point that arises here did not arise in Campbell's Cash and Carry Pty Ltd [2006] HCA 41 ; 229 CLR 386. However, the reasoning of Gummow, Hayne and Crennan JJ at [68]---[82] and Callinan and Heydon JJ at [258]---[261] supports the opinion of Finkelstein J. In my opinion, the principle enunciated in Trendtex [1982] AC 679 can be taken to be established for Australia. It needs to be borne in mind that the statement in Poulton 89 CLR 540 was not the centre of controversy in that case. 34 Did All Saints have a genuine commercial interest in the enforcement of Tosich's claim? There is no direct evidence concerning the position of All Saints prior to the transaction. The inescapable inference from all the circumstances, including the structure of the transaction, is that All Saints was under the control of the Warne interests and that the transaction was to ensure that this proceeding continued notwithstanding a reluctance to pursue it on the part of Tosich. In particular, it seems to be aimed at removing or minimising Tosich's risk as to costs. It may be inferred that the purpose was to provide a vehicle for the defendants to pursue their cross-claims with the benefit of a claim proved by a plaintiff. That would remove the kind of problem exemplified by CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36 ; (2007) 237 ALR 420 ; (2007) 81 ALJR 1551 ; (2007) 62 ACSR 609. Indeed, as much was made clear by counsel for the plaintiffs and for the defendants on various occasions. I do not see anything objectionable about that purpose or about the structure of the transaction. All Saints could not profit from the arrangement. It is not "trafficking" in causes of actions in any real sense. Facilitation of cross-claims to be determined on their merits is not objectionable as such. However, it seems to me that the dicta in Trendtex [1982] AC 679 would have to be extended to include these circumstances within the permissible categories of assignment. The assignee is not shown to have had any interest in the claim prior to, or regardless of, the assignment. In view of the controversy surrounding the topic, an extension of the categories is not the province of a single judge. 35 What, then, of the connection with property? Austin J found that there were property interests created by the scheme. The deed purports to assign those interests and causes of action, including the present. In one sense, there is a clear connection. The intention is to recover the loss of property invested. However, the claim in negligence is not to recover the property that existed at the time of the transaction --- it is to recover the loss by way of damages. In my opinion, that is not the kind of claim connected with property that is covered by the traditional exception to the rule against assignment of causes of action, assuming, as I do, that the exception can include claims in tort where appropriate. The assignment of the cause of action in tort is not effective. 36 In the course of argument, counsel for the plaintiffs referred to a claim for money had and received. Such a claim can be ignored for present purposes. 37 The statutory claims remain to be considered. Counsel for the plaintiffs ultimately conceded that he could find no support for assignability of these causes of action. That is correct. That relieves me from deciding the point. I should say that the concession would follow, directly or indirectly, from a long line of authority in this Court that is against assignment of a claim for damages pursuant to s 82 of the Trade Practices Act 1974 (Cth) commencing with Park v Allied Mortgages Corp Ltd (1993) ATPR (Digest) 46-105. Those cases were recently reviewed and followed by Rares J in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146 at [50] ---[58] in relation to claims made pursuant to s 82 for breaches of s 52 and s 51AC of the Trade Practices Act . 38 It follows that the purported assignment of each cause of action is ineffective. I should add that if the assignment is ineffective, it is so for all purposes. It follows that Tosich retains the causes of action regardless of the deed. That transaction has no relevant impact upon his claims. There is no evidence as to the arrangements between Tosich and All Saints in the eventuality of the assignment being ineffective. Such evidence would be as irrelevant to this case as would any other side arrangements between parties such as insurance. The defendants adopt a "coat-tails" approach. Aon has taken the running on the issue. The starting point is that Tosich was reintroduced to the proceeding as a plaintiff by amendment on 18 May 2007. The next step is that 18 May 2007 is taken to be the date of the commencement of the proceeding by Tosich by virtue of O 6 r 11(3) of the Federal Court Rules . It is then contended that all relevant causes of action accrued on or about 6 November 2000 when the money was paid by Tosich. The last step is that each cause of action is barred, either by particular limitations in the Corporations Law or by the Limitation Act 1969 (NSW), applicable by virtue of s 79 of the Judiciary Act 1903 (Cth). There is little to recommend such a result. It would be a triumph of form over substance. Tosich commenced the proceeding on 27 November 2003, well within all potential limitation periods. All Saints was substituted for Tosich as plaintiff by order of the Court on 19 April 2006 claiming to be an assignee of the Tosich causes of action. The substantive causes of action remained the same at all times. Thus, the defendants faced the same causes of action at all times. The cross-defendants faced the same cross-claims at all times. However, lack of merit alone is not an answer to the point. 40 The first two steps are common to all causes of action. There has been much debate about amendment and limitation since Weldon v Neal (1887) 19 QBD 394. Many of the authorities were considered by the New South Wales Court of Appeal, presided over by Gleeson CJ, in relation to a rule similar to O 6 r 11(3) in Fernance v Nominal Defendant (1989) 17 NSWLR 710, particularly concerning the relationship between that rule and the New South Wales equivalent of the present O 13 r 2 of the Federal Court Rules . In this Court, see eg Zoneff v Elcom Credit Union Ltd [1990] ATPR 41-058 at 51,746---51,747. The introduction of s 59(2B) to the Federal Court of Australia Act 1976 (Cth) in 1994 and the consequent amendments to O 13 r 2 changed the landscape. Here, no argument was directed to those changes and their significance and, in particular, as to the interplay between O 6 r 11 and O 13 r 2. There was no discussion of the power to dispense with the Rules (O 1 r 8) (cf Karam v Australia and New Zealand Banking Group Ltd [2000] NSWSC 596 ; (2000) 34 ACSR 545). 41 However, even if O 6 r 11(3) alone is considered and operates according to its terms, there is a real issue in this case as to the last step --- the effect of the limitation provisions. In Martinus v Kidd [1982] HCA 64 ; (1982) 150 CLR 648 it was pointed out that no new cause of action comes into being against the personal representative of a deceased tortfeasor --- the existing cause of action survives. In that case, time runs for limitation purposes from accrual of the cause of action against the deceased (see per Gibbs CJ, Murphy and Wilson JJ at 652; Mason J at 659). The same principle must be applicable in relation to a cause of action that survives for the benefit of the personal representation of the deceased estate, absent any special provisions. That principle applies to an action by a trustee in bankruptcy to enforce a liability of the bankrupt ( Re Mansell; Ex parte Norton (1892) 66 LT 245). The same principle should apply in the case of the assignment of a cause of action. The original cause of action remains the foundation of the action (although not directly applicable, see " The Jordan Nicolov" [1990] 2 Lloyds Reps 11 per Hobhouse J at 19; Lefevre v White [1990] 1 Lloyd's Reps 569 per Popplewell J at 577 citing Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363 per Lord Denning at 373; cf per Jacobs J in Re Harry Simpson & Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 at 605; (1963) 81 WN (Pt 1) (NSW) 207 at 209. In the present case, the same causes of action have been pursued at all times. 42 All of the limitation provisions relied upon by way of defence, with one exception, speak in terms of causes of action. The exception is s 1317K of the Corporations Act 2001 (Cth), which provides for a limit of six years "after the contravention". The institution of a proceeding for a compensation order (as in this case) satisfies the section. As I have said, commencement of this proceeding was well within all time limits. It is thus unnecessary to consider the vexed question as to when the various causes of action accrued for limitation purposes. Tasman Investment was deemed an "insured entity" under the Policy pursuant to an endorsement. Warne claims to be an insured by reason of being an "Individual Insured". The cross-claim is for indemnity in relation to the claims by Tosich and All Saints and two other investors whose claims had been paid out --- Kotwal and Roach. 44 AIG denies that the policy responds to the claims; denies that there was a valid notification of any circumstance or of the claim as required; raises estoppels leading to rectification; relies upon certain exclusions and non-disclosure; and says that the cross-claimants settled certain claims other than that by Tosich contrary to the terms of the policy. AIG now accepts that the Tosich claim was made and notified during the period of insurance as required. The pro forma proposal indicates that the insured is a fund manager. The Wollongong Prime Property Fund was the only Fund identified as such in the proposal. Mr Warne was the sole shareholder until April 2000 when Mr Warne sold 33.3% of the company to Mrs J McCoughy a nominee of Mr Stephen Harrison. Court & Co Financial Services Pty Ltd. has since changed its name to Tasman Financial Planning Pty. Also at this time Mason Investments NV purchased 25% of the share capital of Tasman Capital Ltd. Mason Investments NV is the nominee company of the Cullen Group of New Zealand. Mr Cullen is better known to Australians as the owner of the New Zealand Warriors rugby league team. Ltd act as financial planners. Tasman Investment Management Ltd. is also the responsible entity for the Wollongong Prime Property Trust the owners of buildings in Wollongong and Parramatta with a current value of $26.0 million. From1 July 2001 the group has been restructured. All financial planning will now be done by Tasman Financial Planning Pty. Ltd. Tasman Investment Management Ltd. will become the property arm of the group and will concentrate on the Wollongong Prime Property Trust as well as other property investment schemes. On establishing a presence in Sydney and in acquiring the services of suitable financial planners to support the future aims of the group. These aims being to supply an above average level of financial planning services to high net worth clients. The profit for 2000/2001 has been affected by these extra costs without commensurate revenue increases. It aims to increase this to $1 billion within three years. This increase will be obtained by natural increase, from referrals and by further acquisitions. The funds injected into the group by Cullen have been earmarked for these acquisitions. P.I. --- Macquarie Underwriting --- Expires 31.3.02. The defendants contend that this construction is too restrictive and would deny commercial efficacy. It is submitted that construing the clause "contra proferentem" the words "of the Insured Entity" in the definition of "Securities" governs either "debt security" only or, at most, "share or other equity or debt security". It is submitted that if "Securities" had to be of the Insured Entity, that would be inconsistent with Investment Advisory Services "including" (but not being limited to) "in connection with interests in the Fund of the Insured Entity". 51 In my opinion, AIG's construction of "Securities" is clearly correct. It reflects the ordinary meaning of the language. Furthermore, it is consistent with the policy being an Investment Manager Policy and with the emphasis in the Proposal upon the insured as a fund manager. 52 However, some issues of construction of the phrase "Investment Advisory Services" remain. That definition is not easy to construe. For example, it is not at all clear whether rendering investment management services is deemed to be an advisory service. The two concepts would not normally be regarded in that way. It is not clear to what the phrase "including in connection with interests in the Fund of the Insured Entity" relates. In my opinion, the better view is they are limited to "Securities" as defined but that rendering investment management services is a distinct activity, not limited to (but including) in connection with interests in the Fund of the Insured Entity. This is consistent with the core activity being the rendering of such services. However, the cover does not relate to those services as such, but to financial, economic or investment advisory services regarding those services. "Investment management services" are not defined. Can the services provided by Tasman Investment to Tosich be described as the management of investments and, if so, was the advice given regarding that management included in "Investment Advisory Services" within the meaning of the policy? In my opinion, this is stretching the clause too far. 53 However, in any event, the services in question were not provided pursuant to a written contract. There is no evidence of any document in the nature of a retainer, formal or informal. Written advice was tendered from time to time, but that is not what was required. It provides that the insurer is not liable for payment of loss in connection with a claim "arising out of, based on or attributable to" any Wrongful Act committed or alleged to have been committed prior to 31 October 2000. It is submitted that the payment of $125,000 by Tosich and the consequent losses arose out of, were based upon and were attributable to the misleading representations contained in the Initial Offer Letter and Initial Offer Proposal made on or about 3 June 2000 and made at the meeting in September 2000. Those representations constituted Wrongful Acts. On the other hand, counsel for the defendants submits that the receipt of the money on or about 6 November and the payment over to LMS was the ultimate, and relevant, Wrongful Act, and so not excluded from cover. 55 In my opinion, the loss and the claim did arise out of the June and September misleading representations and so fall within (a) of the definition of Wrongful Act. The connection is not broken by the receipt and payment of the money, whether or not that constituted a separate Wrongful Act. No claim can be made pursuant to Insuring Clause A by either defendant. Furthermore, Individual Insured with respect to Insuring Clause B does not include any externally appointed officers, such as receivers, managers, liquidators, administrators, mortgagees, in possession and the like. Employee shall also include an Individual Insured while performing acts coming within the scope of the regular duties of an Employee . It contends that Insuring Clause B only covers a claim against the director or officer personally for default in that capacity, rather than a claim based upon conduct for which the corporate insured is liable vicariously or as principal. It contends that the latter is covered by Insuring Clause A rather than B. No doubt the former is covered by Insuring Clause B, but it is not so clear that it is all that is covered. 61 Some assistance might be obtained from considering those provisions that distinguish between the two. One is the definition of "Individual Insured". Any employee is covered with respect to Insuring Clause A and any employee in a managerial or supervisory capacity with respect to Insuring Clause B. That gives some support to AIG's argument. Another, the clause concerning Retention, is of no particular significance. Endorsement 3 applies only in respect of Insuring Clause B. It excludes liability for claims by past or present shareholders controlling 15% or more of the voting rights of the insured corporation. This supports the view that Insuring Clause B relates to those duties or liabilities imposed upon a director or senior officer as such, rather than all conduct in the course of employment. Endorsement 5 is significant, but the rationale for distinguishing between Insuring Clause A and Insuring Clause B in relation to this exclusion is not immediately obvious. The effect of the clause is that individual duties and responsibilities as a director or senior officer in relation to fundraising are not covered, but that actions carried out on behalf of the insured are covered. This gives some support to the contention of AIG as to scope of Insuring Clause B. All in all, the contentions of AIG as to the scope of Insuring Clause B should be accepted. 62 Thus, it becomes necessary to examine whether any of the causes of action against Warne would fall into that category. All of the causes of action that flow from the direct dealings between Warne and Tosich --- whether in person or by correspondence --- fall within Insuring Clause A. They do not depend upon his position as a director or senior manager as such. A claim concerning the failure to register the scheme and all that flowed from that failure would fall within Insuring Clause B. If there is such a duty it would be on the basis of Warne's personal liability because of his office. That would involve some but not all of the statutory breaches. However, Endorsement 5 would exclude cover. In my opinion, Warne was engaged in the raising of capital by equity, debt or other means, and the liability would arise out of, or be in connection with, that endeavour. Warne cannot rely upon Insuring Clause B. 63 It is now accepted by the defendants that the claim for cover in respect of Kotwal and Roach cannot succeed. 64 As all claims for cover fail, it is not necessary to consider the estoppel and rectification claims by AIG or the issue of non-disclosure. The claim covers the liability to Tosich and to other investors, namely John and Denise Roach and Archana Kotwal. The first issue for determination, in view of my previous findings, is whether Aon was in breach of duty to Tasman Investments in connection with the failure to procure Professional Indemnity (PI) insurance for it to take effect after 31 March 2002 when the cover by Macquarie Underwriting expired. 66 The issue relates to the nature of PI insurance. That form of insurance is generally (as here) offered on a "claims made" basis, ie for claims made upon the insured in the current period of insurance. Such insurance is usually offered on an annual basis. A claims made policy may or may not respond to claims arising out of circumstances occurring before the year of claim. Furthermore, if circumstances that may give rise to a claim are known to the insured prior to the relevant period, they must be disclosed to the insurer. This may cause the insurer to decline to review cover, or to exclude the risk that is disclosed. The Australian Law Reform Commission discussed some of the ramifications of this structure in Report No 20 on Insurance Contracts, eg para 47 and para 265. Section 40 and s 58 of the Insurance Contracts Act 1984 (Cth) are a partial response. (See, generally, Derrington D, Ashton RS, The Law of Liability Insurance, 2 nd ed, LexisNexis, Australia, 2005. It had dealt with the Warne companies since early 2000. Mr Schuyler Elia was the employee who usually dealt with the Warne companies. 68 The claim in this case was made on behalf of Tosich on or about 10 December 2002. Leaving aside the AIG policy, the only PI policy in force in relation to the Warne companies in December 2002 was the policy with Dexta Corporation entered into in April 2002 through Aon. That policy did not cover Tasman Investment at all. By then Tasman Investment was not engaged in financial planning and advisory services. It had been covered by a PI policy with Macquarie Underwriting, taken out effective from 30 June 2000 to 31 March 2001, and renewed for another year, expiring on 31 March 2002. As that was a claims made policy, it did not respond to the claims made after the expiry of the policy. Thus, Tasman Underwriting had no "run off" or retrospective insurance in relation to the financial planning and advisory business it had carried on. That is the cause of the complaint. It is contended by the defendants that Aon should not have caused or permitted that to occur. 69 On 5 March 2002 Tasman Capital Limited sent to Aon (per Mr Schuyler Elia) completed proposal forms for PI insurance for it and its subsidiaries with Macquarie Underwriting. This amounted in substance to a proposal to renew. Tasman Investment was named as an insured. Although financial planning was stated as an activity of the group, the details described Tasman Investment Management Ltd only as the responsible entity of Wollongong Prime Project Trust. A financial planner's addendum was forwarded on 13 March 2002 on behalf of Tasman Capital Ltd and its subsidiaries. Tasman Financial Planning Pty Ltd was identified as the company through which insurance agent agreements are held. 70 Aon, by Elena Kazakova, described as an account broker and one of a service team consisting of herself, Schuyler Elia and Nerida Wallace, sought clarification of some issues arising out of the proposal for renewal. Please advise what you require. If there is no extra cost I suggest we include them. 71 In the meantime, Aon, by Elena Kazakova, obtained a quote for PI insurance from AIG. The "non-binding indication" covered breaches as a licensed security dealer only. The proposed retroactive date was "Policy Inception". No option two was included. 72 On 27 March 2002 Dexta Corporation Ltd responded to Schuyler Elia with a non-binding indication. The insured were Tasman Capital Ltd and Tasman Financial Planning Pty Ltd and the business was described as "Financial Planner". As clarified later, the basis was for a limit of $1 million and $3 million aggregate and an excess of $20,000, a premium of $23,800 plus GST and stamp duty was quoted, alternatively, for a limit of $2 million and $6 million aggregate and an excess of $20,000, a premium of $30,950 plus GST and stamp duty was quoted. AIG was recommended. Neither the analysis nor the recommendation discusses the question of "run off" cover for the financial planning activities of Tasman Investment, although reference was made to "additional reinstatement of the sum insured". 74 Johnson favoured the second Dexta alternative, but elected to wait for a response from Macquarie. After several prompts from Johnson to Aon with no response, on 17 April 2002 Johnson instructed Elia to proceed with Dexta Option 2, confirmed by email on 18 April 2002 at 9.31 am. At 12.29 pm on that day, Elia sent an email to Johnson reporting that Macquarie had quoted $2 million on one claim with $6 million aggregate, with a deductible of $20,000 each and every claim with a premium of $65,000 before charges. He recommended Dexta. The reasons did not include any reference to the position of Tasman Investment. 75 Dexta required further information. Johnson forwarded that information, signed by Warne. It included the material earlier provided for the Macquarie renewal. The insured were identified as Tasman Capital Ltd and Tasman Financial Planning Pty Ltd. The policy issued in due course. 76 In my opinion, Aon was clearly in breach of its duty to the defendants to exercise due care and skill in arranging insurance cover in not drawing to the attention of Johnson the need for cover for the previous financial planning and advisory activities by Tasman Investment, including the officers of Tasman Investment, having in mind the rearrangement of corporate responsibilities within the group. Aon, by Elia, had been closely involved in the details of professional indemnity cover for the group since May 2000, and was well aware of the details of the corporate rearrangement of responsibilities. Aon was involved in effecting PI insurance for all entities in the group, including directors' and officers' cover. It had effected the cover with AIG. The lack of "run off" cover for the prior financial planning and advisory services of the group was a critical feature of the insurance rearrangements and very material to decision making as to that cover. However, there is no evidence of the issue having been raised by anybody on behalf of Aon at any time. Neither Warne nor Johnson was cross-examined to suggest that they had been given any advice by Aon concerning the run off of liabilities of Tasman Investment or, indeed, that there was any discussion by anyone on behalf of Aon about that factor to be taken into account when making a decision about PI insurance. There was no cross-examination of Johnson to suggest that the query concerning Tasman Investment being a party, the subject of the correspondence, was discussed by any officer of Aon with him. What is more, no explanation for the omission has been given by those involved. Indeed, those involved for Aon, particularly Elia and Kazakova, were not called to give evidence. 77 Counsel for AON cross-examined Warne and Johnson to suggest that a conscious choice was made to exclude Tasman Investments from PI insurance. He submitted that Aon's role was limited to executing specific instructions. He also pointed to the absence of evidence from Blackett, who had a role in relation to effecting insurance. There were unsatisfactory features of the evidence of Warne and Johnson, principally because of their attempts to bolster the case against AIG on the Investment Managers Policy. However, the decision making by Warne and Johnson took place without any attention paid to the "run off" of the group's financial planning and advisory services preceding the change of role of Tasman Investment within the group. Blackett's absence is of no significance. Aon has not led any evidence of any relevant communication with Blackett. There is no suggestion that Blackett was aware of the "run off" problem. He was not a decision maker. Johnson gave evidence that, had he been aware at the time of renewing PI insurance after 31 March 2002 that Tasman Investment would be exposed for its past financial planning activities and investment advice, he would have addressed with Aon what needed to be done to protect Tasman Investment against that risk. I accept that evidence. Commercial reality compels the conclusion that, if Warne and Johnson had been made aware of the problem, they would have paid attention to the solution of it. Warne, in particular, had potential personal liability and a considerable stake in the fortunes of the companies. I do not accept that a conscious choice was made to exclude cover for the run off of financial planning liability or that Aon's role, as broker, was restricted to merely executing instructions. 78 The unexplained omission by Aon to draw the attention of the client to such an important consequence of the overall insurance arrangements that were in contemplation was a breach of the duty of Aon to exercise care and skill in carrying out its role as broker ( Caldwell v JA Neilson Investments Pty Ltd (2007) 14 ANZ Ins Cas 61-724; [2007] NSWCA 3 ; per Ipp JA at [103]---[104]). No expert evidence is necessary to come to that conclusion (cf Geoffrey W Hill & Associates (Insurance Brokers) Pty Ltd v Squash Centre (Allawah North) Pty Ltd (1990) 6 ANZ Ins Cas 61-012 per Kirby P at 76768). 79 The next question is what loss flowed from the breach. The role of damages in a case such as the present is to place the wronged party in the position it would have been in if there had been no breach of duty, ie if correct and timely advice had been given. The defendants lost the benefit of that advice. They were never in the position of having the advantage of it. That much is clear. That amounts to a loss caused by the breach sufficient to complete the cause of action (if it is viewed as tort) ( Poseidon Ltd & Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 per Mason CJ, Dawson, Toohey and Gaudron JJ at 355 and Brennan J at 362 and 368). 80 Quantification of damages is a different matter. It has been said that the defendants have to establish that, absent the breach of duty, relevant cover would have been obtained, eg Ferrcom Pty Ltd v Inbush (NSW) Pty Ltd (1997) 9 ANZ Ins Cas 61-339 per Cole JA at 76732. That is so if full indemnity is to be awarded, cf Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1 per Mason, Wilson and Dawson JJ at 13. The position is different if less than full indemnity is considered. Reconstruction of what would have occurred if the correct advice had been given involves a hypothetical set of past circumstances. As explained in Malec v JC Hutton Pty Ltd [1990] HCA 20 ; (1990) 169 CLR 638 , particularly per Brennan and Dawson JJ at 639---640 and Deane, Gaudron, McHugh JJ at 642---643, this is not decided as if it were an assessment on the balance of probabilities as to whether an event did or did not happen. Furthermore, in considering this case, it is to be borne in mind that Aon prevented the posited situation occurring and that it, not the defendants, was the expert in the field. See, generally, Cee Bee Marine Ltd v Lombard Insurance Co Ltd [1990] 2 NZLR 1 at 5---6. The reconstruction of events in this case does not depend upon what the defendants would have done in a particular situation in the sense discussed by Buchanan JA in Crown Insurance Services Pty Ltd v National Mutual Life Association of Australasia Ltd (2005) 13 ANZ Ins Cas 61-659 at [9]---[14]. It principally (but not entirely) depends upon the assessment as to what others would have done. It is to be noted that the discussion of this question by Ashley J in TBI Pty Ltd v Aon Financial Planning Ltd (2004) 13 ANZ Ins Cas 61-601 at [213]---[218] was tentative obiter dicta. 81 The defendants relied upon the evidence concerning Macquarie Underwriting to support the availability of appropriate insurance. That company had been the underwriter for the financial planning and investment advice activities of the group for 2000---2001 and 2001---2002 years. The renewal for 2001---2002 on 3 August 2001 was on the basis that the policy was unlimited as to retroactive date of the circumstances giving rise to the claim without any express exclusion of known claims and/or circumstances. The policy when first issued had an unlimited retroactive date. The communication from Stuart Coleman of Macquarie Underwriting to Elena Kazakova of Aon on 15 March 2002 indicated that Tasman Investment could be named as an insured, however, it would not be covered for conducting a managed property trust. It will be recalled that Johnson's response was to suggest Elena Kazakova talk to Schuyler Elia about whether it was necessary. There is no indication that the policy would not be framed as to the retroactive date in accordance with the then current policy. The only material given by Aon to Johnson at that time made no reference to retroactive cover. The absence of evidence from either Elia or Kazakova from Aon is significant on this aspect, particularly as there is no evidence from Macquarie that proves or explains a change in its attitude to retroactive cover. 83 It was submitted for Aon that Johnson had rejected Macquarie's quote out of hand because of cost and it might therefore be put to one side. I do not agree. There was no explanation of the Macquarie quote by Aon in the context of the "run off" problem and it was never considered by Johnson or Warne in that context. I am satisfied that disclosure of that factor would have compelled close consideration of the Macquarie quote. 84 Aon called evidence from two underwriters as to PI insurance, principally in relation to non-disclosure, but some of that evidence was relevant to the instant issue. One common factor was the impact of the collapse of HIH and its withdrawal from the PI insurance market for financial planners by March 2001. Up until then, it had been the dominant local underwriter in the field. It had a large market share and offered low premium rates. It is interesting in this connection to note that Macquarie Underwriting's original quote in 2000 for the Warne companies was less in premium and deductible than HIH. The principal competition was from two agents for Lloyd's syndicates, one of which was Markel Australia and the other Resource Underwriting. By March 2001 Resource Underwriting was reducing its exposure to the Australian market. As a result, it was said that a sellers market developed in PI insurance, including that for financial planners. Markel Australia declined many financial planning PI proposals in 2001 and 2002. Markel Australia was not approached by Aon in respect of Tasman Investment or the Warne group in March/April 2002. 85 Ian Williams, an underwriter from QBE, was called by Aon to give evidence of guidelines prepared by QBE in 2001---2002 concerning PI cover for financial planners. It is not clear when they actually came into force. Those guidelines are silent as to both renewals and run off cover. QBE had formerly provided professional indemnity cover to the Warne group that was cancelled in July 2000 after the Macquarie Underwriting quote had been accepted. The nature of that cover was not explored. There is no evidence that Aon approached QBE for PI cover in 2002. It can be deduced from the cross-examination of the witness upon particular files that QBE provided cover retroactive to the inception of business to a former client of HIH that had made known claims upon HIH. In another case, Aon had submitted a proposal for renewal to QBE on the basis that it was to be a run off policy. Williams confirmed that QBE would normally afford run off or retroactive cover provided it was already the insurer. 86 That is consistent with the experience with Macquarie Underwriting to which reference has been made. It is also consistent with the experience upon renewal of the Investment Managers Policy with AIG in October 2001. Although it did not cover Tasman Investment for its financial planning activities, it was a PI policy. 87 Based upon the evidence, it can be inferred that if Aon had approached Macquarie Underwriting on the basis that the financial planning business was in truth a continuing business, although carried on by another entity, that PI insurance would have been issued as if it were a renewal on terms no less favourable than the quote given as to premium and with retroactive cover to Tasman Investment and Warne to at least the inception of business and on the basis that prior known circumstances would be covered. At the very least, the evidence required an explanation from Aon as to precisely what occurred between it and Macquarie Underwriting. That explanation may, in turn, have required an explanation from Macquarie Underwriting. Counsel for the defendants is on strong ground in relying upon the unexplained failure of Aon to call any witness of its own, particularly either or both of Elia and Kazakova. A clear Jones v Dunkel inference is to be drawn ( Jones v Dunkel (1959) 101 CLR 298). The consequence is that the inference available from the evidence that a renewal on suitable terms to cover the Tasman Investment run off would have been available from Macquarie Underwriting can be more readily, and is, drawn. 88 In my opinion, counsel for the defendants is correct in submitting that a Jones v Dunkel inference is also available because of the failure by Aon to call evidence from those involved in the negotiations for Macquarie Underwriting, particularly Stuart Coleman. The availability of a Jones v Dunkel inference in the case of a witness who is a third party can be a difficult issue. Macquarie and Aon are not in the "same camp" and Coleman is not under the control of Aon. In a sense, he was available to both parties. However, only the broker, Aon, had dealings with the potential insurer. The client was not, and would never be, directly in that loop. Between the parties here, it was natural for Aon rather than the defendants to call the evidence from those at Macquarie Underwriting who were involved in the dealings between Aon and Macquarie from the inception of business and in the subsequent management of the business including the proposed renewal. The failure to lead this evidence further buttresses the inference in favour of the defendants ( Payne v Parker [1976] 1 NSWLR 191 per Glass JA at 201---202; Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 133 ; (1991) 101 ALR 109 at 123; Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd [1989] FCA 275 ; (1989) 23 FCR 331 at 343---344; Ayoub v Euphoric Pty Ltd (2004) 12 BPR 22,735; [2004] NSWCA 457 per McClellan AJA at [62]---[64]). 89 I am also satisfied that Johnson and Warne, if properly advised by Aon, would have accepted Macquarie's terms if Tasman Investment was a party and satisfactory run off cover was included, unless Aon was able to arrange more favourable insurance. Aon simply did not analyse the offers with the run off as a factor. If that issue had been pointed out, the commercial reality was that the risk had to be covered. To the extent that the Cross-Claimants were named parties under any contract of insurance pursuant to s 48 of the Insurance Contracts Act , the obligation arises under s 48(2)(a) , s 48(3) or on the basis that the rights under s 48 carry with them a relevant duty of disclosure. 93 Some basic propositions about s 21 should be borne in mind before approaching the detail of the issue. (1) "Knows" and "known" are strong words. They mean considerably more than "believes" or "suspects" or even "strongly suspects" (per McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514 at 531; see also Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; (2000) 11 ANZ Ins Cas 61-458 per Davies A-JA at 75259). (2) The "matter" must be known to the insured. (3) On one alternative, the "matter" must also be known to be relevant to the decision of the particular insurer whether to accept risk, and, if so, on what terms --- in this case, on the basis put forward, by Macquarie Underwriting. (See also Twenty-First Maylux Pty Ltd v Mercantile Mutual Insurance (Aust) Ltd [1990] VR 919 ; (1989) 92 ALR 661. (5) In the other alternative, it must be found that a reasonable person in the circumstances could be expected to know that the matter was relevant to the decision of the particular insurer. There is some debate about the meaning of the words "the circumstances". Although they plainly mean the circumstances of the particular case, the debate is said to be between subjective and extrinsic circumstances (see the discussion in Mann P, Annotated Insurance Contracts Act (4 th ed, Lawbook Co, 2003), para 21.10.8). (6) There is a debate as to whether an insured can "know" a matter by its agent cf McHugh, Kirby and Callinan JJ at [30] with Gummow and Hayne JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [82] ---[89]. Pending further clarification by the High Court, the wider view should be taken following Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 per Powell JA at 610---611 (agreed with by Priestley JA and Clarke JA). (7) The obligation applies to renewal of a contract (s 11(9)(b)) ( Alexander Stenhouse Ltd v Austcan Investments Pty Ltd [1993] HCA 22 ; (1993) 112 ALR 353). 94 It follows from (3), (4) and (5) above that a claim of non-disclosure by an insurer would rarely succeed without that insurer giving evidence as to the relevance and significance of the matter not disclosed to it. It would be curious, to say the least, if the particular insurer led evidence as to the practice of other insurers but not from its own camp. Of course, this is not a claim against an insurer but, rather, a claim against the broker. However, the broker led evidence from the other insurers but not from Macquarie Underwriting, which was the particular potential insurer, or from any other insurer that had actually been approached for cover in 2002, including Dexta, which granted cover. No explanation was tendered for that omission. The difficulty is all the greater because of the absence of any witness from the broker itself. It is not uncommon for a broker to be qualified to give evidence as to the state of a particular insurance market at a particular time, assuming a satisfactory actual knowledge of the practices of a sufficient cross-section of insurers. 95 Evidence from the other insurers has little, if any, probative value upon the point at issue. Each insurer is a commercial entity competing for custom with differing business policies and practices. For this reason, it is dangerous for the Court to substitute its own opinion for evidence as to the practice of the relevant insurer. An insurer actively seeking certain types of business will have very different attitudes from an insurer who is not keen to attract that type of business. It will be recalled that in 2000 Macquarie Underwriting was competing actively with HIH for PI business at levels considered to be uneconomic by the witnesses for the insurers that were called. Furthermore, it is clear from the cross-examination of the witnesses from the other insurers, based upon particular files, that general guidelines apparently laying down strict prudential standards by no means govern the consideration of every proposal. There may be all manner of reasons why an insurer may wish to accommodate a particular proposal, notwithstanding the guidelines. 96 Warne, who was effectively the decision maker, was of the view that there was no occasion to give notice of circumstances that might give rise to a claim until the second half of 2002 when it became clear that the application for a retirement village would not succeed and that there had to be a radical recasting of the proposed venture. At that stage, the investors were notified accordingly and the claim from Tosich followed shortly thereafter. Notification was then given to AIG as the insurer claimed to be responsible. Warne's evidence in this respect was somewhat confused, partly because the cross-examination was conducted by counsel for AIG who had objectives relevant to its client in mind. In my opinion, counsel for AIG is correct in putting that the true explanation of that answer is that the AIG policy was, in truth, regarded by Warne as only relevant to the Wollongong Prime Property Trust and not to the Queen Victoria Project. By the time of the AIG renewal, all of the material matters concerning the Queen Victoria Trust were all too clear to the defendants. 97 The real question is whether a duty of disclosure arose before or at the time that PI insurance was to be renewed in March/April 2002. The pleading essentially relies upon breaches of the Corporations Law and the defendants' knowledge about them, together with delay in relation to the project. That was also the foundation of the evidence led from the witnesses from the other insurers. 98 I am satisfied that the defendants knew of the likelihood of breaches of the Corporations Law in relation to the fundraising for the Queen Victoria Project from at least late 2001 after the first Phillips Fox letter. I am also satisfied that Johnson was also aware of that circumstance. I am satisfied that Harrison drew Warne's attention to the potential problem and that knowledge of the first Phillips Fox letter would have come to the attention of both Johnson and Warne. It was significant enough not to be forgotten. In particular, I find that Warne knew of the substance of that letter and that it remained present to his mind. On the other hand, I am not satisfied that it was a matter of particular concern to Johnson and Warne until after March 2002. 99 The pleading relies upon the fact that the progress of the Queen Victoria Project was slower than had been represented by the time of renewal of the PI insurance in 2002. However, there is no evidence of active investor concern at that time. Warne had circulated a progress report to investors including Tosich in 2001. That indicated a program that would take some time to complete. Tosich expressed concern to Warne some weeks thereafter about progress, but did not follow the matter up with Warne until about August 2002. By then, the withdrawal of the Development Application was public and Tasman Investment had recognised the inevitable. The first record of a complaint from an investor was in early July 2002. The critical letter from the Council to Chris Lonergan & Associates was not sent until 17 April 2002. The pleading does not allege that Warne knew of the impending failure of the project at the time of effecting PI insurance in 2002. There is no evidence of any real concern on the part of Warne about the project up to the time of the renewal, notwithstanding that he was an investor in his own right as well as being, in effect, responsible for the investments by his clients. In short, Warne appears to have remained a true believer until after March 2002. His draft letter to investors was dated 13 May 2002. That timing explains his lack of concern about potential breaches of the Corporations Law during the relevant period. It can be concluded that Warne would not have known that the disclosure would be relevant to Macquarie Underwriting in March/April 2002. Neither Johnson nor Warne was cross-examined on the part of Aon on the topic of non-disclosure. 100 Aon seeks to sidestep this aspect of the matter by aggregating the knowledge of all relevant officers of the Warne group, including Harrison's knowledge through his LMS connection. Even if that doubtful proposition be legitimate in this context, it could not rise higher than the pleaded circumstances --- likely breach of the Corporations Law and delay in the Queen Victoria Project. Those circumstances were known to Warne in substance and have been dealt with. 101 Thus, the issue of non-disclosure is to be decided without any evidence from any relevant potential insurer, from the insurance broker actually involved and without any relevant admissions on the part of the potential insured. 102 I have adverted to the problem confronting Aon in the absence of evidence from Macquarie Underwriting or Aon itself on this point. It cannot be doubted that the existence of the pleaded circumstances might be regarded by an insurer as relevant to the decision as to whether to accept the risk in question. But that does not establish that this insurer would so regard it, let alone that this insured, or a reasonable person in the circumstances, would know it to be so relevant. 103 There could, no doubt, be a case where the circumstances are such that it can be taken that any reasonable insured would know that any insurer would regard them as relevant to cover of the risk proposed without the benefit of evidence from the insurer or broker. It may be that the position arrived at by September/October 2002 would fall into that category so far as PI insurance in relation to run off insurance for Tasman Investments was concerned. A fund raising that was advised to be likely to be in breach of the Corporations Law was clearly failing, with the investors likely to suffer considerable losses. In my opinion, the same cannot be said of the circumstances in March/early April 2002. The likelihood of loss on the investment was not known. The possibility of breaches of the law in relation to the fund raising was known, but that is as high as it reached at that point. That was likely to be academic if the project succeeded. The relevance of that circumstance to a particular insurer needs to be established by evidence. It is conceivable that such evidence could have been led, but it was not. For the Court to fill that gap and make a finding as to that issue would amount to speculation. I conclude that it has not been established that a failure to disclose the pleaded circumstances would have given rise to any relief in relation to the hypothetical Macquarie Underwriting policy. The same reasoning would apply in relation to the application of s 28(3) ( Manchester Unity Total Care Building Society v MGICA Ltd (1991) 6 ANZ Ins Cas 61-062). 104 I am, thus, satisfied that the proper basis for quantification of loss is to assume that a Macquarie Underwriting policy would have issued based upon the proposal it received, including Tasman Investment as an insured with a retroactive date at least back to the inception of the business in 2000. The policy would, thus, have responded to claims made in the period from March 2002 to March 2003 arising from circumstances occurring in June---November 2000. Such claims would have clearly fallen clearly within the insured risk and there has been no suggestion of any relevant exception. Allowance will have to be made for the proposed deductible of $20,000 per claim. Some allowance should be made for the higher premium proposed by Macquarie Underwriting. It would not be right in principle to allocate all of that increase to the one claim by Tosich. The amount recovered of $25,608.38 should be deducted. There should also be a modest discount to reflect the possibility that a policy on appropriate terms might not have issued. All in all, the cross-claimants should recover the sum of $70,000 plus interest in relation to Tosich. 105 Little attention was paid to the claims in relation to Roach and Kotwal and no special defence was raised in relation to them. The fact that they were paid out is of no consequence as there was no relevant policy in force at the time. The only distinction is that they were made later than that by Tosich. If proper insurance had been obtained, that should not have been relevant. The quantification of these claims needs to be further considered. The cross-claim by the defendants against AIG fails. The cross-claim by the defendants against Aon succeeds to the extent indicated. 107 The proceeding will stand over to enable draft minutes of order to be brought in to give effect to these reasons, to deal with costs and to enable my attention to be drawn to any failure to deal with a necessary issue. I certify that the preceding One hundred and seven (107) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. • Disclaimer. • Risk factors recorded as Appendix 5. • Intention of Longevity Management Systems --- QV Pty Ltd to redevelop the Queen Victoria Nursing Home and hospital site as a retirement village. • Seeking to raise project finance (equity and debt) to complete the land acquisition, and to build the retirement village. • Tender closes 11.05.00. • Expected Stage 1 (48 units) will commence in February 2001, following development approval. • Rest in four stages, each stage commencing after 65% of prior stage sold. • Expect completion in January 2003. • Section 6.2 - Zoning and Development Approvals. The portion of the site on which the development is proposed is zoned Bushland Conservation --- Hospital. A development application will be submitted to the Blue Mountains Council as soon as the Contract for the purchase has been agreed with the vendor. Development approval should be straightforward as SEPP5 applies to the site. Strong support is evident from the Mayor, Jim Angel, and his councillors. Also, the local member, Mr Bob Debus, has expressed his full support. • Residents will pay a once only licence fee under a Residential Licence. • Deferred management fees (if resident leaves). • Service fees (depend upon standard of case required). • Summary --- The Project Company and LMS believe that the Project, located in a market area where there is strong demand, and providing residents quality accommodation, with access to additional unique services will prove an exciting venture. It will return a substantial development project over a three or four year period and will yield ongoing profit in perpetuity. • Appendix 6 --- Project Risk Analysis. Mitigant: LMS-QV will obtain DA-SEPP5 applies, strong support from local council, and right of access to Land & Environment Court. May 2000 Queen Victoria Retirement Village Project Review 04.05.2000 Tasman Investment receives LMS's feasibility study for the Queen Victoria site 10.05.2000 Letter Tasman Investment (Warne) to LMS-QV. 10.05.2000 LMS tenders for the Queen Victoria site About February/ March or May 2000 Discussions between Warne and Harrison concerning proposed means of fundraising 18.05.2000 Queen Victoria Retirement Village, Wentworth Falls, NSW. Project Review for Tasman Investment May 2000. NB: LMS receives management fees. • Investor's entry --- June 2000. • Investor units --- $10,000. • Investor's return of capital --- June 2002. • Investor's ROI --- approximately 21% pa. • Investor's exit --- by June 2005 or earlier. Design and Development Approvals Design and Zoning: ... • No rezoning required --- as Bushland Conservation (Hospital) --- SEPP5 applies --- which enables retirement villages to be built. • Development approval by Alderman is necessary --- Mayor is supportive. 29.05.2000 LMS successful in tender for Queen Victoria site (refers to LMS last tender 25.5.2000) XX.05.2000 Brennan tells Warne that LMS successful bidder for Queen Victoria site XX.06.2000 Tasman Investment prepares information memorandum on Queen Victoria Project 01.06.2000 Letter from Tasman Investment (Warne) to Tasman Investment client enclosing information memorandum on Queen Victoria Project 14.06.2000 Tasman Investment conducts seminar for clients interested in investing in Queen Victoria Project 22.06.2000 --- 26.06.2000 Drafts of syndication agreement prepared 26.06.2000 Fax from the Argyle Partnership to Investec Australia 26.06.2000 Kotwal (investor) drew cheque in favour of Warne Investment Management Services Ltd Trust Account for $30,000 XX.06.2000 Tasman Investment clients invest $1.6m in Queen Victoria Project 27.06.2000 Queen Victoria Land transferred to LMS 28.06.2000 Argyle Partnership circulates "execution" copies of syndication agreement XX.06.2000 Brennan commences reporting to Warne on progress of Queen Victoria Project development applications 06.07.2000 Tasman Investment directors meeting. Time for conversion of Wollongong Prime Property Trust to single reporting entity extended by ASIC to 31.10.2000 17.08.2000 Letter from Stirling Warton Williams Pty Limited to LMS 22.08.2000 Letter from Chris Lonergan to Carson Group and Tim Brennan 01.09.2000 Kotwal signs acknowledgment of risk in investing in Queen Victoria project 08.09.2000 Roach provides instructions to Warne to proceed to invest funds 21.09.2000 Tasman Investment introduces Roaches to Queen Victoria project 23.09.2000 LMS board resolve to allow Warnes to hold title deeds 10.10.2000 Tasman Investment provides recommendations to Roaches 22.11.2000 Queen Victoria Aged Care Village Funders Status Report 23.11.2000 Warne receives: • Queen Victoria Aged Care Village, Agenda of Progress Report • Queen Victoria Aged Care Village, Funders Status Report, 22nd November 2000 Intended development described as: • restore heritage buildings • combined nursing home and hostel • wellness centre • dementia unit • hospital • day care centre • self care units (approx 200) Position in relation to development application set out 24.11.2000 Warne sends letter to Tasman Investment investors: • met with directors of LMS yesterday • tax lawyers advised preferable for investors to hold preference shares 28.11.2000 Roaches provide $29,500 to invest in Queen Victoria project 22.12.2000 Letter Teys McMahon to LMS Meeting with Warne of Tasman Investment, Harrison of Investec, Wells of Agpura and Brennan of LMS on 20.12.00. Advice on funding methods. Should complete first stage of fundraising as begun, by investor loans to LMS. Should form an investment company and issue a prospectus for the issue of shares to fund the completion and if necessary for some time, the operation of the Queen Victoria Hospital site including the hostel, nursing home and wellness centre and the related longevity management centre at Currawong. This should enable you to achieve your preferred position of being the long term owner and operator of these facilities. Note instructions: • June 2000 a fundraising campaign was undertaken by LMS to raise the funds necessary to settle the Queen Victoria site. The Queen Victoria site was acquired by LMS pursuant to a winning tender and there was only a matter of weeks between communication of the winning tender and settlement which occurred on 28 June 2000. • Approximately $3.2m had been raised from clients of Tasman Investment on the basis of a presentation which accompanied the project overview, dated June 2000. • Further sum of $800,000 required to complete work contemplated by proposal put to the Investors. • Proposed documentation for first tranche fundraising is a loan agreement between LMS and Tasman Investment which presently exists in draft form. The parties contemplated that this fundraising would be exempt from the provisions of the Corporations Law under the sophisticated investor provisions (s 708(8)-(9) Corporations Law ) where an offer is made through a licensed dealer satisfied on reasonable grounds the investors have been able to properly assess the merits, value, risks and information needs and adequacy of information given in relation to the fundraising. However, you are uncertain if written statements have been made by the dealer and the investors acknowledging these things as required by the Corporations Law . Note in first recommendation: • Complete first tranche as it has begun. • Remain true to representations made to the Investors as recorded in the project overview dated June 2000. • I am not retained to advise (Tasman Investment), nor am I in a position to advise whether it might enjoy exemption from the Corporations Law for this or other reasons. Warne intended to rely upon the sophisticated investor provisions of the Corporations Law . To effectively do this, there must be acknowledgements in writing signed by each of the investors as to certain matters prescribed by the Corporations Law. I do not know whether or not the investors have made these acknowledgments in writing. • You should take advice on the terms of the draft loan agreement. For example, clause 4.2 requires you to be satisfied about investors being excluded under s 708 of the Corporations Law before the money is released. You obviously can now not agree to this clause. Note in third recommendation: • Form investment company and issue prospectus. • Type of shares --- redeemable preference (not voting) shares discussed. 10.01.2001 Letter from Blue Mountains City Council to Chris Lonergan & Associates Pty Ltd 27.03.2001 Letter from LMS to Tasman Investment "as per our arrangements" Tasman Investment will continue to raise the funds required to meet the project expenses over the next 12 months 04.04.2001 PKF send facsimile to Teys with a fee proposal Part of the proposal refers to "reviewing your draft advice of 22.12.00 on legal issues" Document annotated with notes from Warne 13.06.2001 Letter Tasman Financial Planning Pty Ltd to investors. • Providing update on progress of DA for QV project. • DA is proceeding well and should be lodged in June (section 1) and July (section 2). • Enclosing June 2001 progress report 16.08.2001 Phillips Fox provided to Mr Spice Please find attaches confidential advice for the attention of you and Colin as requested in your meeting with Andrew last Friday. Would you mind ensuring that Colin also receives a copy. Attachment: • records advice sought regarding existing arrangements • identifies categories of investors who can be included in a scheme without the need to comply with the prospectus provisions • review way investors invited to invest • identifies understanding as to current situation (including fact that Tasman entered into agreement with LMS but no document had been executed) • non compliance with disclosure document requirements • identifies exemption categories 04.09.2001 Email advice of Phillips Fox to Tasman Investment. • Tasman Investment, on behalf of certain investors, has lent money to LMS (on the basis of a profit share) for the purpose of developing the land. • LMS and Tasman Investment want to investigate most appropriate structure to take project to next stage; involve seeking equity from institutions, such as superannuation funds. • Institutional investors prefer, from an internal prudential viewpoint, to invest in registered managed investment schemes. • Proposal: - Tasman Investment establish new registered MIS; - Fund will be unit trust; - Land will be transferred into fund; - Institutional investors invest in fund before land transfer; - Tasman investors could also become unit holders. If they did not profit sharing arrangements could also be transferred into fund, or they could be paid out; - LMS project manager. 20.09.2001 Letter from Andrew Mutton of Phillips Fox to the Commonwealth Department of Health & Aged Care re: Residential Care Places --- September 2001 --- Queen Victoria --- Wentworth Falls, New South Wales 08.10.2001 Letter from Vic Hawse of Blue Mountains Council to Chris Lonergan & Associates Pty Ltd regarding Development Application No. 1013/01 08.10.2001 Letter from Andrew Mutton of Phillips Fox to the Directors of Tasman Investments re Taxation Considerations 15.10.2001 Letter from Chris Lonergan of Chris Lonergan & Associates Pty Ltd to the General Manager of Blue Mountain City Council 26.10.2001 Document prepared by Theresa Kramer of Stan Manning & Associates 28.10.2001 Letter from Chris Lonergan to Chris Lonergan & Associates Pty Ltd to Blue Mountains City Council 29.10.2001 Letter from Michael Stratton of Colliers Jardine to Vic Hawse of Blue Mountains City Council 16.11.2001 Letter from Chris Brogan of Blue Mountains City Council to Chris Lonergan & Associates Pty Ltd 08.01.2002 Valuation report from Nelson Partners 30.01.2002 Letter from Chris Lonergan to Longevity 26.02.2002 Trust deed of the QV Trust between the "Initial Founders" (Dianne Brennan and Timothy Brennan) and the "First Trustee" (LMS). • QV Trust. • Beneficial interest in trust divided into 4 classes of units, having an undivided part of the beneficial interest in the Trust in accordance with the rights of each claim of Unit as set out in Schedule 1: - Tasman Investor Units. - Founder Units. - Consultant Units. - Ordinary Units. • Tasman Investors --- those persons who have invested in the Project via the Tasman Investor Agreement. • Tasman Investor Agreement --- the undated agreement between LMS, Tasman Investment and each individual, company or the trustee of any trust which has become a party to that agreement and has accepted an option to convert their investment into Tasman Investor Units. The Tasman Investor Agreement means the form of that agreement as it stood as at the date of this document except for any changes to it approved by way of an Ordinary Resolution of the holders of the Tasman Investor Units. • Tasman Investors will be allotted the Tasman Investor Units, upon acceptance of an option to convert their investment in Tasman Investment into Tasman Investor Units. • Tasman Investor Units entitled to "Specified Proportion" of the Project Net Profit. • Note transfers of "Founder Units" to various participants including Mr Warne, personally and Tasman Capital Limited. 26.02.2002 Letter from Brennan of Longevity Management Systems Pty Ltd to Wayne Spice of Tasman Investment Management Limited 27.02.2002 Deed of Retirement and Appointment of Trustee 07.03.2002 Further advice of Brian Preston SC 13.03.2002 Deed Poll for Tasman Investment Management Limited and the QV Trust --- prepared by Phillips Fox 17.04.2002 Letter from Chris Brogan of Blue Mountains City Council to Chris Lonergan & Associates Pty Ltd 25.04.2002 Letter from Chris Lonergan to Blue Mountain City Council 10.05.2002 Letter from Tim Brennan of Longevity Management Systems Pty Ltd to Jim Angel --- Mayor --- Blue Mountains City Council 13.05.2002 Draft letter from Colin Warne to Investors 13.05.2002 Letter from Chris Lonergan to Longevity 24.05.2002 Letter from Chris Lonergan to Blue Mountain City Council XX.06.2002 Tasman Investment board meeting when Brennan advises Tasman Investment that Blue Mountains Council will not approve Queen Victoria project as a retirement village 03.06.2002 Letter from Tim Brennan of Longevity Management Systems Pty Ltd to Mr M Willis of Blue Mountains City Council 06.06.2002 Letter from Chris Brogan of Blue Mountains City Council to Tim Brennan of Longevity Management Systems Pty Ltd re recommended withdrawal of Development Application 19.06.2002 Minutes of Tasman Investment directors' meeting noting QV project "on hold" at Blue Mountains city Council until 30 June XX.07.2002 Longevity Management Systems issues press release announcing withdrawal of DA for QV development 10.07.2002 Blue Mountains gazette article re: Longevity Management Systems withdrawing application for DA for QV project 06.08.2002 Brennan proposes to Tasman Investment that Queen Victoria project proceed as a nursing home 13.08.2002 Minutes of Directors Meeting for Tasman Investment Management Limited. 20.08.2002 Email from Andrew Mutton of Phillips Fox to Kevin Wallace of Tasman Capital. 21.08.2002 Phillips Fox advice 26.08.2002 Phillips Fox advice 27.08.2002 Letter from Tim Brennan of Longevity Management Systems Pty Ltd to Kevin Wallace of Tasman 06.09.2002 Email from Amber Matthews of Phillips Fox to Wayne Spice and Kevin Wallace of Tasman. 06.09.2002 Phillips Fox advice 09.09.2002 Offer to Warne Investors to Extinguish Debt Early 10.09.2002 Phillips Fox advice 12.09.2002 Tasman Investment directors meeting. • K Wallace requested that C Warne excuse himself from the meeting when the Board discussed issues of "disclosure" and possible related breaches in the capital raising for the project. • K Wallace and A Mutton presented Phillips Fox legal opinion and accompanying board paper. • It was resolved that the Tasman Investment trustee and CEO be instructed to: 1. Follow up and conclude a buy out by LMS on the basis of: - repayment of investor's capital plus 10% by 30 June 2003 or upon DA, whichever is the sooner. - LMS/buyer hold Tasman harmless from creditors. - LMS has 15 calendar days from Monday, 16 September to pay a non-refundable option fee of $25,000 to secure an exclusive due diligence period of 45 days from Monday, 16 September. Tasman Investment to meet on Tuesday, 1 October to review progress with LMS and other prospective party. 14.11.2002 Letter from Tim Brennan of Longevity Management Systems Pty Ltd to Stephen Harrison of Tasman Capital. 02.12.2002 Draft Heads of Agreement prepared by Phillips Fox 10.12.2002 Letter from Mark Green of Verekers Lawyers to Tim Brennan of LMS 20.12.2002 Project funding and Exit Agreement between Tasman Investment, LMS, BFT and Timothy Brennan. • BFT pay all costs associated with QV project from date of document. • Brennan guarantees BFT's performance. • Tasman Investment will retire as trustee in favour of new trustee (company nominated by BFT; special purpose vehicle). • Tasman Investment grants to LMS option to pay out Tasman Investors. • Tasman Investment may rescind if condition not satisfied by 31.12.02. 23.12.2002 Deed of Retirement and Appointment of Trustee 17.03.2003 Colliers International advises Tasman Capital Limited that LMS offer to Tasman Investment to pay out Tasman investors was acceptable. 01.04.2003 LMS writes to Tasman 04.04.2003 Draft letter from Colin Warne of Tasman to Investors 12.06.2003 Brennan tells Warne that he is seeking alternative funding to repay Tasman Investment 25.06.2003 Tasman Investment sends to Tosich copy of Colliers International letter 17 March 01.07.2003 LMS writes to Tasman Investment 03.07.2003 Brennan writes to Warne re repayment of Tasman Investment funding 04.07.2003 Tasman Investment writes to Tosich enclosing LMS letter 1 July 24.07.2003 Minutes of Board Meeting for Tasman Investment Management Limited. 04.09.2003 Minutes of Directors Meeting for Tasman Investment Management Limited. 10.09.2003 Brennan writes to Warne re repayment of Tasman Investment funding 12.09.2003 Letter from Tim Brennan of LMS to Colin Warne of Tasman Investment re Queen Victoria --- Trust Distribution 09.10.2003 Minutes of Directors Meeting for Tasman Investment Management Limited 17.10.2003 Brennan writes to Warne re repayment of Tasman Investment funding 21.11.2003 Investment and Unitholders Agreement XX.12.2003 Brennan tells Warne that he has a contract with alternative financier in NY but cannot show it to Warne 16.12.2003 Brennan sends email to Tasman Investment re repayment 30.01.2004 ASIC Notice Requiring the Production of Books to Tasman Investment Management Limited 09.02.2004 Letter from Nick Shannon of Shannon & Co to Tim Walker of ASIC 22.02.2004 Nelson partners valuation of QV site 05.03.2004 Affidavit of Timothy Walker filed in the ASIC Proceedings. 09.03.2004 ASIC commences proceedings to wind up QV project 09.03.2004 Interlocutory Process filed by ASIC in the Supreme Court of NSW. 12.03.2004 Affidavit of Colin Warne filed in the ASIC Proceedings. 25.03.2004 Roach threatens legal action against Warne over QV project 02.04.2004 Affidavit of Timothy Walker filed in the ASIC Proceedings. 22.04.2004 David Nelson and Partners --- Consultancy Valuation Report 23.04.2004 Letter from Shannon & Co Report to Investors 29.04.2004 The QV Project Investment Scheme Minutes of Meeting of Investors. 02.07.2004 Mrs Kotwal demands repayment of her investment in the Queen Victoria project 09.07.2004 Roach writes to Warne that he expects Warne to "protect me against loss" in the Queen Victoria project 11.10.2004 Report of SJ Parbery of PPB addressed to the Supreme Court of NSW. Tosich alleges that he decided to go into the investment straight away. At that stage he did not fill out any forms. Tosich decides to invest $125,000. 26.05.2000 Aon to Tasman Investment noticing that Aon did not appear to have received from Tasman Investment a completed professional indemnity proposal form. 30.05.2000 Aon (Elia) to Tasman Investment providing comparative professional indemnity quotes for financial planning business • enclosing comparative professional indemnity quotations • Financial Planners Scheme with HIH • Macquarie Underwriting • HIH is more expensive • HIH has higher deductible ($9700 vs $5000) 30.06.2000 Warne accepts Macquarie Underwriting quotation for professional indemnity insurance for financial planning business expiring 31.3.2001 07.07.2000 Warne cancels QBE professional indemnity policy 11.07.2000 Tasman Investment confirms to Aon that proposal dated 23.5.00 remains accurate save that the company insured should include Court & Co 31.08.2000 Aon provides Tasman Investment with copy of Macquarie Underwriting policy Business: Financial Planner Insured: Tasman Investment and Court & Co Period: 30.6.00 to 31.3.2001 Sum insured: $2m Excess: $5000 10.10.2000 Facsimile from Aon (Elia) to Tasman Investment (Blackett) • Macquarie Underwriting policy not specifically made to MIA standards • Enclosed IMI insurance proposal • Identified insurers AIG, Chubb and Liberty • Upon receipt of documentation Aon would arrange to market • When cover bound will cancel existing insurance and transfer credit due to new cover 20.10.2000 IMI insurance proposal signed by Warne and Johnson 24.10.2000 IMI insurance proposal provided by Aon to AIG 24.10.2000 IMI insurance proposal provided to Liberty 24.10.2000 IMI insurance proposal provided to Chubb 27.10.2000 Email from Aon (Elia) to Blackett (peter @ warne.com.au) requesting further information in relation to the unitholders meeting. Email headed "Professional Indemnity for Responsible Entity" 27.10.2000 Letter from Tasman Investment (Blackett/Johnson) to Aon (Elia) re "Professional Indemnity for Responsible Entity" responding to enquiries 30.10.2000 Chubb declines to provide IMI terms 30.10.2000 Liberty declines to provide IMI terms 31.10.2000 AIG provide 30 day terms for IMI insurance 31.10.2000 Warne accepts 30 day terms for IMI insurance 31.10.2000 Retroactive date for AIG policies entered into for years 31.10.00 to 31.10.01 and 31.10.01 to 31.10.02 02.11.2000 Liberty declines to provide IMI terms. If you have not previously advised insurers of a claim(s) or circumstance(s), please ensure prompt notification is made to this office in order that your right to indemnity is not prejudiced". 02.03.2001 Similar letter to above sent by Aon (Elia) to Tasman Investment (Warne) re Financial Planners Professional Indemnity Scheme Renewal. 13.03.2001 Letter from Tasman Investment (Johnson) to Aon (Elia) enclosing proposal for professional indemnity insurance renewal (stamped as received 19.3.01). Letter requests best quotes for both $2m and $5m with varying excess levels Proposal records: (a) Proposed insured were Tasman Investment and Tasman Financial Planning Pty Ltd (b) precise nature of activities etc • recorded "Financial Planning and Advisory Services" • initially recorded but deleted "Responsible Entity for Wollongong Prime Property Trust" (c) percentage of fees for each activity • financial advisory services --- 100% (originally recorded as 90% with 10% allocated to "Property Management Services") (d) fees for five largest contracts --- initially recorded but deleted "Fee as Manager and Now Responsible Entity for Wollongong Prime Property Trust". • Spice confirmed that the trust is liable to pay for PI insurance of the scheme. Action --- the secretary was asked to obtain quotations for this as soon as possible. - Resolved to change company name to Tasman Investment. Quote acceptance is signed by Warne. For this proposal we are therefore only seeking Directors and Officers liability insurance for our financial planning operations. Brokers have trouble placing insurance. B Johnson to speak to AON (and others?). Attached proposal refers to: • applicants --- Tasman Capital Ltd and subsidiaries • Principal activities --- Financial Planners 09.08.2001 Facsimile from Tasman Investment (Johnson) to Aon (Sinclair/Elia) • requesting advice on status of D & O application • requesting quotes for Investment Management Insurance by 1.9.01 "We note that the Investment Management Insurance in place for the Wollongong Prime Property Trust expires October 31 st ....." 29.08.2001 Aon send proposal to AIG to quote for directors and officers insurance "for their Financial Planning Operations only" 05.09.2001 Email from AIG to Aon (Elia) 18.09.2001 Letter from Tasman Capital Limited (Johnson) to Aon (Elia) re Investment Managers Insurance/Directors & Officers Liability Insurance • enclosing material for IMI renewal (no draft financial plan documents enclosed) • requesting quotations "As discussed we are interested in AIG's proposal to include D & O insurance with the IMI insurance provided this does not preclude us from getting competitive quotes from other insurers. We also need to be able to dissect the cost of the IMI insurance so that we can claim reimbursement from the Trust. " 15.10.2001 AIG email to Aon: • please provide details regarding the PI policy that is covering the Financial Planning arm 18.10.2001 AIG email to Aon following information: • a CV for Bill Tootill • details of the 350m funds under management of Tasman Capital Group. 31.10. 2001 Email from AIG to Aon (Elia) @ 3.13pm For good order, please confirm that: • confirmation that Tasman Capital Ltd do not undertake and (sic) operations besides the ownership of Warne Investment Ltd • confirmation that the intention of this policy is not provide any cover in relation to Tasman Capital Group having $350m funds under management 31.10. 2001 @ 4.47 pm Email from Aon (Elia) to AIG We confirm that the Financial Planning activities of Warne Investments and Tasman Capital are covered under a separate cover with another insurer. The client is aware that this policy is for the Trust only. 31.10.2001 AIG fax to Aon Commencement of AIG IMI cover (At this point the Macquarie Underwriting professional indemnity policy was still in force until 31.3.2002) 01.11.2001 AIG confirm cover bound 02.11.2001 Blackett forwards CV to Aon as requested (part of the information required by AIG) 03.12.2001 Email from Aon (Elia) to Johnson ..... What AIG have done: (1) D & O Warne IMI now in the name of Tasman Capital --- covering the Property Trust only. AIG can extend this to cover wrongful acts by Directors in relation to not just the Property Trust but the company of Tasman Capital Ltd, excluding Investec, excluding Financial Planning activities (2) Macquarie Underwriting insure the Financial Planning activities of Tasman Capital and the old Warne. ... 20.02.2002 Aon provides IMI contract for 31.10.2001 to 31.10.2002 to Johnson, recommending "read it carefully" 05.03.2002 Tasman Capital Limited forward professional indemnity insurance proposal to Aon. • Names four applicants: Tasman Capital Limited, Tasman Financial Planning Pty Ltd, Tasman Investment and Ryan Property Investments • Identifies in details of insurance the expiring Macquarie Underwriting cover • Seeks coverage of $2m, excess $5000 • Signed by Warne • Attaches draft financial plan 15.03.2002 Letter from Macquarie Underwriting to Aon Re: Warne Investment Management Limited & Tasman Financial Planning Pty Limited Policy No 65M00090001818 "There are some issues that need clarification before I can consider offering terms on this risk. We currently insure Warne Investment Management Limited ("Warne") & Tasman Financial Planning Pty Limited in respect to Financial Planning & Life Insurance Broking activities. I note that "Warne" has now changed its name to Tasman Investment Management Limited. It would appear from the submission that "Warne" and now Tasman Investment Management is in fact a Single Responsible Entity under the Managed Investments Act and is conducting a managed Property Trust. Please note that Macquarie does not cover the conduction/management of the Property Trust under this policy. There are further entities listed on the proposal that are not currently insured. Please clarify the following: - Tasman Capital Limited is listed as being the "management company". This is not a very comprehensive description. What professional services/consulting does this entity provide that they require PI cover for? And whom do they provide it to? - Tasman Investment Management Limited (formerly "Warne") can still be named as an insured under any new policy, however they will NOT be covered for conducting a managed Property Trust. Please advice what you require. - Ryan Property Investments Pty Limited previously known as Tasman Property Investments Pty Ltd. This entity is not covered under the current policy. If they require cover please provide details of the professional services that this entity provides. - We are currently providing cover for Life Insurance Broking activities. I note there is no reference made to this on the current proposal form. Please advise what happened to this activity. - Do any of the entities to be insured issue Proper Authorities to Advisers? If so which entity? Do they provide ongoing services to these Proper Authority Holders? Does your client require the individual Proper Authority Holders to be insured under the policy? Or just pick up the vicarious liability? As the policy currently stands there is no cover for either unless the Proper Authority Holders fall within Definition 6.14 "You". Please also have your client answer the following question: "Do you comply with all statutory, government and semi-government laws, regulations and requirements, relevant to your businesses, including the Financial Services Reform Act 2001 and the Privacy Act 19888 (as amended)? Yes No If "No", please explain why. " I await your advices. Regards Stuart Coleman 18.03.2002 Tasman Investment Management Limited extract from Minutes of Directors Meeting 20.03.2002 AIG provide non binding indication for professional indemnity (financial planners) renewal 20.03.2002 Aon (Kazakova) to Tasman Capital Limited (Johnson) re application for professional indemnity insurance. There are some issues that need clarification before the Underwriter considers offering terms. .... Please also clarify the following: .... 2. Tasman Investment Management Limited ("Warne") can still be named as an Insured under any new policy, however, they will not be covered for conducting a managed Property Trust. Please advise what you require. ...... 20.03.2002 Tasman Financial Planning Pty Ltd (Johnson) to Aon (Kazakova) re professional indemnity insurance: Tasman Investment Management Ltd (TIML) has Investment Managers Insurance organised by Schyuler. Please talk to him about this. TIML no longer conducts financial planning or life insurance broking activities. These have all been transferred to Tasman Financial Planning. For your other queries: ..... Suggest you talk to Schyuler about whether or not we need this. If there is no extra cost I suggest we include them. ..... 27.03.2002 Dexta provide non binding indication of terms 31.03.2002 Expiry of Macquarie Underwriting policy 02.04.2002 Tasman Capital Limited (Johnson) request situation re renewal of PI insurance for Tasman Group (expired 31.3.02). 03.04.2002 Email Aon (Elia) to Tasman Capital Limited (Johnson) re PI insurance. • Macquarie Underwriting request further information • requested indicative costing from Macquarie Underwriting • no current held covered arrangement in place pending Macquarie Underwriting's review • alternative quotes from AIG and Dexta • identifies differences between AIG and Dexta quotes • recommend the AIG terms because of the current situation with no cover and the fact they have other business insured • asks if Tasman Capital Limited would like to wait for Macquarie Underwriting's response or proceed with one of the AIG or Dexta quotes. 04.04.2002 Email Tasman Capital Limited (Johnson) to Aon (Elia) • can afford to wait until tomorrow if Macquarie can get back by then • at moment favour Dexta's option 2 • let's see what Macquarie can do • will call Elia after lunch tomorrow 08.04.2002 Email Tasman Capital Limited (Johnson) to Aon (Elia) • have we heard from Macquarie yet • if not, please advise on thoughts of accepting the Dexta option 2 10.04.2002 Email Tasman Capital Limited (Johnson) to Aon (Elia) asking for urgent advise on what is happening with PI insurance 11.04.2002 Email Tasman Capital Limited (Johnson) to Aon (Elia) re PI insurance Can you please call me on 0407 409 173 re the above. URGENT 17.04.2002 Email Tasman Capital Limited (Johnson) to Aon (Elia) re PI insurance As discussed I have Board meeting tomorrow and need to finalise PI insurance today. Please advise urgently what is happening. 18.04.2002 @ 9.31 am Email Tasman Financial Planning Pty Ltd (Blackett) to Aon (Elia) re PI for Tasman Capital Limited. • confirming conversation with Johnson of previous night • proceed with Dexta, failing that go with AIG • imperative cover is in place today • backdate cover to 31.3.02 18.04.2002 File note of Elia (see end of 15.3.02 fax) DEXTA-MC will review costs and get back to me MACQ --- SC -> $62,000 --- (new bvs premium) --- retro inception AIG --- PH to look at X/S $50K = $25K 35000 18.04. 2002 @ 12.29 pm Email Aon (Elia) to Tasman Capital Limited (Johnson/Blackett) re Tasman Financial Planning Pty Ltd professional indemnity • approached AIG and Dexta again to review their insurance costs • Dexta unable to reduce costs on $2m limit; premium remains at $31,950 • AIG have looked at the deductible and offer an alternative $25,000 each and every claim for a base premium of $35,000 pre charges • Macquarie Underwriting provide terms • Macquarie Underwriting - $2m any one claim, $6m aggregate - $20,000 per claim deductible - cost $65,000 pre charges - excludes proper authority holders AIG - $2m any one claim, $2m aggregate - $25,000 per claim deductible - Costs $32,000 + GST + stamp duty - Covers employee proper authority holders automatically, others subject to additional charge Dexta - $2m any one claim, $6m aggregate - $20,000 per claim deductible - cost $31,950 + GST + stamp duty - other activity exclusion - other entity exclusion - covers employee and five other proper authority holders at no additional cost The Dexta Corporation quotation is recommended because of costings in relation to the Deductible. They will also pick up some PAH but in turn can offer separate cover for each adviser, if required. With this in mind we will bind cover w/e immediately with Dexta and arrange a certificate of currency to be forwarded to your office this afternoon. 18.04.2002 @ 1.44 pm Email Aon (Elia) to Tasman Capital Limited (Johnson/Blackett) re Tasman Financial Planning Pty Ltd professional indemnity • re Dexta quote --- cancellation clause/loading • AIG have same terms written not their policy wordings. 18.04.2002 Aon provided instructions to accept Dexta terms 18.04.2002 Aon provides Dexta proposal forms for completion 19.04.2002 Johnson sends completed proposal forms to Aon • insured entities --- Tasman Capital Limited, Tasman Financial Planning Pty Ltd • did not include Tasman Investment or Ryan Property 26.04.2002 Aon send Certificate of Currency re Dexta cover to Tasman Capital Limited Insured: Tasman Capital Ltd and Tasman Financial Planning Pty Ltd 01.05.2002 Facsimile from Aon to Johnson enclosing application to pay premium over 12 months 02.05.2002 Dexta issue policy wording • Insured: Tasman Capital Limited, Tasman Financial Planning Pty Ltd • Professional Business: Financial Planner • Previous Business: Nil • no indemnity for claims directly or indirectly arising from any actual or alleged act, error or omission as a responsible entity • no indemnity for claims directly or indirectly arising from work performed by or on behalf of Tasman Investment • no indemnity for claims directly or indirectly arising from investments in managed investment schemes other than schemes which invest in equities, property, fixed interest or cash. • wording does not include retroactive date exclusion. As discussed the monies raised were done so by Warne Investment Management (now Tasman Investment Management) under their Financial Planning/Investment advice hat. The investors were not grouped together as part of a registered managed investment scheme. ...... As part of this process we only recently picked up the irregularity regarding the raising of capital. Hence it really falls under a different area and not this policy. 31.10.2001 Email from AIG to Aon (Elia) @ 3.13pm For good order, please confirm that: • confirmation that Tasman Capital Ltd do not undertake and (sic) operations besides the ownership of Warne Investment Ltd • confirmation that the intention of this policy is not provide any cover in relation to Tasman Capital Group having $350m funds under management 31.10.2001 @ 4.47 pm Email from Aon (Elia) to AIG We confirm that the Financial Planning activities of Warne Investments and Tasman Capital are covered under a separate cover with another insurer. The client is aware that this policy is for the Trust only. 01.11.2001 AIG confirm cover bound 18.04.2002 @ 12.29 pm Email Aon (Elia) to Tasman Capital Limited (Johnson/Blackett) re Tasman Financial Planning Pty Ltd professional indemnity • approached AIG and Dexta again to review their insurance costs • Dexta unable to reduce costs on $2m limit; premium remains at $31,950 • AIG have looked at the deductible and offer an alternative $25,000 each and every claim for a base premium of $35,000 pre charges • Macquarie Underwriting provide terms Macquarie Underwriting - $2m any one claim, $6m aggregate - $20,000 per claim deductible - cost $65,000 pre charges - excludes proper authority holders AIG - $2m any one claim, $2m aggregate - $25,000 per claim deductible - Costs $32,000 + GST + stamp duty - Covers employee proper authority holders automatically, others subject to additional charge Dexta - $2m any one claim, $6m aggregate - $20,000 per claim deductible - cost $31,950 + GST + stamp duty - other activity exclusion - other entity exclusion - covers employee and five other proper authority holders at no additional cost The Dexta Corporation quotation is recommended because of costings in relation to the Deductible. They will also pick up some PAH but in turn can offer separate cover for each adviser, if required. With this in mind we will bind cover w/e immediately with Dexta and arrange a certificate of currency to be forwarded to your office this afternoon. Investor in the Queen Victoria Project. Pleads the acquisition of all the rights of Tosich as against the defendants by virtue of a deed of assignment and pleads all facts and matters pleaded by Tosich. Tasman Investment Management Limited ( Tasman Investment ) First defendant, first cross-claimant and first cross-defendant to the third cross-claim. Carried on financial planning business. Formerly Warne Investment Management Limited ( WIML ). Undertook financial planning within the Tasman Group until 1 July 2001, when all financial planning began to be undertaken by Tasman Financial Planning Ltd. From 1 July 2001, Tasman Investment operated only as responsible entity for the Wollongong Prime Property Trust. See part E below for details of structure of Tasman Capital group. Colin Philip Warne ( Warne ) Second defendant, second cross-claimant and second cross-defendant to the third cross-claim. Managing director of various companies including Tasman Investment. Aon Risk Services Australia Limited ( Aon ) Third defendant, second cross-defendant and cross-defendant to the fourth cross-claim. Insurance broker and acted as such for Tasman Investment Management Limited and other Warne companies. American Home Assurance Company ( AIG ) First cross-defendant, third cross-claimant and fourth cross-claimant. Provided an Investment Managers Insurance Policy to Tasman Investment and Warne. Philip Chiu Regional Manager with AIG. Adrian Gamble Former professional indemnity underwriter. Stephen James Harrison Company director. Former director of Tasman Investment. Former Executive Chairman of Tasman Capital Limited. Brian Johnson Certified Practising Accountant. Former director of, company secretary and accountant for, Tasman Investment/WIML. Joanne Lindsay-Eschbank Professional indemnity underwriter. Christopher Ian McLean Underwriter with Liberty International Underwriters. Jeremy Douglas Scott-Mackenzie Assistant Vice-President, Financial Services Division, AIG. Ian Williams Professional indemnity underwriter with QBE. Peter Barnes Principal of LMS with Timothy Brennan. Peter Blackett Tasman Investment/WIML employee. Dianne Brennan Initial founder (with Timothy Brennan) of the Queen Victoria Trust. Timothy Brennan Principal of LMS with Peter Barnes. Bob Debus Local member for Blue Mountains at relevant times. Schuyler Elia Aon employee who dealt usually with the Warne companies. Andrew Ford Former director of Tasman Investment. Elena Kazakova Aon account broker. Archana Kotwal Investors in the Queen Victoria Project. Chris Lonergan Principal of Chris Lonergan & Associates Pty Ltd. Andrew Mutton Solicitor with Phillips Fox. Stephen James Parbery Receiver and Manager with PPB. Brian Preston SC Barrister. Provided advice to LMS in relation to the Queen Victoria Project. John and Denise Roach Investor in the Queen Victoria Project. James Sinclair Aon employee. Wayne Spice Former director and CEO of Tasman Investment. Michael Teys Solicitor with Teys McMahon. Bill Tootill CV requested by AIG. Timothy Walker Senior Investigator, Australian Securities and Investments Commission. Kevin Wallace Former CEO of Tasman Capital Limited. Nerida Wallace Aon employee. Part of service team with Schuyler Elia and Elena Kazakova. Geoff Wells Agpura employee. Argyle Partnership Solicitors for LMS. Blue Mountains City Council Local council for the area containing the Queen Victoria Memorial Hospital. Carson Group Pty. Ltd. Project manager for the Queen Victoria Project. Chris Lonergan & Associates Pty Ltd Planning consultants advising LMS in relation to the Queen Victoria Project. Chubb Insurance Company of Australia Limited Approached by WIML in relation to investment management insurance. Colliers International/Colliers Jardine Consultancy and Valuation Advised in relation to the Queen Victoria Project. Court & Co Financial Services Pty Limited Former name of Warne Financial Services Pty Limited. See part E below for details of structure of Tasman Capital group. David Nelson & Partners Pty Limited Advised LMS in relation to valuation of the Queen Victoria Land. Dexta Corporation Professional indemnity insurer. Investec Australia Funding consultant in relation to the Queen Victoria Project. Liberty International Underwriters Approached by WIML in relation to investment management insurance. Longevity Management Systems Pty Limited ( LMS ) Successfully tendered for Queen Victoria land. Macquarie Underwriting Pty Limited Professional indemnity insurer. Markel Australia Pty Limited Professional indemnity insurer. Nelson & Partners See David Nelson & Partners Pty Limited. Phillips Fox Solicitors advising in relation to the Queen Victoria Project. Philsure Former Warne group insurance broker. PKF Chartered accountants and business advisers advising in relation to the Queen Victoria Project. PPB Chartered accountants and business reconstruction specialists advising in relation to investment in the Queen Victoria Project. QBE Insurance Limited Sometime provider of professional indemnity insurance to Warne. Ryan Property Investments Pty Limited Formerly Tasman Property Investments Pty Ltd. Shannon & Co AC Accountants advising in relation to investment in the Queen Victoria Project. Stan Manning & Associates Advised in relation to "independent living" components of the Queen Victoria Project. Stirling Warton Williams Pty Limited Chartered Accountants advising LMS. Tasman Capital Limited Former name of Tasman Capital Pty Ltd. See part E below for details of structure of Tasman Capital group. Tasman Capital Pty Ltd Formerly Tasman Capital Limited. See part E below for details of structure of Tasman Capital group. Tasman Financial Planning Pty Ltd Former name of Warne Financial Services Pty Limited. From 1 July 2001, undertook all financing planning activities of the Tasman Capital group previously undertaken by Tasman Investment. See part E below for details of structure of Tasman Capital group. Tasman Property Investments Pty Ltd Former name of Ryan Property Investments Pty Limited. Teys McMahon Solicitors advising LMS in relation to the Queen Victoria Project. Warne Financial Services Pty Limited Formerly Tasman Financial Planning Pty Ltd. See part E below for details of structure of Tasman Capital group. Warne Investment Management Limited ( WIML ). Former name of Tasman Investment. See part E below for details of structure of Tasman Capital group. Wollongong Prime Property Trust ( WPPT ) Managed investment trust. Responsible entity from 1 July 2001 was Tasman Investment (also responsible for other property investment schemes). | duty of care managed investment scheme duty of care owed by financial planner to potential investors concerning investment advice whether breach of duty where lack of proper investigation by financial planner prior to recommending investment managed investment scheme statutory duties in relation to registration, operation by responsible entity, provision of information statement whether breach of statutory duties in instant circumstances assignment of cause of action whether deed purporting to assign interest in cause of action effected valid assignment whether relevant causes of action capable of assignment whether "genuine and substantial" interest or "genuine commercial interest" in chose in action immediately prior to assignment whether chose in action annexed to right of assigned property limitation of actions original plaintiff purports to assign causes of action assignee joined as plaintiff and assignor removed as party assignor rejoinded after expiry of limitation period whether rejoined plaintiff barred from pursuing original causes of action professional indemnity insurance construction of policy whether policy responds to claims as made insurance brokers failure to procure adequate professional indemnity insurance whether breach of duty of insurance broker to use due care and skill in procuring cover defence of non-disclosure no evidence led by broker or potential insurer as to relevance and significance of matter not disclosed quantification of damages test where breach of duty of due care and skill by insurance broker upon failure to procure adequate cover whether relevant cover would have been obtained absent breach of duty negligence corporations law property practice and procedure insurance law insurance law damages |
The Australian Crime Commission ("the Commission") is established by s 7 of the ACC Act. It consists of the CEO, the examiners (of which the respondent is one) and the staff of the Commission. There is a Board of the Commission ("the Board") (which is not, however, part of the Commission). By s 7C of the ACC Act, it is a function of the Commission to investigate, when authorised by the Board, matters relating to "federally relevant criminal activity". In July 2005 the Board authorised the Commission to investigate certain matters, specified in the instrument of authorisation, relating to federally relevant criminal activity. At the same time, the Board determined that that investigation was a special investigation. A result of that determination was that the Commission's powers of examination under Div 2 of Pt II of the ACC Act were enlivened. So too was the power to summon witnesses to appear at such an examination under s 28. On 23 January 2009, the respondent (as examiner) issued a summons to the applicant to attend and give evidence in the special investigation. After service, and as a result of correspondence between the applicant's solicitor and the Commission, the summons was amended to delete the words "the unlawful manufacture, trafficking and supply of amphetamine type substances; and". It then became a summons to give evidence "of federally relevant criminal activity involving conspiracy to murder". The applicant attended before the respondent on 12 February 2009 as summoned. His own counsel was also present. He answered a number of questions put by counsel assisting in the examination. At a certain point, when the applicant was asked to identify a person mentioned in a conversation between himself and someone else, he declined to do so, on the ground that the answer would reveal an element of his intended defence to serious criminal charges which had been laid against him, and in relation to which he was then remanded in custody. The nature of applicant's objection was elaborated upon by his counsel. The respondent rejected the objection, and required the applicant to answer the question. By agreement, the examination was then adjourned until 3 March 2009 to enable the present proceeding to be brought by the applicant. Although in point of form invoking the provisions of the ADJR Act and the Judiciary Act to which I have referred, in point of substance the applicant has three grounds upon which he asserts that the respondent is acting unlawfully. First, he says that the summons, as amended, was not authorised by the ACC Act because the subject of the intended examination endorsed thereon was not a matter related to federally relevant criminal activity. Secondly, he says that the authority of the respondent to require him to answer questions was confined by the asterisked notation on the summons (see par 4 above) and that, therefore, it was not lawful for the respondent to have required him to give an answer which related to "charges currently before the courts". And thirdly, he says that to answer the particular question to which he objected would have involved him in revealing an element of his intended defence to the criminal charges, and that the requirement to answer did, therefore, tend to interfere in the administration of justice and was in contempt of court. That part of the definition is not presently controversial. It is subpar (ii) of par (b) of the definition of "federally relevant criminal activity" which is central to the applicant's point. The term "federal aspect" is given meaning by s 4A(2) of the ACC Act. He contends that conspiracy to murder is not an offence under Commonwealth law, and that a Commonwealth law purporting to make it an offence would not, without more, be valid. It follows that the State offence of conspiracy to murder does not have a "federal aspect" within the meaning of s 4A(2) of the ACC Act, and that the summons was not authorised by the Act. Section 24A of the ACC Act provides that an examiner "may conduct an examination for the purposes of a special...investigation". In the present case, the endorsement on the summons of a note of the matters upon which the applicant was to give evidence was done pursuant to s 28(3) of the ACC Act. That provision requires the person summoned to be informed of the general nature of the matters in relation to which the examiner intends to question him or her; it does not require that person be informed of the matters being investigated in the investigation as a whole. Thus, while the matters being investigated must relate to federally relevant criminal activity, the questions proposed to be addressed to the particular person need not directly do so, save in the sense that the power to summon must be for the purposes of the special investigation. Absent knowledge of the Board's determination under s 7C(3), it may not be apparent to the addressee of a summons that the purpose of the proposed examination is related to federally relevant criminal activity. The addressee is, of course, furnished with that knowledge by the copy of the determination which must be attached to the summons. At the examination, individual questions may, in the perception of the addressee, have no obvious relation to criminal activity at all. For example, a medical practitioner may be summoned to give evidence about the treatment given to a particular patient on a particular occasion; or a computer engineer may be summoned to give evidence about the significance of particular documents printed out by a specialised computer program used in banking; or the owner of a restaurant might be summoned to give evidence about the identity of a person who booked a certain table on a particular night. In each of these cases, if the notation on the summons foreshadowed the subject of the questions proposed to be asked, it would be quite unrevealing of the "federal aspect" which formed the basis of the investigation pursuant to which the examination was conducted. And, if the questions, as proposed in the summons, need not ex facie relate to criminal activity, there is no reason why they may not relate to a non-federal criminal activity, such as "conspiracy to murder". As noted above, the summons in the present case, as amended, provided that the applicant was required to give evidence of federally relevant criminal activity involving conspiracy to murder. The summons thus shows, on its face, the connection with an investigation having a federal aspect, as required by s 28(7) of the ACC Act. In my view, the applicant does not impugn the legality of the summons merely by pointing to the circumstance that conspiracy to murder does not, in isolation, have a federal aspect. It was no part of the applicant's case to contend the special investigation itself was not into matters that related to federally relevant criminal activity. It follows that his challenge to the summons must be rejected. The respondent filed, but did not serve, confidential affidavits which, according to his written outline of submissions, would have made good the proposition that, in the context of the examination of the applicant, the State offence of conspiracy to murder did have a "federal aspect" because of the particular facts of the investigation. It was because of the highly sensitive, and confidential, nature of the contents of those affidavits that the respondent did not serve them, and resisted them being shown even to the applicant's counsel. I have not read the affidavits, and do not rely on them. I do not consider that the applicant's case in relevant respects reached the point of requiring the respondent to go into evidence at this level of detail. The examiner must also record in writing the reasons for the issue of the summons. In the specific circumstances of the present case, it was submitted that the asterisked notation on the summons --- "you will not be examined in relation to charges currently before the courts" --- indicated that the respondent, when issuing the summons, had formed the view under s 28(1A) that the issue of the summons was reasonable only if the applicant was not examined in relation to charges currently before the courts. The applicant then asserted that the line of questioning in which counsel assisting had been engaged on 12 February 2009 did relate to the criminal charges which he is facing and was, therefore, unauthorised by the summons. In my view, the basis upon which an examiner forms the view that the issue of a particular summons is reasonable under s 28(1A) is not limiting with respect to the scope of the examination of the witness in question. It may be a fair inference that the intended scope of the examination will usually be within "all the circumstances" by reference to which the state of satisfaction required by the subsection will be reached. If so, it may also be a fair inference that the scope of the examination, at least in general terms, would then be foreshadowed by the notation on the summons required by s 28(3). However, as that subsection states in terms, the notation is not limiting of the subject-matter of the questions that may in fact be put to the witness. For the scope of the examination to be limited by the basis of the examiner's satisfaction under subs (1A) would, in my opinion, be incongruous in the light of the clear terms of subs (3). There is, moreover (and fundamentally) nothing in s 28, or in Div 2 generally, which expresses or implies a limitation of the kind for which the applicant contends. It has been held that the purpose of s 28(1A) of the ACC Act is "to focus and enhance decision making and to provide an accountability mechanism by requiring the creation of an 'audit trail'": Barnes v Boulton [2004] FCA 1219 ; (2004) 139 FCR 356 , 363 [29]. The record of reasons required by the subsection is not, therefore, a means to enlighten the summoned witness as to why the summons was issued. That is not to say, of course, that an allegation of a failure to comply with the first sentence of the subsection will not be justiciable at the suit of the witness. But that is not the applicant's point in the present case. At least as relates to this ground, the applicant does not challenge the legality of the summons or compliance with s 28(1A). His point is that it is open to him, as with any witness summoned under s 28, to rely upon the content of the examiner's decision that it was reasonable to issue the summons as a limitation on the scope of the matters as to which he might be examined. For reasons which I have attempted to explain, I consider that the two dimensions of the examiner's role are separate, and that the reasons for issuing the summons are not limiting with respect to the scope of the examination. At the hearing of the present application, counsel for the applicant called for the production of the record of reasons made by the respondent in the present case under s 28(1A) of the ACC Act. The purpose would be to give counsel the opportunity to peruse the reasons with a view to demonstrating, he anticipated, that the exclusion from the proposed examination of the respondent of matters which related to charges currently before the courts was an element in the respondent's conclusion that the issue of the summons was reasonable in all the circumstances. The question was approached as though it related to the respondent's discovery obligations, as a party in the proceeding. The respondent resisted production both on the ground that his reasons under s 28(1A), whatever they were, were irrelevant to the permitted scope of the examination of the applicant, and on the alternative ground that the reasons, if otherwise relevant, were protected from production, and from inspection, by the public interest immunity. During the hearing of the proceeding, I ruled that the respondent not be required to produce his reasons, and indicated that I would provide my reasons for that ruling in the course of giving reasons for judgment at the end of the case. It will be apparent from what I have written above that I take the view that the respondent's reasons under s 28(1A) are irrelevant to the scope of the examination which he may validly undertake, in relation to the applicant, under s 28 of the ACC Act. I thus uphold the respondent's first ground of objection to production, and I do not need to consider the matter of public interest immunity. He says that resort to the coercive process for which Div 2 of Pt II of the ACC Act provides could prejudice his prospect of a fair trial and thus would give rise to a risk of an interference in the administration of justice. He relies upon the principle referred to by Gibbs CJ in Victoria v Australian Building Construction Employees' and Builders Labourers' Federation [1982] HCA 31 ; (1982) 152 CLR 25 , applied by the Full Court in Commissioner of Taxation v De Vonk (1995) 61 FCR 564 , 585-586. Attorney-General v. Times Newspapers Ltd [1974] AC 273 , 299. The essence of this kind of contempt is a "real and definite tendency to prejudice or embarrass pending proceedings": John Fairfax & Sons Pty. Ltd v. McRae [1955] HCA 12 ; (1955) 93 CLR 351 , 372. First, he is frank about the way he proposes to defend the criminal charges. He says that he intends to justify what might otherwise appear to be incriminating conduct by admitting that he was then involved in something quite minor by comparison with the serious offences with which he has been charged. To require him now to reveal, and to admit to, that conduct would be incriminating apropos the minor dimension of his admitted criminality. He also says, as I understand the submissions made on his behalf, that he would thereby be compelled to disclose how he intends to defend himself against the charges which have been laid, a compulsion to which, under the criminal justice system itself, he cannot be subjected. Secondly, he says that for him to be required to answer the particular question to which he objected would (because of the nature of the question) involve him naming a person whom he hopes to call as a witness in his defence. Not only is someone in his position under no obligation (normally) to name his witnesses, the very person he intends to call may, he apprehends, get cold feet about the idea of giving evidence once he or she realises that the applicant has disclosed his or her identity to the authorities. Thirdly, the applicant has only very recently received his copy of the prosecution hand-up brief for the committal proceeding. It is said to be voluminous. The applicant says that it would be oppressive to require him to answer the question to which he objected before he had had a realistic opportunity to come to terms with the contents of the brief. Counsel for the respondent submitted that the applicant's ground should be rejected, for four reasons. First, he submitted that, on the facts of the present case, the court should not be satisfied that there is a real risk, as opposed to a remote possibility, that the requirement that the applicant answer the question to which he objected would give rise to an interference with the administration of justice in relation to the criminal proceeding which the applicant faces. Secondly, he submitted that the decision whether to restrain the continuation of the examination of the applicant, or the putting of any particular question, involved a judgment which balanced the public interest in avoiding the risk of interferences with the administration of justice with the public interest in the investigation of serious crime. On the facts of the present case, if there were a risk of the kind mentioned, that risk was outweighed by the second kind of public interest to which I have referred. Thirdly, he submitted that, as a matter of construction, the ACC Act authorised the respondent's requirement that the applicant answer the question to which he objected, and the continuation of the examination of the applicant generally, notwithstanding that either or both would give rise to a risk of an interference with the administration of justice. Fourthly, he submitted that, in the event that his arguments were otherwise unsuccessful, the most the court should do ought to be to restrain the respondent from requiring the applicant to answer the particular question to which he objected. There was, he submitted, no basis upon which the examination of the applicant generally should be restrained. It may be seen that, if I were to answer either the first or the third of these points favourably to the respondent, the applicant's ground itself would be rejected. The second point is by way of an alternative to the first, and assumes also that the third would be unsuccessful. The fourth point is, as it were, in the nature of a final fall back position. Before turning to the respondent's points, I should say something about the legal basis of the applicant's propositions. Each of the first and second ways in which the applicant puts his case in relevant respects is based upon the supposition that, unless the respondent were restrained as sought, the substance of the applicant's evidence in the examination (either with respect to the question concerned or generally) would become known to third parties. On one aspect of the applicant's case, those third parties would be the prosecuting authorities in the criminal proceeding. On another aspect, they (or, perhaps more accurately, he or she) would be the person presumptively to be identified by the answer to the question to which the applicant objected. The realistic likelihood of there being, in effect, a leakage of the evidentiary record of the applicant's examination by the respondent cannot be assessed without a consideration of certain provisions of the ACC Act designed to maintain the confidentiality of such examinations, and of steps taken by the Commission, including by the respondent, to maintain the confidentiality of that record. These are matters which fall for consideration under the first of the four points by reference to which the respondent responds to this aspect of the applicant's case. I should say something also at this stage about the jurisprudential, as distinct from the factual, assumptions which underlie this ground in the applicant's case. Although, for the most part, counsel for the applicant eschewed any reliance upon the privilege against self-incrimination, there were, as I have noted above, aspects of his client's case which seemed to call up that principle, even if, perhaps, in a slightly modified way. In the facts of the present case, before giving his evidence at the examination, the applicant claimed that his evidence might tend to incriminate him, under s 30(4)(c) of the ACC Act. That claim having been made, the answer to the question to which the applicant objected would not be admissible against him in a criminal proceeding (other than the limited, and presently uncontroversial, exceptions in pars (c) and (d) of s 30(5) of the ACC Act). As a matter of construction, the provisions of s 30 to which I have referred displace the common law privilege against self-incrimination and, in my view, leave no room for the applicant to rely upon that privilege in support of his present contention that the continuation of the examination, or the requirement to answer a particular question, would give rise to a real risk of an interference with the administration of justice: Hamilton v Oades [1989] HCA 21 ; (1989) 166 CLR 486. A significant component of the applicant's case, in presently relevant respects, is that the general law entitles him to conduct his defence of the criminal charges laid against him without revealing the elements of his defence, or the identity of any witness whom he proposes to call. The Court of Appeal referred to the respondent's right not to disclose his defences to the pending charges. Except in the sense that a witness enjoys what is known as the right to silence, the respondent has no relevant right, either at common law or by virtue of statute. The privilege against self-incrimination would not ordinarily protect a person against disclosure of his defence to a criminal charge. The so-called right not to disclose a defence is the result merely of the absence in ordinary circumstances of any statutory requirement that defences be revealed. Whether such a risk arises in the present case, and if so whether the taking of that risk is authorised by the ACC Act, are questions to which I shall presently turn. Before doing so, however, there is one other, potentially important, factual feature of the present case which should be noted. It was not suggested on behalf of the applicant, and it would not be open on the evidence to hold, that the purpose of the respondent's examination of the applicant was to have him disclose his intended defence in the forthcoming criminal proceeding. Indeed, there was no suggestion that, before the applicant took the objection which he did, either the respondent or counsel assisting had any idea that the answer to the question posed by the latter would reveal an element in the applicant's intended defence to the criminal charges. In this proceeding, counsel for the applicant submitted that, once the applicant himself had disclosed that the answer would reveal an element of his defence, thereafter the respondent was on notice of that circumstance and the question which he required to be answered was, somehow, infected thereby. I cannot accept that proposition. The legality of the question, and of the examination generally, cannot depend upon disclosures made by the applicant himself in his own interests. I consider that the correctness or otherwise of the ground upon which the applicant relevantly challenges the line of questioning which the respondent permitted must be determined against a factual setting in which, at most, it is to be assumed (ie accepting what the applicant asserts) that the answer to the question would reveal a fact upon which the applicant proposes to rely in his defence. That he does so propose must, in my view, be treated as wholly incidental to, and unrelated to, the purposes of the respondent or of counsel assisting. The respondent resisted the suggestion that, as a matter of fact, his requirement of the applicant to answer the question posed on 12 February 2009 would give rise to a real risk of an interference with the administration of justice. In the first place, it was pointed out that, the applicant having made the claim for which par (c) of s 30(4) of the ACC Act provides, subs (5) ensured that his answer would not be admissible in evidence against him in any criminal proceedings in which he is accused. The respondent next pointed to a number of directions which he had given under various provisions of the ACC Act, the intent of which was to ensure that the applicant's answer to the question, if given as required, would remain confidential within the narrow circle of persons engaged in the Commission's special investigation. Section 25A(3) of the ACC Act provides that an examination must be held in private, and the examiner may give directions as to the persons who may be present. On 12 February 2009, the respondent gave such directions. He named nine persons who, alone, were authorised to be present during the examination. In a confidential affidavit sworn by him on 19 February 2009, he said that none of those persons was involved in the investigation or prosecution of the applicant in relation to the criminal offences with which he has been charged. The respondent said that he did not intend to authorise anyone who had an involvement in that investigation or prosecution to be present during any examination of the applicant, or to have access to any evidence obtained during any such examination. In an affidavit sworn by counsel assisting the respondent on 20 February 2009, it was also made clear that the Commission has placed tight administrative restrictions upon the range of persons who may have access to the transcript of the examination of the applicant. Those restrictions were placed pursuant to directions given by the respondent. A significant aspect of the respondent's case was a direction which he made under s 25A(9) of the ACC Act. The examiner must give such a direction if the failure to do so might prejudice the safety or reputation of a person or prejudice the fair trial of a person who has been, or may be, charged with an offence. I further direct that the evidence given not be made available to the Australian Federal Police and Prosecuting authorities responsible for prosecuting matters arising from AFP Operation [X] before the completion and final determination of criminal charges arising from AFP Operation [X]. The "prosecuting authorities" referred to are those responsible for the prosecution of the applicant. Counsel for the respondent submitted that the very point of s 25A(9) --- and particularly of the concluding sentence thereof --- is to address the situation where evidence (etc) given in an examination might prejudice the fair trial of a person charged with an offence. He submitted that, such a direction having been given, on 18 February 2009 in the present case, the court should not be astute to suppose that there was a realistic, as distinct from a theoretical, risk that the direction would in some presently unforseen way prove inadequate to achieve the purpose for which it was obviously intended. It was submitted that subs (12) provided a means by which evidence given by the applicant in the examination might find its way into a court, including the very court before which his prosecution is to be conducted. Counsel for the respondent rejoined that the point of subs (12) was to allow for the possibility that relief from the constraints of subs (9) might be considered desirable in the interests of justice in proceedings involving the prosecution of a person. The court before which such a prosecution proceeded would have control over the dissemination of the evidence released to it under subs (12), and would be the body best placed to weigh such arguments as the applicant might then have against the release of the evidence in circumstances that might prejudice his prospects of receiving a fair trial. In such a situation, it was submitted on behalf of the respondent, the prospect that the evidence might be used in such a way as would prejudice a fair trial of the applicant was theoretical in the extreme. I accept the submissions made on behalf of the respondent with respect to this point. The provisions of the ACC Act referred to are manifestly calculated to reduce to the minimum the prospect that evidence given in an examination will find its way into the hands of authorities or persons other than those to whom, in accordance with directions given by an examiner, it is limited. On the facts of the present case, I consider that the directions given by the respondent, and the administrative steps taken by the Commission, are such as would eliminate any real, as distinct from theoretical, risk of an interference with the administration of justice, should the applicant answer the question put to him as required. I am particularly influenced by the direction given under s 25A(9) of the ACC Act. Save to refer to subs (12) of s 25A, counsel for the respondent was unable to suggest any means by which that direction would not, as a practical matter, produce its intended effect, namely, of protecting the fair trial of the applicant from being prejudiced by the leakage of details of the applicant's evidence given in the examination. With respect to subs (12), I accept the respondent's submissions that this court ought not lightly anticipate that the court to which evidence might be available under that subsection would allow that evidence to be further disseminated in a way that might prejudice the fair trial of the applicant. The facts of the present case are quite different from those which led to the judgment of the High Court in Hammond v The Commonwealth. In that case, police officers involved in the investigation upon which the forthcoming prosecution was based were permitted to be present during the administrative examination (see 152 CLR at 194). Here, by contrast, not only are those police officers not present (and not permitted to be present), but the respondent has taken the steps contemplated by the ACC Act to make it as certain as may be that those involved in the prosecution of the applicant will not come to learn of the substance of his evidence in the examination. I take the view, therefore, that the continuation of the examination of the applicant by the respondent, including the respondent's requirement that the applicant answer the question to which he objected, would not present a real risk of an interference with the administration of justice and would not, therefore, be in contempt of court. That conclusion makes it unnecessary for me to consider the respondent's related points, namely, whether, as a matter of balance, the public interest in the continuation of the Commission's work in the special investigation outweighs the public interest in avoiding risks of interference with the administration of justice, and whether, as a matter of construction, the provisions of the ACC Act to which I have referred evince a legislative intention to tolerate the existence of risks to the administration of justice, either absolutely or in circumstances where directions have been given. The applicant's point about oppression is, in my view, of no substance. Nothing which the respondent proposes to do --- or can do --- regarding the applicant will affect one way or the other the opportunity which the applicant will have to prepare for his committal. Although not made clear in so many words, it seems that the gravamen of this point is that the applicant desires to preserve the tactical advantage of not having to answer questions in the examination before he has familiarised himself with the contents of the prosecution brief against him. Such matters, however, are quite separate from those which might present a risk of an interference with the administration of justice. Save for the prospect that the prosecuting authorities might become aware of the evidence given by the applicant in the examination (a matter which I have addressed above), the two proceedings are quite separate. The applicant will not, I find, be oppressed in relation to his defence to the criminal charges by a requirement that he answer questions, including the question to which he objected, in the examination being conducted by the respondent. It follows that the applicant's contempt of court point should be rejected. I shall hear the parties on the subject of costs. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | australian crime commission investigation into matters related to "federally relevant criminal activity" investigation thus tied to "federal aspects" examiner with power to summons witness whether power extended to matters relating to offence under state law relationship between subject of investigation and scope of examination. power to issue summons to give evidence for purpose of investigation into criminal activities statutory requirement for issuing authority to be satisfied that it was reasonable to issue summons requirement for summons to be endorsed with statement of general nature of proposed examination whether scope of examination limited by basis upon which issuing authority was satisfied that it was reasonable to issue summons. person charged with serious offences person also being administratively examined in course of separate investigation into criminal activities whether continuation of examination would present real risk of interference with administration of justice relevance of prospect that person would disclose elements of defence to charges. administrative law administrative law contempt of court |
2 The affidavit of Nikola Petrovski sworn 17 January 2007 confirms that ASIC is investigating matters being, or connected with, the affairs of the company under Div 1 Pt 3 of the Australian Securities and Investment Commission Act 2001 (Cth) ("ASIC Act"). Consequently s 464(1) of the Act permits ASIC to apply to the Court for the winding up of the defendant. Further, the Act applies as if a winding up application had been made by the company: s 464(2) of the Act. 3 The application was as at April this year actively opposed. The alleged failure to comply with the s 912C notices was denied. However, when the motion was last before the Court the defendant's now counsel, Mr Detata, informed the Court that O'Connor Partners, Commercial Lawyers, wished to withdraw as the solicitors of record for the defendant as at 4 December 2007. Ms de Boer was present in Court at that time when the substantive hearing was listed for today's date. Additionally, ASIC wrote to the defendant by letter dated 11 December 2007 confirming the date and time of the hearing and enclosing copies of the minute of proposed orders and ASIC's written outline of submissions in support of the application. I gave O'Connor Partners leave to discontinue acting for the defendant from 4 December 2007. 7 ASIC should identify the public interest on which it bases its application to wind up for just and equitable reasons: Australian Securities Commission v AS Nominees Ltd (1995) 133 ALR 1 and more recently in Australian Securities and Investments Commission v Green Pacific Energy Ltd (2006) 59 ACSR 142 per Greenwood J at [138]-[144]. The plaintiff points to the continued breaches of the Act as the public interest affected by the operations of the defendant through its management. The plaintiff also submits that the public interests requires that corporations have effective management so that creditors of the corporation are dealt with in accordance with the statutory duties of both the corporation and its directors. Winding up is the appropriate remedy to end a period of managerial limbo: Clarke v Bridges [2004] FCA 394 per Finkelstein J at [7] to [13]. 10 Ms Annemeike de Boer is the only director and secretary of the defendant and its sole shareholder, holding all the shares beneficially. The company carried on a financial services business. It was the holder of an Australian Financial Services Licence (No 219817). Some of the clients or former clients of the defendant invested in securities issued by companies associated with the Westpoint Group. 12 Since about March 2006, ASIC has made enquiries for the purposes of ensuring compliance with the corporations legislation for the period from 1 January 1998 and continuing by several entities, including the Defendant, which have been associated with the sale of financial products of the Westpoint Group ("Westpoint Investments"). 13 In Ms de Boer's affidavit, she states that she suffered a depressive illness "largely due to worry" arising from the Westpoint Group collapse in late 2005 early 2006. The illness has required the assistance of medical practitioners, periods of hospitalisation and medication. Ms de Boer, according to her affidavit, was still undertaking comprehensive weekly counselling to enable her to cope with depression as well as undergoing occasional hospitalisation. 14 In or about early 2006, Ms de Boer reduced the office opening hours of the defendant, its assets were sold and she resolved to close the business. She wrote to ASIC, on behalf of the defendant, giving notice of cancellation of its Australian Financial Service Licence, No 219817, effective from 30 June 2006. The reason given was "due to extended ill health of key personnel". I infer this to actually be a reference to the ill health of Ms de Boer. She advised that as from 30 June 2006 the defendant would cease to carry out any financial services business that required such a licence. 15 In about late May to June 2006, the defendant "sold" its clientele to a Mr Cubbage, and transferred its client files to him. 16 Between March and December 2006, ASIC sought to contact Ms de Boer and served notices under s 912C of the Act, on the defendant. These, importantly, sought detailed information concerning the defendant's dealings with companies in the Westpoint Group. The enquiries and notices issued and served by ASIC have been ignored, in breach of the Act. The claims of clients or former clients in relation to their investments have also been ignored by the defendant. This is evidenced by the affidavits of Ms Stewart, Mr Natt and Ms Roddan. 17 Ms de Boer does not deny that the defendant received these notices. She deposes to the fact that as a result of medical treatment she is unable to recall with exact specificity many of the events that have occurred. She also says that she is unable, for medical reasons, and because she has not retained any documents relevant to the matter to produce any written statement as requested by ASIC or otherwise to assist ASIC. 18 As at 16 January 2007 the defendant had not and to date still has not filed a copy of its audited financial statements to 30 June 2006 in breach of the Act. 19 From enquiries made on behalf of ASIC, the defendant quite evidently is unable to carry on its financial services business and indeed has ceased to do so. These enquiries also reveal that the defendant is not carrying on any other business. 20 In September of this year, ASIC permanently banned Ms de Boer from providing financial services as a result, broadly, of the matters which are relied upon by ASIC in this application. 23 The plaintiff's affidavit of Shona Anne Rogers sworn 2 February 2007 deposes to the lodgement of a form 519 "Notification of court action relating to winding up" with ASIC. The liquidator has annexed his hourly rates: Corporations Rules Form 8. That interest has been compromised by the defendant's repeated failure to respond to the s 912C notices, related to the investigations into the collapse of the Westpoint Group, an investigation of considerable public concern. The failure to deal with the inquiries of Ms Stewart, Mr Natt and Ms Roddan goes to the public concern that the corporation is without effective management. I am also satisfied that the defendant is unable to carry on business and has over a considerable period of time been operating in breach of the Act, having failed to comply with three sets of s 912C notices between 31 March and 15 December 2006, in breach of s 1311 of the Act, failed to lodge with ASIC audited financial statements in breach of s 989B within the time required by s 989D and failed to comply with the conditions of its Australian Financial Services Licence as required by s 912A(1)(b) of the Act in breach of s 1311 of the Act. By reason of these findings, I am persuaded that it would be just and equitable to order that the defendant be wound up. I will make orders accordingly. 29 Section 466(2) of the Act provides that the liquidator must reimburse the plaintiff out of the property of the company, the taxed costs incurred by the plaintiff unless the Court orders otherwise. The plaintiff submits that the current application is not a circumstance in which it is appropriate to order otherwise and seeks its costs to be taxed and paid from company property. I accept this submission, and so order. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | winding up on application by asic just and equitable grounds s 461(1)(k) corporations act 2001 (cth) sole director ill company no longer carrying on any business claims by investors made to company ignored no effective management other failures by company to comply with statutory requirements corporations |
On 22 June 2009 the primary judge delivered his reasons for judgment and ordered that the application be dismissed. Accordingly, I will not make any such order. Under Order 52, rule 15 of the Federal Court Rules ('the Rules') provision was made for the filing and service of notices of appeal within 21 days after the date when the judgment appealed from was pronounced. No such appeal was instituted in this case within the specified 21 day period. But in the end, this Court must construe and apply the terms of its own rule. The question is what that rule means, and how it is to be applied to the circumstances of the case. If the law were otherwise, a party in breach would have an unqualified right to an extension of time which would defeat the purpose of the rules which is to provide a time table for the conduct of litigation. It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of twenty-one days. In that context, the expression "special reasons" is intended to distinguish the case from the usual course according to which the time is twenty-one days. But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case. Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression "for special reasons" implies something narrower than this. No return was contemplated to the old law by which the discretion of the Court to waive the rules was itself fettered by further rules. We agree with the dictum of Davies J cited earlier in these reasons, and we think the construction of the rule we have adopted is in line with the decisions in Ex parte Mehta , the Palata Investments case and Avery's case . It would require something very persuasive indeed to justify a grant of leave after, for example, a year; equally, it may be said, something much less significant might justify leave where a party is a few days late. "Special reasons" must be understood in a sense capable of accommodating both types of situation. It is an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served. In my opinion, such a ground exists. The evidence establishes that a further application was made by the applicant to the Commissioner of Taxation for funding referable to an appeal from the judgment of the primary judge. There is no evidence before the Court to indicate when that application was made, although the solicitor for the applicant would appear to have had a discussion with the Australian Taxation Office on 4 August 2009 in which the solicitor for the applicant indicated his client's intention to file an application in this Court for leave to file and serve a Notice of Appeal out of time. However, if your client is successful in obtaining leave, consideration will then be given to extending test case funding for the appeal to the Full Federal Court. I would appreciate it if you would advise me whether or not your client still intends to pursue such an application. It may be that the interpretation placed by the solicitor for the applicant upon the Senior Assistant Commissioner's letter was stretching the limits of the words used. On 25 September 2009 the applicant filed an Application for Extension of Time to File and Serve Notice of Appeal. The application was supported by the affidavit of David Geoffrey Reid sworn 24 September 2009, to which reference has been made, and also by a further affidavit of David Geoffrey Reid sworn 8 October 2009. That affidavit exhibited, but I will treat as annexed, a draft Notice of Appeal upon which the applicant wishes to rely if an extension of time is granted. The affidavit also exhibited a letter sent by the solicitor for the applicant to the Australian Government Solicitor suggesting that approval from the Test Case Funding Department within the Australian Taxation Office in respect of the funding of an appeal had been received. This assertion does not appear to have been contested. However, assuming what may be the content of such application, we are instructed to advise that Commissioner (sic) would not oppose the application for leave but likewise does not support or consent to any such application. If that be the case then there would seem, to me, to be a ground which would justify departure from the general rule that the time limit should have been complied with. When I invited counsel for the applicant to direct me to the key parts of the draft Notice of Appeal, he directed my attention, in particular, to ground 7 out of the 11 grounds included in the draft Notice of Appeal. Schedule 2 is headed ' Beverages that are GST-free '. Clause 1 of schedule 2 has a similar heading. The first identifies the relevant 'Item' number, the second, the 'Category' and the third, the 'Beverages'. Items 11 and 12 both appear in the table under the category heading 'Fruit and vegetable juices'. Accordingly, clause 3 in schedule 2 has no application. His Honour erred in not holding and should have held that products marketed by the appellant as Edenvale Chardonnay, Edenvale Shiraz and Edenvale Shiraz (sic) ("the non-carbonated beverages") were exempt from tax under ... [the GST Act] because they were non-alcoholic non-carbonated beverages consisting "of at least 90% by volume of juices of fruits or vegetables" within the meaning of item 12 of the of the (sic) table ... in clause 1 of schedule 2 of the GST Act. It would appear that the manufacture of the Edenvale products involved a three-stage process, firstly, preparation of the base wine, secondly, a de-alcoholisation process and, thirdly, a reconstitution (or blending) process. The juices of fruits in the final beverage must constitute at least 90% of the volume of the beverage (in the case of Item 11, 100%), and be separately discernible as juices of fruits prior to the mixing (or carbonisation in the case of Item 11). This would be enough to dismiss the application but in deference to the submissions that were made by both parties on the second issue --- whether the Edenvale products were non-alcoholic beverages for the purposes of Items 11 and 12 of the Table --- I will address that issue. The fact that one can readily point to some specific exclusions to this line in the GST Act does not reduce or mitigate against its force as an overall observation or conclusion. While their respective alcohol content by volume is low, it owes its existence to an infused process of fermentation rather than a naturally occurring one. The issues are what is meant by 'non-alcoholic ... beverages' and what is meant by 'consist' in the expression 'if they consist wholly of juices of fruits', or, in the case of Item 12, 'if they consist of at least 90 per cent by volume of juices of fruits'. If the Commissioner is disposed to the view that there is a public interest in having a Full Court determine the correctness of the construction placed upon the relevant legislative provisions by the primary judge, then, in my opinion, it would be appropriate for an extension of time to be granted. In my opinion, the application should be granted. In relation to the question of costs, it is clear that there has been no commitment on the part of the Australian Taxation Office to fund the applicant in respect of the current application for an extension of time. The solicitor for the respondent has indicated that the Commissioner seeks an order for costs, regardless of the outcome of the application, referable to the application for an extension of time, and notwithstanding the fact that the Commissioner has not opposed the application for a grant of extension of time. No explanation has been proffered in the evidence as to why there was a failure by the applicant to file a Notice of Appeal within the requisite 21-day period. There is no evidence to suggest that any application for the funding of an appeal was made within that 21-day period, which would perhaps explain inaction within that period. Whilst I was minded to the view that the appropriate order would be one making the costs of the application the Commissioner's costs in the appeal, I have, on reflection and having heard from counsel for the applicant and the solicitor for the Commissioner, formed the view that the Commissioner should be awarded his costs of the application. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | application for leave to appeal out of time 'special reasons' under order 52 rule 15(2) practice and procedure |
On 12 September 2001 the Group was placed in Voluntary Administration under Pt 5.3A of the Corporations Act 2001 (Cth). On 17 September Mark Korda and Mark Mentha were appointed Voluntary Administrators and on 2 May 2002 the Administrators entered into a Deed of Company Arrangement (DOCA) under Div 10 of Pt 5.3A of the Act. 2 The applicant, a member of the Ansett Group previously known as Ansett Transport Industries (Operations) Pty Ltd, is the registered owner of a number of Australian trade marks consisting of or including the word "Ansett", alone or with various logos and devices. 3 On 29 March 2007 the applicant commenced this proceeding alleging infringement of its trade marks, passing off and misleading or deceptive conduct. The respondents have filed a defence denying the applicant's allegations and raising a cross-claim for removal of the applicant's marks from the Register under Pt 9 of the Trade Marks Act 1995 (Cth) on the ground of non-use. 4 The respondents have moved for an order for security for costs in the sum of $300,000 and an order that issues of liability be determined prior to and separately from any issues of quantum. The latter order is not opposed. The present application was, however, conducted on the implicit assumption that s 1335 had to be satisfied. 6 Thus the threshold requirement, which the respondents must establish, is that there is reason to believe that the applicant will be unable to pay the respondents' costs if they are successful. This will be so even if in other events which can also be fairly described as reasonably possible the plaintiff corporation would be able to pay the costs. 8 On 31 August 2006, following applications to the Federal Court and creditors' meetings, the assets of the Ansett Group were pooled. I turn therefore to the evidence as to the current assets of the Group. 10 Mr Sebastian Hams is a Chartered Accountant and a director of the Administrators' firm KordaMentha. He has assisted the Administrators in the conduct of the administration since October 2003. The focus of his involvement has been in the management of the Group's financial resources and financial reporting. Thus over $40m is immediately available to meet creditors' claims, as well as the assets still to be realised. 13 The Group owns a very large stock of aircraft spare parts which are being sold throughout the world. In Mr Hams' opinion, this will be economically worthwhile for at least another two years on current estimates of stock and sales rates. According to the Administrators' Seventh Report to Creditors (31 March 2007) it is anticipated that the Administration will continue for at least the next few years, in the course of which income will be generated, especially through the sale of spare parts. 14 The Administrators estimate that 87 per cent of pre-administration employees' entitlements will be paid. The respondents point to that fact as evidence of inability to pay their costs. However, any claim by the respondents in respect of costs awarded would rank first under s 556(1)(a) of the Corporations Act as an expense of the Administration. 15 As Administrators under the DOCA, the Administrators have power to carry on the business of the Group: s 437A. They can bring or defend legal proceedings in a company's name or on its behalf: s 442A(c). The respondents complained that the Administrators are not parties. However the Administrators are not owners of the relevant trade marks and there is no reason why they should be parties. 16 The Administrators are liable for the company's debts: s 443A , but have a right of indemnity against the company: s 443D. Any award of costs in favour of the respondents would be a post-administration debt, so the respondents would not be bound by the DOCA: s 444D. Thus the respondents would have unrestricted access to the assets of the Group mentioned above. 17 Mr Campbell SC for the respondents referred to Knight v F P Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178. The High Court there held that the Supreme Court of Queensland had jurisdiction to award costs against non-parties, in that instance receivers and managers of insolvent companies which had brought unsuccessful proceedings. Mason CJ and Deane J at 191 pointed out that the availability of an order for security for costs at an early stage of litigation would be a "strong argument for refusing to exercise a discretion to order costs against a non-party". However, as their Honours went on to point out, that did not deny the existence of a jurisdiction to award costs against non-parties, as distinct from the possible exercise of discretion to refuse such an order. 18 In postulating the availability of an order for security for costs, their Honours were alluding to the situation where an impecunious plaintiff is backed by a non-party which has an interest in the plaintiff succeeding in the litigation; cf Federal Court Rules O 28 r 3(1)(b), White v Butt [1909] 1 KB 50 at 55-56. In such a case, an order for security for costs against the plaintiff will, as a matter of practicality, require the non-party to provide the security. Failure to make such an application for security for costs at an early stage may, as a matter of discretion, tell against the later making of such an order against the non-party. In the present case there is no question this Court has jurisdiction to make an order for security for costs against the applicant, which of course is a party; the problem for the respondents is that the statutory pre-condition for such an order has not been established. 19 Mr Campbell also referred to the decision of Austin J in Cresvale Far East Ltd (in liq) v Cresvale Securities Ltd (No 2) (2001) 39 ACSR 622. His Honour was there concerned with an application for costs against an administrator under a deed of company arrangement. The administrator was a party and in the substantive proceeding had been removed by order of his Honour on the basis of findings of impropriety and negligence in the conduct of the administration. Because the office of company administrator was comparatively new, and not the subject of any costs jurisprudence, his Honour reviewed a number of analogous situations. 20 Under the heading "Personal costs orders against administrators", Austin J discussed a number of scenarios commencing with that identified by the sub-heading "Where the company under a deed of company arrangement is a party to the proceedings, but the administrator is not, and the company is unsuccessful" ([24]-[35]). That of course is the hypothesis on which the present application is brought. In the normal case, the litigation will have been conducted on behalf of the company by the administrator. The question arises whether the court may order the administrator personally to pay the successful party's costs, although the administrator is not a party to the proceedings. (There are no equivalent provisions in Order 28 of the Federal Court Rules . ) He concludes at [32] that the New South Wales Rules would prevent a court in that State from awarding costs against an administrator who is not a party to the proceedings. 22 His Honour then, in a passage relied on by Mr Campbell in the present case, discusses the position of liquidators. His Honour points out at [33] that "in normal circumstances costs are not awarded against a liquidator who is not a party, notwithstanding that the liquidator had the carriage of the litigation in the company's name and the proceedings have been lost. Indeed, it has been said that the availability, at an earlier stage of the litigation, of an order that a party provide security for costs would be in many situations a strong argument for refusing to exercise a discretion to order that costs be paid by a third party [ Knight cited]. The applicant company has not been shown to have insufficient funds to meet the costs of a successful opposing party. 24 The application for security for costs must therefore be dismissed. It is not necessary therefore to say anything about the applicant's submissions as to the substantive merits of the respondents' case or the quantum of the amount of security sought. I would only say that there does seem to be force in the submission of Mr McGowan SC that the respondents are in a real sense the moving party since in their cross-claim they seek removal of the applicant's trade marks, which is something they would have to achieve anyway to obtain registration of their own marks. In substance, so it is said, the applicant is defending its property from attack: Maatschappij Voor Fondsenbezit v Shell Transport and Trading Co [1923] 2 KB 166 at 177, Willey v Synan [1935] HCA 76 ; (1935) 54 CLR 175, Re Travelodge Australia Ltd (1978) 21 ACTR 17. 25 In the event of the respondents' application being dismissed, the applicant seeks costs on an indemnity basis. One established ground for such an order is that an application has been commenced or continued in circumstances where the losing party (in the present case the respondents seeking an order for security for costs), properly advised, should have known that there was no chance of success: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401, Ragat Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175 at 177. 26 Such an order should be made. The critical fact in the present case is the current financial position of the Ansett Group. This was set out in the Administrators' Seventh Report, publicly available on their website. The consequences of this for the present application were pointed out by the applicant's solicitor Ms Penny Pengilley in correspondence with the respondents' solicitors, who last week were given an opportunity to withdraw without costs penalty. The respondents did not seek to contradict the evidence of the applicant's financial position as disclosed in the evidence of Mr Hams. 27 There was no opposition to the respondents' application for a separate trial on liability, which is the usual practice in this Court for Intellectual Property cases. Substantial costs have been incurred by the applicant in meeting an application for security for costs which was doomed to fail. | security for costs plaintiff company under deed of company arrangement costs |
The patent claims an enantiomer of a racemate where that racemate was disclosed and claimed by an earlier patent. This has been an issue in relation to other compounds, most recently in two judgments published after the close of evidence and, in one case, after the close of addresses --- the decision of Lindgren J in Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559 and the decision of the Full Court in Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC [2008] FCAFC 82 respectively. 2 Australian Patent 597784 (the patent in suit) was applied for on 4 February 1988. The patentee is Sanofi-Aventis. Application had been made for international versions of the patent in suit on 17 February and 27 November 1987. It is not contended that the priority date is later than the second of those dates. The term of the patent in suit has been extended pursuant to the provisions of Pt 3 of Ch 6 of the 1990 Act by five years. Thus, the patent in suit is due to expire on 4 February 2013. 3 Each of Apotex Pty Ltd (Apotex) and Spirit Pharmaceuticals Pty Ltd (Spirit) seeks revocation of the patent in suit on the grounds of lack of novelty, lack of inventive step, not being a manner of manufacture, inutility and false suggestion or misrepresentation. Both proceedings were heard together, on the same body of evidence, and one set of reasons will be given. After obtaining regulatory approval, a product was launched by Sanofi-Aventis in 1998 under the name Plavix, the active ingredient of which is the bisulfate salt of clopidogrel. It has been very successful commercially. It inhibits platelet aggregation at the site of blood vessel damage and so inhibits thrombus or clot formation. It is admitted that the applicant Apotex intends to make and sell compositions, the active ingredient of which is clopidogrel bisulfate and, so, would be in breach of claims 1, 3, 10 and 11 of the patent in suit. 6 The invention relates to organic chemistry, which is concerned with the study of carbon compounds and, in particular, with the stereochemistry of carbon compounds respecting the three dimensional structure of their molecules. Isomers are compounds whose molecules consist of the same number and kind of atoms but differ in their structure or arrangement. Material that rotates the plane of polarised light is said to be optically active. The means of identifying compounds which have that property is by shining the plane of polarised light through a sample of the compound dissolved in an appropriate solvent then measuring the extent of the rotation. 7 If the compound displays optical activity, this indicates that the chemical structure of the molecule is non-superimposable on its mirror image. That property is called "chirality" and the molecule is described as "chiral". An organic compound is said to have a chiral centre if it includes a carbon atom bonded to four different substituents. If the structure of a molecule is non-superimposable on its mirror image, the mirror image must be a different molecule. In each case of optical activity of a pure compound there are two, and only two, isomers called enantiomers, which differ in structure such that the arrangements of their atoms in space are non-superimposable mirror images of each other. Enantiomers have identical physical and chemical properties except in two important respects: they rotate the plane of polarised light in opposite directions, though in equal amounts; and they interact in different ways with other chiral compounds, including reacting with them at different rates. The isomer which rotates the plane of polarised light to the left (counter clockwise) is called the levo isomer, or levo-rotatory or L- enantiomer, and is designated (-), while the one that rotates the plane of polarised light to the right (clockwise) is called the dextro isomer, or dextro-rotatory or D - enantiomer, and is designated (+). 8 Although a pure compound is always optically active if it is composed of chiral molecules, a mixture of equal amounts of enantiomers are optically inactive since the equal and opposite rotations cancel each other out. A mixture which is comprised of equal amounts of two enantiomers is often designated by the prefix (+/-). Such mixtures are called racemic mixtures or racemates. The separation of a racemic mixture into its two optically active enantiomers is called a resolution. The racemate has the same chemical formula as each enantiomer. 9 There is a debate as to the common general knowledge as to resolving the enantiomers of a racemic mixture in Australia at the priority date of the patent in suit. I shall return to that issue. 10 In broad terms, the salt of a chemical compound can be formed by combining an acid with a base --- an acidic compound is characterised by its ability to donate a proton to its surroundings whereas a basic compound is characterised by its ability to accept a proton from its surroundings. Salts may form a crystalline compound. 11 Issues that are critical in relation to pharmaceutical drugs include efficacy, tolerance and toxicity. These refer to the pharmacological properties of a compound, ie, the operation of the compound in vivo. This invention is applied to biological systems which are composed of chiral molecules. Because enantiomers interact with other chiral molecules in different ways, they will often behave differently in biological systems. This can result in their having different physiological effects. An enantiomer may also undergo racemization (that is, convert to a 1:1 mixture of both enantiomers) in vivo. In fact, this formula represents both the dextro-rotatory molecule claimed as well as its levo-rotatory enantiomer. The racemic mixture corresponding to this formula [PCR 4099] was described in the French patent application published under the No. 2 530 247. Hereafter the dextro-rotatory enantiomer claimed according to the invention will be designated by Id and the levo-rotatory enantiomer by Il. It is known that the optical rotatory power of a compound depends on the solvent in which it is measured and on its concentration in this solvent. The optical rotatory power of the dextro-rotatory isomer according to the invention is positive in methanolic solution. In an unexpected manner only the dextro-rotatory enantiomer Id exhibits a platelet aggregation inhibiting activity, the levo-rotatory enantiomer Il being inactive. Moreover, the inactive levo-rotatary enantiomer Il is the less well tolerated of the two enantiomers. The invention also relates to the addition salts of the compounds of formula (Id) with pharmaceutically acceptable mineral or organic acids. 82.12599 (Publication No. 2 530 247) [PCR 4099]. A description will now be given of the results of this study which demonstrates another advantage of the invention, namely that the salts of the dextro-rotatory isomer have a better therapeutic index than the salt of the racemic mixture; in fact, the levo-rotatory isomer exhibits almost no platelet aggregation inhibiting activity and its toxicity is markedly higher than that of its dextro-rotatory homologue. " (Emphasis added. " "For the aggregation with collagen, the percentage of inhibition is the difference of the slopes of the curves representing the variation of the optical density as a function of time for the control and the product to be tested divided by the slope for the control multiplied by 100. The results shown in Table II demonstrate again that only the dextro-rotatory isomer is active whereas the salts have comparable activities. " "The results which are presented in Table III show that the levo-rotatory isomer is inactive in this test, in contrast to the dextro-rotatory isomer and the racemate. " "The number of dead animals was determined 14 days after the administration of the compound under study. The lethal doses thus determined, expressed in weight of the salt administered, are presented in Table IV; these results show on the one hand that the toxicity of the racemic mixture is similar to that of the levo-rotatory isomer whereas the dextro-rotatory isomer is markedly less toxic, and, on the other hand, that the toxicity depends on the nature of the acid used to form the salt. " "The pharmacological study just presented has demonstrated the interesting inhibitory properties towards platelet aggregation of the compound Id and the absence of any activity of its isomer Il. " "On account of its interesting inhibitory properties towards platelet aggregation and its interference in the mechanism of formation of arterial and venous thromboses, the medicine of the invention can be usefully administered in the treatment and prevention of platelet disorders due to extracorporeal blood circuits or the consequence of complications in atheroma. Dextro-rotatory isomer of methyl alpha-5 (4,5,6,7-tetrahydro (3,2-c) thieno pyridyl) (2-chlorophenyl)-acetate and its pharmaceutically acceptable salts. Hydrogen sulfate of the dextro-rotatory isomer of methyl alpha-5 (4,5,6,7-tetrahydro (3,2-c) thieno pyridyl) (2-chlorophenyl) -acetate. Process for the preparation of the compound according to Claim 1, comprising the formation of a salt of racemic methyl alpha-5 (4,5,6,7-tetrahydro (3,2-c) thieno pyridyl) (2-chlorophenyl)-acetate with an optically active acid in a solvent, repeated recrystallizations of the salt are carried out until a product of constant optical rotatory power is obtained, then the dextro-rotatory isomer is liberated from its salt by a base and, if necessary, salt formation is carried out with a pharmaceutically acceptable acid. Its title was "New derivatives of thieno (3,2-c) pyridine, process for their preparation and their therapeutic application". The new derivatives of this invention have the following general formula: in which: Y represents the OH group or an OR group in which R is a straight or branched lower alkyl radical, or Y represents a group in which R1 and R2 are each independently of each other hydrogen or a straight or branched lower alkyl group; or RI and R2 form together and with the nitrogen to which they are attached a heterocycle which may include a second heteroatom such as oxygen or nitrogen, wherein the latter may be substituted by a lower alkyl or benzyl radical which may be substituted; and X represents hydrogen, a halogen or a lower alkyl radical. These compounds having an asymmetrical carbon may exist in the form of two enantiomers. The invention relates both to each enantiomer and their mixture. " (Emphasis added. 1. ... 8 --- Methyl α (4,5,6,7-tetrahydro-thieno (3,2-c)-5-pyridyl)-0. chlorophenyl-acetate. (derivative ndeg.1). ... 14 --- Therapeutic composition having blood-platelet aggregation inhibiting activities and anti-thrombotic activities containing as active ingredient a derivative of the formula (I) as claimed in Claim 1, or an addition salt thereof with a pharmaceutically acceptable mineral or organic acid or with mineral bases, as well as one of the two enantiomers or their mixture. " (Emphasis added. The racemic mixture was known internally at Sanofi-Aventis as PCR 4099. Patents corresponding to the French patent were also granted in Canada (Canadian Patent No 1,194,875 (the Canadian patent), Australia (Australian Patent No 554358 (the '358 patent) and the United States (US Patent No 4,529,596 (the US patent)). These four patents are relied upon as the prior art patents in these cases. (2) Sanofi-Aventis was granted various patents around the world, including Australian patent 473141 with a priority date 1 February 1973, for compounds which included ticlopidine. Ticlopidine was launched in France in 1978 and in Australia in 1992. Subsequent to launch, Sanofi-Aventis became aware of reports of rare but potentially fatal side effects in some patients. (3) After the discovery of ticlopidine in 1972, Sanofi-Aventis continued to research other potentially valuable thienopyridines in the hope of finding a compound with better platelet aggregation inhibiting properties. (4) In 1975, Sanofi-Aventis synthesised a thienopyridine compound which it identified as PCR 1033. Unlike ticlopidine, PCR 1033 was a racemic compound. Testing of the racemic compound PCR 1033 indicated that it was a more active platelet aggregation inhibitor than ticlopidine but that it caused trembling, convulsions and even deaths in test animals. (5) In March 1978, Mr Badorc, an employee of Sanofi-Aventis under the direction of Dr Maffrand, succeeded in separating the enantiomers of PCR 1033. The levo-rotatory enantiomer was named PCR 3071 and the dextro-rotatory enantiomer was named PCR 3072. (6) The results of animal testing of the enantiomers of PCR 1033 indicated that PCR 3071 had anti-platelet and anti-thrombotic activity while PCR 3072 was inactive, but that PCR 3071 was too toxic to be tested in humans. In early 1981, further work on PCR 3071 was abandoned. (7) In about 1978, Sanofi-Aventis synthesised another racemic thienopyridine compound identified as PCR 3549. It was very similar in structure to PCR 1033. Testing of the racemic compound PCR 3549 demonstrated platelet inhibiting activity and tolerance which was better than PCR 1033, but not as favourable as ticlopidine. A decision was made to separate the enantiomers of PCR 3549. Mr Badorc undertook the exercise. (8) Mr Badorc's attempts to separate the enantiomers by the diastereomeric salt formation technique failed. He ultimately obtained the enantiomers by means of the asymmetric synthesis process. The enantiomers were named PCR 3620 and PCR 3621 respectively. Testing of those enantiomers indicated that the activity of each enantiomer was similar to that of the racemate and indicated no advantage over the racemate. (9) From about 1976, Sanofi-Aventis commenced synthesising compounds with a more complicated functional group than PCR 1033 and PCR 3549. A series of such compounds was synthesised and tested and ultimately, in July 1980, Sanofi-Aventis synthesised the racemic compound PCR 4099. Test results indicated that PCR 4099 was better tolerated and more effective than ticlopidine. In total, 21 compounds of the same formula were synthesised by Sanofi-Aventis, all of which were referred to as examples in the Canadian patent and the Australian '358 patent (as well as the other prior art patents). (10) The test results for the compounds as reported in the prior art patents indicated no toxicity problems and effectiveness. In 1982 Sanofi-Aventis determined to develop PCR 4099. The prior art patents were obtained, in the case of the Australian '358 patent, with a priority date of 13 July 1982. PCR 4099 is the compound identified in Example 1 of the prior art patents. (11) PCR 4099 underwent development and testing in and after 1982. Between 1983 and 1985 there were reports of side effects in some animals and, in particular, convulsions. Between 1983 and 1987, acute and long term toxicity tests of PCR 4099 were undertaken in rats, mice and baboons. Phase I studies in human volunteers had been carried out as a precursor to obtaining regulatory approval to permit the sale of PCR 4099 as a therapeutic compound. (12) In or about November 1985, Dr Maffrand decided that Sanofi-Aventis should attempt to obtain the enantiomers of PCR 4099. This decision was made in the light of the adverse side effects which test results for PCR 4099 were reporting by that time. (13) Between November 1985 and February 1986 Mr Badorc unsuccessfully attempted to obtain the separate enantiomers of PCR 4099 by means of asymmetric synthesis. (14) Mr Badorc then attempted diastereomeric salt formation. There is debate about the precise order of events but, on 21 March 1986, Mr Badorc carried out an experiment in which he added 9.95 g (0.0397 mole) of dextro-rotatory camphor-l0-sulfonic acid to a solution of 32 g (0.0994 mole) of PCR 4099 in a solution of 150 ml of acetone. Crystals appeared within 48 hours. The concentration of PCR 4099 to solvent in that experiment was significantly higher than in all of the earlier experiments. (15) Subsequent analysis demonstrated that that experiment produced the levo-rotatory enantiomer of PCR 4099. On 8 April 1986 Mr Badorc obtained the dextro-rotatory enantiomer of PCR 4099 after making levo-rotatory camphor-10-sulfonic acid and using that as the chiral resolving agent. (16) The method for obtaining the dextro-rotatory enantiomer of PCR 4099 (later named clopidogrel) specified in the patent in suit is the method employed on 21 March 1986 described above, with the exception that the patent specifies the use of levo-rotatory camphor-10-sulfonic acid. (17) The preliminary tests of clopidogrel were performed using the form of its hydrochloride salt as obtained by Mr Badorc. This salt was suitable for testing but was unstable and difficult to formulate. In particular, it was hygroscopic. (18) Subsequently, the hydrobromide, hydrogen sulfate and taurochlorate salts of the dextro-rotatory enantiomer of PCR 4099 were made. (19) The enantiomers were then tested. A review of the test results indicated to Dr Maffrand that the dextro-rotatory enantiomer of PCR 4099 had all of the activity and the levo-rotatory enantiomer had no activity. The initial pharmacology tests indicated that the levo-rotatory enantiomer was less well tolerated than the dextro-rotatory enantiomer. The dextro-rotatory enantiomer was named clopidogrel. Subsequent acute toxicology testing indicated that the inactive enantiomer was more than twice as toxic as the active enantiomer and caused convulsions in test animals which the active enantiomer did not. (20) Application was made for the international versions of the patent in suit on 17 February 1987 and a convention application for the patent in suit was made on 4 February 1988 with the international filing date priority. (21) In mid to late 1987, further toxicological testing was undertaken in respect of PCR 4099, its levo-rotatory enantiomer and clopidogrel. This testing provided further confirmation that PCR 4099 and the levo-rotatory enantiomer caused convulsions but clopidogrel did not. In about April 1987 it was decided to abandon further development work on PCR 4099. (22) Phase I human testing of clopidogrel commenced in December 1987. After obtaining regulatory approval, it was launched in 1998 under the name Plavix. 23 Several expert witnesses gave evidence relevant to the assessment of the state of the common general knowledge. 25 Professor Shaun Phillip Jackson also gave evidence for the respondent, as did Dr Maffrand and Mr Badorc of Sanofi-Aventis. The evidence of those witnesses does not contribute to an appreciation of the common general knowledge in Australia relevant to these cases. Those portions of the evidence of Professor Jackson that were ultimately admitted, went to specific questions concerning the nature of platelet aggregation and its pathological manifestations, and to the operation of clopidogrel as a platelet aggregation inhibitor. Professor Jackson obtained a Bachelor of Medical Science degree from Monash University in 1987. 26 Set out below is first a broad outline of the evidence given by each expert witness in relation to the four issues above, including a broad outline of the studies and professional activities of each expert up to 1987. There follows a summary of the state of the common general knowledge as distilled from a consideration of that evidence. 27 Before commencing that analysis, it should be noted in relation to issue 1 that the fundamentals of stereochemistry were outlined at the hearing through two tutorials, one prepared by Dr Watson for the applicants, the other by Professor Easton for Sanofi-Aventis, the latter including comments on the applicants' tutorial. Despite the areas of disagreement identified in those comments, the fundamental principles of stereochemistry were not relevantly in dispute between the parties. A broad outline of those principles, informed by the parties' tutorials, has been included above. The comments below in relation to issue 1 are thus directed instead to certain key principles only, and to the question of how widely those principles were recognised by 1987 in Australia. He obtained a PhD in chemistry from Monash University in 1973. Between 1973 and 1977, Dr Watson occupied postdoctoral positions in chemistry at Imperial College in London and the CSIRO in Victoria. His postdoctoral work involved chemical synthesis of derivatives of natural product molecules for testing in biological systems. Between 1977 and 1986, Dr Watson worked as a Research Officer, and later Senior Research Officer, and from 1987 (to 1991) as Senior Principal Research Scientist, at ICI Australia Central Research Laboratories, Victoria. Dr Watson's work at ICI focused on the development and commercialisation of selective herbicides, and a drug to treat heart disease. These appointments had involved the application of synthetic organic chemistry to the preparation of small molecules with biological activity. Dr Watson's experience up to 1987 had principally been in the area of herbicides. Since 1972, Dr Watson has attended conferences, in Australia and overseas, relevant to his field of interest. Dr Watson has also regularly read books and journals relevant to the field of stereochemistry during his career. In 1987, Dr Watson was approximately 40 years of age. (1) Dr Watson was taught the fundamentals of stereochemistry during undergraduate studies in the 1960s, hence those underlying concepts were well known to Dr Watson before 1987. Prior to 1987, Dr Watson had a good working knowledge of the principles of stereochemistry and (relevant also to issue 2) of techniques for resolving racemates. There have been no significant changes in the science of stereochemistry since 1987. Diastereomeric salt formation (including of the kind undertaken by Mr Badorc in relation to PCR 4099) was in 1987 and is today a well known and routine technique for obtaining enantiomers. That technique had been described in the chemical literature well before 1987. Dr Watson could have performed the technique of diastereomeric salt formation prior to 1987, and had done so in 1976, though only on that one occasion. (ii) Dr Watson would have used diastereomeric salt formation as the first technique for obtaining enantiomers as it was the simplest approach, and would have expected a yield sufficient for analytical testing. Dr Watson did indicate that during his work in relation to herbicides, synthesis of the relevant active enantiomer had been the preferred method given the large commercial quantities required. Dr Watson distanced himself, however, both from the suggestion that asymmetric synthesis is a "separation" technique as such, and from the view that diastereomeric salt formation would be difficult and impractical on an industrial scale. Dr Watson compared the two methods by saying that, while limited methods for an asymmetric synthesis were available prior to 1987, at that stage diastereomeric salt formation was a tried and true method. A risk of racemisation of the order seen in relation to PCR 4099 would not have dissuaded Dr Watson from using diastereomeric salt formation in relation to that compound. All of that said, the respondent did highlight certain comments made by Dr Watson during cross-examination that appeared to cast some doubt on his enthusiasm in relation to the process of diastereomeric salt formation. (iii) Prior to 1987, when determining which chiral acid/amine and which solvent to use as part of the diastereomeric salt formation process, Dr Watson would have begun by consulting the literature for those used previously for resolving similar compounds. Had no useful information been available, Dr Watson would have consulted a list of standard readily available chiral acids/amines and run parallel experiments. Parallel experimentation was a common salt formation procedure prior to 1987. The use of camphor-10-sulfonic acid for resolution was not new in 1987; rather, it was well known and had been described in chemical literature before that time, which literature was in Dr Watson's personal library. Further, acetone was a well known, widely used and readily available solvent for resolution prior to 1987, and the choice to use it as part of the diastereomeric salt formation process was not new in 1987. (iv) Dr Watson considered resolution to be generally a relatively fast process, and that one would be able to determine fairly quickly whether the reaction had succeeded. As to the timeframe required for obtaining a yield, Dr Watson deposed variously that hours or days at most, rather than months or years, would be required, and that obtaining small quantities of enantiomers usually takes no more than several weeks, with industrial quantities perhaps requiring several months. The latter reference to several weeks was said by the respondent to cast doubt on the former estimate of hours or days. The latter estimate was sought to be explained by Apotex as being a response only to an estimate by Mr Badorc of the time required for the "whole process" rather than the time for "reactions", which may take hours or days only. Dr Watson stated that, if crystals had not developed within a few days for a particular experiment, he would have tried another experiment (in parallel) with a different chiral acid/amine and solvent. Dr Watson considered that one would expect to succeed with perseverance with the process. Their salts were very commonly made before 1987. That was sufficiently significant to have compelled the separation and testing of the single enantiomers of a racemate. One would expect one enantiomer to have most or all of the activity and the other to have little or no activity, and examples of compounds displaying such properties were to be found in the literature prior to 1987. Dr Watson would have obtained and tested the single enantiomers rather than investigating other compounds in the class of compounds. (ii) Dr Watson considered that, absent literature information about a particular compound, it is impossible to predict the toxicity of enantiomers before testing. A more physiologically active compound would not necessarily be more toxic, physiological activity not necessarily being related to toxicity. (iii) Dr Watson considered pharmacological testing of enantiomers to be a more accurate method for determining their characteristics than a theoretical approach based on molecular modelling. Dr Watson did consider, however, that the properties of salts of racemates can be a useful guide to the properties of enantiomers. He obtained a PhD in organic chemistry from The Victoria University, Wellington in 1979. Between 1979 and 1987, Professor Banwell held academic appointments in organic chemistry at universities in Australia and overseas, including the Ohio State University, the University of Adelaide, the University of Auckland and the University of Melbourne. These appointments involved lecturing, student research supervision and Professor Banwell's own research into the synthesis of novel organic molecules, including biologically active molecules. During this period, Professor Banwell was also involved with asymmetric synthesis, including supervision of PhD students in that area. Prior to and after 1987, Professor Banwell would consult scientific literature, attend conferences and meetings, and review patent literature in order to remain familiar with development in the relevant field. In 1987, Professor Banwell was approximately 33 years of age. (1) Professor Banwell was taught the fundamental principles of stereochemistry as an undergraduate student in the 1970s and possessed at that time copies of leading stereochemistry texts used to teach undergraduate students. There have been no significant changes in the science of stereochemistry since 1987. Professor Banwell had supervised upper level undergraduate and honours students in undertaking separations on multiple occasions. Professor Banwell was himself capable, prior to 1987, of applying his knowledge of resolution techniques in a laboratory setting. (ii) Prior to 1987, Professor Banwell would have employed the diastereomeric salt formation technique to separate out the enantiomers of a racemic mixture that displayed relevant functionality, but the identity of the active enantiomer of which he did not know. The process of diastereomeric salt formation was a relatively straightforward method and was described in leading chemistry textbooks prior to 1987. He understood at that time that diastereomeric salt formation was an efficient process. Professor Banwell also queried whether asymmetric synthesis was a technique for "separation" of enantiomers as such. (iii) When resolving a chiral base, Professor Banwell would have selected the chiral acid by consulting the literature in relation to acids previously used to resolve similar compounds. Professor Banwell was familiar with camphor-10-sulfonic acid prior to 1987 and considered it to be a "classic acid". He expected that both of its enantiomeric forms would have been commercially available. Professor Banwell would have known how to prepare a chiral form of camphor-10-sulfonic acid. Professor Banwell would have consulted the literature in relation to the choice of solvent when undertaking diastereomeric salt formation; while the selection would hinge on the compound to be resolved, Professor Banwell commonly used ethanol, methanol, acetone and water. Professor Banwell would have run various experiments in parallel, that being a straightforward approach with which he had experience prior to 1987 and which would have taken less than an hour to set up. (iv) Results from diastereomeric salt formation would have been expected within minutes or, at most, days. Had Professor Banwell sought to obtain the enantiomers by reacting the diastereomeric salts with a strong (mineral) base and undertaking repeated crystallisations until the desired enantiomeric purity had been reached, that technique (also well developed prior to 1987) would have yielded an outcome in days or weeks. Prior to 1987, the salts described in claims 2---5 of the patent in suit were well known to Professor Banwell and the acids required to produce them were readily available. (4) By 1974 or 1975, Professor Banwell well understood that enantiomers often exhibit different biological activity, including therapeutic activity and toxicity. Professor Banwell cited the example of thalidomide as representing the potentially different activity of enantiomers, and taught undergraduate students from 1982 onwards about the thalidomide example. It became clear during cross-examination of Professor Banwell that the thalidomide example was not in fact supportive of the general proposition that one enantiomer of a pair may have all the activity and the other may be completely inactive. The thalidomide example in fact demonstrated simply that each enantiomer of a pair may exhibit substantially different activity; in the case of thalidomide, one enantiomer was found to possess the bulk of the therapeutic sedative effects, while the other possessed all of the negative teratogenic effects. By 1979, Professor Banwell understood that no direct relationship exists between desired biological activity of each of a pair of enantiomers and their toxicity. It would have been no surprise to Professor Banwell at that time if most of the desired activity was present in one enantiomer and most of the toxicity in the other. He obtained a PhD in pharmacology from the University of Cambridge in 1969, focusing in his research on the in vivo disposition of chemical amines such as adrenaline. After his doctoral studies, Professor Jarrott worked for four years as a Lecturer in pharmacology at Monash University. In 1975, Professor Jarrott commenced a 17-year period of work as Honorary Clinical Pharmacologist at the Austin Hospital, Victoria. Between 1974 and 1984, Professor Jarrott worked as Senior Lecturer, and in 1984 was appointed a Reader, in the Clinical Pharmacology and Therapeutic Unit in the Department of Medicine of the Austin Hospital. From 1978 to 1992, Professor Jarrott was involved in research at the University of Melbourne concerning the mechanisms of action of drugs that block the binding of transmitters to receptors in arteries, heart muscle and the brain. From 1976 to 1990, he was part of a research team working on the development of beta-blockers. Professor Jarrott's research into cardiovascular hypertension required regular analysis and testing of the biological properties of chiral compounds, including the pharmacological properties of individual enantiomers. Professor Jarrott stated that his involvement with drug development work would begin after chemists had isolated a compound or compounds with interesting biological activity in relation to a therapeutic target, and after preliminary in vitro testing for activity and toxicity had been conducted. Professor Jarrott was involved in selecting the most active compounds for further investigation, and thereafter in producing sufficient efficacy data to enable registration of the compound with the Therapeutic Goods Administration. In 1987, Professor Jarrott was approximately 44 years of age. (1) Professor Jarrott was taught the fundamentals of stereochemistry as an undergraduate pharmacology student in the 1960s. Professor Jarrott had acquired, prior to 1987, copies of textbooks widely used for undergraduate pharmacology lecturing, many of which discussed basic principles of stereochemistry. There have been no major advances or changes in those principles as they were known prior to 1987, nor in any separation techniques. (2) Prior to 1987, Professor Jarrott was familiar with the techniques used to obtain enantiomers, having learned about them as an undergraduate student. Professor Jarrott was aware of the technique of diastereomeric salt formation. It was a known, well developed and fairly routine separation method prior to 1987 that was often taught to undergraduate science students. (3) Prior to 1987, Professor Jarrott was familiar with the techniques used by formulation scientists to formulate salts, as he had learned about the as an honours student in the 1960s. Prior to 1987 and today, formulation of a pharmaceutically acceptable salt involves the selection of an appropriate reagent (acid or base). Prior to 1987, Professor Jarrott would have expected different pharmacological activity from each enantiomer in relation to the relevant receptor. Professor Jarrott understood prior to 1987 that similar activity in each of a pair of enantiomers is quite unusual and that, more commonly, one enantiomer will be more active than the other. According to Professor Jarrott, the difference in activity would quite commonly be two-fold, and that approximately that difference would have been expected, however at one point Professor Jarrott stated that he would have expected at least a 10-fold difference in activity between the enantiomers. It would have been unexpected to him had two enantiomers of the same compound displayed the same activity. Equally, it was Professor Jarrott's understanding prior to 1987 that the less active enantiomer generally exhibits some activity and is rarely completely inactive. (ii) Professor Jarrott deposed that, while the level of toxicity of an enantiomer is difficult to predict before separation and testing, toxicity is no more likely in the pharmacologically active enantiomer than the inactive enantiomer. Prior to 1987, Professor Jarrott would have expected toxicity levels to differ between enantiomers. He obtained a Bachelor of Science from the University of Melbourne between 1958 and 1959 and a Master of Science from the University of Melbourne between 1960 and 1961. His undergraduate and Masters studies involved consideration of three-dimensional stereochemistry. Professor Rae obtained a PhD from the Australian National University between 1962 and 1964. Between 1964 and 1967, Professor Rae undertook postdoctoral work in North America at the National Research Council, Ottawa, the University of Toronto and the Massachusetts Institute of Technology, Boston. His work at the University of Toronto was the only work over this period to involve stereochemistry, though stereochemistry remained a key area of interest for Professor Rae throughout. He regularly attended seminars, presentations and conferences, and read literature, concerning (in part at least) stereochemistry. Between 1967 and 1987, Professor Rae worked in chemistry at Monash University as variously a University Research Fellow, Senior Lecturer and Associate Professor. Professor Rae's teaching work during this period required him to teach the fundamentals of stereochemistry to undergraduate students. In 1987, Professor Rae was approximately 50 years of age. (1) Professor Rae was aware of the principles of stereochemistry prior to 1987. The concept that racemates may have different enantiomeric forms was information taught to university students from the 1970s. Between 1967 and 1987, Professor Rae had cause to consult leading textbooks relating to stereochemistry. There have been no major advances in stereochemistry principles or diastereomeric salt formation techniques since 1987, though other methods for obtaining enantiomers have developed and are now more widely used that in 1987. Other techniques were also known prior to 1987. Professor Rae recalled in his evidence that colleagues of his during the 1970s and 1980s had taught courses that included discussion of the theory of resolving racemates by diastereomeric salt formation. Asymmetric synthesis was also a well developed method prior to 1987, but Professor Rae too does not consider it to be a "separation" process as such. (ii) Professor Rae would have elected to use diastereomeric salt formation rather than asymmetric synthesis to obtain enantiomers from a racemate. Resolution techniques were well known and proven prior to 1987. Professor Rae deposed that by 1987, it was not necessary to conduct extensive experimentation to undertake diastereomeric salt formation, as there were well known and established protocols for the process, which a chemist could work through and apply in a routine manner. Parallel experiments would usually be used. When undertaking development of a more active drug than a racemate, Professor Rae would have elected to obtain enantiomers rather than undertake a structure-activity study of the relevant class of compounds. Professor Rae would not agree that the method to be used to obtain a particular enantiomer involved more than routine experimentation. (iii) Professor Rae would have used diastereomeric salt formation as a means of obtaining enantiomers, consulting the literature when choosing the resolving acid and being likely in that regard to opt for the cheapest acids readily available to him. Choices of resolving acid (or base) could readily be assisted by relevant literature, which was owned by Professor Rae prior to 1987. When using diastereomeric salt formation, Professor Rae would have expected a yield sufficient to allow activity analysis of the enantiomer obtained. Prior to 1987, formation of salts of an active enantiomer that was an oil was achievable by well-established, quite straightforward and routine techniques prior to 1987. Prior to 1987, the behaviour of a racemate with regard to salt formation would be likely to be a useful guide to the behaviour of the enantiomer. Professor Rae would have considered sulfuric acid and phosphoric acid as highly relevant when attempting to obtain salts. Nevertheless, prior to 1987, Professor Rae was aware, and would have expected, that the enantiomer of a particular racemic compound would have different biological properties, and that almost always one will have most or all activity and the other little or none. Prior to 1987, Professor Rae would have expected the racemate to be less active than the active enantiomer, and that the active enantiomer would generally be twice as active as the racemate. Prior to 1987 and today, the biological activity of enantiomers could and can only be determined by separation and testing. (ii) Professor Rae considered it impossible to generalise about a relationship between toxicity versus desirable activity. It would not be unexpected to find that the active enantiomer was not toxic while the inactive enantiomer was toxic. He obtained a Bachelor of Science with Honours in physical organic chemistry from Flinders University in 1977. He obtained a PhD in organic chemistry from the University of Adelaide in 1981. Professor Easton undertook work as a Postdoctoral Fellow in chemistry at Harvard University between 1980 and 1981, working in the area of the organic chemistry of bacterial resistance to penicillin. In 1982, Professor Easton worked as a Research Fellow in the Institute of Advanced Studies in the Research School of Chemistry at the Australian National University, where he was involved in projects dealing with organic and biological chemistry in relation to penicillin biosynthesis. Between 1983 and 1986, Professor Easton was first Lecturer and later Senior Lecturer in chemistry at the University of Canterbury in New Zealand, where he continued work on penicillin biosynthesis, which involved the synthesis of compounds and the study of their interaction with biological target molecules. From 1986 to 1988, Professor Easton was a Lecturer in organic chemistry at the University of Adelaide. In 1987, Professor Easton was approximately 32 years of age. (1) Professor Easton's outline, both in his affidavit evidence and through his tutorial, of the basic principles of stereochemistry and what was known in relation to them at the relevant date did not differ in any relevant manner from that which appears to have been understood by the other expert witnesses prior to 1987. Professor Easton would not have sought to obtain the enantiomers of a racemate on the chance that one enantiomer may display increased activity, but rather would have investigated a related group of compounds. (ii) Professor Easton cited various textbooks that cast doubt upon the simplicity of diastereomeric salt formation as a method for obtaining enantiomers. (4) It is not possible to predict the effectiveness or the toxicity of a particular enantiomer without obtaining it and testing it. Knowledge of the structure of the relevant receptor to which an enantiomer would be directed may provide some guidance that the enantiomer with the complementary chirality to that of the receptor is likely to be the more active of a pair. He obtained a Bachelor of Science degree with Honours, focusing on synthetic medicinal chemistry, from Griffith University in 1987. From 1987 to 1991, Professor Scammells undertook research towards a PhD in synthetic medicinal chemistry at Griffith University. In 1987, Professor Scammells was approximately 22 years of age. (1) The stereochemistry described in the prior art patents is chemistry with which Professor Scammells is personally familiar, and which is relatively straightforward chemistry similar to that which Professor Scammells would have expected undergraduate and honours students to be able to perform in practical work and in final year research projects at the publication dates of the prior art patents (around 1984-1985). Professor Scammells states that those methods were known prior to 1987 but that it was not possible to predict whether they would lead to the obtaining of a particular enantiomer. (ii) At the publication dates of the prior art patents, Professor Scammells would not necessarily have attempted to obtain the individual enantiomers of a racemate in an effort to increase activity, but rather would have opted for a wider structure-activity study of the relevant class of compounds. (iii) The choice of chiral acid/base and solvent in diastereomeric salt formation was in 1987 and is now a matter of trial and error, with the price and ease of obtaining any acid being relevant factors. Camphor-10-sulfonic acid was one acid among many that might be suitable. Likewise, acetone is a common solvent but there is a range of other common solvents, as well as certain solvent mixtures. (iv) There is a spectrum of difficulty in obtaining single enantiomers of racemates. An attempt to obtain the dextro-rotatory enantiomer of PCR 4099 in 1987 would have been a matter of trial and error, with no ability to predict success using any particular method. The process of diastereomeric salt formation would not have a fixed likely duration and could encompass a first-time success, a process lasting weeks and a complete lack of success. Even knowledge of the intended receptor in the present cases would not necessarily have enabled predictions to be made. (ii) Professor Scammells stated that, if one enantiomer has all the therapeutic activity, the greatest increase in activity to be achieved by its separation from the racemate would be two-fold. A greater increase would be fairly surprising but could be possible where one enantiomer is blocking the activity of the other. It may also be that each enantiomer will display therapeutic activity, but that the activity will differ in nature between the enantiomers. (iii) Prior to 1987, it was known that one enantiomer may be more toxic than the other, though that may not necessarily be the case. It was not possible to predict toxicity, including on the basis of therapeutic activity. I am satisfied that a synthesis of their evidence gives a sound idea of the state of relevant knowledge in Australia in 1987. At that time, the relevant knowledge was principally academic as there was little evidence as to local pharmaceutical drug development. I am satisfied that these witnesses represent a fair cross-section of the knowledge that was available at the time. I am also satisfied that the common features of their evidence are at a reasonably basic level, albeit in a complex field. They, as well as information concerning techniques for obtaining enantiomers, were taught to undergraduate students, and university students more generally, from the 1960s through to 1987. There have been no significant changes in the science of stereochemistry since 1987, though certain advances have been made in the understanding and application of certain techniques for obtaining enantiomers, asymmetric synthesis being an example. Information concerning those techniques, and in particular diastereomeric salt formation, were taught to undergraduate students from the 1960s, though this may not always have involved practical experimentation. Asymmetric synthesis was also a known technique, though query whether it was to be understood as a "separation" technique. (ii) Prior to 1987, diastereomeric salt formation was a well developed method, which was straightforward and routine, though involving choices. Those choices included choices of chiral resolving agent (acid or base as required) and solvent. The variety of choices in that regard, as well as certain other factors, meant that the process may well involve trial and error experimentation carrying no guarantee of success. That was, however, not such as to take the process beyond routine experimentation, including in respect of parallel experimentation. Though a choice certainly existed in the drug development process as to whether to obtain enantiomers by diastereomeric salt formation or, say, asymmetric synthesis instead, or indeed simply to undertake a wider structure-activity study in the relevant class of compounds, diastereomeric salt formation was certainly a prominent, widely used and well developed technique prior to 1987. It is clear that many would have elected to use that technique as a first step, though there was obvious disagreement on that point. Though not without certain difficulties, the process had been known and reported to yield results, though not necessarily in relation to thienopyridine compounds. (iii) As to the resolving acid or base, and solvent, there were clearly choices to be made in this regard. Guidance could be gained from the literature, though principally, it would appear, where similar compounds had already been resolved. Lists of standard chiral acids and amines were also available. Camphor-10-sulfonic acid was known as a chiral resolving agent prior to 1987 and its use was not new. Its commercial availability in both enantiomeric forms was perhaps not certain, though it was possible to prepare a chiral form of the acid. Acetone was a well known and commonly used solvent prior to 1987. Further variables such as the temperature at which the experiment was conducted, the sealing and shape of the reaction vessel, the concentration of racemate to reagent and solvent respectively, the amount of solvent present and the room temperature, were variables to be dealt with as part of the normal experimentation process. As Apotex alluded to in its submissions, details as to those variables did not appear to warrant particular focus in the patent in suit. (iv) The time that might be expected to elapse before obtaining a yield from the diastereomeric salt formation process, was a matter of some difference of opinion. What appears to emerge is that there is no fixed likely duration for such a process and, indeed, no ability to predict with certainty whether one will be successful. The process may involve immediate success (most likely meaning days) or may be drawn out over weeks. Months or years would not be expected. The process may also be without success. The process involves trial and error and may require perseverance. Yields may be obtained that are sufficient for analysis of the activity of an enantiomer. There was a choice to be made in relation to which salt would be made, that process involving trial and error, and hence a choice in terms of acid. Hydrochloric and sulfuric acids were, however, common laboratory acids and were used to make pharmaceutical salts prior to 1987. The thalidomide example had clearly provided a cautionary tale in this regard. It was not possible without separation and testing to predict with certainty the activity or toxicity of an enantiomer. Some prediction might be made based on knowledge of the intended receptor or the properties of salt of the relevant racemate, but that knowledge, where it was available, still could not ensure certainty. (ii) There was and is a range of potential difference in activity between enantiomers. At the extremes, activity may be the same, or one enantiomer might have all the activity and the other none. Those two extremes were, however, less likely and would have been less expected than a result in the intermediate range. It was not unusual for one enantiomer to display most of the activity and the other little. The difference between the activity of the racemate and that of the active enantiomer could be expected to be about two-fold, though that difference might increase where the inactive enantiomer served to inhibit the activity of the active enantiomer when both were present in the racemate. (iii) The toxicity of an enantiomer is not related to its physiological activity. I am satisfied that this possibility was generally recognised at that time by those in the field. The United States Food and Drug Administration (FDA) draft guidelines were issued in early 1987 and recommended that course. There is little doubt that there would have been widespread knowledge of those guidelines in Australia. There is evidence of similar views in Europe and Japan. The patent was granted pursuant to the Patents Act 1952 (Cth) (the 1952 Act). The grounds for revocation were set out in s 100 of that Act. The 1990 Act, when enacted, repealed the 1952 Act and contained the transitional and savings provisions in Ch 23. (2) A patent mentioned in subsection (1) does not have effect in any place in which it did not have effect immediately before the commencing day. (3) Chapter 9 of this Act does not apply in relation to a patent mentioned in subsection (1). (4) Objection cannot be taken to a patent mentioned in subsection (1), and such a patent is not invalid, so far as the invention is claimed in any claim, on any ground that would not have been available against the patent under the 1952 Act. The revocation of patents is (relevantly) dealt with by s 138 of the 1990 Act, the grounds being set out in s 138(3). Those grounds are similar to, but have important differences from, those which were provided for by s 100 of the 1952 Act. 39 Section 233 of the 1990 Act has been applied on the basis that a 1952 Act patent can now only be revoked on a ground provided for by the 1990 Act but as if it corresponds with the similar ground available under the 1952 Act (eg NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [1993] FCA 404 ; (1993) 44 FCR 239 per Lockhart J at 250---254 (agreed in by Northrop J at 241 and Burchett J at 268); ICI Chemicals & Polymers Ltd v Lubrizol Corp Inc [2000] FCA 1349 ; (2000) 106 FCR 214 at [22] ---[23]; and Abbott Laboratories v Corbridge Group Pty Ltd [2002] FCAFC 314 , (2002) 57 IPR 432 at [81] ). This is a somewhat strange result as the grounds do not correspond, particularly in relation to lack of novelty and obviousness. Uninstructed by authority, I should have thought that the intention was to maintain the status quo in relation to revocation for 1952 Act patents with time to run under the 1990 Act --- in other words, the grounds for revocation would be those set out in s 100(1) of the 1952 Act. That would maintain the status quo and neither advantage nor disadvantage the 1952 Act patentee. However, that approach is not reflected in the authorities and has not been contended for by either party. 554358 laid open to public inspection at the Australian Patent Office on 19 January 1984 (the '358 Patent ), being a translation of French Patent Application No. 82/12599 which was granted without amendment as French Patent No. 82/12599 laid open to public inspection at the Australian Patent Office on 15 March 1984 as European Patent Application No. 4,529,596 laid open to public inspection at the Australian Patent Office on 3 September 1985 (the US Patent ). Relevant portions of the French patent have been set out above. A process for the preparation of derivatives of general formula (I): in which Y may represent either a hydroxyl radical or an -OR group radical, in which R is a straight or branched lower alkyl radical, or Y represents a radical of the formula: in which either R1 and R2, identical or different, represent a hydrogen atom or a straight or branched lower alkyl group; or R1 and R2 form together and with the nitrogen atom to which they are attached a heterocycle which may or may not include a second heteroatom chosen from the group containing oxygen and nitrogen, wherein the latter may be substituted by a lower alkyl or benzyl radical which may or may not be substituted; and X represents a hydrogen or halogen atom, or a lower alkyl radical; and their the addition salts with pharmaceutically acceptable mineral or organic acids if Y represents a radical of the -OR formula or of the ---NR1R2 formula; R, R1 and R2 having the above-defined meanings, or with mineral bases if Y represents a hydroxyl radical; as well as the 2 enantiomers or their mixture of these compounds of formula (I); wherein: - either, in order to prepare the esters of formula (I), in which Y represents a radical of the -OR formula, in which R has the above-defined meaning, and X has the above-defined meaning, the 4,5,6,7-tetrahydro-thieno[3,2-c]pyridine of formula (II) is condensed: on a α-chlorophenylacetate of formula (III): in which R and X have the above-defined meanings, then the derivative sought is obtained, which is isolated and, if desired, its enantiomers are separated and/or it is salified by mineral or organic acid action; - or, in order to prepare the acid of formula (I) in which Y represents a hydroxyl radical and X has the above-defined meaning, the ester of formula (I), in which Y represents a radical of the -OR formula in which R and X have the above-defined meanings, is saponified, then the derivative sought is obtained, which is isolated and, if desired, its enantiomers are separated and/or it is salified by mineral or organic acid action; - or, in order to prepare the compounds of formula (I), in which X has the above-defined meaning and Y represents a radical of the -OR formula, in which R has the above-defined meaning, or a radical of the -NR1R2 formula, in which R1 and R2 have the above-defined meanings, the acid of formula (I), in which X has the above-defined meaning and Y represents a hydroxyl radical, may or may not be activated, is reacted with either an alcohol of the H-OR formula, in which R has the above-defined meaning, or with an amine of the H-NR1R2 formula, in which R1 and R2 have the above-defined meanings, then the corresponding derivative sought is obtained, which is isolated and, if desired, its enantiomers are separated and/or it is salified by mineral or organic acid action. ... 8. Process according to claim 1, for the preparation of methyl α-[4,5,6,7-tetrahydro-thieno[3,2-c]-5-pyridyl]-o.chlorophenylacetate, wherein the 4,5,6,7-tetrahydro thieno[3,2-c]pyridine is condensed over the methyl 2-chloro-o.chlorophenylacetate, and the derivative sought, which is isolated, is obtained. ... 14. Derivatives of general formula (I): in which Y may represent either a hydroxyl radical or an -OR group radical, in which R is a straight or branched lower alkyl radical, or Y represents a radical of the formula: in which R1 and R2, identical or different, represent a hydrogen atom or a straight or branched lower alkyl group; or R1 and R2 form together and with the nitrogen atom to which they are attached a heterocycle which may or may not include a second heteroatom chosen from the group containing oxygen and nitrogen, wherein the latter may be substituted by a lower alkyl or benzyl radical which may or may not be substituted; and X represents a hydrogen or halogen atom, or a lower alkyl radical; and their addition salts with pharmaceutically acceptable mineral or organic acids if Y represents a radical of the -OR formula or of the ---NR1R2 forrnula; R, R1 and R2 having the above-defined meanings, or with mineral bases if Y represents a hydroxyl radical; as well as the 2 enantiomers or their mixture of these compounds of formula (I); each time they are obtained by the process of claim 1 or its manifest chemical equivalents. 15. Methyl α-[4,5,6,7-tetrahydro-thieno[3,2-c]-5-pyridyl]-o.chlorophenyl-acetate, each time it is obtained by the process of claim 8 or its manifest chemical equivalents. " (Emphasis added. To say that the claim of a patent is not novel in that sense is to say that it adds nothing new to that with which it is compared. In the case of a paper anticipation, it assumes that the product described is made or the process outlined is followed. Each integer of the claimed invention must be disclosed in the prior publication. The reverse infringement test is a practical way of detecting whether that is so in most cases ( Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19 ; (1977) 137 CLR 228 at 235). 44 The patent in suit claims a chemical compound with a specific property --- namely, the capacity to rotate plane-polarised light to the right. That property distinguishes it both from the racemate and from the levo-rotatory enantiomer. The dextro-rotatory enantiomer is not expressly identified as such in the French patent. Counsel for Sanofi-Aventis submits that it is not possible from the face of the earlier specifications to say which enantiomer is the levo-rotatory and which is the dextro-rotatory --- the most that can be said is that both are in the racemate. Furthermore, it is said that that difference is significant so far as pharmacological efficacy and toxicity were concerned as disclosed in the complete specification of the patent in suit. Thus, the patentee's contention is that this is something new and different --- novel --- in form and in substance. 45 On the other hand, the formula identified as derivative 1 or example 1 in the French patent and corresponding patents (PCR 4099) has the identical formula to the enantiomer in suit. I am satisfied that the skilled but not inventive reader of the French and corresponding patents would understand that the derivative in question (in common with all of the derivatives) was the racemate and that all of the technical explanations as to the means of obtaining that (and other) derivatives and as to the testing of them related only to the racemate and not to any individual enantiomer. There is no express suggestion that either enantiomer had in fact been separately obtained or tested for efficacy or toxicity. That said, it was commonly known, and was spelled out in the French patent, that the compound in question was a racemate with one chiral centre and two enantiomers --- one dextro and the other levo. There were express references to the enantiomers in both the body of the specification and in the claims of the French and corresponding patents, with the detail most clearly spelled out in the Canadian patent. The express references to the enantiomers in the French and corresponding patents (particularly the Canadian patent) plainly carry the claim that the enantiomers are within the compounds disclosed. 46 The relevant phrases in the French and Canadian patents --- in the specification: "The invention relates both to each enantiomer and their mixture" (French patent) and "The invention also concerns each of the enantiomers and their mixture" (Canadian patent); in claim 1: "as well as the 2 [two] enantiomers or their mixture ..." (French and Canadian patents); "and, if desired, its enantiomers are separated and/or it is salified" (Canadian patent); and in claim 14: "as well as one of the two enantiomers or their mixture" (French patent) and "as well as the 2 enantiomers or their mixture" (Canadian patent) --- are consistent only with a disclosure of, and a claim to, each enantiomer (dextro and levo) separate from the racemate and from each other. I should say that the attempts by the witnesses for the patentee to deny that the claims of these patents encompassed each of the separated single enantiomers were, to say the least, not impressive. 47 The basis of the French and corresponding patents is that all compounds of the class claimed (whether exemplified or not) displayed useful inhibiting action on platelet aggregation and anti-thrombotic activity. The precise effect differed as between the various examples discussed. Although the compounds tested were racemates, no distinction as to pharmacological properties was drawn between the racemate and each of the single enantiomers. It follows that the patentee was asserting that the relevant qualities of each enantiomer were not to be relevantly distinguished from any particular racemate or the other enantiomer. 48 The claims for the separate enantiomers could be described as bare claims for efficacy without any foundation being shown for them in any part of the complete specification. There is no basis for knowing what, if any, efficacy or toxicity would apply to either enantiomer of any particular racemate. It is now known, of course, that one of the enantiomers of PCR 4099 was not only almost completely ineffective but was significantly more toxic than the other. That may have been exorbitant or covetous claiming (cf Mullard Radio Valve Co Ltd v Philco Radio & Television Corporation of Great Britain Ltd [1936] 2 All ER 920, (1936) 53 RPC 323 at 349). No doubt, if only the racemate were claimed, there would be a large risk that this would not protect against competition from a drug with one of the enantiomers as the active ingredient, which might be as efficacious as, and perhaps more efficacious than, the racemate as an active ingredient. The covetous nature of the claim does not advance Sanofi-Aventis' position. The dextro-rotatory enantiomer of PCR 4099 was identified as a compound with useful qualities concerning platelet aggregation. The truth or falsity of the claimed advantage is not relevant for this purpose. 49 Counsel for Sanofi-Aventis submitted that enabling disclosure, not mere disclosure, is required for anticipation, citing, most recently, Lindgren J in Alphapharm Pty Ltd [2008] FCA 559 at [160] ---[161] and the decision of the House of Lords in SmithKline Beecham (Paroxetine Methanesulfonate) Patent [2006] RPC 323. By way of introduction, it is worth remarking that the phrase "enabling disclosure" was brought to prominence by the speech of Lord Hoffmann in Biogen Inc v Medeva plc [1996] UKHL 18 ; [1997] RPC 1 , (1996) 36 IPR 438. That decision concerned the requirements for a valid patent under the 1997 United Kingdom Act (based upon the European Patent Convention) but did not concern the question of anticipation. The most important question was whether a later patent could claim an earlier priority date because it was "supported" by the earlier specification. That is a concept similar to, but narrower than, whether a later patent is fairly based upon an earlier specification in our law (cf F Hoffman-La Roche & Co AG v Commissioner of Patents [1971] HCA 3 ; (1971) 123 CLR 529 ; CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168 ; (1994) 51 FCR 260 ; Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 ; (2004) 217 CLR 274). It may be accepted that, in the case of a claim for a chemical compound by formula, in order to be valid, the specification would have to disclose how it might be manufactured (s 40). The phrase was also used in the speech of Lord Oliver in Asahi Kasei Kogyo KK's Application [1991] RPC 485 , to which I shall return. The phrase is reasonable shorthand in relation to the disclosure required for there to be anticipation of a process or method claim but, in my opinion, has little, if any, relevance to anticipation of a product claim or a claim for a chemical compound by formula. Indeed, it is apt to mislead in relation to the latter. For a product claim, the novelty must lie in the product not the means of producing it ( May & Baker Ltd v Boots Pure Drug Co Ltd (1948) 65 RPC 255 at 281---282). By the same token, a new process to obtain an old product will have novelty. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent. ... There is not, I think, any other general answer that can be given to this question than this: that the information as to the alleged invention given by the prior publication must, for the purposes of practical utility, be equal to that given by the subsequent patent. The invention must be shewn to have been before made known. Whatever, therefore, is essential to the invention must be read out of the prior publication. If specific details are necessary for the practical working and real utility of the alleged invention, they must be found substantially in the prior publication. For those details it is necessary to go to the related case of Hills v London Gaslight Co 5 H and N 312, referred to by Lord Westbury LC in Hill v Evans (1862) 1A IPR 1 at 3. The description of the invention was "an improved mode of compressing peat and of manufacturing gas and of obtaining certain substances applicable to purifying the same". It consisted of passing gas through a mixture with the object of purifying the gas and then renovating the purifying material. Each of the specifications cited against Hill's patent was also process or method patent. Heard's was a patent for the application of lime in the purification of gas, croll's patent was directed to an improved method of purifying coal gas from ammonia and Laming's patent also dealt with the process of purification of gas. The general statements by Lord Westbury LC need to be understood in the context of the facts of that case. With a qualification to be mentioned, the principle was established that all integers of an invention must be in the prior specification if novelty is to be defeated. In the case of a process or method, that means each integer of the process or method. He cannot have meant to refer to the ordinary methods of trial and error which involve no inventive step and are generally necessary in applying any discovery to produce a practical result. There cannot be anticipation, they say, unless this is shown clearly and unmistakably. I cannot accept that argument. I would agree that the anticipating material must be as good for practical purposes as the material in the appellants' specification. But I can see no practical difference between a definite statement of fact and material from which the skilled man would clearly infer its existence. So the question is whether the typical skilled man would infer ground drive from the photograph. It would not be enough that a quick-witted man would guess that. But in this case I think that it is proved that the ordinary skilled man would have had good grounds for reaching the conclusion that these wheels were ground driven. He could not have been certain, but practical men act on something less than absolute certainty. The prior inventor, however, and the patentee may have approached the same device from different starting points and may for this reason, or it may be for other reasons, have so described their devices that it cannot be immediately discerned from a reading of the language which they have respectively used that they have discovered in truth the same device; but if carrying out the directions contained in the prior inventor's publication will inevitably result in something being made or done which, if the patentee's patent were valid, would constitute an infringement of the patentee's claim, this circumstance demonstrates that the patentee's claim has in fact been anticipated. If, on the other hand, the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee's claim, but would be at least as likely to be carried out in a way which would not do so, the patentee's claim will not have been anticipated, although it may fail on the ground of obviousness. To anticipate the patentee's claim the prior publication must contain clear and unmistakeable directions to do what the patentee claims to have invented : Flour Oxidizing Co. Ltd. v. Carr & Co. Ltd. ((1908) 25 R.P.C. 428 at 457, line 34, approved in B.T.H. Co Ltd v Metropolitan Vickers Electrical Co. Ltd. (1928) 45 R.P.C. 1 at 24, line 1). A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee. [Emphasis added. The alleged anticipation being discussed by Parker J in the relevant passage ( Flour Oxidizing Co Ltd 25 RPC 428 at 457) was entitled "[i]mprovements in and relating to the treatment of alimentary substances and beverages" essentially by subjecting the substances to the action of electricity. 54 The patent in suit in General Tire & Rubber Co [1972] RPC 457 was for a process for making a compound suitable for tyre treads by mixing synthetic rubber with oil and carbon black and for the compound thus made (at 470). The issue in General Tire & Rubber Co [1972] RPC 457 , as appears from the general treatment of anticipation from 486---497, focussed upon the method or process. The references to a signpost and a flag, which have excited later imaginations, deal with a situation in which the language and the directions given as to process or method were equivocal. The main principle is that, if the prior inventor's publication contains a clear description of something that would infringe the patentee's claim if carried out after the grant of the patentee's patent, the patentee's claim will have been shown to lack the necessary novelty. Alternatively, if the prior inventor's publication contains clear instructions to do or make something that would infringe the patentee's claim if carried out after the grant of the patentee's patent, the patentee's claim will have been shown to lack the necessary novelty. 55 The first case to which I have referred that suggested that disclosure of a chemical compound by formula was not disclosure for the purposes of anticipation was the decision of Falconer J in Re Genentech Inc's (Human Growth Hormone) Patent [1989] RPC 613, in which it was held that, for a disclosure of a chemical compound in a prior document to anticipate a later claim to that compound, the cited document must contain sufficient directions to enable the compound to be made ([1989] RPC at 629---635). 56 Asahi Kasei Kogyo KK's Application [1991] RPC 485 concerned the 1977 United Kingdom Act. Prior to the Act of 1977 it was settled law in the U.K. that "if the prior inventor's publication contains a clear description of, or clear instruction to do or make, something that would infringe that patentee's claim if carried out after the grant of the patentee's patent, that patentee's claim will have been shown to lack the necessary novelty", see: General Tire v. Firestone [1972] R.P.C. 457 at p 485. Accordingly under the Act of 1949 a claim to a chemical compound has been held to be anticipated by a statement that it has been prepared (Gyogyszeripari [1958] R.P.C. 51) or with a method for preparation which does not work (SKF [1968] R.P.C. 415). The latter cases were consistent with General Tire being instances where the prior documentation contained a description of the invention. The 1977 Act, in s 2(2), included the words "made available to the public". Counsel in Asahi [1991] RPC 485 suggested this may have made a difference to the test. Falconer J's reasoning did not appear to depend upon that distinction, although he did refer to a decision of the Technical Board of Appeal of the European Patent Office supporting his position. Falconer J expressly declined to follow decisions of the Patents Appeal Tribunal in Gyogyszeripara Kurato Interzet's Application [1958] RPC 51 and Smith Kline & French Laboratories' Application [1968] RPC 415 and the established practice of the Comptroller. Counsel for the petitioner for revocation in that case submitted that this was a departure from the long standing law in the United Kingdom as to anticipation and I agree with that submission. 57 Lord Hoffman's speech in SmithKline Beecham (Paroxetine Methanesulfonate) Patent [2006] RPC 323 spells out the current United Kingdom position with clarity. Under the 1977 United Kingdom Act "disclosure" and "enablement" are separate concepts and are cumulative requirements for anticipation, although there may be circumstances where disclosure will also satisfy enablement. In my opinion, at least in relation to product claims and claims for chemical compounds by formula, this is a departure from the law of Australia and from English law as it was applied up to 1977. I would respectfully suggest that it creates an anomalous relationship between anticipation and infringement. 58 In the present case, the earlier patent gave Sanofi-Aventis a monopoly in relation to the making and using of PCR 4099 and its enantiomers, together or separate, even though there was no description of a method of resolving the enantiomers. 59 I venture the view that the claimed symmetry between the disclosure requirements for validity of the earlier patent and disclosure for anticipation purposes does not exist or is anomalous in the case of a chemical compound described (adequately) by formula. 60 Nonetheless, Lord Hoffman's speech is useful in other respects. Because it covered a class of chemicals defined by reference to a formula, it disclosed a myriad of compounds, each of which may be regarded as an invention. But that does not matter if one of those inventions was the crystalline PMS claimed in the patent. There seems to me no doubt that the application disclosed the existence of PMS crystals of 98 per cent purity and claimed that they could be made. Whether in fact they could be made is the question of enablement which I shall come to in a moment. But their existence and their advantages for pharmaceutical use were clearly disclosed in the application. And on the basis of the judge's finding of monomorphism, a PMS crystal of 98 per cent purity must necessarily have all the characteristics of the crystals claimed in the patent, including the IR and XRD spectra. The flag has been planted, even though the author or maker of the prior art was not aware that he was doing so. His common general knowledge forms the background to an exercise in construction of the kind recently discussed by this House in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46 ; [2005] R.P.C. 9. And of course the patent itself must be construed on similar principles. But once the meanings of the prior disclosure and the patent have been determined, the disclosure is either of an invention which, if performed, would infringe the patent, or it is not. The person skilled in the art has no further part to play. That case concerned a method of administration of a naturally occurring drug to a patient. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it. Already more than 200 patients have been entered into this four-arm randomized, NCIC guided international study. Indeed, the 3 hours infusion time administration schedule proved to be feasible, if given concomitantly to profylactic [sic] measures as high dose dexamethasone, cimetidine and difenhydramine. This makes even outpatient treatment with this first available representative of this new class of antitumor agents possible. In any event, the problem does not arise in the present case. The invention disclosed and claimed by the French patent necessarily carried the implication of a direction, recommendation or suggestion. That is the consideration for which the monopoly was granted. 64 Something was sought to be made of the fact that PCR 4099 or derivative 1 was not unmistakably pointed to as the best of the compounds. There was competing evidence from the experts related to that question. In my view, that was a red herring as far as novelty is concerned. On any view, it was expressly disclosed as one of the most promising of the compounds. The invention was not limited to the most effective or most promising example. The invention was a broad class. The patentee need not show that he has proved its application in every individual instance. On the other hand, if the claims include a number of discrete methods or products, the patentee must enable the invention to be performed in respect of each of them. Thus if the patentee has hit upon a new product which has a beneficial effect but cannot demonstrate that there is a common principle by which that effect will be shared by other products of the same class, he will be entitled to a patent for that product but not for the class, even though some may subsequently turn out to have the same beneficial effect: see May & Baker Ltd v Boots Pure Drug Co Ltd [1950] RPC 23 at 50. On the other hand, if he has disclosed a beneficial property which is common to the class, he will be entitled to a patent for all products of that class (assuming them to be new) even though he has not himself made more than one or two of them. The invention of the French and corresponding patents is not described by reference to a particular result as to efficacy or toxicity and the claims are not so limited. In my opinion, it is clear that the formula of PCR 4099 was expressly disclosed as having the claimed advantage and that the same claim was made in relation to each enantiomer. The same can be said of each of the specific examples. 66 The patent in suit identifies the dextro-rotatory enantiomer of example 1 as having all of the activity and the levo-rotatory enantiomer none, with efficacy at least as good as the racemate but less toxicity than the racemate. However, the dextro-rotatory enantiomer of PCR 4099 was clearly enough within the compounds claimed by the French and corresponding patents as having the beneficial effect illustrated by the result of testing of PCR 4099 and the other examples. That disclosure anticipates claim 1 of the patent in suit unless it can be viewed as a selection patent --- a somewhat controversial topic. Before considering it, I should digress to some other authorities concerning racemates, including the two recent cases to which I referred earlier. 67 Lindgren J dealt with a somewhat similar situation in Alphapharm [2008] FCA 559 although, in that case, there was no express reference to, or claim to, the enantiomers of the racemate in the alleged anticipation. His Honour had construed the relevant claims of the patent in suit as relating only to the (+)- or dextro-rotatory enantiomer of citalopram, having a separate existence, not being an indistinguishable part of the unresolved racemate. The skilled addressee would understand that it exists whether a part of the racemate or apart from it, and that the purpose of the (+) symbol is only to distinguish it from the (---)-enantiomer and from its being merely part of the racemate or of some other mixture. The (+) or (---) symbol, devoid of any context suggesting otherwise, implies distinctness from the racemate. It means that the earlier disclosure must point unmistakeably to the (+)-enantiomer of citalopram, as distinct from the racemate, as a drug desirable to obtain. This does not include any separate requirement of enablement in accordance with SmithKline Beecham (Paroxetine Methanesulfonate) Patent [2006] RPC 323 and is consistent with my opinion. 69 It was alleged that the product claims of the patent in suit in that case were anticipated by the Australian Citalopram Patent. It did not expressly or by implication otherwise disclose the individual enantiomers. It disclosed the racemate and enabled the obtaining of it. Whether this anticipated the present invention turns on my construction of the Patent --- see Section C above. The skilled but non-inventive addressee reading the Australian Citalopram Patent would have understood that (+/-)-citalopram consisted of the (+)-enantiomer of citalopram and the (-)-enantiomer, each as to 50%, and would have been able to identify the formulae for the S and R enantiomers, but would not have known, in the absence of experimentation, which was (+) and which was (-). These facts would not, however, point specifically to the independent existence of the enantiomers which is, according to my construction of the Patent specification, of the essence of claim 1. If I had construed claim 1 as referring to (+)-citalopram when present in the unresolved racemate, the Australian Citalopram Patent would have been an anticipation. But because of my construction outlined at Section C above, a person taught by the Australian Citalopram Patent, although taught to desire to obtain the racemate, would not be taught to desire to obtain the specific (+)-enantiomer in its own right. Similarly, the Australian Citalopram Patent's citalopram formula did not disclose the independently existing (+)-enantiomer. I note that if In re Adamson (1960) 275 F2d 952 is authority for the proposition that a patent for a racemate necessarily anticipates a claimed invention of either of its enantiomers, I respectfully disagree. One question was whether the formula in claim 1 of the relevant patent claimed only the racemate and not the enantiomers separate from the racemate. The patentee, Warner-Lambert, called, amongst other witnesses, Professor Christopher Easton and Professor Peter Scammells, who gave evidence for Sanofi-Aventis in these cases. The applicant for revocation, Ranbaxy, called, inter alia, Dr Keith Watson, who was called by Apotex, one of the applicants, in these cases. The physical and biological properties of a racemate differ from that of an individual enantiomer in various respects: for example, there may be differences in solubility between the racemate and its enantiomers and differences in pharmacological properties. (8) The normal expectation is that there would be one enantiomer that is approximately twice as active as the racemate in terms of its operation in the target biological system. (9) Before 30 May 1986, the skilled team would expect that the R enantiomer was very likely to be the active, or more active, enantiomer, but this could not be known with certainty without isolating and testing the enantiomer. (10) Conversely, it was very likely to be the case that the S enantiomer was inactive, or substantially less active, than the R enantiomer, but this could not be known with certainty until the enantiomers had been isolated and tested. (11) Well before 30 May 1986, it was common general knowledge amongst medicinal chemists that racemic mixtures could be separated into the individual enantiomers by well-known methods of resolution. Indeed, undergraduate chemical students were taught procedures to resolve enantiomers. It was also generally known before May 1986 that enantiomers could be obtained by chiral synthesis. (12) As at 30 May 1986, it was feasible to use resolution or chiral synthesis to obtain a single enantiomer drug. Pharmaceutical companies had produced single enantiomer synthetic drugs either by way of resolution from the corresponding racemic mixture or by way of chiral synthesis prior to May 1986. (13) As at May 1986, it was known that enantiomers could have different biological properties and that it may be desirable to separate and remove the less active enantiomer. The skilled addressee would also know that the biological activity of a racemate will be different from that of the single enantiomers, and that the active or more active enantiomer will be approximately twice as active as the racemate. In these circumstances, confronted by a structural formula in claim 1 that shows relative stereochemistry, the skilled reader would consider that the structural formula was intended to claim both enantiomers, as well as racemic mixtures. I do not think that the skilled addressee would read the structural formula as one that was intended to exclude the more active enantiomer. Reading the specification as a whole, the skilled addressee would discern that the patentee had not isolated the individual enantiomers and that the absolute stereochemistry of the more active enantiomer, and that of the less active enantiomer, had not been defined. The skilled addressee would also know that, while it had not yet been done by the patentee, it was a routine step to obtain the individual enantiomers by resolving the racemic mixture, and that it was also possible to make the individual enantiomers by chiral synthesis. In those circumstances, the skilled addressee would expect, in the absence of a clear indication to the contrary, that claim 1 of the patent was intended to include the more active enantiomer. ... In these circumstances, in the absence of any clear indication or language to the contrary, the skilled addressee as at May 1986 would read claim 1 as encompassing both individual enantiomers, as well as mixtures of them. As Warner-Lambert submitted, it would make no sense to exclude patent protection for the more active enantiomer. The point was well made by Professor Easton in the course of his affidavit evidence when he said that to confine the subject of the 981 Patent to racemic mixtures would exclude the thing (the active or more active enantiomer) that he, and any person working in the field as at May 1986, would know to be the key to the useful activity of the compounds disclosed by the patent. It is not in dispute that structural formula I would be construed by the skilled addressee as including a trans racemate of the compounds of the formula. But there is no reason why the skilled reader would construe the formula as meaning only the trans racemate, thereby excluding both the R-trans and the S-trans enantiomers. In the absence of a clear indication to the contrary, it offends common sense to construe structural formula I in that way. 72 The Full Court upheld the decision of Young J on the basis that the conclusion was open to the judge on the evidence, although the Full Court did appear to adopt some of the judge's reasoning ( Ranbaxy [2008] FCAFC 82 at [60] ---[77]). 73 Although the decisions in Alphapharm [2008] FCA 559 and Ranbaxy [2006] FCA 1787 , 71 IPR 46 turned in large measure upon the evidence in each case, a difference in approach can be detected on the question involving the disclosure of enantiomers, with Ranbaxy [2006] FCA 1787 , 71 IPR 46 favourable to the applicants on this issue, and Alphapharm [2008] FCA 559 being neutral. In neither case was there the express reference to enantiomers such as there is in the French and corresponding patents here. The priority dates of the relevant patents are also interesting when compared with the priority dates in issue here. In Ranbaxy [2006] FCA 1787 , 71 IPR 46 , the priority date of the broader patent was 30 May 1986 and that of the enantiomer patent 21 July 1989. In the case of Alphapharm [2008] FCA 559 the Australian Citalopram Patent had a priority date of 14 January 1976 and the enantiomer patent 14 June 1988. The common general knowledge found by Lindgren J to relate to the enantiomer patent and by Young J to relate to the broader patent was very much in the same time band as that relevant to construction of the patent in suit here. Naturally, the field of each invention is somewhat different but the principles of stereochemistry as they were understood at the time should not have varied much. There is no suggestion of any crucial and widely known developments during the years in question. (No. 1,069,343 opposed by Sandoz, P.A.T.). The case could have been treated as a "selection" patent, but it was not. But cf. ante, SS 2-015. A similar view was taken by the EPO in PFIZER/Penem (T1048/92) [1995] E.P.O.R. 207 but not in SANOFI/HOECHST Enantiomers (T296/87) [1990] E.P.O.R. 337 and in (T658/91) [1996] E.P.O.R. 24. The cases seem to be distinguished by the degree to which the earlier publication specified that Enantiomers formed part of the disclosed invention. There has been little discussion of that topic in the Australian authorities and I was not referred to any Australian judicial decision based upon it. Counsel for the applicants submit that it is not referred to in the 1952 Act or the 1990 Act and that there is no warrant for recognizing a special class of patent in Australia. The commentary in Lahore, Patents Trade Marks & Related Rights (LexisNexis Butterworths, Australia, 2006) at [12,910] can be described as lukewarm. Even in the United Kingdom, where the topic has been dealt with in a number of authorities and is firmly entrenched, the commentators remain somewhat sceptical about the principle. The situation there is now affected by the 1977 United Kingdom Act based upon the European Patent Convention. ( Encyclopedia of United Kingdom and European Patent Law at 5-109, 5-110; Thorley S, Miller R, Burkill G, Birss C, Campbell D, Terrell on the Law of Patents , (16 th edn, Sweet & Maxwell, London, 2006) at 7-42). It is a fair brief summary of the position as it was understood at the time of the 1952 Act based upon the authority to which reference was made --- Re IG Farbenindustrie AG's Patents (1930) 47 RPC 289. This remained the basis of the law in the United Kingdom, at least until the decision of the House of Lords in EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303. But within such a range there is room also for the second scientist whose researches may discover and disclose that certain of the items or a section of them have advantages peculiar to themselves, hitherto unknown; and, if so, then there would appear to be no ground on reason or principle why patent protection should not be, in proper cases, available to the second scientist. Her Honour also referred to a decision of Delegate Barker in University of Georgia Research Foundation Inc v Biochem Pharma Inc (2000) 51 IPR 222 , (2001) AIPC 91-676. It is quite clear from that decision that the Commissioner of Patents has applied the IG Farbenindustrie AG's Patents (1930) 47 RPC 289 principles for many years (see also Pfizer Inc v Commissioner of Patents [2005] FCA 137 ; (2005) 141 FCR 413 at [10] and [11]). 79 It seems to me that it is too late in the day to find that the principles explained by Maugham J in IG Farbenindustrie AG's Patents (1930) 47 RPC 289 are not relevant to the question of anticipation under the 1952 Act (and the 1990 Act, for that matter). That is not to recognise a special class of patents --- the reference to a selection patent is a convenient shorthand to pick up the relevant principles concerning anticipation. I approach the United Kingdom cases from and including EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303 with caution. I must also endeavour to keep separate questions of anticipation, on the one hand, and obviousness, on the other. The distinction is not always easy to discern in the authorities on this topic, including the seminal judgment of Maugham J. 80 There is a question as to whether the selection patent principles apply to a compound specifically identified in the early specification as a member of the larger class (eg as an example or derivative) or whether it is restricted to the express identification (for the first time) of a particular member of the larger class with the special characteristic. The latter was conceded by the patentee in EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303. In the Court of Appeal, Buckley LJ had favoured the view that the concession was necessary (395) but, in the House of Lords, Lord Simon preferred to leave the point open ([1982] FSR 303 at 315). In one sense, the dextro-rotatory enantiomer is selected from that sub-class. There is authority to suggest that selection can be from a small class (per Buckley LJ in Beecham Group Ltd's (Amoxycillin) Application, Re [1980] RPC 261 at 292; EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303 per Lord Wilberforce at 310; but, cf Institut Francais du Petrole des Carburants et Lubricants' Application, Re [1972] FSR 147 at 154, [1972] RPC 364). I will therefore assume, contrary to my own opinion, that the principle can apply to the present case on that basis if the requirements are met. It is better tolerated or less toxic than either and as effective as the racemate with a lesser concentration. That proved to be the difference between success as a pharmaceutical drug and otherwise. In that sense, the first of the criteria is satisfied. The second and fourth criteria are also, obviously, satisfied. 84 However, is the selection in respect of a quality of a special character? In my opinion, that is a good description of the performance of the dextro-rotatory enantiomer of PCR 4099. It was obvious from the specification of the French and corresponding patents that it was not claimed that each compound within the class would have equal qualities --- indeed, the report of the tests demonstrated that that was not so --- the advantages were described very generally. If, on the other hand, it were to be established that there were a thousand unselected members which possessed the same advantage, I doubt very much whether the patent could be sustained. The quality must be of a special character. It must not be one which those skilled in the art will expect to find in a large number of the members. It would be rash to attempt a closer definition, for the question is ultimately one of appreciation. Returning to the same old fashioned metaphor I would say that the citadel must be defended, and that there is no reward if the gates have been opened at the first blast of the trumpet. ... I will summarise the conclusion at which I have arrived by saying that in a selection patent the inventive step lies in the selection for a useful and special property or characteristic adequately defined; and this is the proposition which has to be kept in mind in considering the application to amend and the Petition for revocation. However, the advantages here are not different in kind from those described and predicted in the earlier patent specifications. Even if such an advantage could be satisfied by a quantum leap in relation to an earlier claimed advantage, the results here are by no means out of the range of results predictable from the tests done on the examples in the earlier specification. 87 There was debate between the experts as to whether it was "unexpected" that the differences between the enantiomers in their performance would be as great as were ascertained by testing. In my view, for present purposes, that was a false issue. The question is whether the advantages of the characteristics of the dextro-rotatory enantiomer were unexpected. For the same reason, the question is not which of the three possibilities --- the racemate and each of the enantiomers --- was best, either as against themselves or compared with other members of the wider class. 88 I therefore conclude that claim 1 cannot be defended as a valid selection and was anticipated by each of the cited specifications. This conclusion also affects claims 10 and 11. 89 Claim 3 then requires consideration. There is no disclosure of the precise formula of claim 3 in any of the cited specifications (or of claims 2, 4 and 5 either). The closest that the specifications of the prior art patents come is the reference to "and their addition salts with pharmaceutically acceptable mineral or organic acids". It is contended that the choice of acid and the making of the salt of a compound was routine. The specifications most naturally refer to salts of the racemate rather than of the enantiomers. In any event, once there is a choice of acid to be made, then it cannot be said that there is the necessary disclosure to anticipate any particular claim. There is not a clear description of the salt described in claim 3 or clear instructions to do or make that particular salt in the earlier specifications. The attack on the novelty of claim 3 fails. 90 Claim 6 then needs to be considered. None of the cited prior art specifications contain a description of a process which accords with claim 6. Claim 6 is the process for the separation of the dextro-rotatory enantiomer plus salt formation. The earlier specifications in question do not rise above the statement in the claims of the Canadian patent "and, if desired, its enantiomers are separated". The evidence is that more than one method of resolving or separating the enantiomers of a racemic compound of this kind was known as at the priority date. Therefore, a choice was involved and the same reasoning applies here as applied in relation to claim 3. The challenge to novelty in relation to claim 6 fails. 91 Anticipation is deadly but requires the accuracy of a sniper, not the firing of a 12 gauge shotgun. The Patent is invalid and liable to be revoked insofar as it relates to each claim of the Specification on the ground that the alleged invention is not a patentable invention within the meaning of s138(3)(b) of the Act in that the alleged invention does not involve an inventive step. 96 A threshold question of law arises. It is submitted for the patentee that, once it is accepted that clopidogrel was not part of common general knowledge in Australia, let alone the broader teachings of the French patent, the ground of lack of inventive step is misconceived and has no possibility of success. It is pointed out that the statutory phrase is "what was known or used in Australia", before the priority date. It is well-established that that phrase refers to common general knowledge in the relevant field in Australia, that is to say, "the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old" ( Minnesota Mining & Manufacturing Co v Beiersdorf (Aust) Ltd [1980] HCA 9 ; (1980) 144 CLR 253 at 292). 97 The applicants seek to sidestep this considerable obstacle by relying upon the description of the inventive step in the complete specification which makes it clear that the step was to go from the racemic mixture corresponding to the formula methyl alpha-5 (4,5,6,7-tetrahydro (3,2-c) thieno pyridyl) (2-chlorophenyl) acetate, described as derivative 1 in the French patent, to the dextro-rotatory enantiomer of that racemic mixture. The inventiveness of that step would then be judged according to Australian common general knowledge. It was submitted that this approach is consistent with that of the majority of the High Court in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 ; (2002) 212 CLR 411 at [41] and [52]---[53]. That was consistent with the way in which that case had been conducted below ( Aktiebolaget Hässle v Alphapharm Pty Ltd [2000] FCA 1303 , (2000) 51 IPR 375 at [15] ---[24] and [44]). 98 An inventive step does not require any particular process of invention such as a flash of genius. However, there must be a step from one thing to another. In the case of a seminal invention, it may be from very little to something. The same might be said of any original invention. Where an inventor describes the step by reference to the starting point or base line and an end point or result, it is the inventiveness of that step that is to be judged, not, for example, the inventiveness of the base line or starting point. 99 Aktiebolaget [2002] HCA 59 ; 212 CLR 411 provides a good example. The compound, known as omeprazole, which undoubtedly involved an inventive step, was not easily formulated into a satisfactory pharmaceutical composition, and solving a problem in the administration of the drug by formulation was required, that being the gist of the inventive step claimed in that case. Obviousness was not judged on the basis that omeprazole had not been discovered simply because it had not passed into Australian common general knowledge. By analogy in the present case, the only invention described in the specification is moving from the particular racemic compound to the dextro-rotatory enantiomer of that compound. It would be the obviousness, or otherwise, of that step which would be tested, not the obviousness of formulating clopidogrel or any of the other compounds encompassed by the French patent. 100 On this basis, the state of Australian common general knowledge would still have an important part to play in judging inventiveness. It is easy to imagine that there would be technical fields where there is little Australian common general knowledge so that, for example, what may be routine in the laboratories of Switzerland would be inventive by Australian standards. On the other hand, there may be other fields where the relevant Australian knowledge was in advance of the country where the claimed invention took place, leading to the opposite conclusion. 101 It is difficult to see how this patent could have been valid without disclosing the starting point or the master patent in the specification. To do so would have amounted to obtaining the patent on a false suggestion or representation within the meaning of s 100(1)(k) of the 1952 Act or be in breach of s 40(1)(a) of that Act by not describing the invention (see Sami S Svendsen Inc v Independent Products Canada Ltd [1968] HCA 65 ; (1968) 119 CLR 156 at 159 and 164---165). The same applies under the 1990 Act. Hence the necessity to spell out that step and the advantage in the complete specification ( Re IG Farbenindustrie AG's Patents (1930) 47 RPC 289 at 323; Institut Francais du Petrole des Carburants et Lubricants' Application, Re [1972] FSR 147 at 154, [1972] RPC 364). The specification of the patent in suit is drafted consistently with that obligation. The cases on selection patents discuss both novelty and obviousness by reference to the nature of the selection from the earlier patent specification to the later claim. 102 This submission was described as heretical. I, therefore, carefully reread the analysis of s 100(1)(e) of the 1952 Act by Aickin J in Minnesota Mining [1980] HCA 9 ; 144 CLR 253 , particularly at 287---295. That analysis is not directed to the question that arises here. There is no indication in that case that any of the patent specifications relied upon were cited in the patent in suit, that they had any connection with the patentee or that the patentee was aware of them. It was not a selection patent in any sense. 103 The position established in Minnesota Mining [1980] HCA 9 ; 144 CLR 253 was of relatively short duration. Until then, the wider view of Williams J in HPM Industries Pty Ltd v Gerard Industries Ltd [1957] HCA 47 ; (1957) 98 CLR 424 had applied (see Graham Hart (1971) Pty Ltd v SW Hart & Co Pty Ltd [1978] HCA 61 ; (1978) 141 CLR 305 per Aickin J at 329---330). The 1990 Act widens the prior art base, but does not change the nature of the issue. Leaving aside Aktiebolaget [2002] HCA 59 ; 212 CLR 411 , the principal survey of the topic by the High Court since Minnesota Mining [1980] HCA 9 ; 144 CLR 253 was in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 ; (2007) 235 ALR 202 , (2007) 81 ALJR 1070 , particularly at [31]---[66]. That case did not involve the problem that arises here. However, the idea remains that the prior disclosures to be taken into account, even as enlarged by s 7(3), are being considered for a particular purpose. That purpose is the purpose of looking forward from the prior art base to see what a person skilled in the relevant art is likely to have done when faced with a similar problem which the patentee claims to have solved with the invention. " (Emphasis added. ) The applicants do not seek to utilise the contents of the prior specification as an admission as to common general knowledge (cf Lockwood Security Products [2007] HCA 21 ; 235 ALR 202 , 81 ALJR 1070 at [105] ---[109]). Rather, it is a statement of the nature of the inventive step that is claimed (cf in another context, Commissioner of Patents v Microcell Ltd [1959] HCA 71 ; (1959) 102 CLR 232). 104 The submission by the patentee would have the consequence that, pursuant to the 1952 Act, a person (including a foreign patentee) could take a foreign patent published in Australia some time ago that was not widely known, make sufficient changes to avoid anticipation and could seek a patent without having to run the gauntlet of obviousness, even if the changes were routine for those in the field in Australia at the time, but taking care to disclose the existence of the foreign patent to avoid any charge of false suggestion or representation and to describe the invention. That patent would have a term commencing again. That result is counter-intuitive. ) It will be observed that the section protected against invalidity on the ground of obviousness not novelty, and did so regardless of the state of common general knowledge in Australia. (For an interesting example of patents of addition in a similar context see Beecham Group Ltd's (Amoxycillin) Application, Re [1980] RPC 261. It may, as in this case, provide a useful product for the public, thus justifying patent protection. 107 The applicants' contention cannot be rejected out of hand, particularly in the case of a selection patent where the prior publication is a patent specification published or issued in Australia. If that contention is wrong, then this objection to the validity of claim 1 fails. I will consider the position if the contention were accepted and on the basis that the starting point for analysis of the inventive step was the racemic compound of PCR 4099 as disclosed in the French patent. The starting point of the invention identified in the complete specification in suit is the racemic mixture of derivative 1 as described in the French patent application. There is no claim of invention in selecting that racemic mixture out of the others disclosed in the French patent. The invention claimed was ascertaining that only the dextro-rotatory enantiomer exhibited platelet aggregation inhibiting activity, the levo-rotatory enantiomer being inactive and being the less well tolerated of the two. It is, thus, expressed to be a selection patent only in that limited respect. 108 The specification in suit does not explain in express terms the reason or motivation for separating and testing the enantiomers and comparing the results with those for the racemic mix. It is assumed that the enantiomers might be separated. The reason for that course is not disclosed. There is no statement, for example, of the problems concerning tolerance and toxicity which are now known to have affected the racemic mix and to have led to the search for a better alternative. The inventive step claimed, in relation to the product claim for the dextro-rotatory enantiomer, was the unexpected nature of the result. It is as if, in the course of an investigation, an unexpected result occurred. That can be sufficient to provide subject matter (as it used to be called) for an invention in appropriate circumstances. The references to the French patent in the complete specification of the patent in suit are sufficient to permit reference to the French specification but only to understand the context of the disclosure of the particular racemate. The discussion by Gummow J (agreed with by Jenkinson J) in Nicaro Holdings Pty Ltd 91 ALR 513 at 532---539 is apposite, although directed to novelty in that case. 109 The applicants submit that it would also be appropriate to inform the skilled addressee of the results of the testing of the formulations of PCR 4099 which had taken place up to November 1985 when the decision was made to attempt to obtain the enantiomers of PCR 4099. In particular, that between 1983 and 1985 there were reports of side effects and, in particular, convulsions and death in some animals. I cannot reconcile that submission with the narrow basis upon which inventive step is being considered. It is also questionable as to whether that would be consistent with the limited use to which evidence of what the inventor knows and does can be put (cf Wellcome Foundation Ltd [1981] HCA 12 ; 148 CLR 262 per Aickin J at 268---288). The patentee chose to omit those matters from the specification. 110 The result which might be described as unexpected in the light of the French specification was not so much the characteristics of the dextro-rotatory enantiomer (which were within the expected broad range) but rather the characteristics of the levo-rotatory enantiomer --- in particular, that it was inactive. It was common general knowledge among skilled workers in the field in Australia at the priority date that one of the two enantiomers might contain all of the activity. In my opinion, the discovery of that characteristic in this case was not so unexpected as to amount to an inventive step. Therefore, if, contrary to my opinion, claim 1 was novel and if it is to be considered in the light of the complete specification, then it was obvious and did not involve an inventive step. 111 It then becomes necessary to consider claims 2---5, which I do consider novel. The specification in suit refers to the finding of salts among the mineral and organic acid salts of the dextro-rotatory enantiomer, "which crystallize easily, are not hygroscopic and are sufficiently water-soluble as to make their use as active medicinal principals particularly advantageous". Three salts in particular are identified: hydrogen sulfate, the taurocholate and the hydrobromide. The hydrochloride had been identified as of use because it was in powder form. These compounds are the subject of claims 2, 3, 4 and 5. The conversion of the pure enantiomer to any of the salts was not suggested to have any particular difficulties --- that was described as being achieved "in standard manner" and "by means of standard methods". The specification in suit does not claim any inventive step in the method of obtaining the salts once clopidogrel was known --- the claims rest on the properties of the salts. Again, the critical issue is the correct starting point. If it is only common general knowledge in Australia at the priority date, then the ground of invalidity must fail, as clopidogrel was not part of that common general knowledge. On the other hand, if the starting point is that which is recounted in the specification of the patent in suit, including the racemic mix PCR 4099 disclosed in the French patent and the dextro-rotatory enantiomer, then there is at least substance in the contention that each of the claims was obvious. 112 In my view, the inventive step is not to be judged on the basis that either PCR 4099 or the dextro-rotatory enantiomer of it is the starting point. It may seem anomalous that the major compound might be obvious because of the statements in the specification in suit but that salts of it are not. However, the salts are novel without any special consideration as selection patents. To take the specification in suit into account in this way to judge the obviousness of these claims would have to be based upon a general principle, not restricted to selection patents. There is much to be said for the view that a patentee should be held to the advance in the art identified in the specification for the purposes of judging whether there is an inventive step. Put another way, the contents of the specification in suit would be taken into account in identifying the inventive step for the purposes of judging obviousness. However, no authority was cited that directly establishes such a principle. Even application of it to selection patents is doubtful. A similar issue arose in the recent Full Court decision in Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC 139 in connection with a mechanical invention under the 1990 Act. To the extent that the decision has any application to these cases, it tends against the applicants' contention as to the use that can be made of statements in the specification in suit as to the inventive step, although the reasoning is not altogether clear (see Insta Image Pty Ltd [2008] FCAFC 139 at [38] ---[61] and [80]---[115]). The applicants' contention is a step too far for a single judge. It follows that claims 2---5 do represent an inventive step compared with common general knowledge in Australia at the time. 113 If the inventive step were identified as having the single enantiomer of clopidogrel as the starting point, I would have held that each salt claimed was obvious. It was known that a pharmaceutically acceptable salt was useful for administration of an active compound. It was known how to prepare such salts using known mineral or organic acids. The acids chosen here --- hydrochloric acid sulfuric acid, hydrobromic acid and taurocholic acid --- were conventional. They were (with the exception of taurocholic acid) the acids utilised in relation to the salts of PCR 4099 in the French patent. Standard methods of preparation of the salts were known. 114 Claim 6 is the principal process claim. It describes in a general way the process of liberating the dextro-rotatory enantiomer from the racemic compound PCR 4099 by means of diastereomeric salt formation. The desire to obtain the dextro-rotatory enantiomer of the racemic compound is taken for granted. The claim does not relate to that choice; it relates only to the means of doing so. Novelty lies in the fact that no prior art discloses the use of that process in relation to that particular compound to obtain that particular enantiomer. That method was well-known in the field in Australia at the priority date as a classic means of obtaining the enantiomers of a racemic compound. What the specification in suit discloses is that the classic method worked in this case. The patentee sought to establish, principally through Mr Badorc, firstly, that the method did not always work in relation to particular compounds and, secondly, that the application of the method in this case required choices to be made in the light of difficulties encountered in the course of carrying it out that were not standard, and were not obvious. A number of other methods of obtaining the enantiomers of a racemic compound were known at the priority date and it was also contended that the choice of one over the other was not obvious. 115 None of those contentions detract from the fact that claim 6 represents a classic process being applied to a known compound to produce the desired result. The relevance of Mr Badorc's evidence to the issue is doubtful at least. Even if admissible, in my opinion, the particular application of the method by Mr Badorc did not involve any inventive step. Mr Badorc's evidence of the steps he took by way of diastereomeric salt formation, leading to the successful experiment on 21 March 1986, was challenged in various respects, principally because of apparent discrepancies between that evidence and the contemporaneous records. His explanations were far from convincing. Even if his evidence is accepted, the steps he took were typical of the trial and error that was necessarily involved with the use of such a technique. Even if there were an inventive step in the particular application by Mr Badorc, claim 6 is not so limited. Each of the additional integers in claims 7, 8 and 9 was well-known in the field in Australia at the priority date and were available as part of the ordinary process of trial and error. They do not reflect any particular inventive step identified by Mr Badorc. 116 The fact that a process may not always work in particular circumstances and that there were other available alternatives does not establish that it was inventive to choose to use it. The choice of one known process over other known processes may be inventive in some circumstances --- perhaps where the received wisdom would point in the other direction or the result was unexpected. There were no such circumstances here. For the sake of completeness, I should say that there was no inventive step involved (or claimed) in ascertaining the pharmacological characteristics of the respective enantiomers. 117 Given the racemate, and given the desire to obtain the dextro-rotatory enantiomer of it, the processes described in claims 6, 7, 8 and 9 were obvious and the claims invalid. The most illuminating discussion of that which is encompassed by "a manner of manufacture" is that by the High Court in National Research Development Corp v Commissioner of Patents (NRDC Case) [1959] HCA 67 ; (1959) 102 CLR 252 where the extended meaning of the phrase in accordance with principles which were developed for the application of s 6 of the Statute of Monopolies was explained by reference to the authorities up to that point. In my opinion, it could not be suggested that the subject matter of the present claims is outside that extended notion. The claims are for compounds and processes in a field of useful pharmacological application. 119 That decision was delivered several months after the decision of another Full Court of the High Court in Commissioner of Patents v Microcell Ltd [1959] HCA 71 ; 102 CLR 232. But the case cited [ie Microcell] shows also that even if the process is within the concept the Commissioner is not bound to accept the allegation of the applicant that it is new, if it is apparent on the face of the specification, when properly construed, that the allegation is unfounded". 120 The latter decision has subsequently been discussed by the High Court in Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19 ; (1998) 194 CLR 171 , particularly at [36]---[40] per Brennan CJ, Gaudron, McHugh and Gummow JJ and in Lockwood Security Products [2007] HCA 21 ; 235 ALR 202 ; (2007) 81 ALJR 1070 at [106] ---[107]. It is made clear that external evidence cannot be relied upon. The same ground of invalidity was examined in some detail by the Full Court in Merck & Co Inc [2006] FCAFC 91 ; 154 FCR 31 at [20] ---[75] (cf at first instance Arrow Pharmaceuticals Ltd v Merck & Co Inc (2004) 213 ALR 182 , (2004) 63 IPR 85 at [80]---[97]). The true scope of this ground of invalidity is difficult to discern in a case such as the present where the claims are for conventional products (albeit defined by chemical formula) and processes for the manufacture of products compared, say, with Merck & Co Inc [2006] FCAFC 91 ; 154 FCR 31 which dealt with a variation of a dosage regime. It is clear that the grounds of novelty and obviousness must be considered as such rather than through this prism ( CCOM Pty Ltd [1994] FCA 1168 ; 51 FCR 260 at 295---295). 121 In my opinion, it cannot be said that the patent in suit claims an invention that is not new on the face of the specification without regard to what may be described as external evidence. Indeed, the specification has been drawn in a fashion which is designed to ensure that the claims are new if the contents of the specification are accepted. I do not agree that the French specification is incorporated by reference as a whole and for all purposes into the specification in suit. It is incorporated sufficiently to understand the reference to the racemic compound in the specification in suit. Even if that be wrong, and it is incorporated as a whole (as appeared to be the case with some prior documents in the Full Court decision in Merck & Co Inc [2006] FCAFC 91 ; 154 FCR 31) , it would take the matter no further than the decision to which I have come on novelty. (Emphasis added. " (Emphasis added. 2 530 247. That representation would again go to the question of novelty of claim 1 and dependent claims. Furthermore, it would only be established if the earlier specification did disclose the enantiomer in a way that would destroy novelty. In Arrow Pharmaceuticals Ltd 213 ALR 182 , 63 IPR 85 I had to consider a similar argument based upon what was said to the office about an article. The patent office and others with an interest are all able to read the article and form independent judgments. 125 As I have found that claim 1 and dependent claims lack novelty, this ground adds nothing to that result. The 1990 Act contemplates revocation claim by claim (s 138(3)); the 1952 Act ground is "that the patent was obtained on a false suggestion or representation" (s 100(1)(k)). Nonetheless, the Full Court in ICI Chemicals & Polymers Ltd v Lubrizol Corp Inc [2000] FCA 1349 ; (2000) 106 FCR 214 at [93] held that the opening words of s 100(1) of the 1952 Act contemplated claim by claim revocation. 126 It was submitted for the patentee that the descriptions "unexpected" and "interesting" are expressions of opinion and can only be falsified or made misleading by establishing that they were not genuinely held. That distinction is well-known in the fields of misrepresentation, misleading conduct contrary to s 52 of the Trade Practices Act 1974 (Cth) and defamation. There is a good deal to commend the approach in this context. There is material in the internal documents of Sanofi-Aventis that would provide some support for such a case. However, it was pointed out on behalf of Sanofi-Aventis that such a case had not been pleaded or presented by the applicants. Further, that does not appear to be the way in which the issue was approached by the Full Court in Ranbaxy [2008] FCAFC 82 at [131] ---[141] where it was considered objectively. The decision of the Full Court in ICI Chemicals [2000] FCA 1349 ; 106 FCR 214 may support an objective approach as it was held that a false suggestion or representation may be made in good faith --- although the false statement in that case could possibly be regarded as a statement of fact not a statement of opinion (see ICI Chemicals [2000] FCA 1349 ; (2000) 106 FCR 214 at [88] ---[91]). 127 Viewed in an objective fashion, if the question is asked, "'surprising' and 'unexpected' to whom? ", presumably the answer would be, "to a notional person skilled in the art in Australia". On that basis I would not conclude that the statements were false. At the priority date, it was known to those in the field in Australia that at one end of the spectrum each enantiomer would contribute equally to the activity of the racemate. At the other end of the spectrum, one would have all of the activity and the other none. Both of those results were known to be possible, but the usual result would be somewhere between the two. Prediction, without testing, was not regarded as reliable. To say that a possible result at one end of the spectrum, even if unlikely, was unexpected cannot be categorised as false. The statement that the result was "interesting" is even more difficult to falsify. 128 Even if the statements were false, it must be asked whether the suggestion or representation was "a material inducing factor which led to the grant" ( ICI Chemicals [2000] FCA 1349 ; (2000) 106 FCR 214 at [88] citing Prestige Group (Aust) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 at 201 per Lockhart J and 218 per Gummow J, with whom Northrop J agreed). To establish the ground, there must be a finding that the Commissioner or the Commissioner's delegate was in some way misled or deceived by the suggestion or representation in question and that being so misled or deceived contributed to or caused the decision to grant the patent. The Commissioner was a party to the proceeding but took no substantive part in the proceeding. The Commissioner may have taken the view that Ranbaxy was prosecuting the alleged grounds of invalidity with sufficient vigour for the Commissioner not to be involved. Ranbaxy adduced no evidence as to the way in which the alleged false suggestions or misrepresentations operated on the decision making process of the Commissioner. Where it is alleged that a patent was obtained on or by false suggestion or misrepresentation, it is relevant, although not decisive, that the Commissioner has made no complaint about being misled or deceived. In the absence of an allegation of fraud, which involves an examination of the state of mind of the patent applicant, it is not sufficient to make out the ground of false suggestion or misrepresentation to prove simply that a false or misleading statement was made and nothing else. That is to say, even if a suggestion or representation is shown to be false or misleading, that, of itself, is not sufficient reason to draw an inference that the suggestion or representation contributed to the decision to grant the patent. In the present case, there was no explicit evidence to the effect that, if there had been no assertion that the effectiveness of the relevant compounds was surprising and unexpected, the Enantiomer Patent would not have been granted. While inferences can be drawn, in the absence of any evidence concerning the Commissioner's decision making process, the inferences must be reasonably cogent. " (Original emphasis. The statements which were found to be false were made on behalf of the patentee in order to overcome the examiner's objection. In those circumstances, the Full Court agreed with the conclusion of the primary judge that the necessary element of causation was present. 130 However, in the present case the Patent Office file shows no indication that the examiner was conscious of any potential problem or raised one with the patentee. That being so, the approach of the Full Court in Ranbaxy [2008] FCAFC 82 would require a negative answer to the question as to whether the false statements did materially induce the decision (see also ICI Chemicals [2000] FCA 1349 ; 106 FCR 214 at [92] ). In any event, I would be inclined to think that by the time this application was being considered, patent officers would have regarded the description of a finding as "unexpected" or "interesting" in the field of selection patents as likely to be a patent attorney's "puff" rather than a serious statement of fact. That relieves me from deciding whether, in any event, the objection is misconceived. My inclination is to think that it is. 132 "Utility" in this sense "depends upon whether, by following the teaching of the complete specification, the result claimed is produced" ( Advanced Building Systems [1998] HCA 19 ; 194 CLR 171 at [24] ). The result claimed may cover two aspects --- one is physically producing a result and the other is producing a result that is useful. Useful in this sense does not mean commercially successful. Indeed, it has not been contended that the compounds claimed are not better in that respect than the racemate. I do not see that the claims that the properties were "unexpected" or "surprising" have anything to do with that concept. The decision of Young J in Ranbaxy [2006] FCA 1787 , 71 IPR 46 must have been based upon the view that the specification there was construed as promising a particular level of result. The correctness of the decision on this point was left open in the Full Court ( Ranbaxy [2008] FCAFC 82 at [142] ---[144]). Claims 10 and 11 as presently framed fall with it. Claims 6---9 inclusive are invalid on the ground of lack of inventive step. All other grounds of invalidity are dismissed. 135 The proceeding will stand over for a limited period for orders to be made, either by agreement or after argument, including orders for costs. The parties should also consider whether any necessary issue has been overlooked in these reasons. I certify that the preceding one hundred and thirty-five (135) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | applications for revocation validity patent in suit claiming d -enantiomer (clopidogrel) of racemate, pharmaceutical compositions of d -enantiomer and process for preparation of each where racemate the subject of prior art patents in australia and overseas available grounds for revocation where patent in suit granted under patents act 1952 (cth) whether d -enantiomer a novel invention in light of prior art patents whether pharmaceutical compositions (salts) of d -enantiomer novel in light of prior art patents whether process for preparation novel in light of prior art patents whether patent in suit valid as a selection patent whether obtaining d- enantiomer of racemate, preparing its pharmaceutical compositions (salts) and the process for preparation obvious so as to lack inventive step relevance to consideration of inventive step of references to prior art patents in patent in suit whether d- enantiomer valid as a manner of manufacture whether patent in suit contained false suggestion or representation that was a material inducing factor leading to grant of patent in suit whether d- enantiomer a useful invention applications granted in part and dismissed in part patents |
This proceeding concerns a truck that they bought from Mack Trucks Australia Pty Ltd (referred to hereafter as 'Mack') in 1998. The truck was a new Mack CH Elite Highway prime mover (hereafter 'the truck' or the 'Lowes' truck'), which Mack had manufactured. The Lowes' case is that Mack assured them that the truck was suitable for their interstate long-haul transport business (hereafter 'the business' or 'the Lowes' business'), when in fact it was not. They seek damages in respect of the loss allegedly suffered as a result. For the reasons that follow, I find that their claim is not made out. 2 The Lowes conducted the business from Adelaide, transporting goods by truck from Adelaide to Brisbane, Sydney and other destinations mostly along the east coast of Australia. On 23 March 1998, they entered into a conditional contract with Mack to purchase the truck, for a price of $209,230. Although the Lowes initially contemplated a Freightliner or Western Star model vehicle as a changeover for their then current Mack CHR (which they purchased in 1995), they gave consideration to a new Mack when they were offered a competitive price. Mr Dean Kumnick, a Mack branch salesman in Adelaide, stated that the truck would be suitable for their needs. He knew that the Lowes were involved in the business of interstate long-haul goods transport as truck owner-operators. 3 On 1 April 1998, Mr Lowe took delivery of the truck from Mack and set out to drive the truck from Adelaide to Brisbane and back, towing a fully loaded Tautliner trailer. Mr Lowe noticed problems with the truck almost immediately. He complained to Mack in Brisbane and, on his return, to Mack in Adelaide. 4 It was part of the Lowes' case that "[t]he litany of complaints was so bad" that as early as June 1998, the Lowes asked Mack about the possibility of returning the truck on a walk-away (or no-loss or no-cost) basis. As appears below, the evidence did not establish as much. The evidence did, however, establish that Mrs Lowe enquired about returning the truck on a walk-away basis in October 1998. 5 In early 1999, the Lowes' complaints about the truck led to it being included in a group of trucks selected for examination by Roaduser International Pty Ltd (hereafter 'Roaduser') as part of an inquiry by the Federal Office of Road Safety (hereafter 'FORS') into aspects of long-haulage road transport operation in Australia. Indeed, in an initial "inspect and drive" test organised by Roaduser, Mr John Lambert, who gave evidence at the trial, reported that the truck exhibited characteristics of vibration, wandering and darting. The FORS Inquiry resulted in a Final Report, entitled "Investigation into the Specification of Heavy Trucks and Consequent Effects on Truck Dynamics and Drivers". In this proceeding, this report was referred to as the 'FORS Report'. This Report is discussed below. 6 Throughout the period he drove the truck, Mr Lowe complained about it, especially its rough ride and poor performance. The Lowes claimed that, over the period they operated the truck, these characteristics were made manifest by various things, particularly vibration, inordinate component failures, and the need for constant repairs and parts replacement. The Lowes' case was that the on-going defects in the truck ultimately led Mr Lowe to 'park up' the truck at Rick Cobby's depot and 'walk away' from it. They claimed that they did so "despite the clear and substantial financial ramifications" for them and the business. 7 The genesis of this proceeding was a class action that began on 17 May 1999. The class action was unable to proceed as such and, by an application and statement of claim dated 11 October 2001, the Lowes elected to continue the proceeding as applicants in their own right against Mack and Australian Guarantee Corporation Limited (referred to below as 'AGC'), which had financed the truck's purchase. The proceeding against AGC has been resolved. The matter took some time to be ready for trial, in part because of changes in legal representation. 8 At trial, the applicants complained of the truck's rough ride, poor handling and poor performance, which they said was manifest by "vibration, darting and wandering and a litany of breakages, repairs and premature replacement of parts". The applicants alleged that there was a general design problem with big trucks, such as theirs. This meant, so they said, that the panhard rods in the truck did not fulfil the objective of transverse rods, which was to keep the axles centred laterally. The applicants also claimed (written submissions, 1.2.8) that air bag suspensions contributed to "potential instability in trucks generally" and to "the overall problem whereby each element provides potential feedback to the others". They relied on the evidence of Mr Lambert to make good this proposition. 10 As the applicants said, "[a] feature of [their] case" was "the question of the harmonic signature of the vehicle". In this regard, they relied on the evidence of Mr Lambert and Dr Arnold McLean as to how harmonics work. 2. The Lowes also relied on the Fair Trading Act 1987 (SA) and the Sale of Goods Act 1895 (SA), but did not suggest that the State Acts would produce a result different from the TPA. Save for a brief discussion in the context of damages, I do not discuss them further. The applicants sought various remedies (see below) but they did not press their claim for personal injuries, or exemplary and aggravated damages. 12 By the end of the trial, the applicants had effectively abandoned much of their pleaded case. This was confirmed by the applicants' closing written submissions, which contained a statement of their claims. This was the applicants' best written statement of the case they sought to make at trial. The applicants did not pursue any matter outside this summary, and they effectively abandoned their claims based on ss 53(a) , 53 (aa), 53 (ea) and 53 (g) of the TPA and unconscionable conduct. (See section 4B(1)(a) and (4) of the [TPA] ) Section 66(2) of the [TPA] provides a definition of 'merchantable quality'. Particulars of the inadequate examination and testing are set out in paragraph 19B. In closing, the applicants' counsel agreed that the key issue in the case was whether or not defects in the Lowes' truck rendered it unfit for the purpose of interstate long-haul goods transport. Broadly speaking, the applicant's counsel agreed with the respondent's counsel that the central issue was whether the Lowes could successfully invoke s 71 of the TPA by establishing that, on account of defects in construction and design, the truck was unfit for this purpose and not of merchantable quality. 15 At trial, the applicants filed amendments to [16] and [19] of the Further Amended Statement of Claim. There were, however, many further matters, which I do not list here. I note that some of them were not the subject of evidence at trial and were not pursued in closing submissions. Broadly speaking, they fell into the following categories: (1) incorrect installation and design of the suspension system in that transverse rods were both mounted to the same side of the chassis; (2) uneven distribution of air pressure through the air suspension system and variable airbag pressure; (3) adverse operation of right height control valve; (4) drive line torsional vibrations; (5) cut out of the top and bottom chassis rail flanges; (6) inadequate front engine mounting design; (7) steering mechanism exhibiting excessive bump steer; (8) adverse kinematic geometry in steering column to steering box input shaft; (9) significant outer edge scalloping and uneven wear of steer tyres; (10) vehicle handling erratically and unpredictably due to flexible chassis vibrations, torsional loading and bogie axle roll steer; (11) inadequate design of the driver's seat mechanism; (12) cyclic twisting of the chassis due to the combination of torsionally rigid trailers with high centre of gravity load; and (13) the harmonic signature of the vehicle being of a frequency too closely matched to external excitation sources such as drive wheels and vehicle pitching and rocking thereby causing adverse frequency phenomena through the vehicle chassis. Their counsel effectively abandoned any solely contractual cause of action, i.e., not depending on s 71 of the TPA. This was unsurprising, given that the evidence about any relevant contract of sale was limited. 20 At the time Mr Lowe parked up the truck, he and Mrs Lowe were purchasing the truck by way of a hire purchase agreement with AGC, pursuant to which AGC acquired the truck and hired it to the Lowes. The evidence before the Court included a copy of a Quotation dated 23 March 1998 for the sale of the truck, "New Truck Proposal" for the truck signed by Mrs Lowe on or about 23 March 1998, AGC's Standard Asset Purchase Agreement Schedule with the applicants, which was dated 27 March 1998 and named Mack as the supplier, as well as a warranty registration form signed and dated 31 March 1998 and "New Vehicle Warranty Information". The documentary evidence did not include either AGC's "Standard Conditions" (as referred in AGC's Schedule) or any particular contract of sale (with AGC or any other person). It is true that Mr Kumnick gave clear evidence of his pre-contractual negotiations with the Lowes. There was, however, little, if any, foundation for a separate cause of action in contract, at least for one independent of s 71 of the TPA; and the applicants' counsel did not ultimately contend to the contrary. 21 Moreover, in closing submissions, the applicants accepted that, if they failed to make out their claim based on s 71 of the TPA, then they would fail to make out their negligence claim. Accordingly, I do not hereafter discuss claims in negligence or contract simpliciter (i.e., apart from s 71 of the TPA). 22 Indeed, apart from the s 71- based claims, in closing oral submissions, counsel for the applicant conceded that the only other remaining claim that the applicants pursued was a limited claim based on s 52 of the TPA. Mack admitted that it had sold the truck to the Lowes in the knowledge that Mr Lowe wanted the truck for interstate long distance goods transport. The contest about the representations made at sale was slight. The focus of Mack's defence was on the vehicle itself, which it said was not defective in any relevant sense. Mack acknowledged that in the absence of the driver's log books, this remained no more than speculation. See below for further discussion. 24 The FORS Report was central to Mack's defence. It submitted that "the Court should not go past the findings of the FORS Report in determining the issue in this case" (written submissions, 1.8). If the Court had any doubts about the FORS Report, then, according to Mack, "these doubts are removed by the evidence of Dr Morrison" ([1.18]). 4. The respondents sought to provide a little more assistance in this respect. 27 Further, I note, lest it be thought the matter was overlooked, that the applicants proceeded as if there was a contract of sale between them and Mack in respect of the truck: see statement of claim, [3], [4], [10], [12] but see [11]. In its Defence (at [5]), Mack denied this contract of sale, but admitted that Mr Lowe entered into a contract with Mack for the acquisition of the truck, conditional on finance, and an agreement with AGC for the provision of finance. If there is any doubt about the contract between the parties, nothing apparently turns on it. The parties chose to proceed upon the assumption that s 71 of the TPA applied to "the contract for the supply of goods" between them, upon the basis that there was some such contract to which the provision might apply. The parties did not refer to s 73 of the TPA. 28 The applicants' claim for damages rested primarily on the conditions that s 71 of the TPA implies in a contract for supply of goods to which the provision applies. Section 71 of the TPA implies into contracts for the supply of goods to a consumer by a corporation in the course of business, a condition that the goods are of merchantable quality and, where the consumer makes known to the corporation the particular purpose for which the goods are being acquired, a condition that the goods are reasonably fit for that purpose. These conditions cannot be excluded: see s 68. Mack did not contest that it was a corporation within the meaning of the TPA, and that it supplied the truck in the course of business to the Lowes as consumers: see ss 4(1) and 4B. Further, Mack did not dispute that the Lowes made known that they required the truck for interstate long-haul goods transport. Mack did not rely on the exceptions in s 71. In a case such as this, the 'relevant circumstances' are likely to include the nature of the defect, its intractability, and its effect on performance: see, e.g., Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220, at 227-228 per Rougier J; Crowther v Shannon Motors Co [1975] 1 WLR 30 at 33; and Jillawarra Grazing Co v John Shearer Ltd (1984) ATPR 40-441 at 45-089 per Toohey J. Goods that are not of merchantable quality are unmerchantable: see Rogers v Parish (Scarborough) Ltd [1987] QB 933 (" Rogers v Parish ") at 946 per Woolf LJ and Courtney v Medtel Pty Ltd (2003)126 FCR 219 (" Medtel ") at 264 per Sackville J; appeal allowed in Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 but not on this point. Medtel concerned s 74D of the TPA, but its discussion of 'merchantable quality' is relevant in the present context. These issues call for an objective assessment. The focus of the first is the purpose or purposes for which the goods are "commonly bought" as opposed to the particular consumer's subjective purpose. Further, to quote Cooper J in Cavalier Marketing (Australia) Pty Ltd v Rasell (1990) 96 ALR 375 (" Rasell ") at 400, s 71(1) "requires that all normal purposes for which goods are commonly bought be brought into consideration. Fitness is to be tested against each of those purposes and none are to be excluded". 32 Rogers v Parish provides some limited guidance as to an appropriate approach in this context because it too concerned a road vehicle, although not a heavy commercial vehicle. Although roadworthy, the vehicle in question, a Range Rover, misfired at all road speeds, had excessive noise emitting from the gear box and substantial defects in the body work. The judge at first instance held that the vehicle was of merchantable quality because it was roadworthy and capable of proceeding from one place to another. This finding was set aside on appeal. What is the appropriate degree and what relative weight is to be attached to one characteristic of the car rather than another will depend on the market at which the car is aimed. The loads carried by the truck in this case were not said to be other than within the common range. Indeed, Mack conceded that the interstate long distance haulage of loads of the kind allegedly carried by the truck in the course of the Lowes' business was a "purpose for which trucks, such as the Lowe truck in question, would commonly be utilised". Thus, the first issue to arise under s 71(1) was not in dispute. 34 The contentious issue was whether or not the truck was fit for this purpose "as is reasonable to expect". In Graham Barclay Oysters Pty Ltd v Ryan [2000] FCA 1099 ; (2000) 102 FCR 307 at 445, Lindgren J (with whom Lee J on this point agreed) held that the words "as it is reasonable to expect" in s 74D are to be considered from the perspective of a reasonable consumer placed in the position of the actual consumer. Put another way, these words require the Court to consider what is objectively reasonable to expect at the time of supply to the consumer: see Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 , at 205 per Branson J, with whom Jacobson J agreed, and 199 [43] per Moore J. This assessment is to be undertaken in light of the information concerning the goods that is available at the time of trial: see 206 per Branson J. The first is the description applied to the goods. In the present case the vehicle was sold as new. Deficiencies which might be acceptable in a secondhand vehicle were not to be expected in one purchased as new. Next, the description 'Range Rover' would conjure up a particular set of expectations, not the same as those relating to an ordinary saloon car, as to the balance between performance, handling, comfort and resilience. The factor of price was also significant. At more than 14,000 [pounds] this vehicle was, if not at the top end of the scale, well above the level of the ordinary family saloon. The buyer was entitled to value for his money. The point does not admit of elaborate discussion. I can only say that to my mind the defects in engine, gearbox and bodywork, the existence of which is no longer in dispute, clearly demand a negative answer. The outcome of the case very much depends on the answer to this question. For this reason, in this case, s 71(1) and (2) give rise to substantially the same question. 37 Mack accepts that the applicants made it known to it that they were acquiring the truck for interstate long-haul goods transport. This entitles them to rely on s 71(2), as well as s 71(1). Indeed, Mack accepts that it assured them that the truck was fit for this purpose. It is common ground, therefore, there was an implied condition under the contract for supply that the truck was at the time of supply reasonably fit for this purpose. As noted, Mack did not seek to argue at trial that s 71(2) was unavailable to the applicants because they did not rely on Mack's skill and judgment or the skill and judgment of Mr Kumnick. 38 Although the notion of reasonable fitness for purpose is not precisely the same as the concept of merchantability, in this case there is no significant difference. There is here an overlap in the operation of s 71(1) and (2) and, under both, the real question is whether or not the truck was fit for the purpose of interstate long-haul goods transport. At trial the applicants and Mack accepted that this was so, and the applicants relied on the same facts to demonstrate a failure on Mack's part to meet both s 71(1) and (2). 39 Of course, even if the applicants establish that the truck was not fit for the purpose of interstate long-haul goods transport, there is a further question whether or not they are entitled to the relief they seek. As it happened, there was no great dispute as to whether Mr Kumnick made these statements to the applicants. Mr Kumnick admitted making the second statement and that he said something like the first. Thus, in an affidavit sworn before trial, he said that he told Mr Lowe that the truck should prove to be "safe and reliable" for about 800,000 kilometres. He also told Mr Lowe that the truck would be ideally suited for his purpose of interstate haulage. Mr Kumnick emphasized that he made this latter statement and the observation that the trucks "drive like cars" in the context of talking to an experienced heavy vehicle driver. 41 Section 52 of the TPA prohibits a corporation from engaging in conduct in trade and commerce that is misleading or deceptive, or that is likely to mislead or deceive. The words "engage in conduct" include the making of representations about a past, present or future matter. It is not in issue that, for the purposes of s 52 of the TPA, the respondent is a corporation engaged in trade and commerce. 42 The application of s 52 is not restricted to conduct that is intended to mislead or deceive: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 (' Puxu ') at 197 per Gibbs CJ; and Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228 per Stephen J. The conduct complained of must be viewed as a whole: see, e.g., Puxu at 199 per Gibbs CJ. 43 In order to make out their case under s 52 of the TPA, the applicants need to establish that: (1) the conduct of which they complained occurred; (2) viewed objectively, the conduct was misleading or deceptive; and (3) they relied on Mack's conduct in the sense that it operated as an inducement for them to enter into arrangements for the acquisition of the truck. In order to be compensated for any loss and damage under s 82(1) of the TPA, they also need to establish a causal connection between this conduct and the loss for which they seek compensation: see, e.g., Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525-526 per Mason CJ, Dawson, Gaudron and McHugh JJ and Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469-470 per Gleeson CJ, 480 per Gaudron J, 489 per McHugh J and 509 per Hayne J. 44 Where a corporation makes a representation with respect to a future matter, and the corporation does not have reasonable grounds for making the representation, s 51A(1) of the TPA deems the representation to be misleading for the purposes of s 52 ; and s 51A(2) deems a corporation not to have reasonable grounds unless it adduces evidence to the contrary. See Ting v Blanche [1993] FCA 524 ; (1993) 118 ALR 543 at 552 per Hill J and Phoenix Court Pty Ltd v Melbourne Central Pty Ltd (1997) ATPR (Digest) 46-179 at 54,432 per Goldberg J. Applicants who rely on s 51A do not, therefore, have to establish as part of a cause of action under s 52 of the TPA that the respondent did not have reasonable grounds for making the representation. (C) Were there insurmountable deficiencies in the applicants' s 52 claim as Mack alleged? If accepted, this would constitute the short answer to this part of the applicants' case. Mack's position was stated in submissions received, with leave, after closing submissions. This case is, however, different from the majority of cases in this court. The applicant's pleading has never been very satisfactory, as earlier discussion indicates. At trial the applicants focused on what they, and therefore Mack, perceived to be the key issue: whether or not defects in the truck rendered it unfit for the purpose of interstate long-haul goods transport. This had been identified as the key issue at an earlier court-initiated meeting of experts. Immediately prior to trial, the applicants did not apparently give more than fleeting consideration to any cause of action other than that deriving from s 71 of the TPA. At no point did they make a clear case on any matter other than s 71. Save in answer to my questions, the applicants made virtually no closing written or oral submissions as to the operation and application of s 52 of the TPA having regard to the evidence at trial. In this context, Mack was granted leave to file late submissions. The applicants have not sought to answer them. In these circumstances, if, as Mack says, there is a fundamental defect in the applicants' s 52 case, Mack is entitled to succeed in having this aspect of the applicant's case dealt with accordingly. 47 There has been no application to amend the pleading. I accept that there are at least three significant deficiencies in the applicants' pleading of their s 52 claim. First, the pleading does not specifically identify the basis upon which sixteen representations, pleaded at [5], including the two that continue to be relied on, were untrue. As noted, the Further Amended Statement of Claim at [20] asserts that, by reason of matters in [16]-[19], the representations were false and that Mack had no reasonable grounds for them. Paragraph [16] pleads that the truck was not fit for the purpose (i.e., of "long distance interstate haulage of semi trailers carrying loads of approximately 42.5 tonnes") in that within six months of operation it suffered from numerous (identified) defects. Paragraph [17] pleads that the applicants reported the defects to Mack. Paragraph [18] pleads that the defects worsened. As we have seen, [19] is concerned with the cause of the defects. No part of the pleading states precisely in what respect or respects either of the two representations presently relied on was false. At best, the reader is left to trawl through [16]-[19] to work out what matters might be said to support the applicants' pleading at [20]. It is plain enough that much in these paragraphs is irrelevant to this claim. There is therefore no adequate basis for the pleading at [21] that, by virtue of matters asserted in [6]-[10], [12] and [16]-[20], Mack engaged in misleading and deceptive conduct or conduct likely to mislead or deceive contrary to s 52 of the TPA. Furthermore, this last-mentioned pleading is itself confusing since much of these cited paragraphs can have nothing to do with the matter. A fortiori, there is no adequate basis for the pleading in [35] that by reason of the TPA contraventions (which include the pleaded s 52 breach) they have suffered loss and damage. 48 Secondly, notwithstanding their apparent invocation of s 51A of the TPA, the applicants did not, at any stage, indicate which of the sixteen representations alleged in [5] of the Further Amended Statement of Claim were representations in respect of future matters. They made no submissions on the issue at trial. Again, the reader is left to guess whether or not they allege that the representations on which they presently rely (for example, the 'safe, reliable and efficient service' representation) is to be treated as a representation as to a future matter. 49 Thirdly, the applicants provided no particulars of the damages that they allege flowed from this supposed misleading and deceptive conduct. 50 The applicants have not pleaded the facts upon which their s 52 claim would depend with the care and clarity that is called for in such a pleading: compare Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (1998) ATPR 41-633 and Banque Commerciale S A v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J. What the applicants have done is pick up and rely on their pleading as regards s 71 of the TPA as part of the pleading of a claim based on s 52 of the TPA. This course has left the scope of their s 52 claim a matter for guess work. As I have said, it was a claim scarcely mentioned at trial and all but abandoned in closing submissions, when counsel for the applicants conceded that the s 52 claim added nothing in substance to the s 71 claim. In these circumstances, it is plain enough that the claim was fundamentally flawed at the outset of the trial and remained so. It would be unfair to require Mack to guess at what it meant and therefore how it might be answered. In so far as the applicants sought to retain any part of their s 52 claim, it must fail. 51 Further, although it scarcely matters, I agree with Mack's submission that Mr Kumnick's statement to the effect that driving the truck was like driving a car was in the nature of commendatory puffery and not a representation of an actionable kind. Whether representations made in the course of negotiations such as those for sale are actionable or merely in the nature of puffery depends on the particular facts, considered "in the light of the ordinary incidents and character of commercial behaviour": see General Newspapers Pty Ltd v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 , at 178 per Davies and Einfeld JJ; Pappas v Soulac Pty Ltd (1983) 50 ALR 231 at 234-235 per Fisher J; and Sanders v Glev Franchises Pty Ltd [2002] FCA 1332 at [270] - [274] per Kenny J. 52 In Pappas v Soulac (1983) 50 ALR 231 , Fisher J held that a number of the statements made by the vendor's agent (a Mr Spencer) to the purchasers of a shopping centre were of this kind. They were also essentially the type of introductory comments, in the nature of puffery, made at the start of negotiations for the purpose of attracting the interest of a possible purchaser. As such they became irrelevant or of little, if any significance when detailed information is subsequently given a fortiori, to a potential purchaser with commercial experience. To the extent that they are essentially puffery, it is proper to be reluctant to elevate them to the status of potentially misleading conduct. See also Hanave Pty Ltd v LFOT Pty Ltd [1998] FCA 1051 (31 August 1998) per Moore J. 53 The fact was that Mr Lowe was a knowledgeable truck driver, having over 20 years' truck driving experience involving some 10 trucks, three of which had been Mack trucks. He was also a qualified mechanic, who undertook some of his own servicing. Mr Lowe had also bought this kind of vehicle before and was therefore a relatively experienced purchaser of trucks. It was clear from the evidence that he aware of pricing and comparative specifications and Mr Kumnick knew this. In these circumstances I accept that, as Mack submitted, Mr Kumnick's statement was in the nature of commendatory puffery. It was a statement of opinion that was incapable of being objectively proved to be true or false. To the extent that this representation was essentially puffery, it should not be elevated to the status of potentially misleading conduct. 54 In any event, even if Mr Kumnick's statement that the trucks "drive like cars", was a representation of material fact, the applicants did not establish any causal connection between the representation and the Lowes' entry into arrangements to buy the truck. That is, there was no evidence that Mr and Mrs Lowe relied on the representation. 55 I would not take the same view of the 'safe and reliable' representation. Although the applicants gave evidence at trial that a factor influencing their decision to purchase the truck was the matter of price, it is equally clear that they also relied on Mr Kumnick to identify a vehicle suitable for use in their business. 56 The real difficulty with this aspect of their s 52 claim flowed from the initial pleading failures mentioned above. Save to refer broadly to the unmerchantability/unfitness for purpose claim, the applicants did not state at any stage in what precise respect or respects the 'safe and reliable' representation was false. There was no reference at trial to s 51A in connection with this representation. Furthermore, as noted above, the applicants did not attempt to identify the particular damage that flowed from their reliance on this supposed misrepresentation. 57 Furthermore, I am unable to discern in the evidence anything that might be regarded as proof of damages for this purpose: compare Gurdag v Stillwell Ford Pty Ltd (1985) 61 ALR 689. There is no claim for repairs or loss calculated by reference to the price the applicants paid for the truck and its true worth. As discussed below, the evidence led in connection with loss of profits is fundamentally flawed. There is a claim for loss of time for 73 days, which has not been proved. These observations confirm my conclusion that, as the applicants' counsel said, this cause of action can in fact add little to the applicants' primary case. 5. Mr Lowe was forty-nine years of age when he acquired the truck. He was a qualified mechanic and an experienced truck driver. He had more than twenty years' experience of driving a number of different heavy prime mover vehicles in long-haul interstate transport operations. Mr Lowe and his wife had begun their long-haul goods transport business over twenty years before the purchase of the truck. He had owned and operated numerous different model trucks prior to March 1998, including three Mack trucks. In September 1997, some months before the purchase of the truck in March 1998, he and his wife purchased a new Tautliner semi-trailer. The truck was to be used to transport this semi-trailer, loaded with goods. 59 On or shortly before Friday, 20 March 1998, Mr Lowe spoke to Mr Kumnick at Mack's Adelaide office about buying a new truck to replace the Mack CHR he was operating at that time. Mr Lowe and Mr Kumnick had regular dealings with one another at this time. In this circumstance, Mr Kumnick knew that the replacement truck was for use in interstate haulage. Mr Kumnick made an appraisal of Mr Lowe's Mack CHR and looked into what Mack might offer by way of a replacement. 60 On the evening of 20 March 1998, Mr Kumnick telephoned the Lowes and told Mr Lowe that the truck --- the Mack CH Elite --- would "ideally suit his intended use" and that "it should prove to be a safe and reliable vehicle for about 800,000 kms". When asked in cross-examination about this "ideally suited" statement, Mr Kumnick affirmed that Mr Lowe "understands the spec of trucks just as well as I do". Mr Lowe said that he was looking at trading in his Mack CHR on a new truck that was not manufactured by Mack but that he was attracted to the truck because of the price Mr Kumnick quoted him. His evidence in cross-examination was that the trade-in price Mr Kumnick offered on the evening of 20 March 1998 was what made the truck "very interesting" to him. 62 Mr Lowe left for Brisbane in his Mack CHR on Saturday, 21 March 1998, having agreed with his wife that, if she thought it was suitable, she would enter into arrangements to purchase the truck. Mr Lowe did not need to see the truck, because he knew what it looked like. Test-driving it was impractical because, as Mr Lowe said, "[t]here is absolutely no point ... without a trailer on". Mr Kumnick substantially agreed that the Lowes were to a large extent reliant on Mack to identify a vehicle that was suitable for their business. 63 On Monday, 23 March 1998, Mrs Lowe looked at the truck and spoke to Mr Kumnick. She too said, and I accept, that there would have been no utility in her taking the truck for a test drive since she was not a truck driver. Mr Kumnick reiterated that the truck was suitable for what her husband needed. Besides listening to Mr Kumnick, Mrs Lowe also said that she thought the price a good one and that this was an important factor. Furthermore, she liked the look of the truck, observing it "just looked comfortable". On that day, she signed a 'New Truck Proposal' on the applicants' behalf, which included a trade-in of the Mack CHR and was subject to finance. The finance company gave her verbal approval that day. 64 On her way out of Mack's office on 23 March 1998, she picked up and took away a sales brochure, which she later read. Mr Lowe read the brochure before he signed AGC's finance documents some time after he returned from Brisbane, by which point the Lowes were already committed to the acquisition of the truck. 65 Mr Kumnick telephoned Mrs Lowe two days later, on 25 March 1998, to clarify the truck's specifications. On 27 March 1998, Mr and Mrs Lowe visited their finance broker and signed AGC's 'Standard Asset Purchase Agreement' in respect of the truck. On 31 March 1998, they visited Mack's office and spoke with Mr Kumnick and his superior, Mr Reno Buttignol, and, in Mr Buttignol's presence, Mr Lowe signed a 'Retail Sale and Warranty Registration Form'. He also received a document entitled 'New Vehicle Warranty Information'. Later that day, he insured the truck with the truck insurer, National Transport Insurance ('NTI') and took delivery of it. Mr Lowe began to drive the truck on 1 April 1998, when he took it from Adelaide to Brisbane. Mr Lowe's evidence was that the ride was rough and jarring and worsened during the trip. He said that the handling was bad and that the truck darted and dived off course unpredictably. Mr Lowe said that he repeated these complaints on his return to Adelaide when he took the truck in for its first service. 67 I do not wholly accept this account of Mr Lowe's first experience with the truck. I accept that he complained to Mack about the rough quality of the ride and mentioned handling issues at this time, since this is consistent with his subsequent complaints about the vehicle. Further, some time in April 1998, Mrs Lowe also raised the 'rough ride' issue with Mr Kumnick. I do not accept that his complaints went much beyond this, however, because this is not borne out by the work that Mack undertook shortly thereafter. Mr Lowe conceded in cross-examination that any work done on the truck on 3 April 1998 was relatively minor and that the truck went in for a standard service on 6 April 1998. On this occasion, the Mack workshop rectified a leaking cab valve and replaced broken fuel cap washers. 68 Further, on 16 April 1998, after 13,487 kilometres, Mack did some more work on the truck. On this occasion, Mr Lowe complained about the front and rear wheels scrubbing, as well as lack of power. The truck was sent off for tests to ensure that its wheels were correctly aligned and the axle correctly cambered. In cross-examination, Mr Buttignol, who was at the time service manager for Mack Adelaide, said that these tests showed that the front axle required minor adjustment. 70 Johnson's Truck and Coach Service, Buronga, New South Wales, made further repairs on 14 August 1998. At Johnson's, Mr Lowe specifically complained about the fact that the truck "rides rough and [was] hard to handle". Mack job cards for 23 April 1998 and 14 May 1998 recorded Mr Lowe's complaints of poor or harsh ride and lack of power. A dynamometer test at this time indicated, however, that the power train was performing within specifications and there was no power deficiency. 71 Also during this time, there were repairs or replacements of such things as shock absorbers and shock absorber rubbers, spring shackles and brushes, bonnet mounts, window seals, and steering covers. There was an issue with the gear stick. In April 1998, work was done on the air bag suspension, by adding quick acting valves, and Mr Lowe conceded that he did not experience problems with the air bag suspension system beyond this time. In July 1998, the transverse cabin rod was replaced. 72 There is thus some evidence that Mr Lowe complained about handling problems after his first trip and in the first six months of operating the truck. On 10 July 1998 and again, on 14 August 1998, conversations between Mr Lowe and Mr Kumnick touched on this issue. There is also no doubt that Mr Lowe complained about the truck's 'rough ride' during this time. Mack job cards recorded the complaint. 73 In mid June 1998, Mr Lowe was admitted, mid trip, to Swan Hill hospital, with appendicitis. As a result, Mr Edward Pasfield completed the trip for him. Mr Lowe had known Mr Pasfield for numerous years and had earlier worked with him. As Mr Lowe was still recovering from surgery in late June 1998, he and Mr Pasfield drove as a two-up team on a trip from Adelaide to Cairns. Mr Lowe's evidence was that, on this occasion, the ride was "so rough that it was almost impossible to sleep in the cab bunk" and "[e]very bump in the road jarred the whole truck and the driver". He also said that "the ride in the truck was extremely rough" on the Cairns trip and the co-driver was unable to sleep in the cabin because it was "too rough". Mr Pasfield also gave evidence that, at some stage, Mr Lowe had offered him a regular job driving the truck. Mr Pasfield said that he had declined the offer because he had never driven a vehicle as difficult to handle as the truck. 75 For the reasons stated below, I would not regard Mr Pasfield as an entirely reliable witness. 76 From at least July 1998, relations between Mack and the Lowes were difficult. On 6 July 1998, Mr Kumnick spoke to Mr Lowe, Jon McLean and Mr Buttignol about Mr Lowe's 'rough ride' complaint. Mr McLean was Mack's branch manager for Adelaide and Darwin. Four days later, Mr Kumnick spoke to Mrs Lowe and Mr Buttignol about the handling and rough ride issues that Mrs Lowe raised on Mr Lowe's behalf. Three days later again, on 13 July 1998, Mr Kumnick again spoke to Mr Lowe about these issues. These conversations were inconclusive and, on 14 July 1998, Mack issued Magistrates Court proceedings for the non-payment for work done on the truck. 77 One problem was that Mack employees did not themselves perceive the 'rough ride' and handling problems that Mr Lowe complained of. In cross-examination, Mr Buttignol was asked how many times Mack had road tested the truck. His answer was that "it would have been quite a few times", although he rode in it only once, on 24 August 1998. He said that, though not always recorded, test drives would have been done following repair work. I accept his evidence in this regard. Just as Mr Buttignol said, the repair documents indicated that the truck had been tested on a number of occasions following repairs. 78 On 24 August 1998, when Mr Lowe took Mr Buttignol for a test drive, they went with a fully loaded trailer, for somewhere between 60 kilometres (according to Mr Buttignol) and 100 kilometres (according to Mr Lowe). Mr Buttignol said that he could not identify any problem with the vehicle and, in particular, he could not detect the rough ride that was the subject of Mr Lowe's complaints. His evidence was that Mack carried out the standard checks to investigate the rough ride complaint and they did not show the truck to be operating outside specifications. Mr Lowe, on the other hand, said that the problems with the vehicle were "clearly apparent". On the drive I went up to Kapunda, across to Tarlee; from Kapunda to Tarlee is a rough road. [The problem was] rough ride and wandering. Mack tested the gearbox later in 1998 and found it to be fully operational. I accept that he genuinely believed that there were 'rough ride' and handling issues, the significance of which fall for determination. I also evaluate Mr Lowe's evidence in this regard below. 81 A settlement of the Magistrates Court proceeding was negotiated in October and November 1998. The proceeding was ultimately discontinued on 24 November 1998. 82 On 12 and 28 October 1998, Mr Kumnick and Mrs Lowe had conversations about the truck. In the latter conversation, Mrs Lowe asked Mr Kumnick whether Mack would buy back the truck. On 29 October 1998, Mr Kumnick spoke to Mr McLean about Mrs Lowe's proposal and later told her that Mack would not buy the truck back from them. These conversations with Mrs Lowe must be viewed in the context of other conversations at this time and the work then being done by Mack on the truck. 83 On 19 October 1998 Mr Buttignol told the Lowes that Mack would look at some agreed issues whether covered by warranty or not. The issues were whistling on the external mirrors, replacement of the turbo for the engine brake, replacement of the front spring hangers, rubber fittings to the doors, and engine overheating. There was no specific mention of rough ride, handling or vibration. When the truck came in for service on 19 October 1998, two further items were added to this list --- cabin squeak and mirror heater. As at this date, the truck had done 141,160 kilometres. 84 On 22 October 1998, Mr Buttignol and another Mack employee, Dean Hutchinson, went through the completed work with Mr Lowe. At this stage, Mr Lowe identified only two matters for further attention --- an outstanding turbo unit and draft excluding material for the doors. He latter mentioned the replacement of the front bumper bar. Mr Buttignol said that he told Mr Lowe that he would be notified when the turbo unit became available. Mr Buttignol also said (and Mr Lowe did not recall) that, when he telephoned Mr Lowe on 28 October 1998 to confirm his satisfaction, Mr Lowe complained that the engine was still over-heating and the wind was whistling on the side skirts. Mr Buttignol agreed that Mr Lowe should bring the truck in the following week, which Mr Lowe did. The service records show that the truck was inspected on 2 November 1998 and found to be mostly without fault. Notwithstanding this record, Mr Lowe brought the truck in again on 25 November 1998, with a further list of work to be done. According to Mr Buttignol, Mack did the work as requested. 85 In November 1998, the truck's steer axle tyres were replaced, having done 105,000 to 110,000 kilometres. This was, so Mr Lowe conceded, "above average". 86 Apart from this, there were no major repairs in November 1998 and, as Mr Lowe conceded, nothing that would have indicated handling or other major issues with the truck. 87 In December 1998, Mack replaced front spring shackle brackets and a cab shock absorber. Mr Lowe described the former as relating to handling issues, and the latter as relating to rough ride. In January 1999, for example, Mack replaced the steering wheel. In mid February 1999, when the truck had travelled about 220,000 kilometres, two steer tyres and eight drive tyres were replaced due to wear. Mr Lowe acknowledged that he had fitted retreads as drive tyres. He also conceded that the original set of tyres had provided adequate service life. Flat batteries were replaced in late February 1999. 90 In late 1998 or early 1999, the applicants met with Mack's National Service Manager, Wayne Wallace, to discuss their complaints about the truck. Amongst other things, Mr Wallace was ultimately responsible for all warranty issues throughout Australia. Mr Wallace's evidence was that he first became aware of issues with the truck around September/October 1998 when Mr Heironymus, at that time Mack's Zone Service Manager in Brisbane for South Australia, Tasmania and Papua New Guinea, told him about Mr Lowe's concerns. Mr Wallace said in cross-examination that, whilst rough ride was mentioned by Mr Lowe in this interview, most of the problems were "more technical issues like cab mounts, shackles and those type of things". 91 The meeting with Mr Wallace was unsatisfactory from the Lowes' point of view. Mr Lowe said that they discussed rough ride, cab mounts, tyre wear, the chassis, and the problems of getting warranty work done. Mr Lowe said, and Mr Wallace denied, that Mr Wallace told him that he was not stopping enough to let the cab mounts cool down. Mrs Lowe corroborated Mr Lowe's account. Mr Wallace said that Mr Lowe "was quite emotional and it was difficult to obtain a coherent list of complaints". Mr Wallace also said that Mr Lowe provided him with a list of issues and demanded that they be completed within two days. Mr Wallace told him that this was not possible but that Mack would attend to the two or three most important matters and that Mr Heironymus would attend to the rest in Adelaide. 92 Mr Wallace gave evidence about the repairs that Mack carried out following this meeting. These repairs included the replacement of the front spring shackle, modification of front spring rubbers, rectification of the pyrometer, replacement of rear shock absorbers and rear shock absorber rubbers, refixing of a Mack badge, fixing of a broken brake hose clamp, sealant applied to fix an oil leak at the steering pump, a radio bracket fixed, refitting of air conditioning hose, fixing door to prevent wind penetration, replacement of air compressor, replacement of door trim, modification of mirrors, replacement of insulation rubbers around bunk skirt, and removal and reglueing of fuel tank rubbers. 93 I accept Mr Wallace's evidence about Mr Lowe's demeanour at his first meeting with him. I have little doubt that Mr Lowe was "quite emotional". I also accept Mr Wallace's account of the discussion, which is borne out by Mack's subsequent work on the truck. Notwithstanding the Lowes' evidence, I do not accept that Mr Wallace said that Mr Lowe was not stopping enough to allow the cab mounts to cool down. I accept that one or other or both of the Lowes may have understood him to say this and that they persuaded themselves in later discussions with one another that he did make these comments. By this time, Mr Lowe's judgment about the truck was clouded by emotion and Mrs Lowe was embroiled in his concerns. 94 Mr Wallace subsequently asked Jon Heironymus to obtain a list of complaints from the Lowes. On 11 January 1999, Mr Heironymus telephoned Mr Lowe for a list of items that Mr Lowe considered were defective or deficient. On 8 February 1999, Mr Wallace responded by fax, commenting that the list "has far from enough detail to complete an accurate investigation" and that some items were no more than "routine maintenance". In cross-examination, Mr Lowe agreed that there was nothing about handling in this list, apart from the reference to "steering universal joints loose"; and nor was there any specific mention of vibration. Mr Lowe sought, however, to rely on "tyre wear" as further evidence of a handling issue and "rough ride". The evidence did not, however, establish that the tyre wear was below the expected level. 96 Also on 8 February 1999, Mr Lowe made an inspection of the truck, as he said, "to try and discover why it was giving so many problems". He believed he observed bent chassis rails. He telephoned Mr Heironymus the next day and told him that the chassis was bent laterally and sagged. Mr Heironymus, who was a heavy commercial vehicle mechanic by training, looked at the truck in Brisbane on 12 February 1999. The only defect he found was a minor leak in the right shock absorber, although he also saw that "to the unaided eye the rails were not perfectly straight". He went over the truck with a copy of the solicitors' list and annotated the list as he went. The list, as annotated, was the basis of a further list that accompanied Mr Wallace's letter to the Lowes' solicitors dated 2 March 1999: see below. Also on 12 February 1999, Mr Lowe took Mr Heironymus for a test drive for about 50 kilometres along the Cunningham highway to around Willowbank. Mr Heironymus did not detect anything wrong with the truck and, in particular, did not observe any vibration, shocks, wandering or darting. He did not perceive the rough ride of which Mr Lowe complained. 97 From March 1999, Mack Adelaide assumed responsibility for Mr Lowe's vehicle because Mr Lowe notified Mack that he was not intending to take it to Brisbane any longer. On 2 March 1999, Mr Wallace wrote to the applicants' solicitors stating that Mack wanted to inspect the truck chassis, since Mr Lowe said it was bent. He also attached a list of the work Mack was to do on the vehicle. I set out the list, since it records Mack's understanding of the vehicle issues as at that date. Rough ride from front This will be assessed during a test drive, this would be best done by a neutral party. 2. Front springs out of shape The springs in this vehicle are normal, however, the bump stops will be changed to items that provide more clearance to the chassis to minimise bump stop to chassis contact. 3. Turbo This turbo has been put aside in Brisbane for Graham and will be fitted when suitable for Graham. 4. Front bumper This issue will be taken up with Adelaide Branch as it is a sales issue and not a service issue. 5. Tyre wear Graham could not provide figures on tyre life as he did not have them at hand. However, the original set of tyres provided adequate service life. We suggest Graham goes back to the tyre manufacturer for assistance in diagnosing his current complaint. 6. Steering universal joint worn This is a warrantable repair and will be corrected as such. 7. Right seat no valve action As agreed to by Graham, a manual style adjusting valve will be fitted to the seat. 8. Right front wheel bearing caps leaks As agreed to by Graham, alternative breathers will be fitted to these hub caps. 9. Front left hand guard warped As agreed to by Graham, there will be nothing done with this item as this is the normal shape of this item. 10. Tank strap rubber All tanks will have rubber fitted to the fuel tank mounting brackets and under the straps. 11. Bunk light U.S. This will be replaced as required. 12. Wind through door lock The correction for this complaint has apparently not worked on Graham's vehicle and this will have to be looked into further to determine action. 13. Front hub cap missing Although Mack cannot be held responsible for this aftermarket item, a new one will be supplied to Graham. 14. Heat in cab As agreed to by Graham, we will fit thermal blankets to the exhaust under the cab. 15. Radio falls out The mounting bracket requires adjustment to enable the clips to latch into the mounting frame. 16. Power steering hose rubs on pulley The hoses will be adequately restrained to prevent this. 17. Batteries wrong Correct batteries will have to be fitted. Air cleaner pipe to motor found The oil sample results will be monitored to determine the effect of this pipe being loose. 19. Rubber on skirts out again This foam rubber will be adequately secured to the transition panels. 20. Hole rubbed in breather As inspected there was not actually a hole rubbed in the breather. The mark in the breather was caused by the stud for the lower mounting bracket being loose, Graham offered to correct this himself. 21. Air conditioner hose worn The shroud will be fitted with a piece of protective moulding to prevent further wear occurring. 22. Air cleaner tube worn on bonnet Graham accepted that this would be corrected with a simple adjustment and committed to do this himself. 23. Cab leaking water during heaving rain The evacuator valves in the air intake duct were removed to prevent this condition. This was done by Graham during this meeting. *24. Hose coming loose @ rear of transmission This will be assessed when the vehicle is in the workshop. *25. Pyrometer not operating This will be repaired as normal warranty. * Indicates issues that were not on the original list that was supplied and have been added to the list after they were raised by Graham. He conceded, however, that Mack substantially addressed the issues that he raised. 99 Mr Wallace subsequently arranged for Carmello Gentilcore, of All Transport Industries, to do a laser alignment test of the truck chassis. The test, which was completed on 15 April 1999, showed that the chassis was straight. Mr Lowe did not contest the result of this test. 100 The applicants and two other husband and wife truck owner-operators met Mr Lambert on 24 March 1999, to discuss what was planned for the next day. On 25 March 1999, the applicants met Mr Lambert and Lindsay Pollock (a DECA senior driver) at Rick Cobby's depot. Later that day, Lambert and Pollock completed an inspect and drive test of the truck for the purpose of selecting vehicles to be examined in the FORS Inquiry. 101 On 29 March 1999, the applicants received the report and, after reading it, Mr Lowe contacted NTI. This report was compiled after Mr Pollock had driven Mr Lambert on a 183 kilometre round trip through Kapunda (in South Australia). By this time the truck had done about 246,800 kilometres. Some 26 vehicles were taken through the 'inspect and drive' stage, but only five vehicles, including the applicants' vehicle, were ultimately given full instrumental testing. When the road is rough, the ride, wander, and directional stability problems are probably the second worst experienced during the test drive program. His evidence was in substance that he did not drive the truck at this time because he believed there was a risk that he was uninsured. Mrs Lowe corroborated her husband's evidence on this issue. 103 Mr Lowe claimed to telephone Mr Wallace on 30 March 1999, to inform him of this, although Mr Wallace said that he spoke only with Mrs Lowe (and Mr Lambert) this day. According to Mr Wallace (whose evidence I prefer since he kept a contemporaneous record of such conversations) he telephoned Mrs Lowe on 30 March 1999, in order to contact Mr Lowe. In this conversation, Mrs Lowe told Mr Wallace that NTI would no longer insure them and that there were more problems with the truck. Also on 30 March 1999, Mr Wallace and Mr Lambert had a conversation about the truck. 104 On 31 March 1999, the Lowes' insurers, NTI, wrote to Mrs Lowe about the terms of the contract of insurance for the truck. By this time, the list of defects had increased to 49 and contained the first mention of "severe vibration (downhill 1 2 3 gears)". When Mr McLean received the fresh list of complaints on 31 March 1999, he asked Mr Lowe what list Mack was to work from. Mr McLean said (and Mr Lowe did not deny) that Mr Lowe wanted all the 49 items dealt with, on the basis that they were covered by warranty --- a claim that Mack did not accept. 106 When Mr Lowe was asked about the addition of items that had not figured in previous discussions he said, "Well, the truck is another six weeks older, it has had more problems". I reject Mr Lowe's explanation. It should be borne in mind that this list coincided with the end of the truck's warranty period. Apart from the fact that the warranty period was ending, there would appear to be no good reason for the large increase in further defects. I also note that, even though enlarged, this list mentioned nothing expressly about wandering or darting, or computer faults of the kind Mr Lowe alleged. 107 When Mr Wallace telephoned Mr Lowe on 1 April 1999, Mr Lowe reiterated that he could not get insurance. Mr Wallace sought to clarify NTI's position. He spoke to Mr Lowe again on 6 April 1999 and, on 7 April 1999 at Mack Adelaide, when he went through Mr Lowe's list of complaints with him. 108 Mr Buttignol was kept informed of the communications between Mr Wallace, Mr Heironymus, Mr Lowe and his solicitors. On 7 April 1999, Mr Lowe brought the truck into Mack Adelaide, where Mr Wallace and Mark Albertson, another Mack employee, spent about 90 minutes going over the truck. Mr Wallace and Mr Albertson were to give Mack Adelaide an action plan for the truck's repair or rectification. On 7 April 1999, when the Lowes left, the truck was moved over to the pit area, and Mr Wallace and Mr Albertson "went through the truck taking measurements". On 8 April 1999, by which time the truck had done 251,321 kilometres, a jobs list was written up from the issues agreed with Mr Lowe the previous day. There were about 27 items, some of which were of a relatively minor nature. 109 Mack had the truck for about three and a half days before returning it to Mr Lowe as requested. Mack maintained (and Mr Lowe disputed) that Mack performed all the work as agreed, although not all at the same time. For reasons that appear below, I prefer the evidence of Mr McLean and Mr Buttignol on this matter to the evidence of Mr Lowe. 110 On 9 April 1999, Mr Lowe asked Mr Wallace for a letter, for insurance purposes, stating that the truck was safe. He also informed him that he was joining a class action against Mack. Mr Wallace told him that any such letter would need to come from Mack's solicitors. A week later, on 14 April 1999, Mr Wallace told the Lowes that they would need to make a written request for such a letter. The applicants never made this written request. Under the s 75A notice, the Lowes purported to rescind the contract for the sale of the truck on the basis that it was not of merchantable quality and was not fit for the purpose for which it was supplied. Mack, through its solicitors, denied the validity of the purported rescission. Mr Lowe explained this decision on the basis they could not operate their business without using it. I accept that this was so. Work was done on the truck on various dates thereafter, including on 3 May 1999 (when Hancock and Just worked on the steer axle allegedly to rectify a camber fault) and 4 May 1999 (when batteries were refitted). On 30 June 1999, Mr Lowe had gas shock absorbers fitted at a cost of $1,120. 113 On 5 May 1999, Mr Buttignol faxed Mr Wallace a list of outstanding jobs from the Lowes' list. Mr Lowe spoke to Mr Heironymous about cab mounts around 14 May 1999. 114 On 17 May 1999, the representative proceeding began against Mack in this Court. In late May 1999, Mr Lowe delivered the truck to Roaduser in Melbourne for testing by it for the FORS Inquiry. The truck remained with Roaduser between 21 and 27 May 1999. On 30 June 1999, the FORS released its interim report. It released its draft final report in October 1999 and invited written responses by 30 November 1999. 115 Between May and July 1999, Mr Wallace had various conversations with the Lowes. When Mrs Lowe telephoned him on 8 June 1999, asking when Mack was going to fix the rest of the truck, Mr Wallace told her what had been done and that the only outstanding matters were spring brackets and cab mounts, which had been available for some weeks. Mr Wallace asked Mrs Lowe whether Mr Lowe would show him the alleged faults. Mr Lowe said that around this date Mr Wallace told him over the telephone that from this point Mack would only do warranty work on cab mounts and shackle chassis brackets. He alleged that, from that point onwards, Mack did not do all that he asked and was slow in what it did. Whether true or not, from 30 June 1999, the truck was no longer repaired and serviced at Mack's workshop and Mr Lowe did not obtain spare parts from Mack. Mr Lowe conceded that, from the end of June, there was much less work done on the truck than earlier in his operation of it. 116 As noted above, the FORS released the interim report on 30 June 1999, describing the steps being undertaken in the project and the project methodology. When Mr Wallace spoke to Mr Lowe on 12 July 1999, he offered to look at the truck to see whether Mack could solve any of the problems he said it still had. Mr Lowe rejected the offer and Mr Wallace did not speak with him again. In cross-examination, Mr Lowe denied that Mr Wallace made any such offer to re-examine the truck. However, I prefer the evidence of Mr Wallace to that of Mr Lowe on this issue. Subject to my comments below, Mr Wallace was basically an honest witness, whose evidence was generally supported by his contemporaneous notes. For the reasons set out below, I conclude that Mr Lowe's evidence was flawed by a lack of objectivity. 117 The FORS released its draft final report in October 1999 and invited written responses by 30 November 1999. 118 At Mr Lowe's request, the Lowes met Gordon Hellowell, Mack's new CEO, on 15 October 1999 to discuss the truck. Mr Hellowell declined to look at the truck, however, saying he was an accountant and, in any event, he could not talk about it much because of the Lowes' legal proceedings. 119 On 28 and 29 December 1999, Mr Lambert tested the truck in Adelaide. 120 On 21 January 2000, the applicants parked up the truck at Rick Cobby's depot. They sold their 1997 Tautliner trailer several days later. When Mr Lowe parked up the truck, he had, so he said, just completed a particularly difficult trip, dogged by computers problems that made the truck unsafe to drive. In cross-examination, Mr Lowe said that the truck was "just too bad to operate any more". He (and Mrs Lowe) denied that the truck was parked up because of the proceeding in this Court, in which the applicants' claim was that the truck was unfit for the purpose of interstate long distance haulage. For the reasons stated below, I do not accept this explanation. 121 On 28 February 2000 and 26 June 2000, the applicants met Dr McLean, who took some measurements on the latter date. The FORS Report was published on 18 April 2000. 122 On 10 May 2000, AGC terminated the Lowes' account and, on 26 May 2000, it took possession of the truck. On 5 June 2000, AGC served a termination notice on the Lowes. Mr Robert Jenkins purchased the truck in October 2000. The mileage was then recorded at 405,000 km. Mr Jenkins was still using the truck when he attended court to give evidence. By this time, the truck had done well over 500,000 kilometres more. Mr Jenkins stated that he did not detect the problems in the truck that Mr Lowe alleged. 123 A further report, "ATSB-ARRB Transport Research Report: Heavy Vehicle Seat Vibration and Driver Fatigue", was published on 10 August 2001. I refer to this hereafter as the 'ATSB-ARRB report'. 6. It does not, plainly enough, cover everyone who gave evidence at trial. It was readily apparent from the manner he gave his evidence that he was convinced that Mack had treated him shabbily. The evidence showed, however, that Mr Lowe was a very particular person. The repair history indicated that Mr Lowe frequently required Mack to undertake the repair and replacement of comparatively minor items. Mr Kumnick and Mr Buttignol both agreed that Mr Lowe was very particular about the truck he drove, and Mr Buttignol perceived him to be overly particular. Furthermore, at the time he acquired the truck, Mr Lowe was approaching fifty years of age and had been driving for over twenty years. His evidence that his health problems first arose in 1998 was shown in cross-examination to be incorrect. On the evidence, I conclude that Mr Lowe was an especially demanding customer, whom Mack could not satisfy notwithstanding that it tried assiduously to do so. The history of Mr Lowe's dealing with Mack personnel showed that he repeatedly found fault with the truck where none existed (e.g., the loss of power and bent chassis claims). It also showed that once Mack had done the work on one list of alleged defects, Mr Lowe would find further defects requiring Mack's attention. Mr Lowe was a person inclined to make mountains out of mole hills (e.g., the wheel alignment issue). 126 His personality was such, moreover, that he acted on occasion contrary to his interest. For example, Mr Lowe never made the written request in respect of insurance cover that Mr Wallace said Mack needed before it could write the letter that the Lowes sought. Likewise, if, as Mr Lowe said, he did not park up the truck on account of the litigation, his conduct in so doing is virtually inexplicable. Mr Lowe had been driving the truck for almost two years by this time, during which the vehicle had been subject to a variety of tests and Mack had carried out a very large amount of work. There was no objective evidence that the truck was operating any worse than before. In parking up the truck, the Lowes chose the least financially prudent way to end their business. 127 At the least, it was clear that Mr Lowe's recollection of events had dimmed with the passage of time, although his belief that the truck was 'unsafe' had not. 128 Furthermore, in some instances, Mr Lowe was not a consistently credible witness. For example, Mr Lowe stated that, at the time of the sale of their home in May 1999, he was not aware that the applicants were involved in a class action. This is directly contradicted by a solicitors' letter dated 18 May 1999, which refers to an approach from the Lowes about participating in the class action. Furthermore, Mr Wallace recorded a conversation with Mr Lowe on 9 April 1999 in which he told Mr Wallace that he "was changing solicitors and going to the firm with class action against KW. Said he was starting action against MTA". 129 I note too that Mr Lowe was unable to produce his driver log books for critical periods. His explanation that he had lost them was unsatisfactory. Further, although he produced his personal diaries for some of the relevant period, he produced no such diaries for the critical period between July 1998 and September 1999. He also conceded the diaries contained many gaps, which he could not explain. One of the diaries tendered was filled out in the same ink, a curiosity that was never explained, and, ultimately, I do not think much turns on this. The 'cut and paste' was mostly inadmissible hearsay. In so far as it was admissible, I have given little weight to this affidavit. 131 It was evident from Mrs Lowe's evidence at trial that she was determined to support her husband. By her evidence, she demonstrated an unwavering loyalty to him as well as an unassailable conviction that the truck was 'unsafe' and that Mack had wrongly sought to deny its responsibility. 132 At trial Mrs Lowe was shown to have very little, if any, personal knowledge of the defects that she referred to in her affidavit. She relied on what her husband had told her and her evidence in this regard was inadmissible. Further, Mrs Lowe had little experience of riding in the truck, having done so only about three times. Her evidence that she found the ride rough "all the way" and that Mr Lowe had "constantly" to correct the steering is contradicted by Mr Lowe's evidence that ride and handling were of concern principally on rough roads. It was also inconsistent with Mr Lambert's observation of the vehicle in his submission of 30 November 1999 (that it "drove beautifully on good surfaces but was very difficult on poor surfaces") as well as with the FORS report, as to which see below. Her statement at trial that she gave instructions to her solicitor in respect of every matter referred to in her affidavit was not credible. 133 Mrs Lowe was thus shown not to be an entirely reliable witness. In cross-examination, she denied that the truck was parked up in January 2000 because of the applicants' participation in the class action against Mack. She denied that she had informed NTI that this was the reason that the truck was being parked up. Her evidence was, however, directly contradicted by a contemporaneous email sent by Nick Egan to Owen Driscoll within NTI. At trial Mrs Lowe denied speaking with Mr Egan, but Mr Egan, who had responsibility for the Lowes' account at the relevant time, gave evidence that he independently recollected the conversation with her due to the fact that "it was an unusual situation, in that it was the first time I have ever heard of a vehicle being stored etcetera, due to a class action". He recalled her telling him that they "were storing their vehicle, due to a class action they were heading against Mack". Mr Egan impressed me as an entirely reliable witness. 134 In all the circumstances, I would not accord Mrs Lowe's testimony a great deal of weight. His evidence was that he commenced driving for Mr Lowe when Mr Lowe had his appendix removed in June 1998 and stopped driving for him later that month, after a trip to Cairns. Comparison with his affidavit and the evidence of Mr Lowe revealed some uncertainty in Mr Pasfield's mind about the correct dates. Probably nothing turns on this, and can be put down to a memory growing confused with the passage of time. Mr Pasfield denied, however, that he drove in the truck in September 1998, although the Lowes and their business records clearly established that he did. Further, it was plain enough at trial that Mr Pasfield was given to exaggeration and that he was anxious to give evidence in such a way as would best support Mr Lowe's case. His evidence is to be assessed in light of these observations. He was prepared to argue the toss with counsel and, in some instances, was evasive in cross-examination. Unsurprisingly, his recollection of some events was poor. Subject to these comments, he was a generally honest witness. Whilst his evidence has a hint of a desire to protect Mack's position as best he could, overall Mr Heironymous impressed me as an honest and reliable witness. He made this very clear in cross-examination when he said that, when Mr Lowe acquired the truck, he was worried "we would start all the problems again" and "every time we tried to repair or fix things on Mr Lowe's truck we could never please him or make him happy". 139 Counsel for the applicants challenged Mr Buttignol's affidavit evidence on the basis that he had taken insufficient care in its preparation. I accept that there were some inaccuracies that may have reflected a lack of care, although, generally, the most that can be said is that these inaccuracies were inadvertent. I also accept that his affidavit did not contain a complete service history of the truck and omitted some work that had been done in Brisbane and some relevant repairs. 140 On account of Mr Buttignol's attitude towards Mr Lowe, there were some occasions when Mr Buttignol had difficulty in giving his evidence objectively and fairly. In the main, however, he did the best he could to give truthful evidence about the truck. He stated that he relied heavily on his diary notes in giving evidence. This was self-evidently a proper concession. I accept, however, that, as the applicants' counsel submitted, there were numerous indications in his affidavit that its drafting left something to be desired. 7. It was relied on by both and neither proposed any constraints on its admissibility. As best I can, I confine my discussion of it to the points that are pertinent to the issues in dispute. 143 The Report itself was exhibited to an affidavit sworn by Scott McFarlane, who was employed by Roaduser as chief engineer. Mr McFarlane was the co-author of the FORS Report, with Dr Peter Sweatman. The parties did not challenge Mr McFarlane's affirmation that the Report accurately recorded the findings of the Inquiry. The Report was the subject of detailed evidence given by Mr Lambert, Dr McLean and Russell Morrison. None of the following discussion is contentious in so far as it sets out the contents of the Report. The FORS commissioned Roaduser to test and report on the alleged problems with regard to the effect on vehicle dynamics and drivers. See FORS Report, Executive Summary, p i. A project steering committee supervised the preparation of the Report. The committee consisted of an industry representative nominated by the Australian Trucking Association, a Professor of Engineering from the University of Queensland, representatives from the FORS, and representatives from Roaduser. See FORS Report, p 8. 145 On 30 November 1998, Roaduser advertised for truck owners with wandering, poor handling, instability, or abnormal vibration problems to provide it with details of their problems. Roaduser received 27 complaints, involving 31 vehicles. See Executive Summary, pp i-ii. The complainants' vehicles generally had the following characteristics: (a) longer wheelbase highway prime movers; (b) air suspension on the drive axle group; (c) higher powered engines; and (d) hauling semi-trailers over long distances at highway speeds. See FORS Report, p 1. (I have previously referred to the Lowes' complaint to Roaduser: see also FORS Report, p 11. At this time, it did not include 'darting'. (b) "Wandering" --- described as behaviour allegedly resulting in the requirement for continuous steering corrections. In the worst cases, it might be evident on apparently flat roads. (c) "Vibration" --- described as behaviour allegedly resulting in significant vibration being detectable by the driver or the passenger. All 13 were driven by DECA driver, Lindsay Pollock, in early 1999. A Roaduser observer accompanied Mr Pollock on each occasion. Mr Lambert was the Roaduser observer on a number of occasions, including with regard to the Lowes' vehicle. See FORS Report, p 4. The 13 vehicles were test-driven from the locations at which they were based. Mr Lowe gave Mr Lambert a list of alleged problems when Mr Lambert came to inspect his truck at Rick Cobby's depot. Mr Lowe proposed the route --- a round trip through Kapunda --- over which the truck was driven. 148 As far as possible, the trailer of each truck that took the 'inspect and drive' was loaded in the manner that the complainant stated was most likely to be associated with the claimed behaviours and with similar fuel tank loads. See FORS Report, p 4. In the Lowes' case, the truck was test-driven using Mr Lowe's curtain-sided semi-trailer, with a load consisting of ferro-chrome, a very dense product in bulk bags on wooden pallets. The height of the load on the pallet was about 350 mm, with the result that the load centre of gravity ('COG') was about 310 mm above the trailer surface. The gross combination mass ('GCM') was approximately 42.5 tonnes. 149 After the 'inspect and drive', Roaduser chose five vehicles for instrumented testing. The Lowes' vehicle was one of these. Roaduser also tested three additional vehicles, in respect of which no complaint had been received. These three vehicles were tested to provide 'benchmarks' against which the performance of the complainants' vehicles could be compared. See discussion below. 150 Roaduser gave all vehicles the same instrumentation package using a 32-channel data acquisition system. See FORS Report, p 30, Table 7. 151 As far as possible, Roaduser undertook the instrumented testing in uniform conditions. With the exception of BM3, all vehicles were tested fully laden, using the same freighter triaxle flat-top semi trailer with gates and a tarpaulin covering the load of 44-gallon drums filled with dry sand. The GCM of the truck and trailer was approximately 40 tonnes, and the COG height of the trailer was moderate at 2.00 metres. All vehicles were tested over the same test route, which covered some 330 kilometres. Roaduser considered that the route represented the majority of high-speed sealed-road conditions that heavy vehicles experienced in Australia. The same DECA driver drove all vehicles except vehicle F26 (the Lowes' truck) and BM1. F26 and BM1 were driven by two different alternate DECA drivers. See FORS Report, pp 33-35. 152 For the purposes of the Inquiry, Roaduser determined the measures of vehicle response and driver input for three different sections of road. 153 Following Roaduser's release of a Draft Final Report for comment in early November 1999, Roaduser received submissions from: (a) complainants and other interested owner-operators and small fleets; (b) experts and consultants, including Mr Lambert and Dr McLean; and (c) manufacturers, including truck manufacturers and a suspension manufacturer. See FORS Report, p 117. Experts and consultants in particular (including Dr McLean) raised a number of issues. Roaduser summarised what it saw as the most significant issues and the analytical work it carried out in response in Table 45 of the FORS Report (at p 120). The instrumentation package designed to measure vibration comprised: (a) vertical and horizontal accelerometers in a seat pad (to measure ride vibrations) (2 channels); (b) two triaxial accelerometers in the cabin --- one on the B-pillar and one on the steering wheel column (to measure vibrations) (6 channels); and (c) one accelerometer on the cabin floor (to measure vertical vibrations) (1 channel). See FORS Report, p 5. (b) another study recorded attempts to establish maximum tolerable levels of vertical and fore-aft vibration and concluded that "such tolerance curves provide useful background in evaluating vibrations transmitted to truck occupants" but had "little correlation with subjective ratings"(p 20). (c) studies recognised the principal factors affecting truck driver fatigue as: length of total working hours; pre-work activity; monotony; general state of health; environment (including light, climate, noise and vibration); circadian rhythms; sleep deprivation; stress; medical conditions such as sleep apnea; and use of alcohol and some medications (pp 21-22). 157 Roaduser measured vibration quality in accordance with ISO 2631-1 (Mechanical vibration and shock --- evaluation of human exposure to whole-body vibration) (1997) ('ISO Standard 2631-1: 1997'). The ISO Standard 2631-1: 1997 refers broadly to whole-body vibration generated in vehicles and by machinery and industrial activities (p vi). Annexes to the Standard give information on the "the possible effects of vibration" on health (annex B); comfort and perception (annex C); and the incidence of motion sickness (annex D). The ISO Standard 2631-1: 1997 stipulates that vibration data be recorded for a minimum duration to ensure that the data are typical of the vibration exposures being assessed (p 5). 158 ISO Standard 2631-1: 1997, in relation to health, is concerned with "the effects of periodic, random and transient vibration on the health of persons in normal health exposed to whole-body vibration during travel, at work and during leisure activities" and applies primarily to seated persons (p 13). The Standard cautions that it "generally takes several years for health changes caused by whole-body vibration to occur" and, for this reason, "exposure measurements" should be "representative of the whole period of exposure" (p 13). The Standard stipulates that the assessment of the effect of vibration on health is to be made along each axis by determining the frequency weighted rms acceleration for each axis (x (fore-aft), y (lateral) and z (vertical)) of translational vibration and using the highest such value (p 13). Notwithstanding this, Annex B notes that "[m]ost of the guidance in this annex is based upon data available from research on human response to z-axis vibration of seated persons. There is only limited experience in applying this part of ISO 2631 for x-, y-axes seating and for all axes of standing, reclining and recumbent positions" (p 21). 159 Annex B indicates a health guidance caution zone for vibration levels based mainly on exposures in the 4 to 8 hour exposure range, since the majority of studies are based on this time period (p 22). Annex B (p 22) provides the following interpretation: (a) for exposure below the zone, health effects have not been clearly documented and/or objectively observed; (b) for exposures within the zone, caution should be exercised with respect to potential risks as indicated; and (c) for exposures above the zone, health risks are likely. See FORS Report, p 39. Where a particular measure for a complainant vehicle was higher than all the benchmark vehicles, it was described as "higher" (p 39). 161 Table 11 of the FORS Report, headed "Seatpad measures by vehicle", provided a summary of the seat pad measures by reference to peak rms acceleration, FWRMS acceleration, and maximum acceleration in frequency range. 165 The results for additional rms acceleration measures showed that, in relation to steering wheel accelerations, the applicants' vehicle had lower measurements than two of the benchmark vehicles in both the vertical and fore-aft directions: see Table 12. 166 In order to provide further insight into vehicle characteristics that may have affected ride quality, the Report undertook an analysis of seat pad acceleration power spectra; cabin floor acceleration power spectra; chassis acceleration power spectra; chassis deflection modes; axle acceleration power spectra; and steering axle suspension deflection. These are vehicles F1 (Kenworth T900), F3 (Kenworth C501), F4 (Mack CH Fleetliner) and F26 (Mack CH Elite). ... In the case of vehicle F26, the higher seatpad measures were accompanied by higher acceleration peaks on the chassis (at all positions) and on the steering axle. 167 In accordance with the ISO Standard 2631-1: 1997, the FORS Report placed primary emphasis upon the FWRMS seat vibration measurement to assess the ride vibration quality experienced by the driver. Thus, whilst noting that the applicants' vehicle registered higher results in certain of the vehicle characteristics measurements (see above), these results did not impact upon the seat vibration findings (see p 62; Table 11) or the conclusions in respect of health. It is apparently for this reason that the applicants' vehicle was the only complainant vehicle not mentioned in respect of vibration in the concluding recommendations of the FORS Report. Four vehicles, excluding the applicants' vehicle, were the subject of a specific recommendation. The manufacturers of these vehicles should also be advised of the test results and recommendation for rectification. Apart from its recommendations, conclusions and recorded measures, it also referred (at p 59) to the comment of the DECA driver that "vehicles F1, F3 and F26 had vibration levels such that they would induce fatigue over a 12 hour driving period". The significance of this comment (if accurately reported) is doubtful since it is contradicted by the results of the instrumented testing. 169 I also note that the applicants' vehicle (F26) was the only vehicle driven by the DECA driver who made this comment. The comment thus provides no comparative insight into the ride of the applicants' truck as compared with the other vehicles tested. The FORS Report itself emphasises that there is academic consensus about the subjectivity of the experience of vibration. 'Wandering' was one of the applicants' complaints about their vehicle: see FORS Report, p 14. 171 The FORS Report identified that greater difficulty in steering control of the truck could manifest itself as measurably greater vehicle responses, measurably greater driver steering effort, or both: see FORS Report, Executive Summary, p iv and p 66. Roaduser sought to measure vehicle responses and driver effort in various ways. With regard to unwanted steering inputs, measurements were made of the variability in front steering angle (rms) and of the variability of drive wheel steering angle (rms) (p 27). 173 The Report treated the key measures of vehicle response as lateral acceleration and yaw rate (p 66). The Report also recorded that "[s]peed variations were caused by influences outside the scope of the test plan ... and the speed results are not considered to have significance as indicators of the handling quality of the vehicles tested" (p 67). Lateral acceleration and yaw rate were measured over the three sections of the test route --- Hume Highway, Euroa and Nagambie: see FORS Report, Tables 19, 20 and 21. Dr Morrison gave evidence (which I accept) that, if a vehicle suffers from wandering, then higher values of lateral acceleration and yaw rates could be anticipated. In the Nagambie section, Table 21 indicates that the applicants' vehicle performed generally better than the benchmark vehicles as well as the other complainants' vehicles (with minor exceptions). In the Euroa and Hume Highway sections, Tables 19 and 20 indicate that their vehicle's performance was broadly comparable with the benchmark and the complainants' vehicles. 174 As already indicated, Roaduser also measured driver steering input over the three sections. The results are set out in Tables 24, 25, 26 and 27 of the FORS Report. Generally speaking, the applicants' vehicle returned unremarkable results for the Nagambie and the Euroa sections when compared with the benchmark vehicles. On the Hume Highway, however, the vehicle recorded a marginally higher steering wheel angle in comparison with the benchmark vehicles. Table 24 records this difference and is accompanied by the comment that "vehicles F1, F3, F4, F6 and F26 show higher steering wheel angle measures". The applicants' vehicle performed better than all but one other complainant's vehicle over both sections, better than one of the benchmark vehicles for the Euroa section and better than two of the benchmark vehicles for the Nagambie section. (b) Transfer Functions --- Results for transfer functions are set out in Table 29. The applicants' vehicle had better results than all three benchmark vehicles and all but one (F1) of the other complainants' vehicles. (c) Steering Axle Dynamics --- Table 30 records the relationship between vertical suspension displacement and front wheel steering angle, which represents a form of 'bump steer'. Here 'bump steer' refers to unwanted front wheel steering related to suspension response to road roughness. The applicants' vehicle recorded better or comparable results to the benchmark vehicles and the other complainants' vehicles. Roaduser also measured left and right front wheel bump coefficients. The applicants' vehicle measured higher than the three benchmark vehicles, although, broadly speaking, its results were comparable with them. (d) Driver Axle Dynamics --- measured by reference to (i) roll steer coefficients; (ii) suspension roll angle; and (iii) drive axle steer angle. The applicants' vehicle had a higher roll steer coefficient than all other vehicles, but, as the Report recognised, this is not determinative and the suspension roll angle must also be taken into account. This is because the tendency of the vehicle to roll on the suspension is important in measuring quality of handling. The most accurate measure of the impact of drive axle steer on vehicle handling is the drive axle steer angle: see FORS Report, p 80. Dr Morrison confirmed this in his report (at 17 and Fig 14) and evidence, as to which, see below. On this criterion, the applicants' vehicle performed better that two of the benchmark vehicles and all but one of the other complainants' vehicles. (e) Prime Mover Roll Gradient --- This measures the tendency of a truck to roll in response to lateral acceleration acting on the truck. In respect of this measurement the applicants' vehicles recorded the best results in comparison with all other vehicles: see Table 34. (f) Chassis Torsion Flexibility --- This measure is relevant to the applicants' complaints that the chassis stiffness was compromised by the flange cut outs on the chassis. Whilst this test was only an estimation, the angle torsional flexing on the chassis for the applicants' vehicle was quite low (0.33 and 0.31) and comparable to the benchmark vehicles. Mr McFarlane also gave evidence that flange cut outs are common in straight-rail chassis. (g) Air Suspension Bag Pressure --- The results are set out in Table 36. There was no real difference between the right or left side of the applicants' truck, which gave results comparable with the benchmark vehicles. As we have seen, the applicants' vehicle (F26) was not one of the vehicles singled out for comments of this kind. Significantly for this case, the Report recorded that "[t]here is no direct evidence that any of the other vehicle characteristics measured ... adversely affect prime mover handling": see Executive Summary, p vi. 8. He was well-qualified to provide expert evidence in this case. He gave his evidence in a thoughtful and objective way. Where there was conflict between his evidence and the evidence of other experts, I prefer his evidence. 179 Dr Morrison prepared a report dated 18 May 2006, which addressed the Lowes' claims in relation to the truck ('Morrison Report'). He also gave evidence at trial. Dr Morrison's evidence was that vibration problems are capable of being assessed "against fairly well recognised criteria". This was not true of handling problems, which though quantifiable, had no "universally adopted standards of acceptability". He considered, however, that the FORS Report was "a very comprehensive set of measurements, a very comprehensive process" and that Roaduser's methodology was "entirely logical and appropriate". He added that "not only was [it] an independent, thorough, comprehensive set of measurements, it had also been a set of measurements that had been subject to a lot of review". On the contrary, because similar levels were measured for vehicle BM3, vibration levels for the Lowe truck are towards the lower end of levels for the general population. For the reasons noted above, it is also true that the health risk implications for the Lowe truck are probably towards the lower end of the general Australian population of heavy trucks. According to him, the fact that the FORS Report did not measure lateral vibration on the y-axis was not unusual for studies of this kind. Dr Morrison stated that, in his experience of a large number of measurements of this kind, the lateral transverse acceleration was always lower than either vertical or fore-aft accelerations. Given that the Standard stipulates that vibration be measured on the basis of the worst reading on any one axis, the failure to measure the lateral acceleration would not have had any impact on the results presented. 182 Dr Morrison noted that ISO Standard 2631-1: 1997 emphasises that an extended period of time is necessary for the effects of vibration to impact on human health. He also noted that "it is well recognised that because humans are so variable, their response to a given acceleration level will also be very variable". Further, there is, he said, presently limited data on the effect of vibration levels on human health. 183 Dr Morrison stated (and I accept) that "it is only vibration measurements which can provide a rational basis for making an assessment of [vibration] acceptability or otherwise". See Morrison Report, p 7. Further, he stated that the primary measurement of ride vibration quality as experienced by the driver is seat pad vibration. Whilst measurement of other vehicle characteristics may provide an understanding about the contributors to seat pad vibration, they are not indicative of the actual vibration level experienced by the driver in the driver seat. In this connection, he observed that: "[y]ou really can't be too specific about the differences, once you get to differences of this order". 185 Dr Morrison concluded that there was nothing in the FORS Report to support the conclusion that the applicants' vehicle gave a poor ride compared to other vehicles in the benchmark group or in comparison with the other complainants' vehicles. Rather, results for the Lowe truck were all comparable with or lower than the benchmark vehicles. Significantly, a comment in the FORS report that a particular parameter is 'higher' does not imply a significant difference and is not to be interpreted necessarily as indicating any kind of problem. In fact, closer examination of the results related to steering effort demonstrate that in terms of all of the measures used in the FORS tests, there is no significant or consistent difference between the Lowe vehicle and the benchmark group. In any case, these are just one of the many mechanisms which together determine the overall handling behaviour. It would be surprising if any of the differences between the Lowe truck and the benchmark vehicles were statistically significant. He concluded that it would be unlikely that "any differences would be statistically significant". Rather, this is best given by the drive axle steer angle change which occurs as a result of the vehicle rolling. Mr McPherson stated that, during his employment with Mack, he had overall responsibility for the durability and reliability of Mack vehicles. He gave evidence of his experience in the testing of prime movers both in Australia and the USA. He also gave evidence that it was a normal industry practice to have cut-out flanges as in the chassis in the applicants' truck. At trial, he was asked about the impact of these cut-outs on chassis stiffness (which according to the applicants was the wrong issue). In any case, he said that the flange cut-outs did not have any adverse effect on the chassis. Mr McPherson also gave evidence that the movement of the transverse rod is very small indeed and that fixing them on the same side of the chassis would have no adverse effect. Also, as the applicants said in closing submissions, much of Dr McLean's account was "based extensively on the effects and consequences of harmonic vibration". They just shut down the engine. 191 Subject to the Evidence Act 1995 (Cth), evidence that is relevant in a proceeding is admissible. In order, however, for 'expert' opinion evidence to be admissible, it must fall within s 79 of the Evidence Act 1995 (Cth). By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question. 193 Furthermore, the facts and assumptions on which the witness bases his or her opinion must be identified and proved, and constitute a proper foundation for the opinion expressed. The field of specialised knowledge must be shown to apply to these facts or assumptions. See, generally, Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 743-744 per Heydon JA and Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 ; [2002] FCAFC 157 at [87] , where a Full Court of this Court observed that many of the matters on which s 79 depends involve "questions of degree, requiring the exercise of judgment". Whether or not an expert has the requisite expertise is, however, a question of fact: see Hamod v Suncorp Metway Insurance Ltd [2006] NSWCA 243 at [39] . Where an expert purports to give an opinion that lies outside the field of his specialised knowledge, the opinion will be inadmissible: see, e.g., Allstate Life Insurance Co v ANZ Banking Group Ltd (No 6) (1996) 64 FCR 79 at 85 per Lindgren J and Henscke & Co v Rosemount Estates Pty Ltd (1999) 47 IPR 63 ; [1999] FCA 1561 at [69] per Finn J. 194 The proof of facts and assumptions on which an opinion is based is not always straightforward. The primary evidence relating to those assumptions might be controversial. Which parts of the primary evidence are to be accepted, and what the correct conclusions from the primary evidence are, are matters for the trier of fact at the end of the trial. The opinion evidence may be admitted if there is evidence which, if accepted, is capable of establishing the truth of the assumptions. The witness must disclose in what way, if any, the opinion is based on information communicated by another person. If this is not done, then the opinion may be inadmissible or carry diminished weight: Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 at 347-348 and Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 123 at [13] . More generally, the reasoning on which the opinion is based must be sufficiently intelligible and transparent to enable the court to form its own assessment about the cogency of the opinion. 195 It is also accepted that an expert witness is not an advocate for a party and has a paramount duty to the Court and not to the person retaining him: see 'Guidelines for Expert Witnesses' applicable in this Court and National Justice Compania Naviera SA v Prudential Assurance Co Ltd [1993] 2 Lloyd's Rep 68 at 81-82 per Creswell J. A want of independence, in the case of an expert witness said to be affected by interest or bias, tends to affect the weight to be given to his or her opinion: see FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33 (" FGT Custodians ") at [12] per Ormiston JA, with whom Chernov and Eames JJA agreed. 196 In the present context, the respondent also drew attention to s 135 of the Evidence Act 1995 (Cth), which confers a discretion to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party; (b) be misleading or confusing; or (c) cause or result in undue waste of time. It seems that the failure of a witness to comply with relevant 'Guidelines for Expert Witnesses' may be a factor weighing in favour of the exclusion of his or her evidence, since the expert's opinion is infected by failure to understand his or her responsibilities as an expert: compare United Rural Enterprises Pty Ltd v Lopmand Pty Ltd [2003] NSWSC 870 at [15] - [19] per Campbell J. 198 It was apparently common ground that, as at May 2007, Dr McLean was a senior lecturer in the School of Mechanical, Materials and Mechatronics Engineering, in the Faculty of Engineering at the University of Wollongong. A University of Wollongong website stated Dr McLean's research activities to be "Bulk solids, Handling and Physical Processing" and his "area of specialisation ... machine and mechanical system dynamics and evaluation of power and drive requirements for Bulk Solid Handling and Equipment". 199 In his curriculum vitae for May 2007 (Exhibit A31), however, he claimed his research interests were "bulk solid structural and mechanical device interactions" and similar, and " heavy vehicle dynamics and design, nonlinear vibrations, effects of whole body vibration; bio mechanics " (emphasis added). I accept that engineering is a field of specialised knowledge, a subset of which includes knowledge about 'heavy vehicle dynamics and design, nonlinear vibrations, effects of whole body vibration; bio mechanics'. I also accept that this latter subset of engineering knowledge may be relevant to issues arising in the proceeding. The real question is whether or not Dr McLean has been shown to have this claimed knowledge by reason of his training, study or experience. 200 At trial Dr McLean stated that his doctoral thesis was in the area of bulk solids handling, although he had never taught this as a subject. I cover ... strength of solids, fluid power, system dynamics and engineering analysis. And from 100 level dynamics right down to pack horse level. 201 Dr McLean's further evidence was to the effect that he had never undertaken his own research or tests on heavy articulated vehicles. Dr McLean said that, with the exception of an undergraduate thesis in 1974, he had not conducted any tests or research on heavy vehicles or their design prior to 1998. He said that his interest in the engineering aspects of heavy vehicles was 'rekindled' in about September 1998. He had not conducted any research on heavy vehicles prior to this date. Nor had he published in the area. In particular, at the time of his correspondence with Andy Read of the FORS regarding the FORS Report, he had not done any testing in relation to the harmonic signatures of heavy vehicles. He had not subsequently undertaken any dynamometer testing of vehicles at Shellharbour TAFE despite at one stage giving a contrary indication. Most, if not all, of his claimed research was undertaken by his students without any actual testing of trucks. He admitted that he had done no testing to establish the effect on the behaviour of a vehicle of the positioning of panhard rods and had no actual knowledge as to how the position of rods would affect vibrations or handling of the vehicle. Diversion of trucks from the Newell Highway for me to inspect --- to inspect trucks. 202 Furthermore, Dr McLean had not published any articles in refereed journals. He had, however, presented a number of papers (alone and jointly with others, including Mr Lambert) at conferences on aspects of air suspension systems in prime movers, chassis flex, nonlinear vibration phenomena of prime movers, dynamic modelling and the like. Save for some joint publications, there was, therefore, little evidence that he was regarded as knowledgeable by others in the field. His "reports" included some 17 documents that he had elected to provide to the FORS in the period September 1999 to November 1999. He would not have appeared to have supervised any doctoral candidates, although he had supervised other candidates, including undergraduates. 203 Save for his 'inspections' of trucks, by reason of his training, study or experience, Dr McLean's knowledge of the field of 'heavy vehicle dynamics and design, nonlinear vibrations, effects of whole body vibration; bio mechanics' was, at best, theoretical. He explained that it was, in essence, the extrapolation and application by him of his knowledge of "resonance and dynamics ... fluid mechanics and fluid power ... harmonics effects and how they interact with a mechanical boom light structure". This knowledge was apparently acquired by him in the course of his study of engineering, including his teaching and supervision of students. The evidence regarding truck inspections was sparse. It cannot advance Dr McLean's claim to have specialised knowledge very far, if at all. 204 On the basis of this evidence, I accept that Dr McLean had some specialised knowledge, at a theoretical level, of 'heavy vehicle dynamics and design, nonlinear vibrations, effects of whole body vibration; bio mechanics'. It followed that to the extent he gave his opinion outside this theoretical domain, his opinion was inadmissible. Subject to what follows, practically speaking, in this proceeding, probably the only admissible opinion evidence that he might have given was evidence about the theory of vibration measurement and analysis. 205 The more difficult question is, to what extent, if any, was Dr McLean's opinion evidence wholly or substantially based on his somewhat limited specialised knowledge. For the reasons that follow, it is generally impossible to be satisfied that his opinion was wholly or substantially so based. There are many instances in which it is apparent that his opinion was merely speculation. 206 Dr McLean's evidence did not differentiate between his assumed facts or assumptions and his 'expert' opinion. These assumed facts and assumptions were in most cases unproven and untested. Much of his evidence was virtually incomprehensible, ill-ordered, illogical or manifestly erroneous. 207 For example, Dr McLean expressed an opinion concerning the condition of the applicants' truck. The inspections and data analysis were shown to be demonstrably unreliably or wrong; the relevant reasoning processes, questionable; and his account disorganised. 208 Dr McLean's unarticulated assumptions were that, first, the truck actually exhibited the defects alleged by Mr Lowe; and secondly, that there was a correlation between his theories of vibration and the alleged defects. Dr McLean in fact admitted that his theory was a 'generalisation' based on elementary theories of vibration. His opinion regarding the likely cause of the alleged defects in the truck was based on the fact that the alleged defects were apparently consistent with his theory of vibration. Once exposed as merely a generalisation that might account for alleged (but unobserved) phenomena, the untested nature of Dr McLean's opinion becomes apparent. Both Dr Morrison and Mr McPherson made this point. Dr Morrison noted that neither Dr McLean nor Mr Lambert made any objective quantification and assessment of the defects alleged by Mr Lowe and compared these assessments against 'criteria of acceptability'. Mr McPherson also gave evidence as to the untested nature of Dr McLean's engineering assumptions. 209 The fact that Dr McLean had very little, if any, factual foundation for his opinions was emphasised by his very slight first-hand knowledge of the truck --- a fact that emerged clearly in cross-examination. Dr McLean stated that he inspected the truck on only two occasions --- around Easter 1999 and in September 1999. (The second inspection is likely to have been in 2000, not 1999, bearing in mind Dr McLean's statement that, at the time of the inspection, the vehicle had been parked up for some time and in September 1999 the vehicle was still being used by Mr Lowe. He stated that there was "certainly some unusual steering behaviour with that vehicle, when operated bobtail". At trial, however, witnesses for both parties, including Mr Lowe himself, agreed that a bobtail test drive, without a trailer attached, would give no indication as to the actual handling of the vehicle, due to the fact that the truck is designed to be operated with a trailer attached. They are not designed for optimum ride or optimum drive line angles or anything else when they are bob tail. They are designed to run with a load on them. So, they would ride rough if they are in a bob tail condition. Nor would I regard them as providing any very satisfactory basis for his opinion about the condition of the truck. 211 At trial, Dr McLean commented upon certain observations he made during the course of his inspection of the truck in Easter 1999, including what he stated to be "evidence of movement in travel" indicated by the condition of certain components. On Dr McLean's own account, however, the inspection itself was "very rushed" as he had to "race out the facility to do a test run for another vehicle of the same brand". In view of this, I would not place any weight on these observations and I would not regard them as providing an adequate factual basis for the opinions he expressed. 212 There is simply no evidence that Dr McLean conducted any reliable testing of the vehicle. He stated that he conducted two, or possibly three, tests. The first was a "hammer" or "imprint" test to ascertain any deficiency or deviation in the chassis rod strength. Dr McLean stated that this test was "so crude that I did not pursue that any further". The second test appears to have been a test using a cathode ray oscilloscope to ascertain the harmonic signature of the chassis rail. Again, Dr McLean acknowledged that this was a "very crude experimental facility". He also appears to have undertaken a "curvature" test which he also described as a 'very crude quantified assessment". On Dr McLean's own evidence, none of these tests provided reliable measurements of the applicants' vehicle. He could not identify his reasoning, at least not readily, and sometimes not at all. When he did so, the difficulties with it were patent. 215 Dr McLean's evidence was peppered with inaccuracies and inconsistencies. (b) The graph on page 29 of his report showing data for F26 from the so-called "Tooborac to Seymour test section" had been plotted against distance averaged data for BM1 over the entire instrumented test route. Dr Mclean accepted that the analysis was flawed in that he was "comparing apples with pears". (c) The NRM cannot provide a fixed excitation frequency due to the randomness of spacing between road bumps and corrugations. Dr McLean was unable to identify any academic research or industry practice supporting his theory of a link between the NRM value and the "harmonic signature" of a vehicle as alleged in his expert report. (d) Under cross-examination Dr McLean accepted that he was incorrect to assert in his report that steering wheel vibration had been "completely ignored" in the FORS Report when such vibration had been specifically measured and reported upon. (e) Dr McLean accepted that, contrary to the analysis presented in his report, there was no way of knowing whether the segment of data identified in his report as the 'Tooborac to Seymour' section of road was, in fact, that road. In fact, Dr McLean conceded that it may well have been the Hume Highway. Having regard to these matters, his failure to differentiate between assumed facts and opinion, the want of any real factual foundation, the failure to identify an acceptable reasoning process and the fact that much of his evidence was disorganised, poorly written and expressed to the point of being incomprehensible, I am not satisfied that his evidence was wholly or substantially based on the specialised knowledge he acquired by his study, training or experience. For this reason, I would uphold the respondent's objection to the admissibility of Dr McLean's evidence. Alternatively, in so far as it was based on this knowledge, it is impossible, for the reasons stated, to make any proper assessment of its reliability. I would, therefore, attach little, if any, weight to his evidence. Where appropriate, however, I refer to and discuss the principal items of his evidence. 217 In view of my conclusion in this regard, it is unnecessary to say anything further about the respondent's contention that Dr McLean was partisan and that his evidence should not be accorded the weight due to an independent expert. This much appears from appendix 2 to Mr Lambert's report of August 2004, which he prepared for use in this proceeding ('Lambert's report'). Furthermore, from January to November 1999, Mr Lambert was an employee of Roaduser, holding the position of "Manager, Accident Mitigation and Operational Safety". He was involved to a limited extent in the FORS Inquiry. He gave evidence of the 'inspect and drive' test in respect of the Lowes' vehicle on 25 March 1999. Between July 1999 and 15 November 1999, when his employment with Roaduser terminated, Mr Lambert was a contact person at Roaduser for owners and manufacturers. Mr Lambert conceded, however, that he had no involvement in the instrumental testing. 219 The respondent submitted that Mr Lambert's evidence was compromised by a lack of independence. (b) Towards the latter part of his employment at Roaduser, and following his termination, he became disaffected with Roaduser and critical of its handling of the FORS Report. (c) At the time of his termination, he stated that he had "issues" with Peter Sweatman and his wife Patricia. (d) In order to assist the applicants, Mr Lambert had been "supplied with 8,500 pages of documents from Mack Trucks, and [he] went through those to get these figures, so the figures are based on Mack Truck invoices. In the course of this retainer he had attended mediation in relation to the Kenworth matter and provided advice to Slater and Gordon. He had subsequently been retained by three drivers in relation to proceedings against Mack Trucks following the de-classing of the class action. (f) Mr Lambert had an "ongoing involvement" with Mr Bill Haire, a manufacturer of a rival air suspension system to that manufactured by Hendrickson and installed in the applicants' vehicle. (g) There was some evidence that Mr Lambert had a poor opinion of Wayne Wallace . I do not consider that Mr Lambert's involvement with Mr Haire would necessarily have affected the evidence he gave. I note too that Mr Morrison was also involved as an expert in other proceedings --- though for the truck manufacturer. Involvement in other proceedings in the same or similar interest need not affect independence. It was, moreover, clear that Mr Lambert gave evidence of opinions he genuinely held. Nonetheless, it was equally clear that Mr Lambert was inclined to 'side' with the applicants. His apparent commitment to the applicants' position indicated more than intellectual attraction to their position. Precisely why Mr Lambert was so disposed is unclear. As the respondent noted, he had not seen 'eye to eye' with the Roaduser's management or with Mr Wallace from Mack. I doubt, however, that this is a sufficient explanation. It is enough to say that Mr Lambert impressed me as a witness who had, for whatever reason, become somewhat overly involved in the interests of a party to the litigation. As Ormiston JA's discussion in FGT Custodians at [12] makes clear, this circumstance may diminish the weight accorded an expert's opinion. Here, it lessened to some degree the weight I might otherwise have given Mr Lambert's opinion. In the end, however, my preference for Dr Morrison's opinion to that of Mr Lambert's was more affected by considerations other than this. I would add that there was no occasion to exercise my discretion under s 135 of the Evidence Act 1995 (Cth). 222 There were a number of other matters that also tended to diminish the weight to be attached to Mr Lambert's evidence, including that, in cross-examination, it became apparent that much of his technical opinion was not based on any actual testing of the applicants' truck. Thus, for example, Mr Lambert conceded that he had done no testing to establish the relative torsional rigidity of trailers. Instead, his opinion was based on the fact that he had "a very good eye for observing vehicle behaviour". Further, Mr Lambert stated he used his "own observation and measurements" to establish the chassis was bent. When asked whether he established first whether the ground surface was flat, he conceded "Well, I didn't check it in an absolute sense, no ... I have got a very good eye for flat surfaces". 223 Notwithstanding these reservations, I have found it necessary to consider Mr Lambert's evidence carefully. 224 Mr Lambert relied on his observations in the 'inspect and drive' test to support the proposition that the applicants' truck was defective. This evidence should be treated cautiously since not all of it is to be found in the contemporaneous report on the 'inspect and drive' test. Further, Mr Lambert's comments at the time about the applicant's vehicle, including his rating it as the second worst vehicle tested, must be considered in the context in which they were made. The 'inspect and drive' tests were not conducted under uniform conditions, and the trailer, load, road quality, road route and speed of the drive varied between vehicles. There were no instrumental measurements at this stage. Mr Lambert's observations were subjective. I accept that, as the respondent submitted, to the extent the observations in the 'inspect and drive' report might be thought inconsistent with the later results of the instrumented testing, the latter are to be preferred. This is because the instrumented testing provides quantifiable comparative data of an objective kind. 225 In his report (Lambert Report, pp 22-23) Mr Lambert stated that the FORS Report data showed the applicants' truck to be a problem. For the most part, I reject this evidence. Mr Lambert referred to the fact that the applicants' vehicle had a chassis bending mode of 10.4 Hz "which is close to normal axle hop modes at 90-100 km/h, so there is a high potential for the two modes to excite each other". Neither of these factors established the truck was in fact a problem. Indeed, Mr Lambert conceded that the FORS Report results on vibration indicated that this was not an issue. Mr Lambert also relied on the fact that the applicants' vehicle measured a value of 25.6 degrees on the Nagambie section of the route, commenting that this showed a dramatic deterioration on poor roads. For this section, as we have already seen, however, the applicants' vehicle had a lower steering wheel angle than one benchmark vehicle and two other complainants' vehicles. Mr Lambert also relied on the fact that the applicants' vehicle had a low average speed on the Nagambie section and the highest standard deviation on the Euroa section. As the respondent noted, however, on the roughest section of route, the Euroa section, the applicants' vehicle had the second highest mean speed of all tested vehicles. Moreover, as mentioned above, the FORS Report expressly addressed and discounted the significance of speed variations. Mr Lambert also referred to the roll steer coefficient of 0.31 for the Euroa and Nagambie section but disregarded the axle steer angle measure. He referred to the higher bump steer coefficient for the Hume Highway section, but, as already stated, this would not appear to have been a problem. 226 Mr Lambert (and Dr McLean) identified a number of methodological inadequacies with the FORS Report. None of these criticisms, however, significantly undermines the data or findings within the FORS Report. Mr Lambert's submission on the Draft Final FORS Report did not mention this, however, and Mr Lambert conceded in evidence that these submissions had exhaustively stated what he perceived to be deficiencies in the Report. Mr Lambert's view on this issue was also inconsistent with his experience in the 'inspect and drive' test and with Mr Jenkins' evidence that the truck exhibited no adverse behaviours when used for cattle transportation on secondary rough roads when travelling between 80 and 100 kilometres per hour. Mr Lambert had never measured the COG of the applicant's truck as loaded by them. Again, Mr Lambert's submission on the Draft Report did not mention this matter. Apart from a video of marginal probative value, there was no other evidence led to show how the torsional rigidity of the trailer would have affected the results of the FORS Inquiry. In cross-examination, Mr Lambert admitted that he had never tested the torsional rigidity of trailers, including curtain-sided trailers. (c) Both Mr Lambert and Dr McLean expressed the opinion that the applicants' vehicle operated badly on rough roads. Mr Lambert based this opinion on the 'inspect and drive' test and on the analysis of data in the FORS Report referred to above. As noted, however, his contention that the applicants' vehicles showed the lowest speed over the "poorest road" was unconvincing. (d) It is convenient to note that Dr McLean's attempt to diminish the significance of the FORS Report on the ground that the route used for instrumented testing was not representative of the roads typically driven by Mr Lowe. Dr McLean conceded, however, that he had not driven the Adelaide to Brisbane route that Mr Lowe travelled. There was no other evidence that showed that the assumption in the FORS Report that the route was reasonably representative was wrong. (e) Dr McLean relied on two 41-second segments of raw FORS data as representative of the likely vibration and handling characteristics of the Lowes' vehicle under normal operating conditions and compared this data with data relating to the benchmark vehicle BM1. There were 12 files of data collected on the Lowes' vehicle in the FORS Inquiry. The segment, which Dr McLean identified as the "Tooborac to Seymour" section came from file number 12. His evidence as to how he selected this data was, as the respondent submitted, contradictory and confusing. He contended that he selected a particular section of the road on the basis of its correlation with the NRM value. In cross-examination, however, he accepted that the correlation of two sections of road on the basis of their NRM values alone was unsound. He accepted that the NRM measurement could provide only a very rough approximation as to the state of a road since it measured only one characteristic (bumps or displacements measured as the displacement of the rear axle relative to the chassis) and did not provide any information as to undulations, potholes, camber and the like. (f) Dr McLean's secondary position was that he selected the data because it exhibited "interesting accelerations", but he conceded that he could not determine whether the data selected and identified as the "Tooborac to Seymour" was in fact this segment of road. He provided no adequate explanation as to why he considered the segment of the data relating to the Lowes' vehicle to be typical. (g) Dr McLean compared the two 41 second segments of data relating to the Lowes' vehicle with the data relating to BM1. As previously noted, he conceded that this latter data was distance averaged over the whole FORS test route, and that he was not comparing like data. (h) Dr McLean ultimately accepted that the analysis of speed and steering wheel variation measurements prepared by Dr Morrison from the data in file 12 showed that the vehicle was in fact travelling at a constant speed of around 100 kilometres per hour and had minimal steering wheel variations. He further accepted that such measurements would be inconsistent with likely measurements for speed and steering wheel variations on the Toorborac to Seymour road and that it was possible that the data in file 12 related to the Hume Highway. (i) Finally, Dr McLean conceded that the period of data analysed by him did not accord with the requirements stipulated by a note to clause 5.5 of the ISO Standard 2631-1: 1997. He said that he did not know this earlier because he had been using a copy of the Standard held by the University of Wollongong, which may have been out of date. As the respondent submitted, this comment did not reflect well on his scholarship and expertise. (j) Although Mr Lambert criticised the instrumented testing in the FORS Inquiry, he did not provide any evidence as to how these alleged deficiencies affected the results. (k) Whilst Mr Lambert criticised the FORS Report for ignoring Mr Lowe's claims about low component life, it is clear that alleged component failure was not within the scope of the FORS Inquiry. There is no evidence for his statement that the FORS Inquiry preferred the views of the manufacturers to that of the truck owners. Dr McLean's complaint that the FORS Report did not compare "like vehicles with like vehicles" did not lead to a result supportive of the applicants' case. As already noted, he accepted that the FORS Report found that the Lowes' truck did not exhibit any adverse vibration behaviour. Mr Lambert maintained, however, that Roaduser's analysis of vibration was deficient because it did not include lateral acceleration along the x-axis. This was the result, so Mr Lambert said, of Roaduser economising by buying a data logger that could not collect this data. On this point, however, I accept the evidence of Dr Morrison, referred to previously. 228 Mr Lambert also stated that both the vertical and fore-aft whole-body vibration ('WBV') measurements recorded for the Lowes' truck "at 12 hours per day exposure (the legal limit) would have been towards the top of the health caution zone". He referred to the ATSB-ARRB report: see above. This report, which followed the FORS Report, sought to determine the extent to which vibration in heavy vehicle cabs contributed to driver fatigue or might constitute a health hazard. It also sought to establish and recommend vibration thresholds for fatigue and health hazards. Reference to the findings of the ATSB-ARRB report shows that WBV measurements of the Lowes' vehicle were better than average when compared with the typical population of vehicles. 229 At trial Mr Lambert relied on the fact that the ISO Standard 2631-1: 1997 guidelines for measuring the effect of vibration in respect of comfort recommended that a total vibration dose value be calculated using measurements from the three axes. As the respondent pointed out, however, at the meeting of experts held pursuant to my orders of 10 February 2006, the experts (including Mr Lambert) agreed that the main 'vibration' issue was whether vibration levels with respect to the Lowes' vehicle were excessive compared to the general population of comparable Australian trucks with respect to, amongst other things, productivity and health. Comfort was not mentioned in the Joint Statement of Experts filed on 12 July 2006, in accordance with my orders. The applicants adduced no evidence that would permit the Court to assess the relationship, if any, between comfort and productivity. 230 Ultimately, Mr Lambert failed to identify any quantifiable outcome that might have resulted from what he suggested were potentially adverse excitation activity. 231 If his evidence were admissible (which I find it was not), Dr McLean did not take the applicants' case with respect to vibration any further. His primary contention was that the FORS Report failed to consider the 'harmonic signatures' of the vehicles being tested. His theory as to the harmonic signature of the Lowes' vehicle was based on his assumption that the length of the chassis was 214 inches. He accepted that his analysis would be incorrect if the chassis length was different. The chassis length was apparently only 210 inches: see RGL 4 'New Truck Proposal'. In any case, Dr McLean had never tested his theories by reference to actual vehicles. Further, his evidence that chassis rail cut-outs may affect stiffness or flexibility of chassis rails and the natural frequency of the beam had no empirical support. I prefer the evidence of Mr McPherson in this regard. As already noted, Mr McPherson stated that cut-outs were common and did not have any adverse affect on the chassis. 232 Dr McLean also said that the FORS Report had paid "minimal attention to the significance of the F26 frequency weighed set pad vibration measures". As to this Dr Morrison said (and I accept) that the results for the Lowes' truck were the second lowest of the eight tested vehicles and he could discern no failure with regard to the FORS Report's treatment in this regard. In cross-examination, Dr McLean was unable to identify any academic research or industry practice that would support his theory that there was a link between NRM value and the "harmonic signature" of a vehicle, as his report alleged. In cross-examination, he conceded that the NRM value cannot provide a fixed excitation frequency due to the randomness of spacing between road bumps and corrugations. Dr Morrison's evidence (which I accept) was that there was no basis for Dr McLean's linking of potential vibration exposures with NRM values. 233 I have already referred to Mr Lambert's comments on ride and handling in his report on the 'inspect and drive' test. Referring to the FORS Report, Mr Lambert opined that the applicants' vehicle performed well on standard roads and badly on poor roads. The fact was, however, that, as noted above, the Report made a contrary finding. 234 Mr Lambert's criticism of the air suspension system also lacked an empirical basis. He gave evidence that the bump steer coefficient was exacerbated by the air suspension system, which can be accepted, but he did not refer to the findings of the FORS Report with respect to drive axle steer angle. This, as Mr Lambert effectively acknowledged in cross-examination, indicated that there was in fact no problem with the air suspension system and the height control valve. He maintained that the fixing of both differential transverse rods to the same side of the chassis in the Lowes' truck was a design fault, but he did not provide any specific evidence, in the form of test data or the like, as to the effect of this on handling. 235 As I have said, Dr McLean's evidence on handling, panhard rods and torsional flexibility was inadmissible, but if it were not, it did not advance the applicants' case. On examination, Dr McLean's statement that "the handling characteristics of the Lowe truck are grossly more adverse than those exhibited by BM1" is mistaken. Dr McLean conceded that he had done no test in respect of transverse rods. His opinions about torsional flexibility were not supported by any empirical data. 9. This calls for an objective assessment of the vehicle, although evidence of subjective impressions may inform this assessment. 237 The applicants bought a new truck for this purpose. The applicants said (and the respondents did not deny) that it was "top of the range". The respondent described it as a Mack CH Elite Highway prime mover. In the circumstances, in order to be fit for the purpose of interstate long-haul goods transport, the truck was required to be able to transport the applicants' loads over long distances safely, reliably and efficiently. 238 The heart of the applicants' case was that the truck was not fit for long-haul goods transport because it had vibration and handling problems that made it unsafe, unreliable and inefficient. Vibration problems, in the context of this case, included 'rough ride'. Handling problems included darting and wandering. The applicants also alleged other defects in the truck. I also discuss them briefly below. 239 In support of their vibration and handling claims, the applicants relied on the evidence of Mr Lowe, Mr Pasfield and Mr Lambert (and to a lesser extent Mrs Lowe) to the effect that each had experienced rough ride and handling problems. I have already indicated that I would not place any great weight on Mr Pasfield's evidence and that I would not regard Mr Lowe's evidence as entirely reliable. As for Mrs Lowe and Mr Lambert, I do no more than refer to my comments above. 240 I have found that Mr Lowe complained of rough ride and handling problems from the very beginning of his operation of the truck. His complaints about rough ride were persistent. He made fewer complaints about handling, although he (and Mr Pasfield) made some occasional references to 'darting'. 241 Notwithstanding Mr Lowe's complaints, there was little, if any, major work done on the truck in the first months of its operation. There was some work on the air bag suspension system in April 1998, but Mr Lowe conceded that he did not thereafter experience problems with the air bag suspension. There was a good deal of work done on the vehicle in October 1998, but handling and vibration were not expressly mentioned. "Rough ride" headed the list in February 1999, but again there was no specific mention of handling or vibration. The first mention of "severe vibration (downhill 1 2 3 gears)" (as opposed to 'rough ride') appeared in the Lowes' list of 31 March 1999. Bearing this in mind, and for the reasons already stated, whilst I accept that Mr Lowe had an honest belief that his vehicle had vibration problems, I would not accept his evidence as reliable evidence that the vehicle in fact had vibration or handling problems. 242 I accept that, on the 'inspect and drive' test in March 1999, Mr Lambert, then a passenger, considered that he experienced vibration and handling problems. As I have already said, however, his comments at the time were his subjective impression, without the benefit of instrumented testing, and must be considered in the context in which they were made. As I have said, to the extent the observations in the 'inspect and drive' report are inconsistent with the later results of the instrumented testing, the latter are to be preferred, because they provide quantifiable comparative data of an objective kind. 243 Further, as regards subjective impression, it must be recalled that a number of Mack employees took the truck for test-drives, but none could detect the rough ride and handling problems of which Mr Lowe complained. Mr Buttignol and Mr Heironymus were passengers in the vehicle when Mr Lowe took them on test-drives in August 1998 and February 1999. Neither detected any problem with rough ride (or vibration) or handling. Subject to the reservations expressed above, they were both credible witnesses. 244 Finally, to the extent that it matters, bearing in mind that his use of the truck --- for short-haul, high COG loads, and at lower speeds with frequent slowing and stopping --- was different from Mr Lowe's use, the present owner's experience did not support the applicants' case. Mr Jenkins, who had purchased the truck from AGC after AGC had repossessed it from the Lowes, made no complaint at all about the truck. Mr Jenkins was an honest and credible witness. 245 Plainly enough, perceptions about the ride and handling of the Lowes' vehicle differed markedly. There is ultimately no reason to prefer the evidence of Mr Lowe, Mr Pasfield or Mr Lambert over the evidence of Mr Buttignol or Mr Heironymus. Further, as indicated, there were deficiencies in the applicants' and Mr Pasfield's evidence, which caution against too ready acceptance. 246 The applicants contended that Mr Lowe had a "litany of complaints" about the truck and that they were so unhappy with it, they offered to return it on a walk-away basis. There is no doubt that Mr Lowe made a great many complaints about the vehicle. Also as indicated above, I accept that Mrs Lowe spoke to Mr Kumnick about returning the truck in October 1998. These facts do not, however, establish that there was in fact any defect of the kind alleged. The applicants also argued that the truck had a poor service history, which was consistent with there being undue vibration. 247 I am not satisfied that the applicants have shown, on the balance of probabilities, that the truck had a poor service history and, even if it did, that this history was due to vibration problems in the truck. 248 The applicants relied on certain comments of Mr Heironymus and Mr Buttignol in cross-examination. Mr Heironymus' comments supported them to some extent. Mr Heironymus agreed that the "history [of the truck] would be below average". He accepted as "fair comment" that the truck had "a history of these little niggly, bad luck, odd things coming up continually". I do not consider, however, that Mr Buttignol's evidence is in the same vein. When Mr Buttignol was asked about the service history of the vehicle, he insisted that "every time that truck came in ... we rectified those problems, that should have gone out without that problem in the truck". When asked whether the truck was "close to being perfect", he answered, "it falls between a range". There is no objective evidence that would permit me to say which interpretation of the truck's service history is to be preferred. There are a number of factors that make this evaluation difficult, if not impossible. 249 During the period of Mr Lowe's operation of the truck, it completed every trip. In all, in the first year of Mr Lowe's operation, the truck completed about 250,000 kilometres, which even Mr Lambert conceded was "well above average". Servicing and repair did not significantly interfere, if at all, with the transportation of goods. For most of the period that Mr Lowe operated the truck, the truck was covered by Mack' s 12 month (unlimited distance) warranty, providing for free-of-charge repair or replacement of vehicle components. The truck was taken in for service and repair on many occasions and for most of the time at no cost to Mr Lowe. He was, as I have already observed, very particular about the truck, and I have no doubt that he took advantage of the warranty cover to ensure his truck was kept in the best condition possible. 250 Many of the repair or replacement items done by Mack were for comparatively minor items. A proportion of the items were self-evidently for wear and tear on a vehicle travelling great distances and carrying heavy loads. At least some of the repairs were, as Mack said, consistent with normal maintenance and service issues. There were two instances in which Mack did work on the applicants' vehicle and similar vehicles as part of a program of component upgrading (replacement of bonnet mounts and steel springs). Further, there were numerous occasions when proper assessment showed Mr Lowe's complaints about the vehicle to be unfounded. 251 Mr Heironymus gave evidence (which I accept) that Mack's general policy with regard to complaints was to try to keep the customer happy "and if that entailed doing work that we thought would ... help address the complaint, then that is what we did". He gave evidence in cross-examination that sometimes Mack's service department would perform work on a vehicle to try to address a customer's complaint and not because they knew it would fix a problem, as for example, in the case of replacing alternative shock absorbers. It is difficult to say to what extent this policy accounted for the repairs and replacements on Mr Lowe's vehicle. 252 Doubtless, given the mileage, there was on numerous occasions a real need for repair and replacement. Mack worked assiduously, however, to meet Mr Lowe's complaints about the truck. The FORS Inquiry may have been a factor in the steps Mack took in January to March 1999 to bring the truck up to Mr Lowe's expectations, but it can have been no more than this, because it is clear that Mack's repair and replacement work on the truck had been on-going and dated from well before the FORS Inquiry. Whether there were other factors apart from wear and tear (for example, speed) contributing to component or other failure remains a matter for speculation. Mr Lowe was unable to produce relevant driver log books, which may have assisted in this regard. 253 In the circumstances of this case, it is difficult, if not impossible, on the evidence as it stands, to determine whether or not Mr Lowe's multiplicity of complaints about the truck in fact reflected an abnormally high level of items requiring mending, replacing or restoring. Even if I were so satisfied, however, there is no evidence that would lead me to conclude that the cause of all these things going wrong was a problem with vibration. As already indicated, Dr McLean's evidence, even if admissible, would not so persuade me. Nor was I so persuaded by Mr Lambert's evidence. 254 The only objective, independent, and contemporaneous testing of the applicants' vehicle was done in the course and for the purposes of the FORS Inquiry. Roaduser carried out instrumented testing to assess vibration and handling problems (as well as chassis flexibility and airbag suspension issues). Though not perfect, the instrumented testing for vibration and handling was extensive. The measurements have not been shown to be inaccurate. I am not persuaded by the evidence of Mr Lambert (or Dr McLean) that the FORS Inquiry and Report were fundamentally flawed. 255 I accept that, as the applicants said, the FORS Inquiry and Report were looking at a broader problem than that which arises in this case, because the Inquiry was seeking to identify the possible existence of systemic problems for vehicle manufacturers and road safety authorities, and not to assess fully the trucks involved in the testing procedures. I accept too that the circumstances of the instrumented testing did not precisely replicate the applicants' use of the truck. The Inquiry replicated the applicants' use of the truck as nearly as was reasonably practicable having regard to the objects of the Inquiry. The results of the instrumented testing are, however, the only available results of instrumented testing on the applicants' vehicle. The results are plainly relevant to the applicants' complaints about their vehicle. In summary, while they may not be the perfect reflection of the vehicle when it was being operated by Mr Lowe, the results set out in the FORS Report constitute the best available evidence. As we have seen, these results do not support the applicants' case about the ride and handling qualities of the vehicle. 256 The applicants argued that the fact that a problem did not manifest itself for the purposes of the FORS Inquiry and Report does not lead to the conclusion that there were no problems with the truck. Even if accepted, this observation falls well short of providing a basis for a positive finding that there were in fact problems of the kind they alleged. It is also true that the instrumented testing was principally designed to provide comparative data about the group of vehicles that were subject to the testing. Save for the guidance provided by ISO Standard 2631-1: 1997 or the ATSB-ARRB report, there was no standard for a good, as opposed to bad, truck. It may be that, as the applicants submitted, the comparative data did not establish that their vehicle was good for the purpose of their operation and that the problems with it were manifest at certain times in certain conditions. In the absence of evidence (or sufficient evidence), however, neither of these observations provides a ground for a positive finding that the truck was unfit for their purpose. 257 The FORS Report findings on vibration provide the only objective assessment of ride quality available to the Court today. There was nothing in the FORS Report to support the conclusion that the ride of the applicants' vehicle was 'rough' in that it was adversely affected by vibration. This is confirmed by the evidence of Mr Morrison and Mr Lambert. 258 Further, notwithstanding the recommendation in the FORS Report that Mr Lowe be notified of the test results in relation to the increased steering effort required for his vehicle on a sector of the test route, on the critical data regarding drive axle steer angle, the applicants' vehicle performed better than two benchmark vehicles and all but one of the other complainants' vehicles. I accept Mr Morrison's evidence in this regard. 259 The applicants have not, therefore, satisfied me, that, on the balance of probabilities, the truck suffered from rough ride, vibration or poor handling characteristics. The pleaded defect of "severe vibration (downhill 1 st , 2 nd and 3 rd gears)" is not made out. Mr Lowe's evidence was that any such problem was manifest only once and was rectified by the replacement of the engine mounts. 260 As noted early in these reason, the applicants alleged many other defects in the truck. As we have seen, the service history of the truck over time involved work on most, if not all, of these items, as a result of which Mack rectified any item needing repair or replacement. There is no evidence that these items separately or together made the truck unfit for the applicants' purpose. I note some particular items since the applicants made special mention of them. Chassis bowed and bent --- The applicants alleged that the chassis was bowed and bent. This claim is not made out. Mr Lambert's evidence was that he undertook a test at Rick Cobby's depot showing the chassis was bent, but he conceded in cross-examination that prior to testing the chassis he had not checked surface flatness and tyre air pressure, which were critical to the integrity of the test. The result of Mr Gentilcore's chassis straightness test on 15 April 1999 showed that, save for a minor 3 millimetre variation, the chassis was straight. Mr Jon McLean gave evidence of a test on 14 April 1999, which showed a similar result. Mr McPherson stated that he examined the vehicle at around 800,000 kilometres (when it had passed out of the applicants' hands) and detected no bend. He further stated that once chassis rails are bent, they stayed bent. 2. Axle camber wrong --- The applicants alleged that the axle camber was wrong for Australian conditions. I accept the evidence of Mr McPherson and Mr Wallace that the axle is cambered for Australian conditions. There was evidence that the applicants' vehicle had undergone a very minor or slight corrective adjustment. There was no evidence that this would have affected the operation of the truck in any material way. There are evident difficulties with the pleading. At this point, they were difficult to follow and in part circular. Since I have rejected the applicants' case on the defects, it is strictly unnecessary to deal with this part of their case. 262 Since the matter occupied some time, however, I set out briefly the evidence concerning the alleged design and construction failures. Torque rods --- The applicants relied on the fact that the transverse rods were both mounted to the same side of the chassis. The applicants presented no test data or actual evidence as to the effect of transverse rods being mounted on the same side of the chassis as opposed to one either side. Mr McPherson gave evidence (which I accept) that the movement of the transverse rod is extremely small and that it made little or no difference whether the torque rods were mounted on the one side as opposed to being on either side. Mr Morrison gave evidence to similar effect. I am not persuaded by Mr Lambert's evidence that the location of the transverse rods on the applicants' vehicle had any material effect on the vehicle's stability. 2. Uneven distribution of air pressure --- The FORS Inquiry tested the issue of air pressure. The results are set out in Table 36 of the FORS Report and are not indicative of the alleged failure. There is no or no sufficient evidence to substantiate the allegation. 3. Variable air bag pressure --- Table 36 of the FORS Report does not support this allegation. The air pressure of the applicants' vehicle is constant with an almost constant deviation for the Euroa and Nagambie sections. There is no or no sufficient evidence to substantiate the allegation. 4. Adverse operation of right height control valve --- There is no or no sufficient evidence to substantiate the allegation. 5. Driveline torsional vibrations contributing to premature component failures --- I refer to the discussion above. As already stated, there is no or no sufficient evidence to substantiate the allegation. 6. Deficiency in pneumatic dampening of air suspension system --- Table 36 of the FORS Report does not support this allegation. There is no or no sufficient evidence to substantiate the allegation. 7. Adverse periodic phenomena occurring in the sub-harmonic frequency band --- There is no or no sufficient evidence to substantiate the allegation. 8. Air suspension system fails to dynamically load share leading to high dynamic wheel loads and high dynamic service loads --- Table 36 of the FORS Report does not support this allegation. There is no or no sufficient evidence to substantiate the allegation. 9. Cut-out to the chassis rail top and bottom flanges in the vicinity of the rear engine mounts adjacent to the air compressor thereby diminishing the stiffness of the chassis and lowering the harmonic signature of the prime mover --- Even if Dr McLean's evidence were admissible, the applicants have not provided any empirical evidence as to the effect of the chassis rail cut-outs on the 'harmonic signature' or on vehicle behaviour. Mr McPherson gave evidence (which I accept) that cut-outs were commonplace and had no known adverse effect. 10. Inadequate front engine mounting design --- There was evidence that Mack rectified a front engine mount and the issue did not arise again. 11. Steering mechanism exhibiting excessive bump steer --- Table 30 of the FORS Report showed that the applicants' vehicle had similar or better results than the benchmark vehicles and the other complainants' vehicles. 12. Significant out scalloping and uneven wear of steer tyres --- The applicants complained about the steer tyres. On the evidence of Mr Lowe, the steer tyres provided average or slightly above average life and the drive tyres provided well above average lifetime. 13. Adverse kinematic geometry --- This allegation was not pursued. 14. Vehicle handling erratically and unpredictably and exhibiting excessive response to flexible chassis vibrations, torsional loading and bogie axle roll steer --- There was no evidence of such phenomena. 15. Engine and cab sleeper cab mount dynamic parameters inappropriate for vehicle's harmonic signature --- There was no evidence of such a phenomenon. 16. Engine and cab sleeper cab mount dynamic parameters inappropriate for vehicle's harmonic signature --- There was no evidence of such a phenomenon. 17. Inadequate design and operation of drivers seat mechanism --- There was no evidence of this. 18. Cyclic twisting of primer mover chassis --- There was no evidence of such a phenomenon. 19. Roll centre of front prime mover raised by high centre of gravity engine and cabin affecting efficiency of front shock absorbers --- There was no evidence of such a phenomenon. 20. Unequal pressure in suspension --- Table 36 of the FORS Report does not support this allegation. There is no other evidence to substantiate the allegation. 21. Poorly matched harmonic signature causing adverse frequency phenomena --- I refer to the discussion of Dr McLean's evidence. Even if his evidence were admissible, there was no evidence to support the allegation or to establish that it resulted in any adverse behaviour in the applicants' truck. Furthermore, Mr McPherson gave evidence that the issue of the 'harmonic signature' or vibration characteristics of a vehicle would be considered in the development of heavy vehicles. As we have seen, the respondents called Mr McPherson to give evidence of his experience in the testing of prime movers both in Australia and the USA. 264 It follows from the above discussion that the applicants have not shown that, on the balance of probabilities, the truck was not of merchantable quality and was unfit for the purpose of interstate, long-haul goods transport. They have not shown that the truck was other than as represented to them by Mr Kumnick in March 1998. In particular, they have not established that his statement that the truck would be safe and reliable for at least 800,000 kilometres was misleading or deceptive, or likely to mislead or deceive. If this were a representation with respect to a future matter that attracted s 51A of the TPA, there is no doubt that the respondent adduced more than enough evidence that it had reasonable grounds for making the representation. 265 I do not consider that anything ultimately turns on the so-called Browne v Dunne points referred to in the applicants' closing written submissions. The applicants did not elaborate on them in closing address. 10. I would express briefly my conclusions on the matter of damages in the event that I was wrong. 267 Had a breach of the condition created by s 71 occurred, would the applicants' damages claim have been made out? The applicants' statement of claim sought damages or compensation by reference to various provisions of the TPA, including ss 73 , 75AD, 82 and 87 . At no stage in the proceeding, however, have the parties referred again to s 73. The authorities are clear that no action for damages lies under s 82 for breach of a condition implied by s 71 of the TPA: see Austral Pacific Group Ltd (in liq) v Airservices Australia [2000] HCA 39 ; (2000) 203 CLR 136 (" Austral ") at 141 per Gleeson CJ, Gummow and Hayne JJ, citing Brennan J in Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283 at 285-286. Provisions such as ss 75AD and 87 are of no assistance in this context. I accept, however, that the Court may award damages in respect of a breach of a s 71 condition by virtue of s 39B(1A)(c) of the Judiciary Act 1903 (Cth). That is how Brennan J analysed the matter in Arturi v Zupps Motors Pty Ltd. It follows that a party claiming damages for breach of such an obligation asserts a right which owes its existence to federal law thereby, in a State court, attracting the exercise of federal jurisdiction invested under s 39(2) of the Judiciary Act . See also LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31 ; (1983) 151 CLR 575. In any event, the applicants' s 52 claim would provide an independent basis for jurisdiction over the s 71 claim. 268 The measure of damages for a breach of an obligation created by s 71 of the TPA is the contractual measure, namely, the estimated loss directly and naturally resulting in the ordinary course of events from the breach. The prima facie measure of that loss is "the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty": compare Hadley v Baxendale [1854] EWHC Exch J70 ; (1854) 9 Ex 341 at 354; (1854) 156 ER 145 at 151; AFA Electronics Pty Ltd v Strathfield Group Wholesale Pty Ltd [2001] VCS 289 at [88], discussing s 59 of the Goods Act 1958 (Vic). Section 52 of the Sale of Goods Act 1895 (SA) is to similar effect. In other words, prima facie, had they succeeded on liability, the Lowes would have been entitled to the difference between the value of a truck fit for the purpose of long-haul goods transportation and the value of the truck they actually received and used in their business. The applicants did not, however, seek damages on this basis. There was no evidence of this amount. 269 Effectively, the applicants sought damages under the second limb of Hadley v Baxendale for the loss as may reasonably be supposed to have been in the contemplation of the parties, at the time they made the contract, as the probable result of the breach of it. It is on this basis, for example, that they claim damages in respect of loss of earnings: compare Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81 ; (1986) 161 CLR 653 at 667-668; Hodgson & Hodgson v Morella Pastoral Co Pty Lt d (1975) 13 SASR 51 at 66-67; NEA Pty Ltd v Magenta Mining Pty Ltd [2005] WASC 106 at [305] per EM Heenan J, affirmed in NEA Pty Ltd v Magenta Mining Pty Ltd [2007] WASCA 70. A claimant is of course under a duty to take all reasonable steps to mitigate the loss caused by the breach. 270 In order to be compensated for any loss and damage under s 82(1) of the TPA in respect of a claim under s 52 of the TPA, the applicants needed to establish a causal connection between the respondent's conduct (here, the alleged misrepresentation) and the loss for which they sought compensation: see, e.g., Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525-526 per Mason CJ, Dawson, Gaudron and McHugh JJ and Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469-470 per Gleeson CJ, 480 per Gaudron J, 489 per McHugh J and 509 per Hayne J. 271 For present purposes, it is sufficient to refer to the Full Court's discussion in Kenny & Good Pty Ltd v MGICA (1992) Ltd (1997) 77 FCR 307 at 330 (per Wilcox, Branson and Sackville JJ) regarding the general principles governing damages under the TPA. But this is not an inflexible rule and is merely illustrative of a more general proposition, namely, that the purchaser is entitled to recover as damages, a sum representing the prejudice or disadvantage he has suffered in consequence of altering his position under the inducement of the respondent's misrepresentation. It is not enough simply to show that the transactions was induced by the representation and the losses would not have occurred but for the transaction. In such a case the applicant would have been exposed, in any event, to the precise risk that ultimately eventuated. 272 Gurdag v BS Stillwell Ford Pty Ltd (1985) 8 FCR 526 is illustrative of these principles in a context similar to the present. Forster J upheld the applicants' claim in that case that the vendor of a truck had falsely represented its condition to the applicants, who had made known their intention to use the truck for the interstate transport of perishable food. His Honour awarded damages under s 82 of the TPA, comprising: (i) the difference between the purchase price of the vehicle and its true value at the date of purchase; (ii) expenditure reasonably undertaken to rectify faults relating to the misrepresented condition of the vehicle, plus interest thereon, irrespective of whether the rectification work was successful; and (iii) loss of profits for a period of twelve months less the costs of modifying the vehicle to suit the applicants' intended use. His Honour held that the applicants could not reasonably expect to be compensated for loss of profits indefinitely or for a long period, given the age of the vehicle, even if it had been in the represented condition. The applicants made no application to amend. Mr Wilkinson's report was directed mainly to expected profit and loss. For the period 1998-2003, he concluded that loss of income was about $429,996; for 2003-2014, about $73,514; and for 2005-2014, about $330,745. He also noted a figure of $6,627 as increased costs and a $145,000 loss on the sale of the applicants' house. The respondent relied on the evidence of James Scott, who also prepared an accounting report as "a critique and responsive report to the report of Peter Wilkinson". 275 For numerous reasons, I would not accept Mr Wilkinson's assessment of the applicants' loss. Broadly speaking, my reasons include that: (1) key assumptions depended on the applicants' unsubstantiated allegations of fact; (2) key assumptions had no reasonable basis in the evidence or elsewhere; and (3) key assumptions were contrary to the facts even as the applicants alleged them to be. 276 There was in fact little evidence that repairs on the applicants' truck had interfered much, if at all, with their business. The evidence at trial failed to establish that the applicants had lost the 73 days between 6 April 1998 and 28 December 1999, as they claimed in their particulars of loss and damage. Claims made in respect of some days were plainly unjustified. 277 At trial, the applicants included a claim for the alleged loss made on the sale of their house on 31 May 1999. This claim was not a part of their pleadings. I would reject it on the basis that they failed to show that they were compelled to sell the house by reason of Mack's conduct and/or the defective condition of the truck (assuming, contrary to the case, that they had established their case on liability). 278 In their particulars of loss and damage, the applicants claimed the loss of value of the truck. The applicants adduced no evidence of this. As indicated earlier, the applicants abandoned a claim for damages in respect of personal injuries. Their general damages claim lacked any satisfactory evidence and was not apparently pursued. 279 For the reasons stated, I would dismiss the application. I would give the parties an opportunity to file written submissions on costs. I certify that the preceding two hundred and seventy-nine (279) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | consumer protection breach of implied condition of merchantable quality breach of implied condition of fitness for purpose misleading and deceptive conduct (cth) trade practices act 1974 ss 52 , 66 (2), 71 (1), 71 (2), 75ad , 82 , 87 opinion expert evidence admissibility (cth) evidence act 1995 ss 79 , 135 trade practices evidence |
By that decision, ACMA refused BCR's application for renewal of its community broadcasting licence. Its written submissions described the proceedings as an appeal from ACMA's decision. At the hearing, Mr Weaver, who appeared for BCR, stated that the application was one for judicial review of ACMA's decision pursuant to s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (' ADJR Act' ). 3 The specific grounds upon which BCR challenges ACMA's decision appear to be those in s 5(1)(a) of the ADJR Act (that a breach of the rules of natural justice occurred in the making of the decision) and s 5(1)(e) of the ADJR Act (that the making of the decision was an improper exercise of the power conferred by the relevant enactment). More particularly, so far as the alleged improper exercise of power is concerned, BCR invokes s 5(2)(g) of the ADJR Act. Section 5(2)(g) provides that the reference in s 5(1)(e) to an improper exercise of power is to be construed as including a reference to an exercise of a power that is so unreasonable that no reasonable person could have so exercised the power. The general principle is that a statutory body whose decision is impugned should not become a protagonist in the litigation because there is a risk that such a role will endanger its impartiality: The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13 ; (1980) 144 CLR 13, at 35-36, per curiam . However, there may be exceptions to the principle, for example where the Attorney-General does not intervene and there is no party other than the statutory body itself that can assist the Court in assessing the arguments of the party challenging the decision: TXU Electricity Ltd v Office of the Regulator-General [2001] VSC 4 ; (2001) 3 VR 93, at [42]-[45], per Ashley J. 5 In my absence on leave, ACMA approached Lindgren J shortly prior to the hearing seeking guidance as to whether the Attorney-General of the Commonwealth should be notified of the matter in order to allow him to consider whether he should intervene. ACMA also sought the Court's guidance as to the proper extent of its participation in the proceedings. Lindgren J did not resolve the latter question, but directed ACMA to notify the Attorney-General of the pendency of the proceedings and the nature of the issues that it raised, in order to assist the Attorney-General in determining whether he wished to intervene. In the event, the Attorney-General declined the invitation to intervene in the proceedings. 6 In these circumstances, I think that it was not inappropriate for ACMA to assist the Court by explaining the bases for its decision not to renew BCR's community broadcasting licence and by briefly addressing the arguments advanced by BCR. To the extent that this involved ACMA acting as a contradictor by opposing the relief sought by BCR, I think the course was justified by the unusual circumstances. I appreciate that if BCR's arguments were to succeed, its application for renewal of the community broadcasting licence would probably be remitted to ACMA for further consideration (cf TXU Electricity , at [45]). Nonetheless, I think it was consistent with the Hardiman principle for ACMA to take the measured approach it adopted in the proceedings. I should add that Mr Weaver did not object to ACMA taking the approach it did at the hearing. Section 91(1) in its current form empowers ACMA to renew the licence for a period of five years. The licence was renewed in 1988, 1997 and 2002. Following the last renewal, the licence was due to expire at midnight on 1 July 2007. 12 On or about 28 June 2006, BCR applied to ACMA for a renewal of its licence. On 20 February 2007, ACMA placed a newspaper advertisement seeking submissions from the public on whether it should renew the licence. ACMA subsequently received 349 submissions, of which 334 supported renewal of the licence and 15 opposed renewal. 13 On 19 April 2007, ACMA wrote to BCR advising that ACMA had formed the preliminary view that it should not renew BCR's licence. ACMA invited BCR to make submissions in writing by 11 May 2007 in relation to ACMA's preliminary view. ACMA also indicated that it was happy to hold a meeting to discuss or clarify matters raised in its preliminary view. 14 A meeting duly took place on 4 May 2007 between representatives of ACMA and BCR. In consequence of that meeting, ACMA granted BCR an extension of seven days for the preparation of its written submission. The submission sets out the various concerns identified by ACMA and responds to each seriatim. 17 On 29 June 2007, ACMA granted BCR a temporary community broadcasting licence. The temporary licence expires on 1 January 2008. 18 BCR instituted the present proceedings by an application filed on 22 August 2007. An amended application was filed on 5 October 2007 and a statement of claim on 4 December 2007. It made findings of fact under various headings, some of which correspond to the relevant sub-paragraphs of s 84(2) of the BS Act (these being matters ACMA was compelled to take into account by s 91(2A)). 20 ACMA noted that, in accordance with s 29 of the BS Act , the Australian Broadcasting Authority (ACMA's predecessor) had designated a defined licence area for BCR's licence known as the Bankstown RA1 Licence Area. A map of the licence area was appended to ACMA's reasons. The map showed, as ACMA's reasons recorded, that the licence area included, but was by no means confined to, the Sydney suburb of Bankstown. 21 ACMA found that the population of the area was ethnically diverse, with a large proportion born outside Australia and a majority of people speaking a language other than English at home. These languages included Arabic, Chinese and Vietnamese. 22 The reasons first addressed the ' Capacity of BCR to provide the service ', a phrase clearly derived from s 84(2)(d) of the BS Act . ACMA noted that BCR had successfully broadcast for 23 years and found that BCR had the technical and financial capacity to provide the service. ) After consideration of certain breaches of BCR's licence conditions, ACMA found that on balance and subject to exceptions dealt with later in the reasons, BCR had satisfactory management systems in place to ensure compliance with its licence conditions. 24 ACMA then considered whether BCR had the management capacity to comply with the licence conditions set out in cl 9(2)(b) and (c) of Part 5 of Schedule 2 to the BS Act ([8] above). 26 ACMA pointed out that 66 per cent of BCR's members lived outside the licence area. Five of the seven elected directors lived outside the area, although two of those directors worked there and one lived nearby. However, that number is not likely to be so great that the membership could claim to represent the community within the licence area in a numerical sense. BCR provided no evidence to demonstrate that, when involved in formal decision-making (such as the election of directors), the majority of its members make specific efforts to take account of the interests of licence community members, rather than acting in their own interest. It claimed that it was unaware of "an ACMA requirement that members ... live and work within the licence area". BCR appear to have misconstrued ACMA's preliminary view which was not that ACMA has such a requirement but that, when considering whether to allocate a licence, ACMA will take account of the membership of the organisation when considering whether it has the capacity to comply with the representation conditions. It is common sense that an organisation made [up] mostly of people from outside the licence area is not likely to have the capacity to represent interests that are specific to the community within the licence area. It claimed that this would "place us in jeopardy as we will be acting outside the provisions of the Co-operatives Act 1992 ". It has not proposed any other action which could ensure that, over time, it becomes an organisation made up of members of the licence area community. In the circumstances, ACMA must confirm its preliminary view that BCR does not have the capacity to continue to represent its community of interest. ACMA has some outstanding concerns in relation to BCR's general approach to compliance with its obligations given its submissions that responses to breach findings ... are evidence of good management practice. However, ACMA's view is that, on balance, these matters would not create a concern that is so great that it would affect an allocation decision. In the circumstances, ACMA must [find] that it is not satisfied that BCR has the capacity to provide the service in accordance with its obligation to represent the general community of Bankstown. ' (language derived from s 84(2)(a) of the BS Act ). ACMA found that the means used by BCR to identify the needs of the licence area were not effective. In particular, BCR had not developed any process for assessing whether members of the licence area community had a need for proposed programs. ACMA considered that the absence of such a process suggested that BCR might not have been meeting existing needs and was unlikely to be able to meet future needs. 29 ACMA referred to the submissions it had received from the public. These demonstrated support for programs in the Vietnamese, Hindi, Punjabi and Pacific Island languages within the larger Sydney community but not, in ACMA's view, the need for such a significant amount of programming in these languages to the licence area community. However, it finds that its programming (and therefore its programming decisions) are not balanced in that a significant proportion of the programming is not directed at meeting the needs of the licence area community. ACMA notes BCR's protestations that its directors have links to the licence [area] community and have not acted otherwise than in its interests. However, given the low level of need for this programming within that community, ACMA finds the inference that their own interests have affected programming decisions to be compelling. In the circumstances, ACMA must confirm its preliminary finding that the programming is primarily directed at communities outside the licence area. 31 Finally, ACMA concluded that it should exercise the discretion enlivened by its findings to refuse BCR's application to renew its community broadcasting licence. This submission assumes that if ACMA's decision can be characterised as ' irrational or illogical ', the terms of s 5(2)(g) of the ADJR Act will be satisfied and a ground of review under the ADJR Act will be made out. As McHugh and Gummow JJ observed in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59, at [66], the wording of s 5(2)(g) follows the language used by Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1 ; [1948] 1 KB 223, at 230. 33 It is not necessary to examine the correctness of BCR's assumption as to the operation of s 5(2)(g) of the ADJR Act . In Re MIMA; Ex parte S20/2002 , Gleeson CJ noted (at [5]) that to describe reasoning as ' illogical, unreasonable or irrational ' may merely be an emphatic way of expressing disagreement with it. In my view, the criticisms levelled by Mr Weaver at ACMA's reasoning amount to no more than strong disagreement with the findings made by ACMA. They do not show that ACMA's exercise of the power to refuse BCR's application to renew its licence was so unreasonable that no reasonable person could have exercised the power to deny BCR renewal of its licence. 34 Some of the specific criticisms BCR made of ACMA's reasoning, in my opinion, are without foundation. Mr Weaver argued, for example, that ACMA had impermissibly identified the relevant community as that of the Bankstown local government area, rather than that of the much larger licence area. But a fair reading of ACMA's reasons clearly indicates that the single reference to the ' general community of Bankstown ' was intended to be to the licence area which, for better or worse, is known as the ' Bankstown RA1 Licence Area'. ACMA's reasons correctly identified the licence area and, indeed, attached a map showing its boundaries. 35 A second criticism advanced by Mr Weaver was that ACMA's reasons fail to identify clearly the community whose interests or needs must be taken into account. Yet ACMA expressly stated that, in its view, members of the relevant community are people who live or work in the licence area or otherwise spend a significant amount of time in the area. 36 A third criticism advanced by BCR was that ACMA had prepared two investigation reports, in 2004 and 2005, each of which had rejected a complaint that BCR had contravened cl 9(2)(b) and (c) of Part 5 of Schedule 2 to the BS Act . These, however, were reports prepared in response to complaints made some time before ACMA considered BCR's most recent application to renew its community broadcasting licence. In any event, findings that there had been no breaches in 2004 and 2005 do not establish the irrationality or illogicality of a different finding, based on different material, in 2007. 37 Other criticisms made by BCR of ACMA's reasoning process amount only to disagreement with the analysis and do not establish that ACMA's approach was illogical or irrational. But there is nothing irrational or illogical in an administrative decision-making body with responsibility for allocating and renewing broadcasting licences using its own knowledge or understanding of community broadcasting to assess the representativeness of a particular organisation made up partly of outsiders. In any event, the representativeness of BCR's board was but one factor ACMA took into account in concluding that BCR did not have the capacity to represent the interests of the licence area community. 39 In my opinion, BCR's contention that ACMA's exercise of power was unreasonable, within the meaning of s 5(2)(g) of the ADJR Act , fails. ACMA's reasons recorded that BCR appeared to have misinterpreted ACMA's preliminary view as imposing a requirement that members should live and work in the licence area. BCR's complaint is that ACMA denied BCR procedural fairness by failing to correct its misconstruction of ACMA's preliminary view and thereby failed to afford BCR an opportunity to address the point ACMA was making. 41 ACMA's preliminary assessment was forwarded to BCR on 19 April 2007. However, that number is not likely to be so great that the membership and management could claim to represent the community within the licence area in a numerical sense. The members and directors may take account of the interests of the community within the licence area but 2BCR has not provided evidence that this is the case. Your preliminary view states that 2BCR has not provided evidence [that] members and directors may take account of the interests of the licence area. ' (Emphasis added. It then developed a submission that five of its seven directors either lived or worked in the licence area and that they therefore represented people within the licence area. 45 First, although Mr Weaver suggested at one stage that ACMA's preliminary assessment was misleading, he did not persist with that suggestion. There was in fact nothing misleading about the way in which ACMA expressed its preliminary assessment. ACMA specifically recognised that BCR's members and directors might have taken into account the interests of the licence area community, but pointed out that BCR had not yet provided evidence that this was the case. If BCR did misinterpret ACMA's comments, ACMA was not responsible for the misinterpretation. 46 Secondly, BCR had two opportunities to put its case to ACMA and to respond to ACMA's concerns. The first was at the meeting of 4 May 2007 (after BCR had received ACMA's preliminary assessment). The second was in BCR's detailed written response to ACMA's preliminary assessment, which BCR forwarded on 18 May 2007. Mr Singh's evidence was that at the meeting all points raised by ACMA had been covered by BCR and all questions answered. 47 Thirdly, it is by no means obvious that any of BCR's board members in fact misinterpreted ACMA's comments. It is necessary to read BCR's response as a whole. The statement that BCR was unaware of any requirement that members and directors live and work in the licence area could well have been simply a means of highlighting what appeared to BCR to be an inconsistency in ACMA's position --- that is, that after 24 years ACMA had decided to find fault with the composition of BCR's membership and board. The affidavit of Mr Singh (who prepared BCR's response) does not say that he or any other board member of BCR in fact misinterpreted ACMA's comments. 48 Fourthly, BCR attempted to provide evidence in its response to ACMA's preliminary assessment that BCR's members and directors did not represent and would not represent the interests of the licence area community. It chose to address this issue by detailing the links between board members and the licence area community. Clearly enough, whether or not members of BCR's board misinterpreted any aspects of ACMA's preliminary assessment, they understood the fundamental question they had to address. Their difficulty is that ACMA did not accept their contentions. 49 Fifthly, BCR adduced no evidence as to what it would have done had it correctly understood ACMA's preliminary assessment, over and above what it did. I drew the absence of any such evidence to Mr Weaver's attention and, at his request, granted a short adjournment to enable him to take instructions. At the conclusion of the adjournment Mr Weaver made no application to re-open his case. 50 The point is not that the absence of evidence suggests that any breach of procedural fairness was trivial and therefore should be ignored: cf Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141, at 145-147, per curiam ; Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82, at 116-117, [80], per Gaudron and Gummow JJ. The significance of the absence of evidence is that it reinforces the conclusion that there was nothing in the procedure adopted by ACMA that involved any unfairness to BCR. BCR had ample opportunity to put its case to the regulator. The Court's role is not to second-guess ACMA's rejection of the contentions advanced by BCR. 51 BCR's submission that it was denied procedural fairness must be rejected. I shall give the parties an opportunity to be heard on costs, having regard to ACMA's unusual role as contradictor in the proceedings. I certify that the preceding fifty-two (52) numbered Paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. | renewal of community broadcasting licence whether refusal to renew unreasonable whether denial of procedural fairness judicial review |
The Tribunal affirmed the decision of the delegate of the respondent made on 23 April 2003 to refuse to grant the appellant a Spouse (Migrant) (Class BC) visa, subclass 100 ("the permanent visa"). 2 The appellant, who is a national of Lebanon, had made an offshore application for the permanent visa and a Spouse (Temporary) (Class VF) visa, subclass 309 ("temporary visa") on 7 September 2000. The applications were based on his marriage to an Australian citizen, Ms Fatima Mustapha ("the sponsor"). The appellant claimed he had met the sponsor in Lebanon in July 2000 and they were married there on 13 August 2000. The appellant was granted the temporary visa on 6 December 2000 and arrived in Australia later that month. 3 The type of permanent visa for which the appellant applied usually cannot be granted until two years have lapsed after lodgement. On 20 June 2002, the Department of Immigration and Multicultural and Indigenous Affairs ("the Department") wrote to the appellant requesting him to provide evidence he and the sponsor were still in a genuine and continuing relationship, for the purpose of assessing whether the he was the spouse of the sponsor under clause 100.221(2) of Sch 2 to the Migration Regulations 1994 (Cth) ("the Regulations ") and therefore whether the permanent visa should be granted. The Department wrote a similar letter to the appellant on 15 January 2003. The Department did not receive a response to the letters. 4 On 10 April 2003, the sponsor telephoned the Department, advising that she and the appellant were no longer in a relationship and that she had taken an apprehended violence order (AVO) against him. By letter dated 23 April 2003, the Department advised that the application for the permanent visa had been refused. The delegate was not satisfied that the appellant was the spouse of the sponsor, as defined in Reg 1.15A of the Regulations . In particular, there was no evidence that they were in a "genuine and continuing relationship" as required by Reg 1.15A. The appellant therefore did not satisfy clause 100.221(2). The delegate considered the alternative criteria which did not require the existence of a spousal relationship and found that none were satisfied. 5 By letter received by the Department on 7 May 2003, the sponsor advised the Department that she had reconciled with the appellant. She also advised that they were living together and had a 14 month old daughter. On 12 May 2003, the Department wrote to the appellant advising that the application could not be further considered. The appellant's application for review was then lodged on 26 May 2003. At the time of decision, an applicant must satisfy clause 100.221(1) of Sch 2 to the Regulations . That clause in turn requires an applicant to satisfy clause 100.221(2), (2A), (3), (4) or (4A). On 22 April 2004, the Tribunal wrote to the appellant inviting him to comment on information in the Departmental file indicating the sponsor had taken out an AVO against him and that they were no longer in a spousal relationship. The appellant responded by letter dated 24 April 2004 indicating that although the AVO had been taken out, "we have since resolved our issues and there has been no violence since". He also stated that he and the sponsor lived together and that they had a daughter. On 28 April 2004, the Tribunal again wrote to the appellant, inviting the appellant to appear before the Tribunal at a hearing and provided the relevant hearing details. The letter stated that the Tribunal wished to take oral evidence at the hearing from the appellant as well as from the sponsor. On 10 May 2004, the Tribunal received a completed "response to hearing invitation form", which was signed by the sponsor. In response to the typed statement "I request that the Tribunal take oral evidence from" was written "English Fatima Mustapha, his wife". Under "I request that the Tribunal obtain the following written evidence or written materials" was written the sponsor's address and name, followed by the words "his wife". 11 On 12 May 2004, the Tribunal received a letter from the sponsor advising that she wished to "withdraw her sponsorship application", because her husband had been "very bad" to her and was using her so he could stay in Australia. She claimed that he abused and swore at her and did not support her financially. She also advised that she was now residing apart from him with their daughter. 12 The appellant did not appear at the hearing scheduled for 27 May 2004. However, on that day, an employee of the Tribunal, Micaela Callan, made a file note or minute in relation to a conversation she had in person with the sponsor. Based on the minute, the conversation included the following. Ms Callan told the sponsor that she longer had standing in the case and could not appear for the appellant. The sponsor informed Ms Callan that the appellant did not know about the hearing because she had not told him. She also said that although she was living with the appellant, he did not deserve to be granted a visa because he did not support her financially. The sponsor asked whether a visa would be granted because of their daughter, to which Ms Callan replied that the Tribunal would take the daughter into account. The sponsor also asked whether she could change the address to which the decision record would be sent. Ms Callan informed her that a change of address could not be accepted from the sponsor because she lacked standing. At the end of the minute, Ms Callan recorded that she would bring the details contained in that minute to the Tribunal member's attention and would also tell the member of her concerns that the sponsor might try to continue to intercept the appellant's mail. 13 Apparently in response to the details contained in the minute, the Tribunal wrote to the appellant inviting him to comment, in writing, on the information that "Your sponsor has withdrawn her nomination in support of your application". Section 359(2) of the Migration Act allows the Tribunal to invite a person to provide additional information that it considers relevant to the review of a migration decision. 16 It appears that by at least 5 August 2004, the Tribunal member had determined to decide the matter on the papers. This is based on a minute of 5 August 2005 by an employee of the Tribunal advising the Tribunal member that the date by which the appellant was to respond to the letters of 3 and 4 June 2004 had passed, and asking whether the member wanted to "decide on paper or set a hearing". The member's direction as recorded on that minute was that the appellant had failed to attend the scheduled hearing and she would therefore finalise the matter on the papers. 17 On 16 August 2004, the Tribunal wrote to the appellant indicating that it had made a decision and invited him to the handing down of the decision. A statement of decision together with the Tribunal's reasons was faxed to the appellant on 17 September 2004. 18 In its decision, the Tribunal noted that no evidence had been provided to support the contention that the relationship was "genuine and continuing". The Tribunal recorded that, in determining whether the appellant was the sponsor's spouse, it must take into account the considerations set out in Reg 1.15A(3). These included the financial aspects of the relationship, the nature of the household, the social aspects of the relationship and nature of their commitment to each other. It noted that the only evidence about financial arrangements between the appellant and the sponsor which had been provided was the evidence of financial circumstances provided in support of an application for fee waiver. The Tribunal was not satisfied from that material that there was any joint ownership of assets, joint liabilities or any pooling of financial resources. 19 The Tribunal acknowledged the possibility that the appellant had not received some of the correspondence from the Department and the Tribunal, for the reason that the sponsor had not passed it on to him or because no one had translated it for him. It also noted that, based on the minute, "[t]he sponsor told the Tribunal that she did not tell the visa applicant about the hearing date". However, in the Tribunal's opinion, the appellant could be taken to be aware that the application was under review because he would have known that the temporary visa was granted for two years only and also because he had responded to the Tribunal's letter dated 22 April 2004. It also expressed the view that the appellant was under an onus to follow up his application and provide supporting documentation. 20 It noted also the previous advice received by the Tribunal and the Department that the appellant and sponsor were not living together, and that there was no information before the Tribunal on the current living arrangements or social aspects of the relationship. It was not satisfied that the two were living together and concluded that they were not in a spousal relationship. Subclause 100.211(2) was therefore not satisfied. 21 The Tribunal considered whether the appellant met any of the alternative subclauses for the purposes of fulfilling the requirement of subclause 100.221(1). The Tribunal noted that it had seen a Centrelink statement dated 23 May 2003 indicating that the sponsor had a child and had written to the appellant inviting him to provide certain information relating to his daughter, but that it had not received any response. The Tribunal found that there was no evidence to support a conclusion that any of subclauses 100.221(3), (4) and (4A) were satisfied, and affirmed the decision under review. Failing to hold the hearing to which it had invited the unrepresented applicant. Taking what it claimed to be evidence from an unsworn hearsay account of a conversation between a counter staff member and the [sponsor]. Failing to put the further allegations contained in the said unsworn hearsay account of a conversation between a counter staff member and the [sponsor] to the unrepresented applicant. Failing to allow the unrepresented applicant the opportunity to respond. Founding its decision partly or wholly upon the said unsworn hearsay account of a conversation between a counter staff member and the [sponsor]. Even if the appellant had not become aware of that invitation, the letter was taken to have been given to him in accordance with s 441C because it had been given to him by one of the methods prescribed in s 441A. His Honour also found that the Tribunal had complied with its obligations under s 360 in relation to the information it obtained from Micaela Callan's conversation with the sponsor, by its letters dated 3 and 4 June whereby the appellant was invited to provide additional information. 24 The remaining grounds centred on the minute of 27 May 2004. The appellant's then solicitor, Mr Newman of Newman & Associates, claimed that the minute evinced a denial of natural justice by the Tribunal. It was submitted that Ms Callan's advice to the sponsor that she no longer had standing was incorrect, because the sponsor was the legitimate representative of the appellant and was there to represent the appellant at the hearing. It was further submitted that Ms Callan had purported to exercise functions of the Tribunal by shutting out the sponsor's evidence, in possible breach of ss 354 and 357 of the Act. 25 His Honour also observed that the decision in respect of the sponsor's standing was not necessarily made by Ms Callan, or at least not made in isolation or without the authority of the Tribunal member, since the Tribunal decision addressed the issue of standing at [26] of its reasons. The Federal Magistrate appeared to conclude that the Tribunal had approved of what had occurred or had adopted Ms Callan's decision, if it can be so described, as its own. From the documents contained in the Court Book there is a strong possibility that the applicant was completely unaware of these activities and whether his interests were being represented". His Honour was not satisfied that the Tribunal had committed jurisdictional error. That issue related to whether, in the unusual circumstances of the case, the Tribunal was entitled to proceed to determine the review under s 426A of the Act without taking any further action, in light of the decision of North J in Fale v Minister for Immigration and Multicultural Affairs [2001] FCA 1645. Leave was granted for the filing of an amended notice of appeal and the hearing adjourned. The appellant has since changed solicitors. On 15 May 2006, an amended notice of appeal was filed. At the hearing on 7 June 2006, the Minister raised concerns that the amended notice of appeal and submissions filed by the appellant went beyond the scope of matters foreshadowed on 26 April 2006, which had given rise to the grant of leave. The hearing proceeded on the basis that any prejudice to the Minister could be remedied by written submissions, and the issue potentially having some bearing on the costs order made. 29 As emerged at the hearing on 7 June 2006, the appellant's main argument (in substance, the only ground now pursued) is that he satisfies items (A) and (E) of clause 100.221(4) of Schedule 2 of the Regulations and that the Tribunal and Federal Magistrate erred by failing to ask the necessary questions and ignored relevant material, namely provisions of the Family Law Act 1975 (Cth) ("Family Law Act") and the Child Support (Assessment) Act 1989 (Cth) ("Assessment Act"). The appellant relied on the decision of Dowsett J in Fitch v Migration Review Tribunal [2004] FCA 1673. 30 The appellant's argument is as follows. In relation item (A), the appellant relied on s 61C and s 61D of the Family Law Act . Under s 61C(1) of the Family Law Act , a parent has parental responsibility for a child to the extent that it is not displaced by a parenting order of the Court, and under s 61C(2) , that legal position is not affected by changes in the nature of the parents' relationship, such as separation. Section 61B explains what parental responsibility means. Section 61D sets out the effect of a parenting order. Since there was no evidence before the Tribunal of any court order affecting the appellant's parental responsibility, the Tribunal should have taken as given that it was intact and he had joint custody of his daughter. 31 The minute of 27 May 2006 was also said to be relevant to item (A). It was submitted that the Tribunal should have drawn the inference from the sponsor's statement she was now living with the appellant that their young daughter would also be living with them. On that basis, the Tribunal should have concluded that not only did the appellant have parental responsibility, but also that by living with her he was necessarily exercising a measure of day to day care for the daughter's welfare and development. He therefore satisfied item (A). 32 Secondly, the appellant satisfied the second of the two alternate requirements in item (E) which requires the sponsoring spouse has "any other formal maintenance order". The first is the judgment of Sundberg J in Yazbeck v Minister for Immigration & Multicultural Affairs [2002] FCA 980 ; (2002) 124 FCR 458 (" Yazbeck "). The applicant in that case had been refused a permanent visa of the same type as that applied for in the present case. Also as in the present appeal, the delegate had refused to grant the permanent visa on the basis that the relationship was not genuine and continuing, and the Tribunal reached the same view. In his amended application in this Court, the applicant contended that the Tribunal had erred in not finding that he satisfied items (A) and (E) of subclause 100.221(4). The Tribunal had before it evidence that the applicant had recently seen the two children of his marriage to the sponsor at a cousin's house, which the applicant claimed established that he had "access" to the children for the purposes of item (A). The applicant relied on s 66C of the Family Law Act for the claim that his former spouse had a "formal maintenance order" for the purposes of par (E). Prior to amendments effected by the Family Law Reform Act 1995 ("the 1995 Act "), Part VII of the old Act had provided for custody and access orders. The 1995 Act introduced "parenting orders", in a new Part VII , to replace those orders. His Honour set out s 64B of the Family Law Act which defines a "parenting order" as dealing with any aspect of parental responsibility for a child, including with whom the child is to live ("residence orders") and contact between the child and another person or persons ("contact orders"). Subclause 100.221(4)(c)(ii) uses both the old terms "custody" and "access", as well as the new terms "residence" and "contact", and was intended by the drafters to accommodate both types of orders. His Honour then considered the discrepancy in the words between items (A) and (B), being that (B) expressly referred to orders made under the Family Law Act whereas item (A) does not. His Honour concluded that the omission of a reference to orders in item (A) was to be explained by bad drafting. His Honour found that this view was supported by the terms of item (C) which refers to the situation where the spouse was granted "joint custody or access by a court". His Honour described items (A) and (C) as "counterparts", explaining this description by giving the example that clause (C) deals only with the sponsor having joint custody because clause (A) deals with (sole) custody. 36 Having found that "custody" and "access" in item (A) referred to the concepts under the old Family Law Act , his Honour concluded that the Tribunal had been correct in finding that there was no evidence of custody or access before it. His Honour noted that "There was no evidence that a court order existed that entitled the applicant to access the children" (at [9]). 37 However, his Honour should not necessarily be taken to have excluded the possibility that something less than a court order could establish "access". Evidence that the applicant "saw his children recently and his wife at a cousin's house" does not established that he has access to his children. 38 Having found that item (A) was not satisfied, his Honour said that the applicant's case would not be assisted even if he succeeded in his claims in relation to item (E). Nevertheless, his Honour turned to consider whether the applicant's spouse had a formal maintenance obligation for the purposes of item (E) by virtue of s 66C(1) of the Family Law Act . His Honour broke up item (E) into two limbs, being "an obligation under a child maintenance order made under made under the Family Law Act 1975 " and "any other formal maintenance obligation". The first limb was a type of order under the Family Law Act specifying the amount of maintenance to be provided. His Honour found that the type of obligations to which the second limb was directed was maintenance agreements made in writing by the parties to a marriage addressing the maintenance of a child, and which are regulated by the Family Law Act . It was not clear whether or not his Honour viewed this as being the only type of obligation which would satisfy the second limb. 39 His Honour also considered the result of the applicant's contention in relation to s 66C , if it was accepted. Any applicant whose relationship with the sponsoring spouse had ceased, and who satisfied par (A) or par (B) would, as a result of s 66C(1) , automatically satisfy the second limb of par (E). This would be an absurd result which is avoided by the approach I favour. Thereby effect is given to pars (C) and (D) and both parts of par (E), rather than rendering pars (C) and (D) and the first part of par (E) ineffectual. In that case, the Minister's delegate refused to grant the visa applicant a Subclass 801 visa, a permanent spouse visa. At the time of the decision whether to grant the visa, an applicant must satisfy clause 801.221(1) of Sch 2 of the Regulations which requires that the applicant meets the requirements of one of clauses (2), (2A), (3), (4), (5), (6) or (8). Clause 801.221(6)(c)(ii) is identical to clause 100.221(4)(c)(ii). The applicant's relationship to the sponsor had ended. In the Tribunal, the applicant claimed that clause (6) was satisfied because he satisfied item (6)(c)(ii)(A) and his sponsor satisfied item (6)(c)(ii)(E), in relation to the son of their relationship. There was evidence before the Tribunal, in the form of a statutory declaration, that the applicant and the sponsor had an informal agreement whereby the applicant saw his son on particular days and alternate weekends and contributed financially to his upkeep. The Tribunal found that the visa criteria were not satisfied. It found that there was no evidence before it of a Court order under the Family Law Act granting access, joint custody or residence, nor was their evidence that the applicant had an obligation under a child maintenance order under that Act "or any other formal (and accepted) maintenance obligation" (see [7] of his Honour's reasons). 41 In this Court, the applicant submitted that the Tribunal had erred in its construction of items (A) and (E) in three respects. The Minister conceded one ground, namely that the Tribunal had construed the alternative criteria in items (C), (D) and (E) as referring to the visa applicant rather than the sponsoring spouse. However, the Minister contended that the application would have failed for other reasons. The two other grounds urged by the applicant were (1) that informal arrangements under which an applicant has custody, joint custody or access can satisfy item (A), and; (2) the sponsoring spouse may have a "formal maintenance obligation" for the purpose of item (E) even in the absence of a court order or other formal arrangement. 42 Dowsett J concluded that both items (A) and (E) were satisfied. In relation to item (A), his Honour found that the applicant had "custody" or "joint custody". His Honour considered the definition of "custody" in the Regulations and the definition of "parental responsibility" in s 61B of the Family Law Act , concluding that the two expressed "the same core concept" and neither purported to "create new rights or obligations" (at [14]). His Honour considered that the content of the term "custody" as used in the Regulations depended upon the Family Law Act as well as the general law and other statutes. In that context, his Honour found that "parental responsibility" and "custody" were not matters of strict legal rights but were more in the nature of parental obligations. I see no reason to conclude that the informal arrangements in place between him and his sponsoring spouse make any difference to the custody situation. However, his Honour noted that the term "access", not defined in the Regulations , was traditionally used to describe contact arrangements between a non-custodial parent and his or her child. His Honour said (at [25]) that "I see no reason to conclude that access arrangements must be pursuant to a court order if they are to satisfy item (A)". 44 In relation to the sponsoring spouse satisfying item (E), his Honour noted the common law responsibility of a parent to maintain a child, which was recognised and enforced by statute (referring specifically to s 286 of the Queensland Criminal Code and s 15 of the Maintenance Act 1965 (Qld)). His Honour noted that at all relevant times the sponsoring spouse was under a statutory obligation to maintain her child, and concluded that such obligation constituted a "formal maintenance obligation". 45 Dowsett J was mindful of the apparent inconsistency with Sundberg J's decision in Yazbeck and discussed that decision at some length, at [30] to [38]. Prior to considering the decision in Yazbeck , Dowsett J considered the meaning of "residence order", "contact order" and "child maintenance order" used in items (B), (D) and (E), and notes that the terms were introduced by the 1995 amendments to the Family Law Act . His Honour also notes that prior to the 1995 amendments, the terms "custody orders", "access orders" and "maintenance orders" were traditionally used and the meanings of those terms. 46 Dowsett J agreed with Sundberg J's conclusion in Yazbeck that the Tribunal in that case had correctly concluded that the applicant did not have access on the basis of having recently seen his children at a cousin's house. Dowsett J's reasoning was that "Item (A) contemplates some form of continuing access rather than one previous incident of contact" (at 31]). His Honour then went on to consider the aspects of Sundberg J's judgment which appeared to go further. First, there was the issue of the relevance of the express reference in items (B), (D) and (E) to orders "made under the Family Law Act 1975 ", and to rights granted "by a court" in the case of item (C), whereas item (A) does not contain any such a reference. Dowsett J did not accept Sundberg J's analysis, concluding it was more likely to reflect "deliberate decisions than bad drafting" (at [32]). In reaching this conclusion, his Honour did not embrace Sundberg J's approach to items (A) and (C) as "counterparts", which analysis had apparently been a major part of Sundberg J's reasoning. Dowsett J observed that an approach to items (A) and (C) as counterparts seemed to assume that only the visa applicant and sponsor had any direct interest in the relevant child, whereas there was no reason to assume this, especially since there was no requirement that the child be the biological child of either person. His Honour also observed that, even assuming only the visa applicant and sponsor had direct links, item (C) does not provide a counterpart to item (A) for a case where a visa applicant has "access", since sole custody by the sponsor will not satisfy item (C). Although his Honour discusses some possible purposes of items (A) to (E) and their interaction (at [33]), his ultimate view was that it was very difficult to understand these matters entirely, and that the best course was probably "to give each item its natural meaning, unless some absurdity results" (at [35]). 47 Dowsett J considered Sundberg J's conclusion that item (A) was intended to deal with custody and access orders under the old Family Law Act . Dowsett J noted that, as Sundberg J had himself pointed out, the amended Act gives effect to orders made under the old Act (custody and access orders) as if they were orders made under the amended Act (residence and contact orders). On that basis, his Honour concluded that item (B) applied both to orders made under the old Act and the amended Act, and that item (A) must have been intended to deal with arrangements other than orders made under the old Act (at [36]). 48 Dowsett J considered Sundberg J's conclusion that an absurdity would arise if s 66C of the Family Law Act satisfied item (E). Dowsett J did not accept with Sundberg J's analysis that where a visa applicant satisfied item (A) or (B), the second limb of item (E) would automatically be satisfied, and that items (C) and (D) would thereby be rendered unnecessary. Dowsett J noted this analysis again assumed that the relevant child must be the biological (or perhaps adopted) child of either the visa applicant or the sponsor. Since s 66C applies only to "parents" (which exclude, for example, step-parents), and yet orders referred to in items (C) and (D) can be made in respect of non-parents, items (C) and (D) still had work to do. On Dowsett J's reasoning, the second limb of item (E) would not automatically be satisfied where a visa applicant satisfied items (A) or (B) since it could not be assumed that the sponsor was a parent for the purposes of s 66C. I see no reason why the Migration Regulations would discriminate, for present purposes, between recognized rights and obligations existing at law, but not evidenced in any order or other "formal" document, and rights and obligations which are so evidenced. Such discrimination would encourage unnecessary litigation". 51 Dowsett J concluded by expressing his reluctance in reaching a different conclusion on item (E) than Sundberg J, adding that it was arguable that Sundberg J's decision on the issue did not form part of the ratio. Dowsett J also offered as explanations for the different decision that it "was based upon the evidentiary shortcomings of the applicant's case" and that "his Honour did not have the benefit of argument on the wider aspects of the matter" (at [39]). That statutory relationship obviates the need for a visa applicant to produce evidence of even make submissions in order to satisfy the requirement contained in clause 100.221(4)(c)(ii). It should also be noted that counsel for the appellant submitted that Dowsett J's reference to ss 61C and 66C of the Family Law Act was incorrect as s 3 of the Assessment Act would apply in relation to the child in Fitch as well as in the present case, but nothing turns on that since the provisions are the same in substance. 53 Counsel for the Minister, submitted that Fitch did not go so far as the appellant contended. What Dowsett J concluded was that the level of formality required to satisfy the relevant criteria was not stringent, but not that the statutory relationship between parent and child obviated the need for evidence and submissions. As the Tribunal correctly stated, there had been no evidence before it that the criteria in clause 100.221(4)(c)(ii) were met. The Tribunal could not sensibly have accepted the minute as proof that the appellant had responsibility for the daughter's day to day welfare and that there was a joint custody arrangement. It could equally have been presumed from the minute that the appellant was failing to care for or support their daughter. 54 Counsel for the Minister also submitted that, in any event, Yazbec should be preferred to Fitch. She submitted that, following Yazbec , the Tribunal did not have before it evidence of a formal maintenance obligation and did not err by proceeding to make a decision under s 359A when such information was not forthcoming. The main basis on which it was contended that Yazbec should be preferred was that Sundberg J took a more thorough and orthodox approach to statutory construction, particularly in relation to the term "formal maintenance obligation" in item (E). Counsel contended that the approach of Dowsett J in Fitch gave no meaning to the term "formal", rendering it otiose and with no work to do. This was contrary to a proper approach to statutory construction. It was submitted that Dowsett J did not undertake a proper assessment of the term "formal maintenance obligation" in reaching his conclusion and, in particular, that he did not consider the difference between a maintenance obligation and a formal maintenance obligation, whereas Sundberg J did analyse this issue (at [12]). 55 Although it was accepted that the statutory provisions relied upon by the appellant might be maintenance obligations, they were not "formal" ones. Two main reasons were advanced as to why the statutory provisions did not amount to formal maintenance obligations. First, there were no cogent and discernible terms of any such provisions, nor specific details as to amount or other arrangements. Secondly, the statutory provisions were not enforceable or ascertainable without some other process or order or explicit agreement between the parties under the Assessment Act . An application to a court or other body was required before the rights or obligations contained in any of the sections could come to fruition. While not expressed in those terms, it must be assumed that Dowsett J took that view of the reasoning of Sundberg J. In my opinion, the approach of neither Sundberg J nor Dowsett J is plainly or clearly wrong. There is no principle of which I am aware which would guide me in deciding which of the earlier judgments should be preferred in order to maintain judicial comity. However, Dowsett J's judgment is the more recent judgment and for that reason is more likely, I would assume, to be the judgment on which decision-makers presently having to apply the relevant regulations, would base their decisions. Further, Dowsett J's reasoning is, in my opinion, marginally more compelling. 57 In its decision, the Tribunal indicated that it was aware that the appellant and the sponsor had a child. It said there was no evidence that the appellant had custody or joint custody of or access to a child in respect of which the sponsor had, amongst other things, a formal maintenance obligation. However, on the reasoning of Dowsett J, the appellant had a right to custody as incident of the statutory imposition of parental responsibility by operation of the Family Law Act and the sponsor had a formal maintenance obligation (though by operation of the Assessment Act rather than the Family Law Act ). The Federal Magistrate fell into jurisdictional error in not recognising this. It may be accepted that this approach would result in the satisfaction of some of the relevant criteria in all circumstances where a visa applicant and the sponsor had a child in respect of whom Australian law operated. If that is an inconvenient or unintended result then the Regulations can be amended. I should add that in this case, there were arguably some procedural irregularities flowing from the sponsor's behaviour which meant that the appellant may not have been treated entirely fairly though whether any of this would have amounted to jurisdictional error is a question that was ultimately not raised for consideration. 58 The appeal should be allowed, the judgment of the Federal Magistrate set aside, the decision of the Tribunal set aside and the matter remitted to the Tribunal for further consideration according to law. The appellant should have his costs of the appeal, though should pay the Minister's costs thrown away by the adjournment of 26 April 2006. I do not propose to vary the costs order of the Federal Magistrate of 22 November 2005. The issue raised in those proceedings were ultimately not pursued in this appeal and the appellant has succeeded on a point not raised below. I certify that the preceding fifty eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | appeal from federal magistrates court application for spouse visa where tribunal not satisfied of spousal relationship and found no evidence to support alternative criteria including clause 100.221(4) of sch 2 to the migration regulations 1994 where evidence before tribunal of child of relationship whether evidence of informal access arrangements required to satisfy clause 100.221(4) whether appellant satisfied criteria by reason of parental responsibility obligations under statute 'has custody or joint custody of, or access to', 'any other formal maintenance obligation' migration words and phrases |
At the hearing however it became clear that the relief sought by the applicant would be limited to the following claims: Submissions were made on behalf of both the applicant and the respondents at the hearing in relation to these claims. However it also became clear that the terms of the freezing order sought by the applicant required amendment because of contractual and property information pertaining to the fourth respondent which came to light during the course of the hearing. Accordingly, I made orders that the applicant file and serve a revised draft freezing order with supporting submissions, and that the respondents should have an opportunity to respond in writing. That material has now been filed and served, and I take it into consideration for the purposes of this decision. The applicant was incorporated in late 2006 following discussions between Mr Roetger, Mr Cartan (the third respondent), and Mr Wayne Bibby, all of whom became directors of the applicant with Mr Cartan assuming the role of company secretary. The shareholders of the applicant were the second respondent, and two trustee companies representing the family interests of Mr Roetger and Mr Bibby. Mr Cartan and Ms Cooley (the fourth respondent) ceased any involvement with the applicant in December 2007. By a contract dated 20 February 2007 the applicant acquired from the first respondent the business of "Brisbane Guardrail", a scaffold and guardrail supply business. Mr Cartan and Ms Cooley were shareholders of the first respondent, with Ms Cooley being the majority shareholder. Mr Cartan was the sole director of the first respondent, and in a de facto relationship with Ms Cooley. In Mr Roetger's affidavit, he deposes (in summary) as follows: Ms Cooley swore an affidavit (affidavit of Jennifer Elizabeth Cooley sworn 23 July 2009) in which she addressed Mr Roetger's statements. During the hearing it also became clear that Ms Cooley was in the process of selling properties she owned at Sanctuary Cove and Byron Bay, and that Ms Cooley, Mr Cartan and their children were relocating to Melbourne where Ms Cooley had incurred contractual obligations in relation to the purchase of an apartment. Not only does the applicant not depose to having made all reasonable inquiries --- in fact it does not depose to having made any at all, except by way of its letters to the fifth respondent (which was the accounting firm previously engaged by the first, second, third and fourth respondents) which were in fact answered. There is no evidence that the documents now being sought have ever been requested of anyone. The applicant now has the 2005 and 2006 accounts, which were annexed to Mr Walsh's affidavit. There is no reasonable cause to believe on the material that any elements of a cause of action as described in Mr Roetger's affidavit exist, in that: the applicant cannot point to any representation by any of the respondents that the value of the business was $1.8 million. Ms Cooley deposes that she does not recall discussing this sum, and it is not referred to in the materials annexed to the affidavits; the only direct evidence of misrepresentation by the respondents is a statement by Mr Roetger in his affidavit that he has investigated and believes that there have been misrepresentations; Mr Roetger claims that a loss was made in the 2007 year, relying on the historical information contained in the applicant's Trading, Profit and Loss Statement for the Year ended 30 June 2008, however Mr Roetger has mistaken the figures because the 2007 information is only for the first half of 2007. Accordingly it is not surprising that the income and expenses listed for 2007 appear to be approximately half of those listed for 2006. I shall return to the three limbs of this rule later in the judgment. Nonetheless, it is common ground between the parties that the principles articulated by Hely J in St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 ; (2004) 211 ALR 147 with respect to the operation of O 15A r 6 are applicable in these proceedings. Further, the words "or may have" cannot be ignored. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. Indeed O 15A r 6 "expressly contemplates" what once might have been castigated as "fishing". So: As became clear during Mr Ashton's submissions, the applicant's historical trading, profit and loss figures for 2007, found at p 151 of Mr Roetger's affidavit, and contrasted by Counsel for the applicant in his submissions with the earlier 2006 financial information, actually represented figures for only half of the 2007 financial year. The only explanation given by Counsel for the applicant for this error was that perhaps he had not analysed the 2007 figures as accurately as he could have, but that in any event turnover for that period still appeared to be less than $2 million whereas representations had been made by Mr Cartan and Ms Cooley that the turnover should be $3 million (TS p 40 ll 19-20). However: in my view this inaccuracy in analysis of the applicant's trading position goes to the loss claimed by the applicant, and whether the applicant actually apprehends the basis of its potential claim (if any) against the respondents. Given the fact that the subject business was carried on by the same people including management under virtually the same conditions, and returned a gross income of only $818,986 for the 2007 year , resulting in a $368,360 trading loss, the only explanation that I believe exists is that the 2006 accounts were incorrect and wrong. Evidence upon which the applicant relies as a basis for its belief that false representations were made to the applicant with respect to the 2006 figures appeared confined to Mr Roetger's "investigations" (affidavit of Carl Roetger para 22). Without more substance, the unexplained investigations of a director of the applicant are not "evidence (which) must incline the mind towards the matter or fact in question" as explained by Hely J in St George Bank [2004] FCA 1360 ; (2004) 211 ALR 147. To the extent that the applicant claims that the balance sheet and profit and loss statement for the first respondent as supplied to him by the third and fourth respondents (exhibited to Mr Roetger's affidavit at CER-16 and found on pp 206-210 of the affidavit) were false, I note that those documents are nonetheless identical to the balance sheet and profit and loss statement of the first respondent in the records of Mr Walsh and annexed to Mr Walsh's affidavit as JW2 (Mr Walsh's affidavit pp 39-43). While this correspondence of documentation is by no means conclusive in the absence of a substantive hearing, it reflects upon the applicant's claim that there is reasonable cause to believe that the applicant may have a right to relief in respect of falsified accounts supplied by Mr Cartan and Ms Cooley . Evidence produced by the respondents demonstrated that Mr Walsh had in fact provided a number of documents requested by the applicant. More specifically, evidence before the Court demonstrated that Mr Walsh: advised the applicant that his firm did not hold any relevant original documentation in his office, but that he could provide the applicant with electronic copies of Financial Statements and Income Tax Returns upon request (exhibit CER-13 affidavit of Carl Roetger sworn 2 July 2009); and sent by letter of 4 December 2009 to the applicant's solicitors a letter enclosing the Financial Statements and Income Tax Return for the year ended 30 June 2007 for the first respondent and Mr Cartan (exhibit JW3 affidavit of Joe Walsh sworn 22 July 2009). I note in any event that copies of the first respondent's financial statements and tax returns for the years ended 30 June 2005 and 30 June 2006 are annexed to Mr Walsh's affidavit sworn 22 July 2009. In my view these difficulties undermine the applicant's claim such that the jurisdiction of the Court with respect to O 15A r 6 is not invoked. I am conscious of the beneficial construction the courts place on O 15A r 6, the fact that the applicant is not required to establish a prima facie case, and the fact that in this case the applicant claims that it has suffered significant losses in respect of the business it acquired from the respondents and for which it has paid "good money" (TS p 17 l 28). Further, I note that, notwithstanding the provision by Mr Walsh in his affidavit of the 2005 and 2006 financial statements of the first respondent, Mr Walsh did so notwithstanding apparent instructions from Mr Cartan that no material beyond the 2007 financial statements be provided to the applicant (affidavit of Joe Walsh para 16). However as found in St George Bank [2004] FCA 1360 ; (2004) 211 ALR 147 , confirmed by the Full Court more recently in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [43] and Apache Northwest Pty Ltd v Newcrest Mining Ltd [2009] FCAFC 39 at [2] and [26], each of the elements prescribed in subparas (a), (b) and (c) of the rule must be established. In light of: inadequacies and inconsistencies I have noted in the evidence advanced by the applicant supporting the existence of a cause of action; and the applicant's incorrect analysis of the 2007 trading, profit and loss figures. Further, in relation to compliance with O 15A r 6(b) I am not satisfied that all reasonable inquiries have been made for the information sought in the application, as required by the rule. The only evidence before the Court is that inquiries were made by the applicant of the fifth respondent, Mr Walsh. There is no evidence that any inquiries were made of the first, second, third and fourth respondents, or indeed anyone else. "All reasonable inquiries" in O 15A r 6(b) prescribes an objective standard ( Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391 , [1996] FCA 1500 at [41] ). While inquiries of one party only may actually constitute "all reasonable inquiries" if, for example, it is clear in the circumstances that that party is the only or the primary repository of information, or if it would be futile to ask other parties for information, it has not been demonstrated that either situation is the case here. In relation to information held by the fifth respondent, Mr Walsh informed the solicitors for the applicant by letter that the fifth respondent had only electronic copies of relevant financial statements, and that if the applicant wanted further information would have to be obtained from "the clients directly" (annexure CER-13 being a copy of a facsimile from Joe Walsh & Associates to Gadens Lawyers dated 7 November 2008). There is no evidence that inquiries by the applicant of the other respondents, or indeed other persons, were made, or would have been futile if made. As stated by Hely J in St George Bank [2004] FCA 1360 ; (2004) 211 ALR 147 , preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves. The applicant cannot substitute the application before the Court in which it seeks preliminary discovery from the first, second, third and fourth respondents, for the need to make all reasonable inquiries in accordance with O 15A r 6 and which may entail making inquiries of those same respondents prior to bringing that application. It follows that I am not prepared to make an order pursuant to O 15A r 6 in terms sought by the applicant. Key aspects of the application of O 25A r 2 include: In summary, the terms of the revised draft order submitted by the applicant are: In written submissions the applicant contended that the terms of the draft freezing order constituted a proper balance between the competing interests of the parties, namely the need to provide the applicant with proper protection against dissipation of assets and the need to allow the fourth respondent to meet any financial obligations already firmly in place. In the circumstances of this case I am not prepared to make an order in the terms sought by the applicant. I form this view for the following reasons: In light of the views I have expressed with respect to the orders sought by the applicant, it follows that the application should be dismissed with costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | pre-action discovery of documents order 15a rule 6 of the federal court rules alleged misrepresentation of past turnover, predicted turnover and value of the business prior to sale of business principles to be followed when granting a pre-action discovery order whether there is reasonable cause to believe the applicant has or may have the right to obtain relief misunderstanding of financial evidence by the applicant provision of evidence to the applicant by fifth respondent investigations of director of applicant not "evidence" whether applicant made all reasonable inquiries before applying under order 15a rule 6(b) no evidence that 4 of the 5 respondents were asked for the evidence sought freezing order sought against properties of fourth respondent order 25a rule 2 of the federal court rules principles to be followed when granting a freezing order whether there was a risk of dissipation of assets of the fourth respondent practice and procedure practice and procedure |
2 The application came before his Honour on 18 November 2005 in response to the Minister's application for summary dismissal pursuant to Rule 13.10(c) of the Federal Magistrate's Court rules as an abuse of process. Prior to that time, there had been a history of litigation, including one application for review earlier dismissed by Smith FM on 26 July 2005. An application for leave to appeal to this Court from that decision was dismissed by Madgwick J on 16 September 2005, in the context whereby his Honour spoke of 'the lamentable circumstances of his refusal to accept his legal fate' . 3 The trenchant criticisms of Smith FM concerning the futility of the applicant's various and persistent endeavours to delay his return to India is particularised in some detail in his Honour's reasons for judgment. As in the case of the Federal Magistrate's Court, the time has crystallised for the making of an order that no further legal process be accepted by the Registry from the applicant. 4 The present application is entirely devoid of merit, being a purported restatement of untenable grounds for leave to appeal, and must be dismissed with costs, which the Minister's legal representatives has assessed at $1000. The Registry is to be directed not to accept for filing any further process at the instance of the applicant. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | application for leave to appeal judgment and orders of federal magistrate no merit demonstrated by application relief refused migration |
They sought protection visas and were refused. They made unsuccessful applications for administrative review of those refusals in the Refugee Review Tribunal (the Tribunal) in 1998 and for judicial review of the Tribunal's decision in the Federal Court in 1999. They then joined representative proceedings in the High Court challenging the Tribunal decision on grounds of procedural fairness. Following the disposition of the lead applicants proceedings in the High Court the present applicants, in common with other members of the represented group in the High Court proceedings, were directed to file individual applications for orders nisi and remitted to the Federal Court in 2002. Their remitted applications were dismissed in 2004. They then filed fresh judicial review proceedings in the Federal Magistrates Court in 2005. Those applications were dismissed on the motion of the Minister for Immigration and Multicultural and Indigenous Affairs (the Minister) in February 2006. 2 The applicants now seek leave to appeal to this Court as the decision of the learned Federal Magistrate, dismissing the applications summarily, was of an interlocutory character. On the date set for the hearing of the applications for leave to appeal however, they did not attend. I then dismissed their applications for reasons given orally at the time. Those reasons are now published, subject to editorial corrections. They are husband and wife. The husband arrived in Australia on 4 October 1997. The wife arrived on 6 November 1997. On 23 October 1997 the husband lodged an application for a protection visa with the Department of Immigration and Multicultural Affairs. The wife lodged a similar application on 23 December 1997. 4 On 2 January 1998 a delegate of the Minister refused the husband's application. The wife's application was also refused on 30 January 1998. On 22 January 1998 the husband sought review of the delegate's decision in the Tribunal. The wife applied for review on 2 March 1998. 5 The applications for review were heard together but were the subject of separate sets of reasons published by the Tribunal on 8 July 1998. At that time the Tribunal affirmed the decisions not to grant protection visas. Each of the applicants applied, in this Court, for judicial review of the Tribunal decision pursuant to the provisions of s 476 of the Migration Act 1958 (Cth) (the Act) as it then stood. Their applications came before Mathews J. The hearing proceeded on 27 April 1999 in each case. On 12 May 1999 her Honour dismissed the applications for judicial review and published separate reasons for each of the applicants. No appeal was brought against those decisions. 6 The grounds of what appears to have been a joint application on behalf of both applicants before Mathews J were initially as set out in a letter or memorandum attached to the application. In making assessments the 'authorities' (which I take, for present purposes, to refer to the Tribunal) had failed to take into account an important principle stated in the Handbook published by the United Nations High Commission for Refugees. The relevant principle was that the determination of refugee status will primarily require an evaluation of the applicant's statements rather than a judgment on the situation prevailing in his country of origin. The authorities called upon to determine refugee status are not required to pass judgment on conditions in the applicant's country of origin. 2. According to the 1951 Refugees Convention (the Convention) 'a fear of persecution is 'well-founded' if there is a real chance that the refugee will be persecuted if he returns to his country of nationality. ' Where an applicant establishes that there is a real chance of persecution then the fear is 'well-founded'. The Tribunal misconceived the Convention by ignoring the applicants' claims and evidence. In this case the applicants had claimed to have suffered discrimination, beatings, numerous threats, intimidation for Convention related reasons and to have been deprived of civil and political rights of protection. Definitions of persecution and discrimination were set out. Reference was made to the circumstances in which persecution inflicted by non-State agents is 'knowingly tolerated by authorities when they refuse or prove unable to order effective protection'. It was said to be obvious that the persecution suffered by the applicants in their country of former residence was related to Convention grounds. It was said to be obvious that a person who had suffered such persecution would have a well-founded fear of persecution within the meaning of the Convention. 8 It was also said in the memorandum that the Tribunal had failed to take into account another legal principle, namely, in holding that the evidence before it did not support a finding that if the applicants returned to Latvia they would face a real chance of discrimination in that country amounting to persecution. Chan's case was cited to the effect that past persecution gives rise to a presumption of future persecution. Finally it was said that the Tribunal had failed to implement 'the benefit of the doubt' provision. Having no evidence to the contrary they found the applicants had no fear of persecution. 9 The applicants were represented by counsel before Mathews J and the case as presented to her Honour orally was considerably more focused and concise than that presented in the memorandum. 10 Counsel argued that the Tribunal had erroneously held that persecution under the Convention required a course of systematic conduct aimed at an individual or a group and/or a systematic violation of human rights. This formulation was said to be contrary to the decision in Ibrahim v Minister for Immigration and Multicultural Affairs [1999] FCA 374 and contrary to the proposition that individual acts of persecution could be enough to support an inference of a well-founded fear of persecution in the future. 11 Her Honour observed that the Tribunal appeared to have accepted that the husband's fear of persecution was genuine. She cited decisions in the Federal Court which had discussed the meaning of systematic persecution. She considered the Tribunal's reasons. She noted that the mere use of the word 'systematic' could not of itself be indicative of error. Whether it was erroneously used would depend on the circumstances. It therefore cannot be said that the Tribunal was necessarily in error when it referred to "a course of systematic conduct aimed at an individual or a group". The real question is whether the Tribunal erroneously required the applicant to show that there had been a repeated course of persecutory conduct in order to meet this criterion. 12 There was another complaint of discrimination based on language law relating to the use of the Russian language in Latvia. A fine was said to have been imposed upon the husband for failing to speak the State language in the course of business. It was submitted to her Honour by the Minister's counsel that persecution would not include the application of a legitimate law of general application. In the light of the Tribunal's main finding on the matter it was unnecessary to do so. However this consideration provides a further basis, according to Mr Reilly, for concluding that the Tribunal's finding that the law which required that Latvian be spoken in the workplace did not constitute persecution. However it is unnecessary in the circumstances to have resort to it. For in my opinion the Tribunal was entirely justified in finding that the fining of Latvian citizens, including the applicant, for failing to speak Latvian in the workplace is not "sufficiently serious conduct" to amount to discrimination or persecution. There was "some discrimination" and "occasional violence" directed against Russians. Nor was it prepared to find that the assaults committed upon the applicant were sufficient to give rise to a well-founded fear of persecution. The Tribunal's reasoning could, as I have already commented, have been more transparently stated. However its purport was, in my view, sufficiently clear to display that, given the beneficial construction which this court is required to apply, no error has been shown. It was clearly open for the Tribunal to reach this conclusion on the basis of the evidence before it. The independent evidence on the subject was all one way. The complaints in the applicant's statement about the police reactions to her husband's or her friend's complaints were hardly sufficient to counteract this material, despite the strength of the language she used. 15 On the question whether the Tribunal had failed to observe requisite procedures it was submitted on behalf of the wife that the Tribunal had failed to make findings as to whether the attacks were inflicted for a Convention reason. Her counsel urged that the question whether she had been targeted by reason of her ethnicity went to the core of the issue of whether she had a well-founded fear of persecution and was a matter upon which the Tribunal was obliged to make a finding. 16 Her Honour accepted that the Tribunal had made no explicit finding that the attacks against the wife were perpetrated for a Convention reason. However, a reading of its decision made clear that the Tribunal accepted this to have been established. It referred to some discrimination against ethnic Russians and observed that occasionally violence is directed against them. 17 I mention the basis upon which the matters which were put to her Honour in 1999 and the basis upon which she dismissed the applications for review because the grounds for review at that time were limited to those set out in s 476 of the Act and it might be argued that, in an application for prerogative relief, wider grounds were available particularly for breach of procedural fairness (other than actual bias which was preserved as a ground of review under the old s 476). Those grounds were precluded from the scope of judicial review under the previous regime. 18 In any event there was no appeal against her Honour's decision by either of the applicants. However, both of them were joined as members of the representative group in the Muin and Lie litigation which led to favourable findings in respect of those two named applicants --- Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601. That concerned the application of procedural fairness in the way the Tribunal had dealt with documents transmitted from the Department to the Tribunal and in particular the failure to notify applicants that certain documents believed to be considered by the Tribunal had not in fact been transmitted to the Tribunal. 19 No such determination was made in relation to these applicants who, pursuant to orders made in the representative proceedings by Gaudron J on 25 November 2002, were given liberty to file individual applications for orders nisi seeking prerogative relief in the High Court on the basis that upon such filing their applications would be remitted instanter to the Federal Court. 20 Applications for orders nisi were filed and remitted to the Federal Court and eventually on 20 February 2004 Emmett J, in judgments dealing with some hundreds of proceedings so remitted, dismissed the applications for relief. The applications for relief in each case asserted failure of procedural fairness without any particularisation. In dismissing those applications his Honour did indicate that the dismissal was without prejudice to the capacity of the applicants to bring fresh applications for orders nisi for prerogative relief properly supported by affidavit material and appropriately particularised grounds. 21 Assurances were given to Emmett J by the Minister's counsel that the delay which had ensued between the time when each of the applicants was joined as a representative party in the High Court to the time of refusal of an order nisi would not be advanced as a basis for refusing relief in any future application. However, any delay from the time of making the decision by the Tribunal and the joinder of the applicant in the High Court proceeding would still remain to be explained as would any delay from the time of refusal of an order nisi until the commencement of any fresh proceeding. 22 Subsequently each of the applicants lodged an application under s 39B of the Judiciary Act 1903 (Cth) in the Federal Magistrates Court. Their applications were lodged on 17 January 2005. Each application asserted firstly that the applicant was not a vexatious litigant and there was no abuse of process and secondly, in the case of the husband, that the Tribunal had failed to accord procedural fairness because it did not give him an opportunity to comment on information which was significant to the decision to be made and was specifically about the applicant. Reference was made to contravention of s 424A(1) of the Act which, however, was not in force at the time that the Tribunal made its decision. A similar ground framed slightly differently was expressed in the wife's application. 23 The Minister in each case filed a notice of motion on 13 January 2006. The applicant pay the respondent's costs. An order was made in each case that no further application for review of the decision of the Tribunal be accepted for filing without leave of the Court. Each applicant was ordered to pay the first respondent's costs fixed in the sum of $2,750 and allowed 12 months to pay. The Magistrate noted, inter alia, that the applicants had not appealed against the decision of Mathews J in the Federal Court and that they had become party to the proceedings in the High Court and set out the history of the matter which I have already recited. 26 The applicants had filed a written submission in the Federal Magistrates Court in response to the notice of motion. They were not then legally represented. They submitted that the current proceedings were not an abuse of process and argued first that even though their applications were dismissed by the Federal Court, the High Court found that the Tribunal had erred in law and had remitted their matter to the Federal Court. It is true, as the learned Federal Magistrate pointed out, that the applications for an order of review were dismissed by the Federal Court and that the High Court had in the Muin and Lie class action made a finding of error by the Tribunal but not in respect of the applicants' case. Each of the applicants was, as the learned Magistrate pointed out, given the right to file an application for an order nisi in the High Court which was remitted to the Federal Court but that application was subsequently dismissed for a procedural reason. 27 It was submitted to the Federal Magistrates Court that the Federal Court had not examined the Tribunal decision other than in relation to access to documents held by the Minister. As a statement about the decision made by Mathews J in 1999 that contention was, as the Federal Magistrates Court pointed out, incorrect. Her Honour examined the decisions of the Tribunal in detail and dismissed the application for review on its merits. It may be that there was some confusion, on the applicants' part, with the judgment of Emmett J in the later proceedings. 28 A third contention advanced before the Federal Magistrates Court was that after the High Court had remitted the applicants' cases to the Federal Court they had had no opportunity to present their arguments in relation to the Tribunal decision which, according to the High Court, was infected by a jurisdictional error. As the Federal Magistrates Court pointed out, that ground was misconceived. The High Court had not found the decisions relating to the two applicants to be infected by jurisdictional error. The applicants had already presented their arguments to the Federal Court in relation to the Tribunal decision, arguments which were considered and rejected. 29 The Federal Magistrates Court observed that the applicants had not appealed against the judgments of Mathews J in 1999 and expressed the opinion in passing that their joinder in the class action was in itself an abuse of process because their matters had already been decided. I interpolate that this was not necessarily so given the limitation on the grounds of judicial review before Mathews J to those set out in s 476 and, in particular, the exclusion of natural justice grounds which it was open to raise in the proceedings in the High Court. No special circumstances were given as to why any new issue which could have been raised was not raised at the time of the original applications. They were represented by counsel at the time of the original applications. 31 It followed, so the learned Federal Magistrate found, that the applicants were estopped from proceeding with the application because of the principle of res judicata . The repeated bringing of applications to review a decision already reviewed would constitute an abuse of process. Orders were made for summary dismissal of the applications. A direction was made that no further applications for review be accepted for filing without leave of the Court. 32 The learned Magistrate accepted that his decision was interlocutory and the applicants would still have the right to seek leave of the Full Court of the Federal Court to appeal against that decision, but would need to act promptly if they wished to do so. He did go on to give brief consideration to the Tribunal's reasoning on the facts and observed that the evidence was there to allow it to come to the conclusions it did. In each case also a draft notice of appeal was lodged with that application. The application for leave was supported by an affidavit which complained about various aspects of the Federal Magistrate's reasoning. His Honour ignored the fact that the High Court referred the Appellant's matter to RRT. When the applications for leave to appeal came on for hearing, there was no appearance for either. The names of the applicants were called outside the Court. I have decided, given the absence of the applicants, to proceed to deal with their application for leave on the merits. 35 In my opinion, in each case the application for leave to appeal should be dismissed. The proposed draft notice of appeal does not disclose any viable grounds for a proposed appeal nor am I able to see any error in the reasoning of the Federal Magistrates Court which would warrant the grant of leave. 36 It is of course the case that the grounds upon which judicial review could be sought under the former s 476 of the Act, which defined to that extent the jurisdiction of the Federal Court in judicial review of Migration Act decisions, were somewhat narrower in certain respects, particularly in relation to the question of natural justice than the grounds which might be advanced in an application for constitutional writs in the High Court or under the redefined jurisdiction of the Federal Court in an application for prerogative relief under s 39B of the Judiciary Act . However, such differences as there were between those two jurisdictions were not material in any respect to the basis upon which the matter was argued before Mathews J which covered the grounds under s 476 that would also have been available in prerogative relief on the assumption that error of law can be equated to jurisdictional error. 37 Whether or not there is any technical argument that a strict res judicata could not be applied, and I am not saying that there was, the attempted re-litigation of this judicial review process invoking the jurisdiction of this Court under s 39B in my view amounts to an abuse of process. Leave to appeal against the decision of the Federal Magistrates Court should not be granted. I therefore propose in each case to dismiss the application for leave to appeal and to direct that the applicants pay the respondent's costs of the application. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | leave to appeal non-appearance of applicants at hearing of application for leave to appeal leave refused on the merits migration |
That enrolment commenced in 2002. He enrolled for the academic year of 2004. Mr Brown qualified for youth allowance under the Social Security Act 1991 (Cth) ('the Act'). 2 Mr Brown applied for and was accepted for study at Birzeit University in Palestine ('Birzeit') for the first semester of Birzeit's academic year from August/September to 24 December 2004. He was permitted by Sydney to complete an equivalent of full-time enrolment at Birzeit coterminous with the second semester of 2004 at Sydney. Sydney confirmed that two units of the study at Birzeit could contribute to his Bachelor's degree at Sydney. 3 There was no official exchange program between Sydney and Birzeit. There were also, apparently, insurance issues arising if Sydney were to maintain his enrolment during his study at Birzeit. It was his intention to re-enrol at Sydney in the first semester of 2005. On appeal to the Administrative Appeals Tribunal ('the Tribunal'), that decision was set aside. The Secretary appeals the Tribunal decision under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'). Mr Brown enrolled in semester 2 at Sydney and discontinued prior to the HECS census date of 31 August 2004. He intended to re-enrol in semester 1 of 2005 when re-enrolments in his course were next accepted. In the Secretary's opinion, Mr Brown was making satisfactory progress towards completing his course. I note that his grades in 2002 and 2003 were all High Distinctions and Distinctions. 8 Arts/Law at Sydney was an approved course of education or study and Sydney was an educational institution for the purposes of s 541B(1) of the Act. The course at Birzeit was not an approved course of study or education for the purposes of s 541B(5) of the Act. Birzeit was not an educational institution for the purposes of the section, not being an ' educational institution ' ' established under Australian Government or State or Territory government legislation as a higher education institution or is registered by the relevant State or Territory higher education recognition authority ' (Clause 5(1) of the Ministerial Determination of Education Institutions and Courses No. 2002/1 under subsections 3(1) and 5D(1) of the Student Assistance Act 1973 (Cth) , the relevant definition). Section 541B sets out what is ' undertaking full-time study ' for the purposes of the Act. The Secretary submits that ' the course in question ' was the course at Birzeit, as was ' the course ' for the purposes of s 541B(1)(a)(ii). The facts in [8] above mean that, if "the course" was the one at Birzeit, Mr Brown was not relevantly undertaking full-time study. 12 The Tribunal at [8] rejected the Secretary's submission and held that ' the course ' in each case was the Sydney course, on the basis that '[t] he interpretation urged by [the Secretary] is simply not available on the basis of the words of the text ', so that ' course of education at an education institution ' of the kind under discussion in the application was the BA/LLB course at Sydney. 13 Sections 15AA and 15AB of the Acts Interpretation Act 1901 (Cth) did not assist the Secretary. The Tribunal considered the purpose and object of the Act as a whole and held that it was to provide for the payment of benefits to persons who are entitled to those benefits. There was, in the Tribunal's view, no alternative construction reasonably available for the purposes of s 15AA ( R v L (1994) 122 ALR 464 at 468-9). As to s 15AB , the Tribunal considered that the purpose and object of the Act and the purpose of s 541B(1)(a) as stated in the Explanatory Memorandum (referring to a person enrolled and intending to re-enrol), were not at odds with the ordinary meaning of the words of the section: '[t] he difficulty that arises in this application is that the text in the provision also does other work beyond the purpose stated in the Explanatory Memorandum, that is, it allows for a hiatus in enrolment of a different kind ' at [12]. 14 The Tribunal then turned to consider, for the purposes of s 15AB , whether the ordinary meaning of the provision leads to a result that is manifestly absurd or is unreasonable. That result is that a student is taken to be undertaking full-time study despite a hiatus in enrolment if the student is enrolled in a course and intends to re-enrol when enrolments are next accepted, without addressing the nature of activity that the student may be engaged in during that hiatus period (by s 541B(i)(ii)). While the activity engaged in during the Sydney enrolment hiatus by Mr Brown was serious study which was to be credited to his Sydney degree, the words of the section, so construed, would allow for an enrolment hiatus spent, for example, snowboarding. The Tribunal found that result to be unreasonable but concluded, nevertheless, that this does not permit an unreasonable or unnatural construction or a rewriting of the provision ( Newcastle City Council v GIO General Limited [1997] HCA 53 ; (1997) 191 CLR 85 at 113 per McHugh J). 15 Accordingly, the Tribunal upheld the interpretation based on the ordinary meaning of the words in s 541B(1) rather than upholding the Secretary's construction of the section which it consider to be ' strained ' and ' unnatural or unreasonable '. As a result, the Tribunal considered that when studying at Birzeit, Mr Brown would be undertaking full-time study and would therefore satisfy the activity test. 16 The Secretary submits that the Tribunal erred in its construction of s 541B(1) by failing to have regard to the narrow and broad context of the provision. The "narrow context" was the "proper" construction of the section: ' the Tribunal was required to ask itself first whether, during the relevant period, [Mr Brown] was enrolled in a course of education at an educational institution. ' The broad context was in fulfilling the purpose of the provision. 17 The Secretary also submits that because the Birzeit course was non-approved and Mr Brown was in fact enrolled at Birzeit, s 541B(1)(a)(ii) also is not satisfied. In the Secretary's submission, the Tribunal wrongly dealt with the criterion of that section by reference to Sydney because Mr Brown was not at Sydney for the relevant period. 18 In my view, it is clear from the wording of s 541B that the ' course ' as referred to in the various sub-sections of that section refer to the same course. That is the course referred to in sub-section (a)(i): ' a course of education at an educational institution '. That can only be the Sydney course. Sub-sections (a), (b) and (c) are linked to (a)(i) and provide for further criteria to be satisfied with respect to that course or the person enrolled in it. Each of the subparagraphs that follow (a)(i), namely (a)(ii) and (iii) and sub-sections (b) and (c) refer to ' the course '. That must be the same course as in subsection (a)(i) and is a reference back to ' a course of education at an educational institution ', the Sydney course. 19 During the period at Birzeit, Mr Brown was enrolled in an approved course of education (Arts/Law) at an educational institution (Sydney). Mr Brown has satisfied s 541B(1)(a)(ii). The fact that during the relevant period Mr Brown was enrolled at Birzeit, and was enrolled at Sydney prior to that period, meant that s 541B(1)(a)(ii) applied rather than s 541B(1)(a)(i). 20 The Secretary contends that s 541B(1)(a)(ii) has a broad context which is also necessary to take into account when construing the provision so as to fulfil its purpose. Mr Smith, who appears for the Secretary, submits that the Explanatory Memorandum of the Act, as quoted by the Tribunal in its decision at [11], shows the broader context in which the provisions were inserted into the Act. The Explanatory Memorandum, in his submission, indicates that the section was intended to cover the short periods between enrolments in educational institutions. The section, he says, ought to be construed with a view to its ' restricted purpose ' so as not to apply to a person who is enrolled in a course of education for reasons other than those required by the education provider. 21 The Court may construe words in a statute so as to operate in a particular way, even if the words used would not, on a literal construction, so operate. However, the words which actually appear in the statute must be reasonably open to such a construction. As Spigelman CJ held in R v Young [1999] NSWCCA 166 ; (1999) 46 NSWLR 681 at 687 ' [c] onstruction must be text based '. Mr Smith was not able to point to a construction of s 541B(i)(a)(ii) or to specific words which could be read down or be given an effect as if they contained additional words, so that the section only gives effect to the ' restricted purpose ' he supports. Mr Smith accepts that the words, read on their face, apply to Mr Brown but submits that the Court must look at the purpose of the section and construe the whole section accordingly. 22 The only way that the words of the section could be interpreted in accordance with the proposed ' restricted purpose ' would be to say that the expression ' enrolled in the course ' brings with it the requirement that enrolment must last for the whole of the term of the course, that is the whole of the semester. Mr Colborne, who appears for Mr Brown, submits that such a construction of ' enrolled in the course ' is not available, as "the course" refers to the ' course of education ', that is to the degree as a whole, not just to a subject. I agree with that submission. 23 Mr Smith submits that the ' modern approach to construction of statues ' requires that regard be had to the purpose of the statute or section, which is ascertained by having regard not only to the grammatical meaning of the words but also to the broad context. He submits that CIC Insurance Limited v Bankstown Football Club Limited [1997] HCA 2 ; (1997) 187 CLR 384 and Newcastle City Council establish that, regardless of clear words, a strained construction of actual words is permitted in order to fulfil the purpose of the provisions. 24 A particular statutory provision is construed in its context, so that it is consistent with the language and purpose of all the provisions of the statute ( CIC Insurance at 408 (per Brennan CJ, Dawson, Toohey and Gummow JJ); Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at [69] (per McHugh, Gummow, Kirby and Hayne JJ); Network Ten Pty Limited v TCN Channel Nine Pty Limited [2004] HCA 14 ; (2004) 218 CLR 273 at [11] (per McHugh, Gummow and Hayne JJ); Rieson v SST Consulting Services Pty Limited [2005] FCAFC 6 at [14] and [20]). Context or purpose can thus justify a court in giving a ' strained construction ' to cure the mischief the provision was intended to cure or to achieve its clear legislative purpose: see Newcastle City Council at 113. 25 It is impermissible, however, as Newcastle City Council makes clear at 113 and as reiterated in Rieson at [20], to use purpose or context to give a provision a construction which, in light of the language used, is unreasonable or unnatural. As Jacobson J observed in Comcare Australia v Pires [2005] FCA 747 ; (2005) 143 FCR 104 at [33] ; 'This is not to say that resort to extrinsic material can override the language of the statute '. Where the ordinary meaning of the provision is clear, it is not ambiguous or obscure and does not lead to a result that is manifestly absurd or is unreasonable, s 15AB of the Interpretation Act does not permit the use of extrinsic material to arrive at the construction contended for ( Nystrom v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 121 at [11] per Moore and Gyles JJ). 26 In order to construe s 541B(1)(a)(ii) in accordance with Mr Smith's ' restricted purpose ', the provision would have to be given an unnatural construction. However unfortunate it may be when that happens, the task of the Court remains clear. The function of the Court is to give effect to the will of Parliament as expressed in the law. It is not ambiguous or obscure and does not lead to a result that is manifestly absurd or unreasonable. 27 As the Full Court observed in Secretary, Department of Family and Community Services v Matheson (2004) 38 AAR 417 at [20], '[t] he words used in s 541B(1)(b)(i) are clearly used and are to be applied according to their ordinary meaning '. The same applies to s 541B(1)(a). 28 The fact that the course at Birzeit was not an approved course was irrelevant if the hiatus in Mr Brown's enrolment at Sydney satisfied the requirements of s 541B(1)(a)(ii). There is nothing in the ordinary meaning of the words in the section or in the context in which the section appears in the Act to suggest that the section includes a qualification limiting what students can do during a hiatus in their enrolment. 29 It may also be observed that the ' restricted purpose ' articulated by Mr Smith, that the section only apply to persons who are not enrolled in a course of education because of a requirement of the education provider, is satisfied in Mr Brown's case. As noted above at [3], Mr Brown deferred his enrolment in Arts/Law at the direction of Sydney. Mr Brown was absent from Australia for a period in excess of 13 weeks. 33 The Secretary submits that s 1218 must be construed having regard to the provisions in Part 2.11 (including s 541B) dealing with eligibility for youth allowance. In Mr Smith's submission, the student has to be undertaking full-time study in accordance with s 541B and has to continue to be enrolled in the Australian education institution during the period of absence. That is to say, Mr Brown does not satisfy s 1218 because, during the hiatus period, Mr Brown was not enrolled at Sydney. 34 Section 541B does not require continuing enrolment. Indeed, it provides for a hiatus in enrolment in s 541B(1)(a)(ii). Section 1218 does not import a requirement of current enrolment. 35 Section 1218(1) does provide that the section will only apply if the person was undertaking full-time study as part of a course of education at an educational institution and was receiving youth allowance. However, as the Tribunal observed, s 1218 does not specifically require the person to be enrolled at the educational institution during the period outside Australia for the purpose of an Australian course. There is no reference to enrolment. 36 Mr Smith also submits that s 541B provides guidance on what is specifically meant by the words ' studies that form part of the course of education ' in s 1218. Mr Smith submits that the Tribunal should have held that the words of s 1218 are ' form part of the course of education ' not will form part. In his submission the words ' form part of the course of education ' must mean ' are required to be undertaken as part of the course of education ' and are studies that are part of the curriculum set in respect of that course of education. 37 The words ' form part of the course of education ' are to be used and applied according to their ordinary meaning. The studies undertaken by Mr Brown at Birzeit were to be undertaken in accordance with the permission given by Sydney for him to complete an equivalent of full-time enrolment at Birzeit. If successfully completed, he would be credited 2 units of that study towards his degree. It follows that those studies were to be treated as equivalent to those at Sydney and thus formed part of Mr Brown's course of education. The Tribunal did not err in its construction of the relevant statute. Nor did it improperly apply that construction to the facts. 39 It was reasonably open to the Tribunal on the evidence to hold that Mr Brown was undertaking full-time study in accordance with s 541B(1) and therefore that he satisfied the activity test for the purpose of s 540 of the Act. His absence was for the purpose of undertaking studies that formed part of the course of education within the meaning of s 1218. It was not suggested that there was no evidence before the Tribunal to support its factual findings. It was not suggested that the findings were unreasonable in the Wednesbury sense ( Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223). Given the proper construction of s 541B(1) and s 1218 as discussed above, the Tribunal did not ignore any relevant considerations. It follows that the Tribunal's conclusions cannot be overturned on appeal under s 44 of the AAT Act. 40 The appeal is dismissed with costs. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | purposive or contextual construction whether purpose of s 541b(1) social security act 1991 (cth) as stated in explanatory memorandum achieved administrative appeals tribunal found that an unnatural or unreasonable meaning could not be given to 541b(1) even if text of provision allows for an unreasonable result construction must be text based nothing in ordinary meaning of s 541b(1) to permit construction contended for ordinary meanings of ss 541b(1) and 1218 upheld no error of law appeal is dismissed "the course" in s 541b(1)(a)(ii) social security act 1991 (cth) "the course in question" in s 54b(1)(c) "form part of the course of education" in s 1218 statutes words and phrases |
An application by the applicant, the Council of the New South Wales Bar Association ('the Bar Council'), to set that authority aside was rejected by me on 3 February 2006: See Council of New South Wales Bar Association v Abdul-Karim [2006] FCA 28. 2 The effect of subs 190(1) and 194(1) of the Act is that Mr Eddy was obliged to call and hold a meeting of Mr Abdul-Karim's creditors in accordance with Div 2 of Part X of the Act not more than 25 working days after Mr Eddy gave his consent to be the controlling trustee on 17 January 2006. (That formal notice was not received by the Bar Council until 27 February 2006. 5 At the creditor's meeting, Mr Abdul-Karim, Mr Eddy and Mr Illek attended in person. A proxy dated 22 February 2006 to Mr Illek, from a Mr Jack Fisher, was relied on to pass a resolution adjourning the meeting to 15 March 2006. 6 Mr Fisher was shown as an unsecured creditor for $4,200 on account of 'unpaid fees' in Mr Abdul-Karim's statement of affairs dated 16 January 2006. On 22 February 2006 Mr Fisher signed a Statement of Claim and Proxy Form, in which he made a claim in the same amount and appointed Mr Illek as his proxy, as referred to in [4] supra. Mr Fisher did not complete the details in either section other than printing his name and writing in the date of his signature. Mr Fisher has produced no document supporting the assertion he is a creditor (despite a subpoena for production being served upon him). He says he has no such documents and no documents were produced, and no other evidence has been adduced, by either Mr Eddy or Mr Abdul-Karim to support Mr Fisher's status as a creditor of Mr Abdul-Karim. By letter dated 2 March 2006 Mr Fisher wrote to Mr Illek withdrawing his appointment as Mr Fisher's proxy and by letter of the same date Mr Fisher wrote to Mr Eddy withdrawing his statement of claim. 7 By letter dated 3 March 2006, Mr Eddy, pursuant to subs 192(1)(d) of the Act, gave the Official Trustee a written request to be relieved of his duties (as controlling trustee) under Part X of the Act. In consequence, the Official Trustee became the controlling trustee: subs 192(1)(e). 8 On 6 March 2006, pursuant to subs 192(1)(f), Mr Abdul-Karim signed a new authority under s 188 of the Act naming the third respondent, Mr Bruce Dennis ('Mr Dennis'), who consented to exercise the powers given by the authority and Mr Dennis thereupon became the controlling trustee: subs 192(2). 9 At the request of Senior Counsel for the Bar Council, and with the consent of counsel for Mr Abdul-Karim, I made an order that Mr Dennis be added as a third respondent to the proceedings, and an order that there be a change to the relief sought, namely, that an order of restraint against Mr Eddy be amended to an order seeking similar restraint against Mr Dennis. The Bar Council also seeks an order restraining Mr Dennis from calling a further meeting of Mr Abdul-Karim's creditors although, in the absence of Mr Dennis obtaining an extension of time in which to do so, for which there is no application before me, I do not think he has the power to call a further meeting of those creditors. 12 Subsection 194(1) of the Act, relevantly par (a), mandates that the meeting of the debtor's creditors be held not more than 25 working days after the relevant consent or approval was given. The relevant consent was given on 17 January 2006 and, having regard to week-ends and the Australia Day public holiday on 26 January 2006, it seemed to be common ground that, in the absence of time being extended --- see Re Ringuet (1984) 11 FCR 45 --- the last day on which the meeting could be held was Wednesday, 22 February 2006, the day on which it was purportedly held. 13 Regulation 10.04 of the Bankruptcy Regulations mandates that the controlling trustee give to, inter alia , each creditor, at least 10 days before the first meeting of creditors is called under an authority under s 188, notice in writing of the date, time and place of the meeting, a copy of his (the controlling trustee's) report, a copy of his (the controlling trustee's) statement and a copy of information relating to his remuneration. 14 The intent is clear --- each creditor is to receive, in sufficient time before the meeting, the information needed to make a determination about voting --- see the various voting alternatives open to creditors under subs 204(1) of the Act. Of course, creditors can only exercise their veto if they are present at the meeting and here the creditors were not only not given timely notice of the meeting but the notice wrongly informed them not to attend the meeting because it would be adjourned. 15 It is common ground that the requirements of reg 10.04 were not complied with. Indeed, I would agree with the Bar Council's submission that they were blatantly breached. While I agree that the conduct complained of relates to a 'proceeding' (the calling of the creditors' meeting) under the Act: See Nilant v Macchia [2000] FCA 1528 ; (2000) 104 FCR 238 at [26] , [27] per Hill J; at [53] per Weinberg J, having regard to the intent of the regulation as described in [14] supra, I do not agree that such conduct can be characterised as a formal defect or irregularity so as to be saved from invalidity by subs 306(1) of the Act. In my view, the blatant breach of the requirements of the regulation would be, of itself, sufficient to grant declaratory relief in terms of the first prayer in the Bar Council's application. 16 There is a further consideration. Mr Fisher's status as a creditor of Mr Abdul-Karim is also put in issue by the Bar Council. The Bar Council submits that on the basis of the facts set out at [6] supra, I should find that Mr Fisher is not a creditor. There is, in my view, considerable force in this submission. Counsel for Mr Abdul-Karim submitted that the subsequent (2 March 2006) withdrawal by Mr Fisher of his statement of claim as a creditor was no more than a concession that he did not want to vote at a meeting of creditors. That may explain the withdrawal, on the same date, of the proxy in favour of Mr Illek, but not the withdrawal of the statement of claim. It was also submitted that Mr Abdul-Karim would not lightly sign a statement of affairs including, as a liability, an amount which, to his knowledge, was not a liability. To do so, it was submitted, would render Mr Abdul-Karim liable to the prospect of a penalty of imprisonment for 12 months: see subs 267(1)(f) and 267(2). But the fact that Mr Abdul-Karim genuinely believed Mr Fisher was a creditor and, apart from his statement of affairs, there is no evidence to suggest he did so believe, while it may absolve him from the penal consequences of s 267, does not make Mr Fisher a creditor, if he was not already one. More telling is the action of Mr Fisher in subsequently withdrawing his statement of claim. 17 The state of evidence on this issue is less than satisfactory, however, I think it is open for me to find, and I do so find, that Mr Fisher was not a creditor of Mr Abdul-Karim on 22 February 2006. 18 The consequence of this finding is that there was no quorum present at the meeting on 22 February 2006 --- see subs 64N(2) --- and the meeting should have been adjourned by Mr Eddy to a time, date and place of his fixing, but not to a date earlier than seven days nor later than 14 days from 22 February 2006: subss 64N(3) and 64N(4). 19 It follows, in my view, that there was no meeting for the purposes of the Act on 22 February 2006. The purported meeting-resolution adjourning the meeting to 15 March 2006 had no effect; there was no meeting at which such a resolution could have been passed. It was submitted at that hearing that the Bar Council was not an entity known to law capable, in relation to the relevant judgment debt relied upon by it in the creditors' petition proceedings, to commence and maintain the proceedings in its name without description of the identity of the constituent members of the Bar Council. 21 Proceedings on the creditors' petition are currently stayed under s 189AAA of the Act, but the standing issue was raised again by counsel for Mr Abdul-Karim on the hearing of the Bar Council's present application. In short, it is said that the Bar Council's lack of standing as a party bringing this application should lead to its dismissal. Its articles of association provide for "a Council of the Association" [Article 45] and for its business to "be managed by the elected members of [that] Council" [Article 61] . It is that Council, constituted by its elected members, which functions as the governing body of the Bar Association and which has been referred to as "the Bar Council". The Bar Council has no separate legal identity but, as will later appear, it has specific statutory powers and functions in relation to barristers and candidates for admission to the Bar. So much may be accepted even though the terms of the certificates certifying the orders made by the Administrative Decisions Tribunal on 17 June and 3 September 2003 which were produced by the Bar Council in response to a notice to produce might suggest that the costs orders were in favour of the Bar Association and not the Bar Council. That Michael Saadey Abdul-Karim pay the costs of the Association of these proceedings in the sum of $33,300. That Michael Saadey Abdul-Karim pay the costs of the Bar Association in the sum of $98,792. In any event, that is how I propose to read them. 24 Indeed, counsel for Mr Abdul-Karim said there was no dispute that there is a debt owing to the Bar Council. What is disputed, he submitted, is the standing of the Bar Council to bring a proceeding in this Court as a creditor in the name of the Bar Council, rather than in the names of its identified constituent members. 25 There is no doubt, indeed it seems to be common ground, that the Bar Council has standing under the LPA, notwithstanding it is not a legal entity separate from the Bar Association, which enables it to be the beneficiary of a Tribunal costs order. Mr Abdul-Karim in his statement of affairs and, through his counsel, on the hearing of the present application, has conceded that he is indebted to the Bar Council for an amount in respect of such costs orders; clearly, the Bar Council is a creditor in the sum of those amounts, has obtained final judgments in respect thereof and Mr Abdul-Karim has committed acts of bankruptcy. 26 That is enough to provide this Court with jurisdiction to make a sequestration order against the estate of Mr Abdul-Karim on a petition presented by the Bar Council: See subs 43(1) of the Act. The fact that the Bar Council is not a separate legal entity does not deny its standing as a creditor for the purposes of the Act; cf., subs 30(1) of the Administrative Appeals Tribunal Act 1975 (Cth): Arnold v Queensland (1987) 73 ALR 607 at 611 per Wilcox J. A partnership is not a legal entity separate from its partners and yet it may be a creditor for the purposes of the Act. Applying the same facilitation, there seems no reason why an action by the constituent members of the Bar Council, claiming as such, may not be brought in the name of the Bar Council, particularly where the debt arises out of the performance by the Bar Council of the statutory functions and duties vested in it by the LPA. 28 It follows that I decline to dismiss the application on the ground of the Bar Council's standing. 29 As the second prayer in the Bar Council's application is expressed in the alternative to the first, and as I propose to make the declaration first sought, the second does not arise. 30 I am not prepared to make an order in terms of the third prayer in the Bar Council's application --- an order restraining Mr Dennis from calling a further meeting of Mr Abdul-Karim's creditors --- because the 25 days prescribed by s 194 of the Act have passed and there is no application for an extension of time before me: See Pretorius v Dalton Carpet Tiles Pty Ltd (1984) 1 FCR 346 at 352 --- 353. Mr Dennis has no power to call any such meeting. 31 Mr Eddy must pay the Bar Council's costs of the application. 32 I give the parties liberty to re-list the matter on two days' notice. | personal insolvency agreements meeting of creditors and control of debtor's property where controlling trustee must call and hold meeting in accordance with div 2 of part x of the bankruptcy act 1966 (cth) within certain time whether trustee failed to comply with prescribed procedure whether quorum at purported meeting where time now expired whether purported meeting a meeting for the purposes of the act. standing where 'bar council' not legal entity where certain powers and functions conferred upon council by state legislation where costs order and judgments in favour of council whether council may commence bankruptcy proceedings in its own name whether proceedings must be brought in the names of the members. bankruptcy practice & procedure |
These proceedings indicate that it is not only that destination that is paved with good intentions, but also the pathway to a courthouse. By that I mean, that when one reflects upon the history of this case, and in particular the observations that Cowdroy J made in his reasons for judgment in Ogawa v Minister for Immigration and Multicultural Affairs and Migration Review Tribunal (2006) FCA 1694 , one sees there particular sources of grievance that, at a humane level, one might see Ms Ogawa having in respect of the saga of her dealing with the immigration authorities of the Commonwealth. 2 Those grievances, though, do not translate into actionable causes of action against either of the Respondents in this proceeding. In between when this proceeding was first instituted in the Federal Magistrates Court in June last year and today, there have been many "good intentions", in terms of adjournments granted for the purpose of seeking legal advice, and in terms of the advance notice of the nature of the application to be made today by the Respondents, and the detailed reasons for it. Earlier in time one sees many other instances of "good intentions" in the dealings between the Commonwealth and Ms Ogawa, even though it must be said, as Cowdroy J observed, some of those good intentions have translated into sources of grievance, which the present proceeding indicates, persist to this day. 3 The detailed background to the case is to be found in a chronology which was helpfully provided at a directions hearing last year by the Respondents, and which is attached to these reasons as Exhibit 1. 4 By reference to that chronology and other material filed, one sees that the proceeding has its origins in the request that was made by Ms Ogawa to the Immigration Department's Ministerial Intervention Unit for intervention by the Minister in respect of her migration affairs, pursuant to s 351 of the Migration Act 1958 ("Migration Act"). That request was withdrawn by, it seems, the First Respondent, without any apparent instruction from Ms Ogawa so to do. That particular event became the subject of litigation before a Federal Magistrate, and later before Cowdroy J, in the decision to which I have already made reference. One finds in Cowdroy J's Reasons for Judgment further detail concerning the earlier background of today's proceeding. 5 It might also be noted that since Cowdroy J gave his decision on 15 December 2006 the following events have occurred. On 25 June 2007, on the initiative of another agency within the Immigration Department, action was taken pursuant to s 351 of the Migration Act to grant to Ms Ogawa a sub-class 574 (post graduate research sector) visa which remained valid until 31 August 2007, and on 30 August 2007 to grant to her a sub-class 010 (bridging A) visa. 7 Ancillary relief and costs are also sought. One of those, in particular, was granted so that Ms Ogawa might have the benefit of access to legal advice pursuant to the pro bono scheme, which is a commendable feature of the relationship which this court has in relation to the administration of justice with the Bar Association of Queensland. Ms Ogawa, as a result, was able, so the Court was informed at a later directions hearing, to take advantage of access to legal advice. That did not translate, as it happened, into her being legally represented in the proceeding or, for that matter, to her discontinuing the proceeding. 9 That opportunity having been extended, the Respondents, on advice, took the course of seeking to have the substantive proceeding dismissed, calling in aid for that purpose the power conferred on the Court to give summary judgment pursuant to s 31A(2) of the Act . That application having been made, directions were given for the service in advance, and filing, of submissions, both by the Respondents and Ms Ogawa. Not without some difficulty, the service of the Respondents' submissions occurred in advance of the hearing and Ms Ogawa has made a submission in response. I have read each of those submissions. Ms Ogawa is not present in court today and it must be said that, at an earlier directions hearing, she did foreshadow that particular contingency. 10 It seems to me convenient, though, and appropriate, not to deal with the application or the proceeding on the basis of non-attendance, but rather to consider on its merits the s 31A application. I am quite satisfied that Ms Ogawa has had due notice of the application and of the submissions to be made on behalf of the Respondents in support of that application. The Respondents' representatives very properly have not today sought to add any further detail to those submissions but instead summarised the gravamen of them and otherwise relied upon the submissions made in writing and served in advance on Ms Ogawa. 11 Section 31A(2) of the Act represents a deliberate step by the Parliament to modify the position which hitherto prevailed in relation to summary judgment applications and which is exemplified in terms of principle in authorities such as Day v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125. 13 It is in s 31A(3) that one finds the express Parliamentary modification of the position which had hitherto prevailed in principle as highlighted in the two High Court cases that I have just mentioned. The precise metes and bounds of what is left for the concept of "no reasonable prospect of success" are probably not usefully the subject of attempted elucidation by any general statement, as opposed to acknowledging the Parliamentary modification of the hitherto position, and then assessing the impact of that phrase, as so modified, in the circumstances of a given case. 15 I first consider the jurisdictional aspect of the application. For that purpose it is necessary to set out a series of statutory provisions from the Migration Act and also from the Commonwealth Constitution . His Honour held that the decision by the Minister not to consider the exercise of his powers under s 351 of the Migration Act was a privative clause decision within the meaning of s 474(2) of the Migration Act because it was conduct preparatory to the making of a decision, as referred to in s 474(3)(h) of the Migration Act . In principle, this submission seems to me to be correct, with the critical question being whether or not there is any reasonable prospect of successfully demonstrating the presence of jurisdictional error. It suffices to note that Ms Ogawa has not, in any of the material which she has filed, raised any reasonable prospect of success in demonstrating any jurisdictional error in respect of any decision which she seeks to challenge. 23 It might also be noted that by s 351(7) , the Minister is empowered to make, by way of substitution, a more favourable decision, but that he does not have a duty to consider whether to exercise his power under subs (1) in respect of any decision, whether he was requested to do so by an applicant or another person, or in any other circumstances. That particular statutory provision and its analogues have the necessary consequence in relation to an application for a constitutional writ, in which it is sought to compel Ministerial consideration, that there is no statutory duty so to do and, hence, a constitutional writ will not go. See in that regard the High Court's decision in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Applicants S134/2002 (2003) 211 CLR 441-48. 24 That in itself is enough to dispose of the proceeding on the basis of an absence of a reasonable prospect of success; i.e. there is no hope of establishing jurisdiction to entertain the claim in respect of relief relating to compelling the Minister to act under s 351. It is desirable though, in the circumstances, to reflect upon other aspects of the claim, even assuming that there were jurisdiction. 25 In their written submission the Respondents, apart from the primary submission which is that the Minister is under no obligation to consider a request, also in an elaborate way chart by way of reference to directions that have been given by the Minister pursuant to his administration of the Act and in relation to s 351, highlight how it is, that a particular course was taken within the Department to proceed as was done once both a request for withdrawal had been received and once there was an awareness of a continuing migration matter litigation. It suffices to note that there is a compelling basis for the submission that the course taken was one that was within power. The detail of that is set out in the submission which is on the court file and it is not necessary to elaborate on it. 26 It is desirable though to elaborate rather more on what the Respondents, with respect, rightly apprehend to be a claim in the nature of damages for misfeasance in public office. Like the Respondents, I too would characterise the second of the grounds in the application as one for damages in respect of that asserted tort. The leading authority in respect of that tort is Northern Territory v Mengel (1995) 185 CLR 307. Damages are recoverable by an individual in respect of the tort of misfeasance in public office, where that individual has suffered loss by reason of an action taken by the holder of a public office, if, and it is a significant if, that officer has acted maliciously, or knew that the action was beyond power and likely to harm that individual. 27 In this sense misfeasance in public office is a "deliberate tort". There is not a scintilla of evidence in any of the material which has been read before me or, for that matter, in the circumstances as detailed by Cowdroy J in his earlier decision, which in any way provides any support for the view that any Commonwealth officer has acted otherwise than honestly and without any intention at all to act in any way maliciously as against Ms Ogawa. Even assuming that there were jurisdiction in respect of the judicial review and declaratory aspects of this case, and assuming that one might regard the damages claim as an associated matter, it is utterly hopeless. 30 A further observation ought also to be made in respect of so much of that damages claim as would seek to make the Commonwealth vicariously liable in respect of the first respondent's action or inaction, as alleged. Obviously enough, the utterly hopeless quality of the damages claim against the First Respondent has a necessary consequence, even assuming that it were possible to make the Commonwealth vicariously liable. That is an assumption though which, in any event, would be wrong in law to make. The present state of authority suggests strongly that, in the ordinary course of events, it is not possible to make the relevant body politic, in this case the Commonwealth, vicariously liable for that tort of misfeasance committed by an officer, see James v Commonwealth [1939] HCA 9 ; (1939) 62 CLR 339 at 359-60 and RACZ v Home Office [1994] 2 AC 45. " As the Respondents submit, this is not a proper ground of review. It follows from the foregoing that this case is one where there is no reasonable prospect of success. It will, therefore, be dismissed. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. 24 December 2002 University of Melbourne enrolment cancelled. 29 September 2003 Student (Temporary) (Class TU) subclass 560 visa cancelled for breach of condition 8202 1 October 2003 Applicant granted Bridging E visa (" BVE ") 8 October 2003 Applicant applies to MRT for review of the decision to cancel her Student (Temporary) (Class TU) subclass 560 visa 10 October 2003 Applicant granted BVE 9 June 2004 Migration Review Tribunal (" MRT ") decides to set aside delegate's cancellation decision to cancel her Student (Temporary) (Class TU) subclass 560 visa because unable to be satisfied that the Applicant breached condition 8202. Effect of the decision was to return to the Applicant her Student (Temporary) (Class TU) subclass 560 visa. However that visa had expired on 15 March 2004 so she was no longer within the 28 day requirement to lodge a further student visa application. 23 June 2004 Applicant lodges an s. 351 request with the Minister to grant her a Student (Temporary) (Class TU) subclass 560 visa. 30 June 2004 Applicant files for a review of the MRT's decision in the Federal Court (" FCA ") even though the MRT's decision had set aside the delegate's decision. 6 July 2004 Applicant granted BVE 20 July 2004 DIAC wrote to Applicant regarding her s. 351 request- advising that it was inappropriate because of the FCA appeal re MRT's decision. 23 July 2004 FCA proceedings summarily dismissed by Kiefel J - Minister win. 29 July 2004 Applicant appealed for leave to appeal in the Full Federal Court (" FCAFC "). 26 November 2004 FCAFC refused to grant leave to appeal. 22 December 2004 Applicant applied for special leave to appeal in the High Court (" HCA ") (" B76/04 "). 20 January 2005 B76/04 - HCA proceedings deemed abandoned (Applicant failed to comply with the timetable). 17 February 2005 BVE (issued 6/7/04) expired. 23 March 2005 B76/04 - Applicant filed summons seeking reinstatement of HCA special leave application. 15 June 2005 DIAC received confirmation from HCA that the Applicant withdrew her summons for reinstatement. 27 May 2005 Section 351 request reactivated because the Applicant no longer had ongoing immigration matter before the Courts. 22 September 2005 DIAC wrote to Applicant indicating it was appropriate for it to consider her s. 351 request now and asked for documents within 35 days. 22 September 2005 Applicant replied to email regarding the s. 351 request. The Applicant advised she had proceedings reviewing the decision of the Registrar of the HCA and that she would like to prepare the s. 351 documents after that has concluded. 30 September 2005 Officer of MIU wrote to Applicant via email indicating that it would withdraw her s. 351 request and she could make a further s. 351 request in the future. Applicant alleges she never received this correspondence. 4 October 2005 Section 351 request finalised as "withdrawn". 19 May 2006 Applicant detained by Australian Federal Police (" AFP ") for being unlawful. 19 May 2006 Applicant applied for a BVE 19 May 2006 Delegate refused to grant the BVE because Applicant did not meet grounds under cl. 050.212. 21 May 2006 Transferred to Villawood IDC 21 May 2006 Applicant applied to MRT for review of the delegate's decision refusing to grant her the BVE. 29 May 2006 MRT wrote an s. 359A letter to the Applicant inviting her comments at an interview prior to the hearing. 30 May 2006 MRT Hearing. 30 May 2006 Applicant makes new s. 351 request to MIU. 31 May 2006 MIU advised the MRT that the Applicant's s. 351 request was withdrawn on 22 September 2005. 1 June 2006 MRT wrote a s. 359A letter to the Applicant inviting her to comment on the information from MIU re withdrawal of her application under s. 351. 5 June 2006 Applicant provided response to the s. 359A letter. 5 June 2006 MRT found Applicant did not meet criteria for grant of BE. 8 June 2006 Applicant lodged application for judicial review with the FMC for a review of the decision to detain her. 15 June 2006 Applicant advised not appropriate to consider s. 351 request until after the FMC had made its decision. 13 July 2006 B76/04 - Applicant applied for reinstatement of special leave application with HCA. 18 July 2006 Minister declines to intervene in Applicant's case. Applicant served with notice of intention to remove to take effect on 25 July 2006. 21 July 2006 FMC affirms MRT decision to refuse Applicant a BE. 21 July 2006 Applicant files appeal of the FMC decisions to the FCAFC and seeks injunction preventing removal. 24 July 2006 FCAFC does not grant injunction and orders that DIAC give Applicant 48 hours notice of any removal. 26 July 2006 Applicant lodge Protection Visa (" PV ")Application. 28 July 2006 Applicant granted BE pending PV decision (conditions on visa - no work, no study, reside at nominated address, advise change of address and report as directed. 31 July 2006 While reporting to Sydney office of DIAC, Applicant arrested by AFP and charged under ss. 474.15(1) and 474.17(1)of the Criminal Code Act 1995 (2 counts). 1 August 2006 Applicant transferred to police watch-house in Brisbane. 2 August 2006 Applicant granted bail by FMC and released from criminal custody. 9 August 2006 Applicant's PV refused. 22 August 2006 FCAFC dismisses Applicant's appeal due to non-appearance. 6 September 2006 Applicant seeks review of the PV decision in the RRT. 14 September 2006 Applicant lodges FOI request (finalised on 6 March 2007). Applicant requests Department of Finance and Administration (" DOFA ") to waive debts to Commonwealth. 12 October 2006 DIAC advises DOFA it does not support request for waiver. 16 October 2006 Applicant lodges complaint with Ombudsman regarding DIAC's removal attempt. 27 October 2006 B76/04 - HCA reinstates application for special leave to appeal FCAFC decision. 6 December 2006 Applicant lodge new complaint with Ombudsman in relation to request to MIU on 30 May 2006. 14 December 2006 RRT affirms DIAC's decision not to grant the PV. 15 December 2006 FCAFC dismisses appeal of FMC decision on 21 July 2006 - Minster Win. 18 December 2006 Applicant request Ministerial intervention under s. 351 and/or s. 471 of the Act. 22 December 2006 Applicant attends preliminary hearing at Brisbane Magistrates Court in relation to criminal charges against her. 9 January 2007 The Applicant files an application in the Federal Magistrates Court for review of the decision of the RRT (" BRG10/07 "). 2 April 2007 BRG10/07 - Federal Magistrates Court of Australia Hearing (Jarrett FM). 31 May 2007 BRG10/07 - Jarrett FM orders that the application filed on 9 January 2007 be dismissed and the applicant is ordered to pay the Respondent's costs. 20 June 2007 Applicant files Application for an order to show cause and interlocutory relief naming Natalie Parker and Cth of Australia as 1st and 2nd respondents respectively (" BRG530/07 "). 21 June 2007 The Appellant files a 'Notice of Motion and Notice of Appeal' in the Federal Court of Australia's District Registry appealing the decision of Jarrett FM. (" QUD185/07 "). 25 June 2007 Applicant granted Subclass 574 (Postgraduate Research) visa valid to 31 August 2007. 18 July 2007 BRG530/07 - Burnett FM orders that the Respondents file an application for an order to show cause by 20 July 2007 and the Applicant files any material in support of her argument by 27 July 2007. hearing listed for 8 August 2007. 20 July 2007 BRG530/07 - Respondents file an application for an order to show cause on the grounds that the applicant cannot raise an arguable case for the relief claimed 25 July 2007 QUD185/07 - Spender J strikes out Notice of Motion 1 August 2007 B76/04 - Application for special leave to appeal to the HCA dismissed. 8 August 2007 BRG530/07 - Hearing adjourned until 22 August 2007 at request of Applicant 22 August 2007 BRG530/07 - 11.00 am - listed for hearing - applicant does not appear and Burnett FM states she may have been confused with the times 22 August 2007 BRG530/07 - 2.30 pm - applicant notified of hearing - applicant does not appear, Burnett FM adjourns hearing to 5 September 2007. 31 August 2007 Applicant's student visa expires and granted BVA. 5 September 2007 BRG530/07 hearing- Applicant files submissions that FMC does not have jurisdiction to hear show cause application. Respondents argue court does have jurisdiction to hear application and the application should be dismissed. 27 September 2007 BRG530/07 judgment- Burnett FM finds FMC does not have jurisdiction to hear application and transfers hearing to FCA. Burnett FM awards costs to Respondents. 2 October 2007 BRG530/07 - applicant files notice of motion seeking leave to appeal the order of Burnett FM awarding costs to the respondent. 3 October 2007 BRG530/07 transferred to FCA - given new proceeding number (" QUD327/07 ") 7 November 2007 QUD185/07 - matter for hearing before Justice Bennett. 15 November 2007 QUD327/07 - Respondent served with Notice of Appeal by Federal Court Registry filed by Applicant on 2 October 2007. Advised of hearing of Notice of Motion on 23 November 2007. | application for summary judgment pursuant to s 31a(2) of the federal court of australia act 1976 (cth) whether court is satisfied that party has no reasonable prospect of successfully prosecuting the proceeding where no reasonable prospect of establishing jurisdiction of court to hear proceeding where no reasonable prospect of successfully demonstrating jurisdictional error or misfeasance in public office practice and procedure |
2 The applicant claims to be a citizen of the People's Republic of China. He claims to have a well-founded fear of persecution by the Chinese authorities for publishing material criticising the local government. 3 The applicant did not respond to the invitation to attend a hearing before the Refugee Review Tribunal. The invitation was sent to the applicant's authorised recipient, his migration agent. The applicant did not attend on the scheduled date. The Tribunal proceeded to make a decision pursuant to s 426A of the Migration Act 1958 (Cth) ('Act'). Under s 426A , the Tribunal may make a decision on the review without taking any further action to allow or enable an applicant to appear before it, if it has invited that person to appear before it and she or he fails to do so. The Tribunal found the applicant's claims to consist of vague and unsubstantiated assertions. The Tribunal was not satisfied the applicant had a well-founded fear of persecution in China and refused to grant a protection visa. 4 On 25 January 2005, the applicant filed an application in the Federal Magistrates Court for an order that the respondents show cause why a remedy should not be granted under s 476 of the Act regarding the decision of the Tribunal. On 17 May 2006, the applicant filed an amended application purportedly under s 39B of the Judiciary Act 1903 (Cth) and s 475A of the Act. The amended application alleged jurisdictional error and denial of natural justice. Federal Magistrate Smith found the particulars which sought to assert the Tribunal failed to comply with ss 425, 425A and 424A(1) of the Act did not support the grounds relied on: the Tribunal invited the applicant to a hearing in compliance with the relevant sections and the Tribunal's reasons for its decision were not based on 'information' but, rather, its inability to be satisfied by the evidence. 5 The applicant asserted he was 'cheated' by his migration agent. Federal Magistrate Smith dismissed the application under r 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth) as no arguable case was raised for the relief claimed. 7 Leave to appeal will only be granted where the judgment below is attended by sufficient doubt to warrant it being reconsidered as an appeal and where substantial injustice would result if leave is refused, supposing the judgment to be decided wrongly. 8 In this matter, the judgment below is not attended with any doubt. The Court below correctly dismissed the application, for the reasons which it gave. This is because the Tribunal followed proper procedures as set out in the Act for notifying the applicant of the hearing via his authorised recipient. The Tribunal then proceeded to make a decision on the matter before it as it is entitled to under s 426A(1). 10 The Tribunal was entitled to come to the decision it arrived at without serving a notice under s 424A(1) as its decision to reject the application was based, not on information given by the applicant, but rather, a lack of it. The only material before the Tribunal supplied by the applicant was correctly described by the Tribunal as 'vague and unsubstantiated assertions'. 11 The application for leave to appeal is refused, with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | application for protection visa refused application for review to refugee review tribunal decision affirmed appeal to federal magistrates court dismissed leave to appeal required no substantial injustice leave refused migration |
2 The application is supported by an affidavit of the applicant sworn 16 July 2008 and one by his solicitor Mr Alan Rumsley sworn 18 July 2008. The respondent relies upon an affidavit of Mr Timothy Burrows sworn on 19 August 2007. 3 An appeal lies to the Court on a question of law: Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), s 44(1). 4 By s 44(2A) of the AAT Act the applicant was required to institute an appeal not later than the twenty-eighth day after the day on which he was given a document setting out the terms of the decision of the Tribunal, or within such further time as the Federal Court may allow. The applicant seeks an extension of time under s 44(2A) and Order 53 rule 7 of the Federal Court Rules 1976 (Cth). 5 The Court has a discretion to extend time. That discretion is given for the sole purpose of enabling the court to do justice between the parties: Gallo v Dawson [1990] HCA 30 ; (1990) 64 ALJR 458 at 459. 6 The discretion to extend time to institute an appeal is not expressly confined. Some relevant considerations are to be found in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 (in respect of applications for extension of time under s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth)). These have been applied to applications under s 44: Peczalski v Comcare (1999) 58 ALD 697 at [19]; Dent v Australian Electoral Commissioner [2008] FCAFC 111 at [48] . The prescribed period is not to be ignored: Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission (1982) 43 ALR 535 at 550. Although it is not an essential pre condition for a favourable exercise of the discretion that the applicant show an acceptable explanation for the delay, it is to be expected that such an explanation will normally be given: Comcover v A'Hearn [1993] FCA 498 ; (1993) 45 FCR 441. (b) The merits of the substantial application are properly to be taken into account, considering whether an extension of time should be granted. 2.2 Whether the applicant, as a tax agent under the Income Tax Assessment Act 1936 , was obliged not to file any return in which the applicant was aware that the information required to prepare the return was not true and correct. 2.3 Whether the Tribunal breached the rules of natural justice in considering the application of ss 166 and 170 of the Tax Assessment Act 1936 without affording the applicant notice of its intention to do so, or an opportunity to be heard on the issue. 2.4 Whether ss 166 and 170 of the Tax Assessment Act 1936 were relevant to the determination of the issues before the Tribunal. 9 The grounds are formulated as four separate questions concerning matters of law. However, the competency of the appeal depends on the identification of questions which are properly characterised as questions of law, as the subject of the appeal: Price Street Professional Centre , at [22]; Comcare v Etheridge [2006] FCAFC 27 ; (2006) 149 FCR 522 at [14] . 10 Whether a decision gives rise to a question of law that will support an appeal under s 44(1) requires consideration of how the decision was arrived at and the point that the appellant seeks to raise: Price Street Professional Centre at [25]. The Court must consider the question sought to be raised and the grounds relied upon: see Birdseye at [18]; Price Street Professional Centre at [40]. The grounds required to be specified in the notice of appeal "are the grounds upon which the appellant will argue that the answers for which it contends to the questions of law entitle it to the relief which it seeks": HBF Health Funds Inc v Minister for Health and Aging [2006] FCAFC 34 ; (2006) 149 FCR 291 at [6] . 11 Any questions of law identified by the applicant must relate to the decision under appeal in such a way that a favourable answer to the question will disclose an error affecting the Tribunal's decision: Birdseye at [23] and [28]. 12 During argument counsel for the applicant effectively abandoned the stated questions of law and said that the error of law relied upon was the failure of the Tribunal to take into account the applicant's explanation for failing to comply with his obligations under s 161 of the Income Tax Assessment Act 1936 (Cth) ("the ITAA Act ") as relevant to the exercise of the discretion under s 251K , whether to cancel the applicant's registration as a tax agent. Nor does he challenge the findings of the Tribunal that the offences of which he was convicted were serious taxation offences or that for that reason and by virtue of s 251BC(1)(e) of the ITAA Act he is not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers. The only issue in this appeal is whether by reason of errors of law, the exercise by the Tribunal of its discretion under s 251K(2) of the ITAA Act and s 43(1) of the AAT Act to cancel the applicant's registration miscarried. The Tribunal held that it was not an acceptable explanation. In considering the applicant's explanation, the Tribunal referred to the general context of taxation legislation of which the applicant, as a tax agent, should have been aware. These included the obligation to lodge annual income tax returns (ITAA Act, ss 161 and 163A), the making of assessments (ITAA Act, s 166), the power to amend assessments after they have been made (ITAA Act, s 170), and the right to object to an assessment (s 175A of the ITAA Act and Part IVC of the Taxation Administration Act 1953 (Cth)). 18 All of these matters were raised in the submissions of the respondent at the hearing. More generally, the option for the applicant of lodging returns based on the information currently available and, if necessary, lodging an amendment was raised on the Section 37 Documents before the Tribunal, including the minutes of the respondent (T13 and 15), and minutes of an interview between the applicant and the respondent on 13 November 2006 (T14). 19 The starting point for the exercise of the discretion under s 251K(2)(d) of the ITAA Act in this case, is that the applicant was not a fit and proper person to prepare income tax returns and transact business on behalf of the taxpayers in income tax matters. This unchallenged finding follows as a matter of law by reason of his conviction of serious taxation offences during the previous five years prior: s 251BC(1)(e) of the ITAA Act : Tribunal's reasons [22]. 20 The finding that he was not a fit and proper person is of itself a sufficient basis to exercise the discretion under s 251K(2)(d) of the ITAA Act to cancel the applicant's registration as a tax agent. 21 Ordinarily, absent mitigating circumstances, I would expect that in such circumstances a tax agent's registration would be cancelled. The discretion permits an amelioration of this result. There is no guidance as to what factors might influence the exercise of the discretion not to cancel a registration. It seems to me however that there would need to be evidence of matters which mitigate the finding that the agent is not a fit and proper person. 22 In this case, the circumstances, additional to the finding that the applicant was not a fit and proper person, were aggravating rather than mitigating in nature. The applicant was late in lodging his income tax returns for the years ended 30 June 1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1999, 2001, 2002, 2003 and 2004 and the Australian Taxation Office demanded the lodgement of the returns in those years. Income tax returns for the years ended 2001, 2002, 2003, 2004, 2005 and 2006 are still outstanding. As noted above, the applicant was convicted on 26 June 2006 for failing to lodge Business Activity Statements (BAS) for the quarters ending September 2002, December 2002, March 2003, June 2003, September 2003, December 2003, March 2004, June 2004 and September 2004. The evidence also shows that a number of companies with which the applicant is associated have failed to file income tax returns since 2001. 23 Even if there were substance in the applicant's complaints concerning the treatment afforded by the Tribunal to his explanations as to why he did not lodge tax returns for the years ended 30 June 2001-2005 (inclusive) this would merely remove one set of circumstances of aggravation. It does nothing to detract from the force of the other circumstances of aggravation. In any event, as I have said, the finding that he was not a fit and proper person, absent mitigating circumstances, would of itself be sufficient grounds for the Tribunal to exercise its discretion by cancelling the applicant's registration. 24 For these reasons, in my opinion, the proposed appeal has no prospect of success. Given that conclusion, it is unnecessary to consider the reasons for the applicant's delay in seeking to appeal from the Tribunal's decision. 25 The application should be dismissed and the applicant should pay the respondent's costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | extension of time to file and serve notice of appeal applicant had been convicted of serious tax offence tax board and tribunal exercised discretion under s 251k(2) of the income tax administration act and s 43(1) administration appeals tribunal act to cancel applicant's registration as he was an unfit and improper person to be registered tribunal had considered reasons complained of by the applicant additional circumstances that he failed to lodge tax returns aggravated the decision finding that the applicant was an unfit and improper person sufficient basis to exercise its discretion no mitigating circumstances no prospect of success. practice and procedure |
The proposed orders provide for third parties to make objections to the liquidators' entitlement to the books and particular uses of them. The basis upon which ASIC proposes the conditions is that objections of which it has been given notice go to use of the documents rather than to the liquidators' entitlement to inspect them. The legal basis of the distinction is not clear. 2 In my opinion and for the reasons which follow, I do not consider that I should make the orders sought. If, as ASIC says, it considers that the liquidators are entitled to the documents then it should provide access without further ado. If there is some third party concern about any particular use of any document or documents by the liquidators or their entitlement to use any of them, that matter can be taken up with the liquidators. Absent an agreed resolution, an aggrieved third party can apply to the Court either under the provisions of the Corporations Act 2001 (Cth) or by way of assertion of property or other rights in support of declaratory or injunctive relief. It is not for the Court to set up a regime for the resolution of disputes which may arise between liquidators and third parties. Quite apart from other considerations mentioned in the reasons, this may encourage the parties too readily to invoke the assistance of the Court without making adequate attempts to resolve disputes themselves. By the notices ASIC required the receivers, members of the firm KordaMentha, to produce to ASIC books in their possession, custody or control that related to Norman Phillip Carey, Graeme John Rundle, Cedric Richard Palmer Beck, John Norman Dixon, Westpoint Corporation and the Westpoint Group. Hard copy documents and electronic records were produced to ASIC in response to the notices. The notices extended to documents relating to up to 193 companies, persons, trusts or entities. 4 ASIC took possession of a large number of documents pursuant to the notices. These comprised approximately 3,464 boxes of hardcopy documents and Westpoint Corporation computer servers in Perth, Sydney and Melbourne. In addition, various laptop computers and stand-alone personal computers were also produced. 5 The hardcopy documents which were produced came from the head office of Westpoint Corporation in Perth, storage facilities used by the company in Perth, Sydney, Melbourne and Brisbane and/or storage facilities used by KordaMentha in Brisbane in connection with their work as receivers and managers of Westpoint Corporation. 6 ASIC created a spreadsheet which listed the folders and bags contained within the boxes of hardcopy documents by general description. This spreadsheet document comprises approximately 786 pages. The contents of 2,889 boxes containing the hard copy documents were recorded, scanned and stored in electronic form to create a document management database. There were approximately 358 boxes which ASIC had received from storage facilities in Sydney, Melbourne and Brisbane under the notices which were not listed in the spreadsheet. They were however included in the database which is referred to in these reasons as the "Hardcopy Database". 7 About 575 boxes containing material which ASIC considered to be irrelevant to its current investigations were not included in the Hardcopy Database although they remain in ASIC's possession. The creation of the Hardcopy Database was completed on 14 November 2006 by which time it contained about 1.6 million scanned hardcopy documents comprising approximately 4.8 million pages. The documents themselves are almost entirely stored in boxes. 8 Analysis of the files contained on the Westpoint Corporation server and associated computers has identified 1.8 million items of mail, 252,000 Word documents, 152,000 spreadsheets and 8,000 presentations. 9 Since its completion of the Hardcopy Database on 14 November 2006 ASIC has not generally permitted physical inspection of the documents comprising the database. It has wished to maintain the integrity and security of those documents for evidentiary purposes. It now effects their release in electronic form. ASIC has experienced logistical difficulties in complying with requests for access to particular documents or groups of documents because of the difficulty of identifying, from the mass of material, those relevant to the request and the difficulty of determining entitlement to the documents by particular individuals or entities. 10 On 14 December 2006 Clayton Utz, acting for Jeffery Herbert and Simon Read the joint and several liquidators of Westpoint Corporation, wrote to ASIC. Their letter followed earlier correspondence and a meeting with counsel for ASIC on 7 November 2006. By their letter, Clayton Utz sought access for the liquidators to documents seized by ASIC from the private receivers and managers of Westpoint Corporation. According to the letter the preliminary investigations of the liquidators showed that the corporate ownership structure of the companies in the Westpoint Group, a list of which was scheduled to the letter, was not reflective of the manner in which the Group was operated. In each instance Westpoint Corporation had control over the administrative and operational affairs of, and operated, a particular business or asset as though it owned it. This had the consequence that the affairs of Westpoint Corporation and the entities in the schedule were closely intertwined. Moreover it was an impossible task to understand the financial and operational manner in which Westpoint Corporation and its businesses were operated without access to the documents which had been seized. A relevant usage right of data and documentation was accordingly created in favour of Westpoint Corporation, the legal nature of which is founded firstly on the relationship of agency, as detailed below, secondly on the relationship of lienor and lienee of documents for use in performance of functions attaching to that agency relationship, and thirdly as principal in the undertaking of the businesses described below. It is not possible to distinguish between the nature of these rights at this point in time; suffice to say, we consider the following analysis establishes a right for the Liquidators to inspect; take copies of; use; and rely upon the documents of the entities in the attached schedule, pursuant to section 37 of the ASIC Act. Their affairs being so extensively intermingled it is impossible to assess which transactions were those of Westpoint Corporation and which of another entity without access to the books and records. 13 ASIC has accepted the factual contentions relating to the Westpoint Group advanced on behalf of the liquidators. 15 The principal objection received came from Elderslie Property Ltd (Elderslie). On 31 January 2007 it indicated that it objected to ASIC releasing any documents concerning the Warnbro Fair Syndicate to the liquidator. It did not identify any documents falling within that description. Discussion ensued between ASIC, the representatives of Elderslie and the liquidators' solicitors. The final position reached was that Elderslie was not prepared to agree to ASIC's proposed release. As the new responsible entity of the Warnbro Fair Syndicate it objected to release to the liquidators of materials which might be used by the liquidators against Elderslie. 16 On 2 April 2007 ASIC wrote to Elderslie explaining that under the circumstances it considered that the liquidators were entitled to all of the Westpoint Corporation documents. It also informed Elderslie that it intended to make the present application to the Court and requested Elderslie to identify its position in relation to such application within seven days. Subsequently, on 16 April 2007, Mr Savundra, a solicitor with ASIC, spoke with Mr Luis Garcia of Elderslie who informed him that Elderslie did not intend to respond to the letter at that time and would wait for ASIC's application to be made. 17 Other interested parties expressed reservations or concerns involving ASIC's proposed release. On 8 March 2007 it sent a further letter to them informing them that it intended to provide the Westpoint documents to the liquidators unless they sought a court order to restrain it from doing so by 16 March 2007. 18 Hotchkin Hanley did not respond to ASIC's letter of 8 March 2007. Ferrier Hodgson responded but did not pursue its previous concerns. Mr Carey and Ms Carey, through their solicitors Mony de Kerloy, wrote to ASIC on 9 March 2007 asserting that the Westpoint documents might contain legally privileged information and that to obtain appropriate advice their clients required funding from moneys held by Healthcare Properties Pty Ltd (Healthcare). ASIC rejected this contention on 13 March 2007. An application for release of funds from Healthcare was refused in my judgment on 17 April 2007: Australian Securities & Investments Commission; In the matter of Richstar Enterprises Ltd v Carey (No 15) [2007] FCA 544. 19 ASIC's release does not extend to copies of what is known as the Redchime server. This is on the basis that the materials obtained from that server were not produced to ASIC by KordaMentha in their capacity as privately appointed receivers and managers to Westpoint Corporation. The proposed release to the liquidators is limited to the hardcopy documents. ASIC released an image of the Westpoint server and associated computers in June 2006. 20 On 27 April 2007 ASIC filed an application under s 477(6) of the Corporations Act 2001 (Cth) seeking orders that the liquidators of Westpoint Corporation be permitted to inspect and obtain copies of the books of the company held by ASIC subject to certain conditions relating to third party interests which were set out in the application. 21 The application was served on Mr Norman Carey, Elderslie and KordaMentha. A process server was engaged to serve a copy of the application on Ms Karen Carey at Unit 6, 12 Forrest Street, South Perth. This was an address obtained from an affidavit sworn by Ms Carey on 28 March 2007 in the proceedings in this Court relating to the appointment of receivers and other controls on property of the Westpoint Group (WAD 83 of 2006). The process server, however, was unable to serve Ms Carey at that address. According to the affidavit of Michael James Shore affirmed 4 May 2007, he spoke with a person who answered the front door at the address in South Perth and was informed that Ms Karen Carey does not live there. The present occupant moved in a fortnight before and was renting through a real estate agency in Como. 22 Following delivery to it of the affidavits Elderslie, through Mr Garcia, wrote to ASIC on 8 May 2007 stating that, having reviewed the affidavits, it had decided that it did not seek to be heard on the application. (3) The person may inspect, and may make copies of, or take extracts from, any of the books. (4) The person may use, or permit the use of, any of the books for the purposes of a proceeding. (b) If the Liquidators are not reasonably satisfied that a third party's claim (that the Liquidators are not entitled or no longer entitled to the Relevant Books) is valid, the Liquidators must inform the third party of this fact and inform the third party that the third party may apply to the Court in these proceedings, within 14 days, and seek an order preventing the Liquidators from making use (including in making any claim against any person) of the Relevant Books. If the third party applies to the Court as provided by this paragraph (b), the Liquidators may not, in any way, make use of the Relevant Books (except as part of making or defending an application to the Court under this paragraph (b) or paragraph (a) above) until the third party's application to the Court has been determined. Despite paragraph 1 above, the Liquidators and ASIC have liberty to apply to the Court, on 72 hours' notice to any affected third party, in case of any urgency. 3. Such further or other orders as to the Court appear appropriate. ASIC has made a judgment, which appears to be correct, that the liquidators are entitled to gain access to the documents which it has seized. There is no dispute between them. The Court has not been asked to determine that entitlement in any binding way. There is no contradictor. The only substantive objection has been raised by Elderslie but it has not appeared in this Court to support its objection. That may have been on the assumption that what ASIC was proposing was in effect by way of a consent order between itself and the liquidators. Any assumption that such an order would be made as a matter of course is misplaced. The Court will only make an order by consent where it is satisfied that the order is within power and appropriate. In this case I do not consider that the order is appropriate. 30 ASIC says it has brought the application because of the third party concern, particularly that of Elderslie, about the use to which some of the documents may be put by the liquidators. ASIC describes the orders it seeks as effectively permitting the liquidators to have access to their books but subject to the Court's supervision and control. 31 Absent a specific controversy about the proposed release or some proposed exercise by the liquidator of its powers, it is not appropriate for the Court to be providing judicial cover in advance for a decision which is properly the function of ASIC. On the evidence before the Court, the liquidators want to have access to the documents and ASIC is satisfied that they are entitled to that access. 32 The liquidators can make their own arrangements, if they think it necessary, to give notice of any potentially contentious uses of the documents to which they have access to any third party affected by such use. If a dispute emerges, an application can be made to the Court by any person asserting a legal right or privilege as against the liquidators. In my opinion it is not appropriate for the Court to put in place a regime for judicial supervision against the possibility of a dispute which may never occur. If, as ASIC accepts, the liquidators are entitled to the documents and their access to the documents is, as ASIC also accepts, consistent with s 33, then ASIC should provide that access without further delay. If Elderslie or any other third party has a concern about the use by the liquidators of any particular document or set of documents to which they are given access then they can raise it with the liquidators. If it cannot be resolved with the liquidators then they can approach the Court to assert their legal rights. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | access by liquidator to corporate group documents seized by australian securities and investments commission under statutory powers no dispute by asic as to liquidators' entitlement large number of documents failed corporate group generalised objection to release by third party third party not appearing access proposed on conditions providing for third party applications to court appropriateness of proposed orders to court in relation to release and attached conditions ambulatory third party dispute resolution scheme inappropriate application dismissed corporations |
The applicants have subsequently produced three of the eight documents and have produced a further two of them in redacted form. They object to the production of the remaining three documents or to the production in un-redacted form of the two previously provided in redacted form. On 24 July 2006, the applicants filed a Notice of Motion seeking, in the alternative, that the respondent's Notice to Produce be set aside or that the applicants be relieved from production of the documents sought on the grounds that those documents are the subject of legal professional privilege. At the hearing, counsel for the applicants did not press to have the Notice to Produce set aside and told the Court that he was content with an order that the documents in question were relevantly privileged. Before considering these documents, it is necessary to go into some background matters. The first applicant is currently known as Rio Tinto Limited and the other applicants were, at the relevant times, wholly-owned subsidiaries of it. The first applicant was formerly known as CRA Limited. CRA Limited merged by way of a dual listing arrangement with a company then known as RTZ plc. RTZ plc is now known as Rio Tinto plc. For some time following the implementation of the dual listing arrangement, the combined group of companies was known as the RTZ-CRA group. It is not suggested that anything turns on a precise identification of which of the above entities created or received certain documents or communications and therefore, for simplicity, I will refer to all of them as the applicants except where it is necessary to distinguish them. The five documents in dispute are contained in the applicants' List of Documents and are subject to standard form claims for privilege. Further description of the claims for privilege was provided in a letter dated 16 August 2005 from the solicitors for the applicants to the solicitors for the respondent. The documents (identified by discovery number) and the description of the privilege claim are as follows: 1434 Description of the subject matter of confidential legal advice received by Bankers Trust International PLC from Mallesons Stephen Jaques, and provided to RTZ CRA. 1444 Description of the subject matter of confidential legal advice received by Bankers Trust International PLC from Mallesons Stephen Jaques, and provided to RTZ CRA. 1445 Copy of extract of legal textbook made by Mallesons Stephen Jaques for the purpose of providing confidential legal advice to Bankers Trust International PLC, with handwritten annotations made by Mallesons Stephen Jaques in connection with providing that advice and faxed by BT Co to RTZ-CRA for CRA to obtain confidential legal advice. 1780 Email from N Tiffen, CRA Corporate Counsel to F Drenth attaching draft papers drafted by N Tiffen, CRA Corporate Counsel 1898 Document drafted by N Tiffen, CRA Corporate Counsel It is apparent from these descriptions that the documents fall broadly into two categories. The first three documents relate to legal advice given by Mallesons Stephen Jaques to Bankers Trust International PLC ('Bankers Trust') and then subsequently provided to the applicants. The last two documents are internal documents drafted by a lawyer then employed by the applicants. Because the two classes of documents raise different issues, I will deal with them separately. I will call these documents collectively the 'Bankers Trust documents'. Further information about these documents is provided in an affidavit of Mr Schoenberg, the solicitor for the applicants, and by counsel for the applicants during the hearing. Document 1434 is a facsimile dated 5 May 1997 from Bankers Trust to the applicants. It encloses advice from Mallesons which is known as document 1435 and is not sought by the Notice to Produce. Document 1434 has been provided to the respondent, but with its subject line, other than the introductory word "Re:", masked. The Court was told that the masked portion of the document sets out two descriptions of areas of legal advice, one an Act of Parliament, the other a section of an Act. The applicants submit that disclosure of the masked portion of document 1434 would disclose the subject matter of the attached Mallesons advice. The applicants' counsel told the Court that nowhere in the statements of issues and contentions of any of the parties is there a reference to either the Act or the section in question. There is no doubt that a Notice to Produce may be set aside if the documents sought by it lack apparent relevance to the proceeding: Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 90 at 102-103; Seven Network Limited v News Limited (No 11) [2006] FCA 174 at [6] . In this case, the documents sought have been discovered and so are prima facie relevant. Other than the assertion from the bar table that the Act and section in question are not to be found in the statements of issues and contentions, no attempt has been made by the applicants to demonstrate that the documents are not relevant. That assertion is at any rate of limited assistance: the proceeding is still at an interlocutory stage and submissions on the substantive issues between the parties are yet to be made. The tentative submission of the applicants that document 1434 is not relevant is insufficient to displace the document's prima facie relevance. Document 1444 is a facsimile dated 6 May 1997 from Bankers Trust to the applicants. It encloses document 1445. It has been provided to the respondent with the subject heading, other than the introductory word "Re:", masked. The applicants again submit that production of the document without the masking would disclose the subject matter of the attached legal advice. The Court was told that document 1445 is a photocopy of a page of a legal textbook with handwriting and certain passages highlighted. The document was originally provided by Mallesons to Bankers Trust and then provided to the applicants under cover of document 1444. I accept that a photocopied page of a textbook, marked with handwritten comments and highlighting, may itself be a privileged communication. The circumstances of the Bankers Trust documents being provided to the applicants are far from clear. Bankers Trust was a party with whom the applicants had business dealings. It is those dealings, and the taxation implications of them, that are, in part, the subject of this proceeding. However, there is no suggestion that at any time the applicants shared with Bankers Trust common interest privilege over the documents. The applicants have tendered a draft Deed of Assignment, Legal Mortgage of Shares and Guarantee and Indemnity, all three of which were provided to the applicants by the solicitors for Bankers Trust on 4 May 1997, one day prior to document 1434, and two days prior to documents 1444 and 1445, being provided to the applicants. I tentatively accepted these draft agreements into evidence, subject to further submissions and consideration. It was submitted by the applicants that the draft agreements were later executed, on 12 May 1997, in substantially similar form. Thus they were executed after the Bankers Trust documents were provided to the applicants. The executed agreements are before the Court having been exhibited to an affidavit of Ms Kerr sworn on 3 December 2004. Each draft agreement contains a confidentiality clause which, in general terms, prohibits the parties to the agreements from disclosing "the fact that this Deed has been executed or any details of the transactions contemplated by this Deed" . Those clauses were repeated in almost identical terms in the executed versions of the agreements. I was invited to infer from the existence of the draft agreements and from the nature of commercial dealings generally, that the Bankers Trust documents were provided to the applicants in confidence and without waiving privilege. There are a number of difficulties in drawing the invited inference. The first is that there is nothing on the face of the draft agreements that affects the legal rights of the applicants. None of them is a party to any of the agreements and they are not asked in the covering letter to observe any of the terms of them. It is true that by the time the agreements were executed, CRA Limited (the former name of Rio Tinto Limited) had replaced one of the parties named in the draft agreements. However there is no evidence of how or why that substitution took place. All that is before the Court is the rather cryptic remark in the letter enclosing the draft agreements that "Please note that these drafts do not reflect that RTZ/CRA will be using more than one entity, this will be reflected in the next drafts. " Secondly, it is not clear that the draft agreements would, had they been executed in identical form, bind Bankers Trust. The three draft agreements are between two Bankers Trust entities, neither of which is the one to which the legal advice enclosed with documents 1434 and 1444 was addressed. The Bankers Trust entity that ultimately executed the agreements is one of those named in the draft agreements, and thus not the entity which provided them to the applicants. Finally, the confidentiality provisions are silent on the question of legal advice; there is no evidence before the Court that the Bankers Trust documents would attract the operation of the confidentiality provisions. For all of these reasons, I decline to infer from the draft agreements that the Bankers Trust documents were provided to the applicants in confidence. Given that I have referred to the draft agreements at length in these reasons, it is appropriate that I accept them into evidence. It is clear that privilege in the Bankers Trust documents, if any, is that of Bankers Trust. The Mallesons advice that is connected with those documents was provided to Bankers Trust. There is no evidence as to whether it was intended that the advice should then be passed on to the applicants. Bankers Trust did not make any submissions to the Court concerning the privilege of its documents, although it is clear from Mr Schoenberg's affidavit that its view on maintaining any privilege in the documents the subject of the Notice to Produce was sought. In particular, Mr Schoenberg deposes that Bankers Trust "wishes to maintain its claim for legal professional privilege over documents numbered 1434, 1444 and 1445 and has requested that the applicants maintain privilege in these documents" . The applicants submit that they are entitled to assert privilege in these documents on behalf of Bankers Trust. The definition is a non-exhaustive list of categories, all but one of which are not presently relevant. Paragraph (b) is "an employee or agent of a client" . It follows that if the applicants can show that, for the purpose of maintaining privilege over the Bankers Trust documents, they are the agents of Bankers Trust, then they are entitled to assert that privilege on Bankers Trust's behalf. But no evidence was led to the effect that the applicants were Bankers Trust's agents. There was a suggestion by the applicants that they were bailees of the documents and could assert Bankers Trust's privilege in that capacity. This was met by a submission from the respondent that because the documents were sent by facsimile to the applicants there could be no bailment. This submission misunderstands the subject matter of legal professional privilege. The privilege attaches to communications and not the pieces of paper and other media on which they are recorded. A communication is essentially information and the law knows no concept of the bailment of information. For the same reason, the applicants' bailment suggestion is unsound. The obligation to prove that a communication is privileged rests with the party asserting privilege: Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674 at 689. That obligation is not discharged merely by an assertion of privilege in an affidavit verifying a list of documents: National Crime Authority v S (1991) 29 FCR 203 at 211. That is especially so where, as in this case, the assertion in the affidavit wrongly describes the privilege as belonging to the applicants rather than to Bankers Trust. Other than what is recorded at [23] and [24], no reason was given why the applicants could assert any privilege that may have attached to the documents in Bankers Trust's hands. It may be that a party to whom privileged documents are provided in circumstances that are not inconsistent with the maintenance of privilege, has a general or limited right to assert that privilege on behalf of that person. I need not decide that question here for the applicants have failed to lead any evidence of the circumstances of the provision of the documents to them. In particular, they have not proved that the provision of the documents to them was done in circumstances that were consistent with the maintenance of privilege: see Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1. The only evidence is the brief reference in Mr Schoenberg's affidavit to Bankers Trust requesting the applicants to maintain privilege in the documents. It is to be inferred that the request was not made at the time the documents were provided to the applicants, but at a later stage. It follows from what I have said that the applicants have also failed to prove that privilege in the Bankers Trust documents was not waived. Where a document which is privileged, or alleged to be privileged, in the hands of the client for whom it was prepared, is then provided to a third party, the party claiming privilege bears the burden of proving that the provision of that document to the third party did not waive privilege. That burden will be discharged by showing that the circumstances of the provision of the document to the third party were not such as to constitute "inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege" : Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at 13 per Gleeson CJ, Gaudron, Gummow and Callinan JJ. An ex post facto request by the client for the third party to maintain the privilege does not discharge the burden. For these reasons, it follows that the applicants have failed to prove that they are entitled to assert privilege over the Bankers Trust documents, assuming they are privileged in Bankers Trust's hands. The motion in respect of these documents must be dismissed. Mr Tiffen has not given any evidence concerning these documents or the circumstances of their creation. However Mr Schoenberg deposes that he has been informed of certain matters by Mr Tiffen. According to Mr Schoenberg, Mr Tiffen was asked by Mr Drenth, then an employee of the applicants, to "advise him on the form of resolutions required by the Boards of certain Rio Tinto group companies to authorise those companies to enter into certain transactions" and that Mr Tiffen prepared document 1780, which is an email attaching draft board papers, in response to that request. According to Mr Schoenberg, Mr Tiffen did so in his capacity as an in-house legal counsel of the applicants and for the dominant purpose of providing Mr Drenth with legal advice. Document 1898 is a suggested outline of matters to be attended to and resolved at a meeting of the board of Rio Tinto Limited. According to Mr Schoenberg, it was prepared by Mr Tiffen in his capacity as in-house counsel and provided to the Chairman of the board for the purpose of providing the Chairman with legal advice on certain legal issues to be attended to by the board. It is understandable that the respondent is suspicious of documents prepared by senior in-house counsel for the board of directors. In contemporary companies, senior lawyers increasingly often play management roles which will sometimes involve them creating documents that are not for the dominant purpose of providing legal advice. The descriptions provided by the appellant of the Tiffen documents, supplemented by the evidence of Mr Schoenberg, do not demonstrate conclusively that the documents are privileged. In such circumstances, often the only possible course of action is for the party claiming privilege to provide the documents to the Court and have the Court determine if the claim can be maintained: see Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674 at 689. This is what has occurred in this case. I have been provided by the applicants with copies of the Tiffen documents. Such copies have not, as I understand it, been provided to the respondent. I have reviewed the two documents. It is inappropriate for me to say anything more about the documents than has been said in open Court in evidence and submissions. I should, however, set out my approach to determining whether the documents are privileged. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and the client. ... Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. A letter from the client containing information may end with such words as 'please advise me what I should do'. But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice. Moreover, legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context. First, to qualify as privileged, the lawyer's advice must satisfy the description of professional advice given by a lawyer in his or her capacity as such ... Secondly, communications for the purpose of obtaining and giving legal advice in the sense discussed in Balabel and the other cases mentioned above must satisfy the dominant purpose test if they are to attract legal professional privilege. Such lawyers are less likely to be provided with a bundle of documents and asked to "advise me what I should do", but it is implicit in their role that they are to advise on legal matters that arise in the course of their employment. Counsel for the applicants described documents 1780 and 1898 respectively as "pro forma matters to be attended to by the board in order to pass certain resolutions, to give effect to approvals by the board to enter into particular legal transactions" and a list of "a number of matters that has to be attended by the board, for the purpose of giving effect to --- or making effective, particular resolutions" . I accept that such documents, while not formal opinions of the law, may constitute legal advice and, if prepared for that dominant purpose, may attract legal professional privilege. They may be, to adopt the words used in Balabel , "advice as to what should prudently and sensibly be done in the relevant legal context" . As well as considering whether the Tiffen documents constitute legal advice, I must also consider whether the provision of legal advice was the dominant purpose of their creation. Many adjectives have been used in an attempt to identify the dominant purpose of a communication. For present purposes it is sufficient to note that a dominant purpose is one that is of greater importance than any other: see Federal Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at 478. The respondent submits that the dominant purpose of document 1898 appears to be the convening of a meeting to discuss identified matters. He makes no submission on what the dominant purpose of document 1780 is, save to say that the applicants have failed to discharge their burden of demonstrating that the dominant purpose test is satisfied. Having considered the Tiffen documents in light of the above principles, I have formed the view that each of them is subject to legal professional privilege. It is true that each of them each of them has a "corporate governance" purpose, but I am satisfied that this is not the dominant purpose of the communications contained within the documents but rather is the context in which the legal advice was given. I accept that the descriptions of the documents given to the Court by counsel for the applicants and set out at [37] are generally accurate and reflect the dominant purposes for which they were prepared. Accordingly, I will grant the applicants relief from production of documents 1780 and 1898 on the grounds that the are the subject of legal professional privilege. In those circumstances, it is appropriate that each party bear its own costs of the motion. | legal professional privilege whether capable of being asserted by a third party whether waived where provided to third party where no evidence of the circumstances of the provision meaning of "legal advice" evidence |
2 The decision of the Tribunal was dated 5 February 2007. The Tribunal affirmed the decision of a delegate of the Minister not to grant the appellant a protection visa. 3 The issue which arises on the appeal involves a short question of construing the reasons for decision given by the Tribunal. The substance of the submissions made by counsel for the appellant is that the Tribunal failed to properly apply the real chance test stated by the High Court in Chan v Minister for Immigration and Ethnic Affairs [1989] HCA 62 ; (1989) 169 CLR 379, as subsequently explained by the High Court in Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559 at 572. 4 This issue turns solely upon what the Tribunal meant in two sentences of its findings and reasons, to which I will refer below. Nevertheless, it is necessary to set out, in some short detail, the background to the matter in order to make clear how the issue now raised on the appeal comes before the Court. 5 The appellant is a citizen of Lebanon. He arrived in Australia on 31 March 2001. He claimed to have a well-founded fear of persecution on political grounds by reason of his former membership of the Lebanese Forces. He claimed that before leaving Lebanon, he had been detained and harassed by the authorities in Lebanon comprised essentially of the Lebanese security forces. 6 The Tribunal set out in some detail the country information which explained the role of the Lebanese Forces as a Christian militia engaged in fighting in the Lebanese civil war and the events which followed the end of the civil war. 7 It is unnecessary to refer to the country information in detail, but it shows that the situation which applied at the time when the matter was before the Tribunal was that the main political divisions in Lebanon were defined by reference to the attitudes of different groups towards Syria. The division was not on religious lines. 8 The main actors of the pro-Syrian block were the Hezbollah and some elements of the Christian Maronites, led by a number of people, including General Aoun. The other block, which comprised the anti-Syrian element, was known as the "March 14 Coalition". It included the members of the Lebanese Forces, described by the acronym LF, and other groups within Lebanon, as more fully spelt out in the country information. 9 The Tribunal accepted that the appellant is a former LF member and supporter. It accepted that there had been a general amnesty for LF members in Lebanon and abroad, but it did not accept the appellant's claimed belief that he would be targeted by the security forces of Lebanon. 10 The Tribunal then turned to the question of whether the appellant feared harm at the hands of non-state actors. It accepted that there was currently inter-political conflict in Lebanon, which involved the LF as a part of the March 14 Coalition. The conflict was found to be specifically with Hezbollah and General Aoun's Maronite Christian grouping. 11 It is the next two sentences which are critical to the issue, which arises on the appeal, and I will set them out in full. However, the Tribunal finds that the chance of the applicant suffering serious harm in such a situation, given the sporadic nature of such conflict, would not be such as to amount to a real chance. The Tribunal found that the appellant did not have a well-founded fear of persecution for reason of his political opinion or for any other Convention reason. 13 The Federal Magistrate found that the Tribunal had stated the real chance test properly and in accordance with the authorities. The learned Federal Magistrate went on to find, in particular at [13] to [15], that the Tribunal, having set out the correct test, made a finding of fact as to the assessment of whether there was a "real chance. " Accordingly, the Federal Magistrate found that there was no jurisdictional error on the part of the Tribunal. 14 The submissions of the parties were effectively distilled in written argument and in the oral submissions of counsel this afternoon. Mr Kennett, who appears for the Minister, submits that the finding in the first sentence, which I have set out above, is limited to an assessment that there is a chance of serious harm. He submits that the Tribunal goes on in the second sentence to determine that the chance is not a real chance. In his submission, a fair reading of the reasons construed in this way, shows that the Tribunal made a finding on the probabilities (or lack thereof) in accordance with the test stated in Chan and explained in Guo . 15 Mr Young, who appears for the appellant, submits with some force that the first sentence appears to be a finding that there is a real chance. He submits that whatever the effect of the second sentence, it is not expressed in language which reflects the concept as explained in Chan and Guo . It states that a fear is well-founded when there is a real substantial basis for it. 16 He submits that when one looks at the two seminal High Court decisions on this topic, a fear of persecution is not well-founded if it is merely assumed or if it is mere speculation. A real chance is one that is not remote or insubstantial or a far-fetched possibility. 17 Mr Young submits that that was not the approach that was taken by the Tribunal in the second sentence, which I have set out above. Mr Young submits that the Tribunal wrongly focused upon and made a finding about the "sporadic nature" of the conflict, which does not go to the question of the assessment of probabilities or whether the chance is not remote or insubstantial or far-fetched. 18 The High Court in Minister for Immigration and Multicultural Affairs v Yusuf (2001)206 CLR 323 at [68]-[69] said that the obligation to state reasons ensures that the person affected by the reasons can identify "with certainty" what reasons the Tribunal had for reaching its conclusion. The reasons in the present case come close to offending the requirement, but I am satisfied that they are sufficient to comply with it. Notwithstanding the brevity of the reasons of the Tribunal, it seems to me that on a fair reading of the two sentences, which must be read together, the second sentence is a qualification of the first. 19 There may well be grounds for complaint that the Tribunal made an error in factual finding, but without more that does not give rise to jurisdictional error. 20 In my view, reading the two sentences together in accordance with the approach taken in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 and in other authorities, the two sentences must be construed in the way in which Mr Kennett submitted. That is to say, the first sentence is confined to an assessment of whether there is a chance of serious harm; the second is an assessment of the probabilities in a way that shows a proper, although in my view a barely satisfactory, application of the real chance test, as stated by the High Court. 21 It follows, in my opinion, that the appeal must be dismissed, with costs. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | tribunal refused application for protection visa serious harm "real chance" test properly applied migration law |
Those proceedings were brought on 28 March 2008 by Consolidated Byrnes Holdings Limited (CBH) and Alpha Asset Group Pty Ltd (Alpha) to wind up Hardel Investments Pty Limited (Hardel) and Avpri Pty Limited (Avpri) (the winding up proceedings). CBH and Alpha relied upon the presumption of insolvency created in the Corporations Act 2001 (Cth) (the Corporations Act ) when a "corporation had failed to comply with a statutory demand served upon it": s 459C(2)(a). In the winding up proceedings CBH and Alpha claimed that they had served statutory demands upon Hardel and Avpri on 18 December 2007 for debts which were then due and payable together with an affidavit that verified that the debts were then due and payable: s 459E(2) and s 459E(3). They claimed to be entitled to the debts by way of assignment dated 17 December 2007 from Contor Developments Pty Ltd (Contor) and Cobra Services Pty Ltd (Cobra): s 459E(4). Hardel and Avpri claimed in the winding up proceedings that they did not receive or were not served with any statutory demand prior to the issue of the winding up proceedings on 28 March 2008 or service of the winding up proceedings on 7 April 2008. They also claimed that there was a dispute as to whether any monies were owed to Contor or Cobra. Hardel and Avpri disputed the claim that they were insolvent. Further, they disputed that if there were debts they had been validly assigned to CBH and Alpha. The matters of dispute were made known to CBH and Alpha and a number of other relevant persons prior to the commencement of the winding up proceedings. CBH and Alpha were always on notice before the commencement of the winding up proceedings that the debts were a matter of dispute and that Hardel and Avpri claimed they had never been served with any statutory demands. However, CBH and Alpha commenced the winding up proceedings. The winding up proceedings were commenced in accordance with the Federal Court (Corporations) Rules 2000 (Cth) (the Rules). An affidavit was filed in accordance with rule 5.4(2) which purported to verify service of the statutory demand, the failure of Hardel and Avpri to comply and a claim that the debts were still due and payable. The statutory demand and the affidavit accompanying the statutory demand which were said to be served on Hardel and Avpri on 18 December 2007 were exhibited to the affidavit. On 28 April 2008 (within 21 days of service of the winding up proceedings) Hardel and Avpri commenced this proceeding pursuant to s 459G of the Corporations Act seeking the following orders: That the Statutory Demands purported to be served by the Respondents on each of the Applicants on 7 April 2008 be set aside pursuant to section 459H of the Corporations Act . In the alternative to paragraph 1 herein, that the Statutory Demands purported to be served on the Applicants by the Respondents on 7 April 2008 be set aside pursuant to section 459J of the Corporations Act . That the Respondents pay the Applicants' costs of this application. He deposed in his affidavit to the grounds of opposition to the winding up proceedings and generally to the relevant history to the date of his affidavit. He said: On or about 3 April 2008, I instructed JWS [Johnson Winter & Slattery, Hardel and Avpri's solicitors] to write to Simmons & McCartney [CBH's and Alpha's solicitors] and inform them that we were aware that winding up applications had been filed, but had not been served, and that such winding up applications were themselves based upon statutory demands that had not been served. Now produced and shown to me and marked "PWH40" is a true copy of that letter. On 7 April 2008, Hardel and Avpri were served with the within application, and the application in Action No. 425 of 2008, at their registered office. On or about 8 April 2008, JWS received an email from Grant McCartney in response to their above letter. JWS forwarded a copy of that email to me. Now produced and shown to me and marked "PWH41" is a true copy of the email. I note that although an unsigned statutory demand has now been received by Avpri and Hardel, in the form attached to the Originating Process in Actions numbered NSD 424 of 2008 and NSD 425 of 2008, no statutory demand has been received at all that is signed and accompanied by a sworn affidavit. I have never sighted a copy, and neither Hardel nor Avpri has received, or had delivered to it, an original or a copy of a statutory demand signed on behalf of CBH or Alpha. In addition, a personal names search of the records maintained by the Australian Securities and Investments Commission demonstrates that Mr Byrnes was disqualified from managing a corporation as at the date of allegedly signing the statutory demands. Now produced and shown to me and marked "PWH42" is a true copy of the personal names search for Mr Byrnes. Despite the failure to serve Hardel and Avpri with a copy of the statutory demands, out of an abundance of caution, Hardel and Avpri have filed applications pursuant to section 459G of the Corporations Act to set aside the Hardel Statutory Demand and the Avpri Statutory Demand. The affidavits of Mr Byrnes purportedly accompanying the demands did not comply with the requirements of section 459E(3) in that they did not properly verify the debts or give proper notice to Hardel or Avpri of the basis for the alleged indebtedness. 101.2. at the time that CBH and Alpha assert that the statutory demands were served on Avpri and Hardel, there was no valid assignment of the Alleged Debts and/or proper notice of any assignment had not been provided. 101.3. Hardel and Avpri dispute the existence of the Alleged Debts and/or have offsetting claims against the Alleged Debts. Up to date accounts of both companies are still in the process of being prepared and are not presently available. I would wish the opportunity to supplement this affidavit in relation to solvency if that becomes necessary. This proceeding was commenced in case it was argued by CBH and Alpha that, even if the Court found that the statutory demands were not served on 18 December 2007, service of the winding up proceedings constituted service of the statutory demands and the affidavit accompanying those statutory demands. The proceeding was commenced, as Mr Harris' affidavit shows, out of an abundance of caution. On 27 August 2008 I dismissed the winding up proceedings, as my reasons show, for a failure by CBH and Alpha to comply with my directions and to prosecute the proceedings. After I dismissed those proceedings Hardel and Avpri sought an order that CBH and Alpha pay their costs on an indemnity basis. Later still they sought an order that certain non-parties, Mr and Mrs Byrnes who are associated with CBH, Dr and Mrs Low who are associated with Alpha, and Mr and Mrs Lazar who are associated with CBH, Alpha, Mr Byrnes and Dr Low and their solicitors, Messrs Simmons and McCartney, also pay their costs on an indemnity basis. Mr James Warren Byrnes be joined as a defendant to the proceedings. Mrs Catherine Gina Byrnes be joined as a defendant to the proceeding. Dr Justin Peter Low be joined as a defendant to the proceeding. Mrs Elizabeth Laura Low be joined as a defendant to the proceeding. Messrs Simmons and McCartney be joined as a defendant to the proceeding. The plaintiffs and each of Mr James Warren Byrnes, Mrs Catherine Gina Byrnes, Dr Justin Peter Low, Mrs Elizabeth Laura Low and Messrs Simmons and McCartney pay the defendant's, [Hardel Investments Pty Limited ACN 083 276 000 and Avpri Pty Limited ACN 109 814 057], costs on an indemnity basis. The costs referred to in paragraph 7 hereof shall include the costs of the preparation, swearing and filing of the affidavit of Peter William Harris sworn on 28 April 2008 and filed in action number NSD 584 of 2008. Hardel and Avpri now seek orders in this proceeding joining the same non-parties as they sought to be joined in the winding up proceedings. They also seek orders that CBH and Alpha and the non-parties pay their costs on an indemnity basis. CBH and Alpha deny that they should be ordered to pay the costs of this proceeding at all. Indeed, they seek an order that Hardel and Avpri pay their costs. They contend that this proceeding was unnecessary and whatever the fate of the winding up proceedings, this proceeding should be dismissed and Hardel and Avpri should pay their costs. I think that contention must be the starting point for determining where the burden of costs should lie. If CBH's and Alpha's contention is upheld and the proceeding held to be unnecessary, it is unlikely that CBH and Alpha would be obliged to pay Hardel's and Avpri's costs. It would be even more unlikely that any order would be made against a non-party. There is no evidence that any party, including any non-party, ever suggested that if the winding up proceedings failed because it was found that CBH and Alpha had not served the statutory demands, that the statutory demands which were exhibited to the affidavit accompanying the original process could serve as statutory demands for the purpose of Part 5.4 of the Corporations Act . However, Hardel and Avpri brought this proceeding in case such a suggestion was made. In my opinion, this proceeding was unnecessary. I think it reflects a far too cautious approach to the issues which were before the Court. Not only was the suggestion in the previous paragraph never made, in my opinion, the suggestion could not have been made. The originating processes in the winding up proceedings both had annexed a "statutory demand" dated 18 December 2007 and an "affidavit" of James Warren Byrnes also dated 18 December 2007. All three documents were also exhibited to an affidavit of Mr Byrnes sworn on 19 March 2008. The statutory demand was not signed. The affidavit dated 18 December 2007 was not sworn. Section 459E of the Corporations Act provides for service on a company of a statutory demand. Section 459E(2)(f) relevantly provides that the statutory demand must be signed by or on behalf of the creditor. The statutory demand was not signed at all. Section 459E(3) provides that the statutory demand must be accompanied by an affidavit that verifies that the debt is due and payable by the company and complies with the rules. Rule 5.2(b) of the Rules provides that the affidavit must be made by the creditor or by a person with the authority of the creditor. This "affidavit" was unsigned and was therefore not made by anyone. The "statutory demand" and the "affidavit" did not, when they were annexed to the originating process or exhibited to the affidavit in support of that process, comply with s 459E and therefore could not have been relied upon by CBH and Alpha as not having been complied with for the purpose of s 459F. There was therefore no need for Hardel and Avpri to apply to set aside the statutory demand under s 459G. I am mindful of the definition of "statutory demand" in s 9 of the Corporations Act as it means a document that is or purports to be a demand under s 459E. However, the document annexed to the originating process and exhibited to the affidavit in support of the originating process did not purport to be a different statutory demand to that which was said by CBH and Alpha to have been served on 18 December 2007. I think this proceeding was, as CBH and Alpha contend, unnecessary. In the winding up proceedings I have been critical of CBH and Alpha and the non-parties, who I ordered to be joined as defendants to those proceedings, but that does not mean that they should be called upon to pay costs in a proceeding which I have deemed to be unnecessary. I refuse Hardel and Avpri's application that the costs of this proceeding be paid by the defendants or any of the non-parties. It follows that there is no need to consider the plaintiffs'' application to join the non-parties as defendants to the proceeding. That leaves for consideration the defendants', CBH and Alpha, claim for costs against Hardel and Avpri. The defendants have, for the reasons given in the winding up proceedings, behaved badly. They did not in this proceeding at any time advise Hardel and Avpri that they did not intend to rely on the documents annexed to the originating process or the accompanying affidavits as a separate process for an application to wind up Hardel and Avpri. Their failure to do so is consistent with the behaviour which I have identified in the winding up proceedings. Moreover, they have not filed any documents in this proceeding, although they did file written submissions opposing the plaintiffs' claim for costs and seeking costs. Little time was spent on submissions or what orders should be made in this proceeding. Although CBH and Alpha and the non-parties have successfully resisted Hardel and Avpri's claim for costs, it does not follow that they should obtain an order for costs. I think justice would be served in this proceeding if there be no order for costs. That will be the order of the Court. No order bringing this proceeding to an end has yet been made. All parties agree that the proceeding should be ended. There will be an order dismissing this proceeding. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | application pursuant to s 459g of the corporations act 2001 (cth) to set aside statutory demands issued against plaintiffs whether initiation of winding up procedures could be considered service of statutory demand where initiation of proceeding was unnecessary proceeding dismissed costs where plaintiffs sought indemnity costs from defendants and non-parties where defendants sought costs where proceedings were unnecessary no order for costs made corporations practice and procedure |
The matter has been adjourned on a number of occasions and Mr Brett Cameron Smallwood, who is a director of the defendant, appears in person and seeks to rebut the presumption of insolvency arising by reason of a failure on the part of the defendant to comply with a statutory demand served on 1 February 2008. The failure to comply with the demand thus arose on 22 February 2008. 2 Mr Smallwood has sworn a number of affidavits in the matter, including affidavits sworn on 28 April 2008 and 29 April 2008. Mr Stephen Peruinder Singh Dhillon has sworn an affidavit on 7 April 2008 in the proceeding which exhibits correspondence received by the Australian Taxation Office from Mr Smallwood and, more importantly, copies of four contracts of sale of lots of land by the defendant. Three of the contracts, each made on 16 April 2008, involve sales of lots by the defendant to an entity described in the contracts of sale, as BC and GM Smallwood Family Trust. Mr Smallwood, in addition to the sworn affidavits, has given oral evidence from the witness box about these contracts. 3 Each of these contracts is made by the defendant in favour of a buyer as trustee of the nominated trust which is the family trust of Mr Smallwood's family. Each contract recites a consideration of $120,000 with a deposit paid of $1000. That deposit has been paid to the agents for the vendor. The balance purchase monies are to be funded by the trustee of the trust by making application to the Commonwealth Bank for loan funds to facilitate each purchase. In Mr Smallwood's oral evidence, he explained that the Commonwealth Bank is not his normal banker but by reason of a particular introduction, he was able to make an approach to the Commonwealth Bank and complete a loan application form which was sent to a gentleman called 'James', who is an officer of the Commonwealth Bank in Sydney. 4 Mr Smallwood had a conversation this gentleman called James recently and sent some further information on behalf of the trustee of the trust and, no doubt, other financial information to the Commonwealth Bank. Mr Smallwood says that he was anticipating hearing a response as to the success or otherwise of that application this week but has not done so and he proposes to talk to James again this afternoon with an expectation that he might hear something favourable or unfavourable next week. The remaining contract is a contract in favour of a company called Laverton Corporation Pty Ltd and the purchase price recited in that contract is $110,000. 5 Each of the first three contracts were entered into on 16 April and seemed to emerge in circumstances where there was some pressing urgency about this very application. According to the affidavit material, the calculations that I have made suggest that if each of these four contracts proceeds to settlement, sale proceeds of $470,000 would be generated. There is a debt due to a Mr Benson of $120,000 which is secured by consent caveats granted by the defendant over the blocks of land and there is a debt due to the National Australia Bank of $218,000. The present debt due to the Deputy Commissioner of Taxation is approximately $120,000 which would result in a balance surplus proceeds of $12,000, assuming finance is obtained and those contracts settle so as to realise the value of the sale price in each case. 6 A further matter arises in relation to a recent GST audit which was conducted, involving transactions associated with the defendant. The result of the audit is that the Deputy Commissioner contends that there is a further amount of additional tax payable of $55,427.79, and that sum falls due as debt due to the Commonwealth on 21 May 2008. Mr Smallwood contends that the defendant proposes to lodge an objection to the GST assessment arising out of the audit and that having regard to documents which were not made available to, or obtained by, the Australian Taxation Office, the result of an objection, taking account of all of those documents, would be that there would be no additional taxation liability and moreover there would be a refund of $60,000. 7 There is not sufficient material before the Court to make any informed assessment of the merits or otherwise of that objection, and for present purposes I simply put to one side the GST liability in any event since it does not fall due until 21 May 2008. The present question is whether or not in respect of debts which are due and payable by the defendant to the plaintiff, the defendant has, by proper admissible evidence, discharged the onus of rebutting the presumption of insolvency. I am not prepared to rely upon the evidence in relation to the finance application to the Commonwealth Bank. 8 There is no affidavit which deposes in detail to the chronology or sequence of conversations between Mr Smallwood and the Commonwealth Bank, nor the loan application documents, nor copies of materials sent to the Commonwealth Bank, nor any information in relation to the officer of the Commonwealth Bank or the branch, and in particular, no specificity is given about the gentleman with whom Mr Smallwood has been dealing. He can only be identified by reference to the Christian name 'James'. 9 Accordingly, because I am not satisfied, on the evidence, that the presumption of insolvency has been rebutted, the company is, as a matter of law, insolvent. (3) The plaintiff's costs of the application, fixed in the sum of $1091.92 be reimbursed as a priority out of the funds of the liquidation. | consideration of an application for a winding-up order and evidence relied upon by the defendant to rebut a presumption of insolvency insolvency |
The majority of those retail stores were franchisees of the relevant business name. 2 The relevant franchisor would appear to have been one or other of the companies in the 'Betta Group,' which comprised Betta Stores Limited ACN 009 710 605 ('Betta Stores'), Betta Stores (Southern) Pty Limited ACN 059 881 220 ('BSS'), Betta Stores (Northern) Pty Limited ACN 112 330 944 ('BSN'), A.K. Truscott Investments Pty Limited ACN 007 818 493, Truscott Electronics Pty Limited ACN 007 549 206 ('TE'), Truscott Finance Pty Limited ACN 007 598 389, PGA & Associates Pty Limited ACN 007 755 615 and BSL Finance Pty Limited ACN 058 061 822 ('BSLF'). 3 The principal banker to the Betta Group would appear to have been Commonwealth Bank of Australia ('the CBA'). 4 The several companies in the Betta Group would appear to have given fixed and floating charges to the CBA to secure the payment of monies outstanding from time to time to the CBA. None of the relevant security documents are presently in evidence. 5 It is common ground that on 5 October 2006 the respondents, Philip Patrick Carter and David Laurence McEvoy, who are partners in the firm of chartered accountants known as PricewaterhouseCoopers, were appointed by the CBA as receivers and managers of Betta Stores, BSS, A. K. Truscott Investments Pty Limited and BSLF. The respondents were also appointed as receivers and managers of TE, Truscott Finance Pty Limited and PGA & Associates Pty Limited on the same day. 6 On the following day, namely 6 October 2006, the respondents were appointed as receivers and managers of BSN also. 7 The nine applicants, Acer Computer Australia Pty Limited, Audio Products Group Pty Limited, Hagemeyer Brands Australia Pty Limited, Ingram Micro Pty Limited, Panasonic Australia Pty Limited, Pebble Electronics Pty Limited, Think Appliances Pty Limited, Grundig Australia Pty Limited and Fujitsu General (Aust. ) Pty Limited, were all suppliers of goods which were offered for sale in the various retail stores trading under the 'Betta Electrical', 'Betta', 'Chandlers' or 'Truscotts' names. At the time of the appointment of the respondents as receivers and managers of the various companies in the Betta Group, the holding company was Betta Stores. 8 In 2006 there were about 140 franchisees of one or other of the 'Betta Electrical', 'Betta', 'Chandlers' and 'Truscotts' names. They conducted their respective businesses through approximately 240 separate retail outlets. In addition to franchisees, a small number of companies within the Betta Group itself operated retail stores. These included TE, which operated eight stores in the Adelaide area, BSN, which operated four stores in Queensland, and BSS, which operated eight stores in Victoria and the Northern Territory. 9 By 5 October 2006 BSN had closed down three of its four stores, leaving it with one retail outlet, and BSS had closed down six of its stores, leaving it with two retail outlets. 10 At this stage in the proceedings there is no agreement between the parties as to the terms and conditions on which goods were supplied by the several applicants nor is there agreement as to the identity of the company or companies or individuals which were supplied with the various goods that were offered for sale through the various stores which traded under one or other of the 'Betta Electrical', 'Betta', 'Chandlers' and 'Truscotts' names. 11 Each of the applicants contends that the relevant purchaser was bound by its terms and conditions. Insofar as the purchaser/s may have been one or other of the companies within the Betta Group there may have been 'terms and conditions of purchase' propounded by Betta Stores and/or BSLF, some or all of which may have formed part of the various agreements for sale of the goods that were supplied. 12 At the heart of the applicants' cases lies the question of whether or not the relevant supplier of goods remained the owner of those goods until such time as payment for them had been effected and whether or not the proceeds of sale of them to third parties were in some way or another impressed with a trust such that the proceeds of sale, or at least part thereof, were held in trust for the supplier and thus not available to the CBA as the holder of equitable charges under which the respondents were appointed. 13 Where goods were supplied directly by one or other of the applicants to one or other of the 'Betta Electrical', 'Betta', 'Chandlers' or 'Truscotts' franchisees, no bailment, trust or other issues are likely to arise in these proceedings except, perhaps, in relation to entitlements which one or other of the members of the Betta Group may have had to receive a rebate from the relevant supplier in respect of the sales to those franchisees. 15 It would appear that some time after 1 March 2004 the Betta Group caused a set of 'TERMS AND CONDITIONS OF PURCHASE' forms to be printed bearing a 'BSL' logo against the name of Betta Stores and also against the name of BSLF. The printed terms and conditions were 3 pages in length and bore the document code 'BSLF1-01/03/04'. The matters covered by the Betta Group terms and conditions of purchase included 'CONDITIONS PRECEDENT', 'TERMS OF PURCHASE', 'QUOTATIONS AND PRICES', 'PRICE PROTECTION', 'DELIVERY', 'REJECTION OR NON DELIVERY OF GOODS', 'TERMS OF PAYMENT', 'GOODS AND SERVICES TAX AND OTHER FEES AND TAXES', 'WARRANTIES', 'INDEMNITY', 'PASSING OF RISK AND RETENTION OF TITLE', 'DEFAULT', 'DISPUTES', 'FORCE MAJEURE', 'APPLICABLE LAW', 'SET OFF' and 'CONFIDENTIALITY'. It is unnecessary to set out the Betta Group's standard terms and conditions of purchase in detail for the purposes of this judgment. The standard terms and conditions included provision at the outset for the insertion of the name of a supplier to be referred to as 'supplier' in the document. In these terms and conditions the term "Company" means BSL Finance Pty Ltd ACN 058 061 822 and its Related Corporations. These conditions replace any previous terms and conditions of purchase or sale. All other rebates to be paid to the Company or BSL in accordance with the Group Trading Agreement shall not be effected by invoicing under these Purchase Terms. An early settlement allowance as set out in the Group Trading Terms will be available on nett weekly basis. Invoices dated between Monday and Friday in any given week will qualify for the settlement allowance if paid in full within 7 days from the end of week (being Friday) in which invoice is raised. If the Company and the Supplier have not agreed on any terms of payment, the Company will pay all invoices on the payment terms as contained in the Supplier's standard terms and conditions provided to the Company. If the Supplier supplies Goods to an Approved Retailer at a price higher than the BSL Invoice Price at the time of the order, the Supplier must either pay or credit the difference. Should the Company fail to pay the full amount for any Goods, the Supplier may not charge the Approved Retailer with any penalty, including without limitation interest or any other charge on the total overdue amount. 17 In the case of the first applicant, Acer Computer Australia Pty Limited, a Betta Group standard 'TERMS AND CONDITIONS OF PURCHASE' was prepared nominating that company as the 'Supplier'. The document was apparently signed by one Emma Carpenter as Credit Controller on 5 July 2005. No early settlement allowance percentage was inserted in the relevant 'SCHEDULE'. 18 A copy of the Betta Group standard terms and conditions of purchase was also prepared for use in respect of 'Audio Products' as the relevant 'Supplier', presumably intended as a reference to the second applicant, Audio Products Group Pty Limited. That document was completed with the insertion of the numeral 3 in the schedule and the addition of certain words in manuscript, the effect of which was to indicate that the relevant early settlement allowance would be 3% 'if paid within 7 working days'. The form was signed on behalf of 'Audio Products' by John Verteouris as Financial Controller on 20 June 2005. 19 Another copy of the Betta Group's standard terms and conditions of purchase included the name Panasonic Australia Limited ABN 83 001 592 187 as the relevant 'Supplier', presumably intended as a reference to the fifth applicant, Panasonic Australia Pty Limited ACN 001 592 187. 20 Whilst the document identification number was the same as that used on the forms completed for Acer Computer Australia Pty Limited and 'Audio Products', which bore the dates 5 July 2005 and 20 June 2005 respectively, the form signed by G Day as a director of 'Panasonic Australia Limited ABN 83 001 592 187' on 21 October 2004 incorporated a different logo for BSLF and omitted space for the inclusion of an early settlement allowance figure in a schedule following clause 35 dealing with confidentiality. Unlike the Betta Group standard terms and conditions of purchase documents prepared for use in respect of Acer Computer Australia Pty Limited and 'Audio Products', the standard terms and conditions of purchase in the case of 'Panasonic Australia Limited ABN 83 001 592 187' were also signed for and on behalf of Betta Stores by Nicole T Quinn as legal counsel and on behalf of BSLF and its Related Corporations by David Goode as GM-Finance. 21 There is presently no set of standard 'Group Trading Terms' in evidence which might answer the description of the 'Group Trading Terms' mentioned in clause 19 of the Betta Group standard terms and conditions of purchase. The second page of the document refers to it as a Betta Stores and BSLF 'GROUP TRADING AGREEMENT' in which the supplier is shown as Hagemeyer Brands Australia Pty Ltd. The second and third pages of the document contained detailed information under the headings 'GENERAL DETAILS', 'CONTACT', 'PERIOD OF AGREEMENT', 'PRICING POLICIES', 'WARRANTY/SERVICE' and 'FREIGHT ARRANGEMENTS' followed by material under the headings 'REBATES --- PAID DIRECT TO BETTA STORES ACN 009 710 605' and 'REBATES --- STORE'. The relevant rebate in respect of Hagemeyer Brands Australia Pty Ltd, the third applicant, was expressed to be 7% payable monthly calculated from purchases (excluding GST) for 'ALL RETAILERS'. The Purchase Data is to be provided electronically and in a format suitable to BSL and BSLF as provided to the Supplier. BSL will use the Purchase Data to calculate and claim rebates on behalf of BSL, BSLF, Related Corporations and Retailers. All purchases are to include direct and central accounting purchases. That document included seven standard 'TERMS AND CONDITIONS', one of which happens to have been deleted. The customer shall take custody of the goods and retain them as the fiduciary agent and bailee of the supplier. However any right to make the supplier liable to any third party by contract or otherwise is expressly nullified. Any such sale must be on market terms and pending sale or utilisation, is to be kept separate from its own, properly stored and insured. Such part shall be deemed to equal in dollar terms the amount payable owing by the customer to the supplier at the time of the receipt of such proceeds. Title Retention. Pending full payment to Acer, the reseller shall store such products owned by Acer in such a way that they are clearly identifiable as Acer's property. In the case of payment by cheque, bill of exchange or note title shall not pass until the same is honoured. It is unnecessary to set out the relevant terms and conditions of sale in these reasons. It is sufficient to note that in respect of the application for commercial credit account in the name of BSLF the last sentence was deleted. That sentence read 'If accepted, I/we agree to your conditions of trading and settlement of accounts in accordance with your normal terms'. 28 It is unfortunate that so much of this judgment has had to be devoted to the various claims and counter-claims in respect of terms and conditions of supply. All that has been set out above is no more than illustrative of the very real problems that would lie ahead for a trial judge in trying to determine the relevant parties to supply agreements and the relevant terms and conditions applicable to those supply agreements, quite independently of the problems arising in respect of individual orders that may have been placed from time to time, the identity of the parties to contracts for the supply of goods, the delivery of goods and the payment therefor. The original Statement of Claim was filed on the same day. 30 In the first instance, the respondents filed a conditional appearance only. Setting aside the originating process. 31 On 16 August 2007 an order was made that the respondents' Notice of Motion filed 14 June 2007 and a subsequent Notice of Motion filed by the applicants on 13 August 2007 be listed for hearing on 20 November 2007. 32 Upon the matter being called for hearing on 20 November 2007 Mr M S Henry of counsel appeared for the applicants and Mr A G Bell SC and Mr D F Villa of counsel appeared for the respondents. The respondents informed the Court that they no longer sought the relief referred to in paragraphs 1, 2(a) and/or 2(b) of their Notice of Motion filed 14 June 2007. They also undertook to file an unconditional appearance in the proceedings on or before 23 November 2007. 33 The only question of substance remaining to be decided on the respondents' Notice of Motion filed 14 June 2007 is to determine whether or not the proceedings should remain in the New South Wales District Registry of the Court or be transferred to the Queensland District Registry pursuant to s 48 of the Federal Court of Australia Act 1976 (Cth). At this stage the respondents do not press for such an order, indicating that it will be preferable to address the question after the pleadings have closed. An order, under Order 6 Rule 2 of the Federal Court Rules (Cwth) (the ' Rules '), granting leave to the applicants to be joined as applicants in the proceedings. An order, under Rule 14.1 of the Federal Court (Corporations) Rules 2000 (' FCC Rules '), extending time for the filing of the originating process in these proceedings (being the Application) up until and including 7 May 2007. An order that the applicants be granted leave to file the Amended Application and the Amended Statement of Claim. 36 The applicants no longer seek leave to file an earlier form of Amended Application and an earlier form of Amended Statement of Claim as they were in existence on 13 August 2007. Accordingly, the applicants seek a grant of leave for joinder, nunc pro tunc, under the Court's discretionary power contained in Order 6 rule 2(b). 42 Notwithstanding the submission of the applicants that s 1321 allows the Court to become involved in the review of actions, omissions or decisions of administrators, receivers and managers and liquidators of companies in the commercial dealings of those companies, it seems to me likely that the Court's power under s 1321 of the Act was intended to be confined to the review of acts, omissions or decisions undertaken in their respective administrative roles rather than in their commercial roles, especially in the context of 'appeals' to the Court in respect of acts, omissions or decisions. This provision is based on ICAC CAs s.279 except that it has been extended to apply to persons administering a compromise or schemes of arrangement, receivers or receivers and managers and provisional liquidators as well as liquidators. Any person aggrieved by any act or decision of the liquidator may apply to the Court which may confirm reverse or modify the act or decision complained of and make such order as it thinks just. (1) Subject to this Part the liquidator shall in the administration of the assets of the company and in the distribution thereof among its creditors have regard to any directions given by resolution of the creditors or contributories at any general meeting or by the committee of inspection, and any such directions given by the creditors or contributories shall in case of conflict override any directions given by the committee of inspection. ( 4) Subject to the provisions of this Part the liquidator shall use his own discretion in the management of the affairs and property of the company and the distribution of its assets among the creditors. 49 Section 246 of the Companies Act 1948 (UK) accorded with s 232 of the Companies Act 1936 (NSW) and s 192 of the Companies Act 1938 (Vic). It was established that, under these English provisions, the Courts would only interfere with the decision of a trustee if it appeared that the trustee was acting unreasonably or in bad faith (see, eg, Re Peters; Ex parte Lloyd (1882) 47 LT 64 at 65 ; Re a Debtor; Ex parte Debtor v Dodwell [1949] Ch 236 at 241 ...; and Leon v York-O-Matic Ltd [1966] 1 WLR 1450 at 1454-5). The principles laid down in such decisions were stated, in at least two Australian cases, to be applicable to the provisions of s 148 of the Bankruptcy Act 1924 (see per Clyne J in Re Carson; Ex parte Carson (1960) 19 ABC 108 at 122; [1961] ALR 118, and in Re Hall (1957) 20 ABC 21 at 29). Under s 178 ... the court, in express terms [is no longer] required to approach the matter on the basis that the appropriate question is whether "the act or decision complained of" should be confirmed, reversed or modified. Once the matter is properly before the court, the court is empowered --- and obliged --- to make such order in the matter "as it thinks just and equitable". Furthermore it is his duty to exercise himself, according to the dictates of his own opinions, what should and what should not be done in the course of any given winding up. It is for him to decide what steps are to be taken, and when, how and by what means such steps are to be taken (per Street J, as his Honour then was, in Re Allebart Pty. Ltd. (in Liq. ) and the Companies Act (1971) 1 NSWLR 24 at 28). This, of course, is not to deny the rights of unpaid vendors of goods that may have been supplied. 55 Leon v York-O-Matic Ltd [1966] 1 WLR 1450 ('York-O-Matic') was a decision of Plowman J on an application for an interlocutory injunction to restrain the completion of the sale of certain freehold and leasehold properties and certain equipment and fixtures and fittings in those properties which belonged to York-O-Matic Limited, a company in liquidation. York-O-Matic Limited operated a number of launderettes, the machinery for which was being acquired on hire-purchase. 56 In the course of his reasons for judgment Plowman J observed that a liquidator is not a trustee for individual creditors. He observed that, prima facie, if there had been a sale at an undervalue, the proper person to complain was the company itself and not an individual creditor. He went on to refer to s 246(5) of the Companies Act 1948 (UK). 57 In this regard his Honour observed that 'there must be circumstances in which the court will interfere at the instance of a creditor'. But the court will not interfere unless the trustee is doing that which is so utterly unreasonable and absurd that no reasonable man would so act. Having considered the evidence at length, his Honour was not satisfied that the liquidator of York-O-Matic Ltd 'did not exercise his discretion bona fide'. Nor was his Honour satisfied that the liquidator had acted in a way 'in which no reasonable liquidator could have acted'. The application for injunctive relief was refused. 59 York-O-Matic was followed by Hodgson J, as his Honour then was, in Yeomans v Walker (1986) 5 NSWLR 378 at 383. That was a case where an injunction was sought by two shareholders to restrain a liquidator of a company from disposing of a company asset in a particular manner. In that case French J considered an application to review a refusal by receivers and managers to provide funding for legal representation to defend winding up proceedings and for an order that funding be provided. Forestview Nominees Pty Limited had granted a fixed and floating charge under which receivers and managers had been appointed. Thereafter Australian Securities and Investments Commission commenced winding up proceedings against the company. A director, Mr Carey, obtained leave to defend the proceedings in the name of the company. He applied to the receivers and managers for funding of $20,000 for legal representation for that purpose, which the receivers and managers refused. The discretion is nevertheless confined, as are all statutory discretions, by the scope and purpose of the section and the statutory context in which it appears. But despite the admission of further evidence, the onus remains with the party who challenges the decision. To the extent to which he makes decisions from time to time, they are in effect made under the authority of the Court itself, and they are subject to review and control by the Court should a proper case be made out requiring such intervention. Whilst this Court does, therefore, have an ultimate control over the day-to-day actions of a receiver and manager, it is a control which is not in my view to be too freely exercised. If, of course, there can be shown to be some defect in the manner in which the receiver and manager is conducting his duties -- a defect arising out of some want of good faith or out of some erroneous approach in law or in principle -- then that is clearly a ground on which the Court would entertain an application by one of the interested parties for appropriate directions or some other form of remedial order. Where, however, the challenge made is that there has been an absence of prudence and wisdom in the receiver's decisions, a far heavier onus rests upon the party who seeks to challenge the decision in question. The Court will not concern itself with minor and ordinary decisions that he may have made: it must be shown that there is a decision of real significance in the affairs of the company and as to which there are real and substantial grounds for questioning its correctness before the Court will embark upon an investigation of what, if any, directions ought to be given. To the extent that those observations related to court appointed receivers and managers, they apply with greater force to receivers and managers privately appointed with extensive powers under a company charge. That section is one which enables appeals to the court to be made in relation to manner of acts, omissions or decisions of a liquidator. The role which the court takes on the appeal is affected significantly by the nature of the act, omission or decision which is being appealed against. Where the appeal is against a discretionary decision by a liquidator, or against a decision involving matters of business judgment, the court will reverse the liquidator's decision only when it is satisfied that he was acting unreasonably or in bad faith. It is sufficient to say that at the very least the person bringing an appeal under s 1321 in these circumstances must demonstrate that the decision is informed by some error of law or significant factual error or is otherwise so unreasonable, in the circumstances, that it should not be allowed to stand. The content of those somewhat ambulatory considerations will be informed by the significance of the decision to the affairs of the company. 63 The second basis on which relief is sought by the applicants places reliance upon what is referred to as the second limb in Barnes v Addy (1874) 9 Ch App 244 at 251. As I would understand it the essence of each applicant's case is that if a person does not actually himself receive trust property, he may nevertheless incur liability to the beneficiaries if he knowingly assists in a fraudulent design on the part of the trustee. It is founded upon an alleged contravention of s 421(1) of the Act by the respondents. Between about 5 October 2006 and about 30 November 2006 (" the Receivership Period "), the Receivers and Managers were controllers of property of BSL Finance and of each company in the Betta Group within the meaning of s 421(1) of the Act. By reason of s 421(1)(a) of the Act, during the Receivership Period the Receivers and Mangers were obliged to open and maintain one or more accounts with an Australian authorised deposit-taking institution pertaining to BSL Finance and each company in the Betta Group. Some or all of the money referred to at subparagraphs (i) to (xviii) of paragraph 231 above was deposited into an account or accounts that was or were opened by the Receivers and Managers pursuant to their obligations under s 421(1)(a) of the Act (" the Accounts "). In breach of s 421(c) of the Act, the Receivers and Managers failed to ensure that the Accounts contained none of the money referred to at subparagraphs (i) to (xviii) of paragraph 231 above. By reason of s 421(1)(d) of the Act, the Receivers and Managers were and are obliged to keep such financial records as correctly record and explain all transactions that the Receivers and Managers entered into as Receivers and Managers. By reason of the matters pleaded at paragraph 235 above, the Receivers and Managers have breached s 421(1)(d) of the Act. By reason of each of the breaches of the Act referred to at paragraphs 233 and 236 above, each of the Applicants has suffered loss. The Applicants are persons whose interests have been and/or affected (sic) , within the meaning of s 1324(1) of the Act, by each of the breaches of the Act referred to at paragraphs 233 and 236 above. In the premises, each of the Applicants claims an order for damages under s 1324(10) of the Act against the Receivers and Managers. Section 1324(10) of the Law could not be relied upon because at the time the action was commenced there was no prospect an injunction would be granted: see also Executor Trustee Australia Ltd v Deloitte Haskins & Sells (1996) 135 FLR 314. ... [where] Bryson J referred to the authorities which deal with the question of the circumstances in which an individual has a remedy in damages for breach of a statutory duty. The applicants are all represented by [Cosoff Cudmore Knox] . The losses the subject of eight of the nine applicants' claims in these proceedings is covered by trade credit insurance that was provided by two insurers. Consequently, in respect of eight of the nine applicants, [Cosoff Cudmore Knox] takes instructions from two insurers for the purposes of these proceedings. In these circumstances, in my view, the time and cost associated with taking instructions from, in effect, three parties and the prosecution of the applicants' claims will be significantly less in one proceeding than in nine proceedings. One only has to state the nature of the cases and the multiplicity of issues that may arise, for that to be apparent. Having said that, the respondents have declared that they neither support nor oppose a grant of leave to the applicants, nunc pro tunc, to be joined as applicants in the proceedings. My understanding is that some, perhaps most, of the witnesses whom it will be necessary for the respondents to call on the hearing of the proceedings will be the same whether there is one action or nine actions before the Court at the same time. Furthermore, whilst the relevant records will be different for the different cases, some of the documents may be common to all. 70 It is blindingly obvious that there will be nine separate sets of witnesses for the applicants and that the documentation which they will rely upon, and its interaction with the various documents of the Betta Group, will be different in respect of each case. 71 With great respect to Mr Polczynski, I cannot accept that there will be any common questions of fact in relation to goods supplied by the several applicants which were disposed of during the period of the respondents' appointment as receivers and managers of the five, out of eight, named companies within the Betta Group referred to in the description of the respondents. As an aside, it may be observed that none of the companies to whom the applicants supplied goods have been named as respondents. 72 Equally, I can see no common questions of fact arising as to what happened to the several proceeds of sales of goods supplied by the various applicants. 73 In relation to goods held by Betta Stores, BSS, BSN, A.K. Truscott Investments Pty Limited and BSLF as at November 2006, there will be no common retention of title claims. The stock the subject of retention of title claims on behalf of each applicant will have to be separately identified and the company holding same will also have to be separately identified. 74 I can foresee considerable difficulties being experienced down the track with the giving of discovery, answering of interrogatories, provision of instructions and conduct of the proceedings where each of the applicants will be answerable for the manner in which the proceedings as a whole are conducted. 75 If (say) one applicant has a good case and the other eight applicants have hopeless cases, it may be that the applicants would be ordered to pay (say) eight-ninths of the respondents' costs, or something of that order. No order could be made by the Court which would differentiate between the entitlements to or the burden of the individual applicants in respect of such costs. 76 Were the joinder of the several cases in one set of proceedings to be permitted, the burden falling upon the Court would be considerably greater than that which would be the case if each case was dealt with separately. The prospect of making separate findings as to the contractual relationships which existed between each of the nine applicants and whichever of the companies in the Betta Group they were dealing with respectively and then determining separately what became of the goods of the several applicants in the hands of the company or companies to whom they may have been supplied or delivered is daunting and would, in my opinion, impose an undue burden on the Court which would not be productive of a just outcome for the parties. 77 Apart from other considerations, I would incline to the view that the costs of one proceeding in which nine separate cases were brought would be three-fold or four-fold of that which would be incurred in relation to each separate case taken on its own. Indeed, it may be that the costs of one joint proceeding would end up being only marginally less than the costs of nine separate actions. 78 In my view the parties would be better served by running one individual case separately and before all of the other cases. With the parties represented by competent solicitors, I cannot imagine that the Court's findings on such issues as may prove to be common to all of the nine cases would not be taken by the parties to constitute appropriate determinations of those issues in the remaining cases. 79 No doubt, the applicants could reach an accommodation between themselves to ensure that the cost of securing findings, which are productive of the early resolution of the later proceedings, could be shared between all of the applicants in a fair and equitable manner. The basic principle ... is that the Court [dealing with an application for joinder under Order 6 rule 2(b)] should take whatever course seems to be most conducive to a just resolution of the disputes between the parties, but having regard to the desirability of limiting, so far as practicable, the costs and delay of the litigation. An Application is not within the meaning of the word 'pleading'. Amendment of an Application requires an order of the Court that a document in the proceeding be amended or that leave be granted to a party to amend the document in such manner as the Court thinks fit (see Order 13 rule 2(1)). 84 If a pleading is amended pursuant to Order 13 rule 3(1) without leave the Court may by order disallow the amendment. 85 The applicants' application for a grant of leave to file the Amended Application (MFI 'B') and the Amended Statement of Claim (MFI 'C') has been addressed by the parties as what one might call a pre-emptive application for summary dismissal under s 31A(2) of the Federal Court of Australia Act 1976 (Cth). ) [1964] HCA 69 ; (1964) 112 CLR 125. In that case Barwick CJ happened to strike out the whole of the plaintiff's Statement of Claim and dismissed its action with costs. It was, of course, decided before the passage of s 31A(3) of the Federal Court of Australia Act 1976 (Cth). ... [the] cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action --- if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal --- is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". Although I can agree ... that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. 90 In my opinion this is a case where leave should be granted, to such one of the applicants as is to remain an applicant in the proceedings, to file an Amended Application and an Amended Statement of Claim raising claims under ss 421(1) and 1324 of the Act as that applicant may be advised, in addition to its Barnes v Addy claims. I would also allow claims under s 1321 of the Act, about which I have considerable reservations, to be included, but for my decision on the extension of time claim (see below). Despite my strong views about s 1321 of the Act, there may still be room for argument on the question of its reach. See, generally, Flexible Manufacturing Systems Pty Ltd v Fernandez [2003] FCA 1491. Any Amended Application would, of course, need to be formulated so as to omit prayers for relief which are out of time under Rule 14.1(2) of the FCC Rules, an application for an order extending the time for the filing of the originating process nunc pro tunc up until and including 7 May 2007 having been dismissed. If that be the case, then the appropriate time within which an application challenging a decision of the respondents should have been brought under Rule 14.1 of the FCC Rules expired on or about 21 December 2006, almost five months before the commencement of these proceedings on 7 May 2007. 92 The essential feature of an appeal under s 1321 of the Act is that the Court should have a real opportunity to confirm, reverse or modify the act or decision of, in this case, the receivers and managers, the subject of the appeal, or to remedy the omission, the subject of the appeal. The observations of Deane J in Re Tyndall , in relation to the comparable s 148 of the Bankruptcy Act 1924, make this abundantly clear. 93 Timeliness is, in my opinion, important. Whatever may be said about notice to the receivers and managers of the applicants' claim, the applicants cannot, in my view, stand back and refrain from seeking reviews by the Court of the conduct complained of and then turn around and ask for an extension of a 21 day time limit by another six periods of 21 days and then some. 94 In relation to the extension of time application, I am mindful of the considerations thought to be appropriate as formulated by Austin J in Derwinto Pty Ltd (in liq) v Lewis (2002) 42 ACSR 645 at [46]-[48]. 95 Where orders are in contemplation which may have the effect of reversing or modifying acts or decisions of receivers and managers, the opportunity for a decision or act that has been reversed or modified to take effect must be a primary consideration, especially if, as the applicants submit, they are of a commercial character. 96 In my opinion, the applicants' second prayer for relief should be dismissed. I certify that the preceding ninety-seven (97) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | application for joinder of nine separate actions by suppliers of goods to companies within a retail chain where relief sought against the receivers and managers of the various companies leave to amend in circumstances where there may be no reasonable prospect of the claims the subject of the amendment being successfully prosecuted corporations application for an extension of time within which to file originating process in an appeal under s 1321 of the corporations act circumstances in which relief may be ordered under ss 1321 and 1324(10) of the act practice and procedure |
Since then he has accrued a substantial criminal record. He had not become an Australian citizen when, on 7 June 2007, the then Minister for Immigration and Citizenship made a decision which placed Mr Gilbert in severe jeopardy of being removed from Australia. Mr Gilbert now challenges the lawfulness of that decision. • Was the visa cancelled by the Minister one which was capable of being cancelled in the circumstances? • Was the cancellation decision affected by irrelevant considerations? On arrival in Australia, pursuant to the provisions of s 6 of the Migration Act 1958 (Cth) ("the Act "), as it then stood, Mr Gilbert's parents were granted entry permits to enter Australia. Under s 6(8) , as their child, Mr Gilbert was deemed to be included in the entry permit of one of his parents. 4 The Migration Reform Act 1992 (Cth) and the Migration Reform (Transitional Provisions) Regulations 1994 ("the Transitional Regulations"), effected changes to the basis upon which non-citizens who held entry permits were entitled to remain in Australia. (Emphasis added. Pursuant to s 34(2) of the Act , a person who was in Australia on 2 April 1984, and who before that day "ceased to be an immigrant" was "taken to have been granted an absorbed person visa on 1 September 1994" (emphasis added). (Emphasis added. Somewhat confusingly, the letter then said: "Consideration has also been given to whether you should be taken to hold an absorbed person visa. " After traversing s 34(2) of the Act , the letter then said: "It has been determined that you would have been granted an absorbed person visa on 1 September 1994 and that you continue to hold that visa now. (Emphasis added. A copy of the notice is attached. On 12 September 2006, Mr Gilbert was notified of the Minister's intention to cancel his absorbed person visa, which would consequently have the effect of cancelling the transitional permanent visa pursuant to s 501F(3). The inaccurate description contained in the 7 December 2006 letter sowed the seeds of confusion which led to competing contentions as to which visa the Minister ultimately cancelled. 13 Mr Gilbert replied to the delegate's letter of 7 December 2006. (Emphasis added. The 31 January 2007 letter advised Mr Gilbert of the existence of a police report concerning him. A further letter to Mr Gilbert on 1 February 2007 extending the date to respond to the request in the previous letter repeated the misleading first paragraph, as did another letter sent on 4 April 2007. 15 On 7 June 2007 the Minister signed the "decision" section of a document entitled, "Issues for consideration of possible cancellation of visa under s 501(2) of the Migration Act 1958 ". (Emphasis added. Mr GILBERT was granted permanent residence on arrival in Australia on 28 August 1981. His permanent residence status was deemed to continue to be in effect on and after 1 September 1994 under the Migration Reform (Transitional Provisions) Regulations, by way of a transitional (permanent) visa. This permanent visa allows Mr GILBERT to remain in Australia indefinitely. (Original emphasis. If you decide to cancel the above visa, the effect of subsection 501F(3) of the Act is that any other visas (except a protection visa) which may be held by Mr GILBERT will also be cancelled automatically. I have decided TO EXERCISE MY DISCRETION UNDER SUBSECTION 501(2) OF THE ACT TO CANCEL Mr GILBERT's VISA, so I hereby cancel his visa. 19 Paragraph 59 was set out as an alternative to paragraph 58, as indicated by the word "or" between the two paragraphs. (Emphasis added. 21 The Minister signed a "statement of reasons" for the cancellation of Mr Gilbert's absorbed person visa. Somewhat confusingly the reasons, under the heading of "Other Considerations", state: "On 31 August 2006, it was determined that Mr GILBERT is likely to hold an absorbed person visa in addition to his transitional (permanent) visa. I decided to exercise my discretion to cancel Mr GILBERT's visa under s 501(2). " While the paragraph commencing, "On 31 August 2006", referred to at [21] above, gives some cause for confusion, it must be remembered that the Minister's actual decision was to cancel the absorbed person visa and his reasons must be read in that context. 24 On 20 June 2007, the Minister's delegate, being the same delegate who corresponded with Mr Gilbert apart from the initial letter of 12 September 2006, wrote a misleading letter to Mr Gilbert. It aggravated the confusing situation that had been created by the delegate's previous confusing correspondence and the bizarre reference in the Minister's reasons to when it was considered that an absorbed person visa was held by Mr Gilbert. 26 These unfortunate misdescriptions and inexact use of language by the delegate and her Minister resulted in the complaint being made by Mr Gilbert's counsel that it was the transitional (permanent) visa that was cancelled and, as a consequence, the absorbed person visa was cancelled rather than the other way around. 27 The significance of which visa was cancelled arises from the terms of s 501(2) and the use of the word "granted". It is not in dispute that Mr Gilbert has a substantial criminal record. In Moore v Minister for Immigration and Citizenship (2007) 161 FCR 236 at 246 a Full Court, by way of obiter dicta , observed that the power conferred on the Minister to cancel a visa only applies to visas that have been granted to a person. Where a visa has been granted to a person, s 501F(3) operates so that any other visa held by that person is cancelled. So when an absorbed person visa is cancelled the transitional (permanent) visa held by that person is also cancelled. However, the Full Court considered in Moore that that process could not operate in reverse. That is because, so it said, the transitional (permanent) visa is a visa which is not granted or deemed to be granted to a person but is held by a person as a result of the operation of the Transitional Regulations. 29 Contrary views to those contained in Moore in the above respect, have been expressed in Hall v Minister for Immigration and Multicultural Affairs [2000] FCA 415 ; (2000) 97 FCR 387 (per Finkelstein J) and Andary v Minister for Immigration and Multicultural Affairs [2001] FCA 1544 (per Dowsett J). 30 It is not necessary for me to express a preference in respect of the two competing approaches. That is because I consider that, in the current circumstances, the issue does not require determination. The better view is that the Minister's decision on 7 June 2007 was that Mr Gilbert's absorbed person visa was cancelled. That is especially clear from the "purpose" of the issues document which specifically seeks a decision on whether to cancel the absorbed person visa. It was a visa which "is taken to have been granted" to him in accordance with s 34(2) of the Act. 31 It is not disputed that if the Court forms the view that the Minister cancelled the absorbed person visa, as a consequence of that cancellation, s 501F(3) has the effect that the transitional (permanent) visa is also cancelled. 32 For the foregoing reasons the Court considers that the Minister cancelled Mr Gilbert's absorbed person visa on 7 June 2007. It rejects the contention that the subject of the Minister's decision was the cancellation of the transitional (permanent) visa. Therefore, the only remaining basis upon which that decision may be impugned is that it was made after the Minister allegedly took into account irrelevant considerations in the exercise of his discretion whether or not to remove Mr Gilbert from Australia. It is that topic which the Court now considers. Counsel referred to it as the "Bennett report". 35 Counsel for Mr Gilbert submitted that the Bennett report inaccurately describes Mr Gilbert's criminal history, by referring to convictions for offences of criminal damage by fire. He contended that Mr Gilbert was dealt with for that offence without the recording of a conviction. It was said that that occurred in the Childrens Court in 1988 but that reading the Bennett report would leave one with the impression that Mr Gilbert had multiple convictions for arson in the adult criminal justice system. 36 Counsel for the respondent submitted that the Bennett report does not use the word "arson" and that a fair reading of it does not suggest that Mr Gilbert has multiple convictions for causing damage by fire. 37 I agree with the submissions of counsel for the respondent that paragraph 2 of the Bennett report does not suggest multiple offences of "Criminal Damage by Fire" but that the reference to "convictions" is one intended to encompass the various offences referred to. GILBERT has even been convicted of offences against the Corrections (Police Goals) Regulations whilst on remand in police cells. No conviction was recorded against him in respect of that charge. However, reference in the Bennett report to a conviction for criminal damage by fire, albeit inaccurate, did not affect the Minister's decision. That is because the issues document does not refer to any conviction for the offence of criminal damage by fire. More importantly, the Minister's statement of reasons, at paragraph 1, set out a list of charges faced by Mr Gilbert in the Heidelberg Magistrates Court on 20 June 2006, none of which concern arson. In addition, paragraph 2 of the Minister's reasons refers to burglary and theft charges heard at Frankston Magistrates Court on 9 August 2006. The offences referred to at paragraph 16 of the Minister's reasons, which he describes as "very serious", in context, are those set out in the first two paragraphs of the reasons. When considering the risk of recidivism, the Minister's reasons only considered Mr Gilbert's recent criminal history. The Childrens Court matter referred to above, occurred in 1988. 39 The ground for review pleaded at paragraph 1(a) of the application is not made out on the material contained in the issues paper, the Bennett report or the Minister's statement of reasons. 40 Counsel for Mr Gilbert also submitted that the former Minister took into account "uncharged allegations" in the Bennett report. This submission is beside the point. The former Minister cancelled the absorbed person visa because Mr Gilbert failed to pass the character test as a consequence of the undisputed fact that he had a substantial criminal record. Whether Mr Gilbert had committed uncharged acts cannot have contributed to determining whether he had a substantial criminal record. 41 The "criminal record" can only record charged acts where the person concerned has been found guilty. Even so, the Minister is entitled, in deciding whether or not to cancel the visa of a person who he suspects does not pass the character test, to take into account various matters in the exercise of his discretion. Considerations relevant to the exercise of the power depend on the nature, scope and purpose of the power, understood in its context in the Act. As Ministerial Direction No 21 makes clear, the Minister considers that two of the factors relevant to the exercise of the discretion are related to the protection of the Australian community and the expectations of the community. (Emphasis added. Such matters may be relevant to the risk of Mr Gilbert re-offending in the future. 43 Having regard to the foregoing it is appropriate to order that the application is dismissed and that the applicant pay the respondent's costs of the proceeding. | visas absorbed person visa transitional (permanent) visa held concurrently visa cancelled by minister due to failure to pass character test whether minister cancelled absorbed person visa or transitional (permanent) visa whether minister had jurisdiction to cancel visa whether minister took into account irrelevant considerations in exercising discretion to cancel visa held : application dismissed absorbed person visa cancelled and consequently transitional (permanent) visa cancelled no irrelevant considerations taken into account immigration |
Les Laboratoires Servier is a privately owned innovative pharmaceutical company in France. Servier Australia is a wholly owned subsidiary of Les Laboratoires Servier. I shall, unless the context requires otherwise, refer to both as Servier. GenRx is a supplier of generic pharmaceutical products. 2 In order to understand the nature of GenRx's complaint in relation to the Act, it is useful to have some understanding of how pharmaceuticals are regulated in Australia. The TGA evaluates the specific form of the drug to be supplied and its safety and efficacy for use in treating particular conditions or indications. An ARTG registration for a drug will be for a specified form of the drug and in respect of particular patient conditions and indications. This registration may be amended for additional conditions or indications after TGA approval. 4 An ARTG registered drug may also be considered for listing under the Pharmaceutical Benefits Scheme (the 'PBS'). Once approved, a drug is listed on the PBS by its brand name, in respect of a specific dosage and at a specified price. 5 Where a particular drug is listed on the PBS by an originator company, a supplier of another brand of that drug may apply to have its brand listed on the PBS as a substitute. In order to be substitutable, the applicant must demonstrate that the new brand has the same active ingredient as the listed brand and is bioequivalent within acceptable levels identified in a particular standard. The existence of substitutable brands for a particular brand of drug is known as "a"-flagging and is indicated by the letter "a" immediately before the brand name of the drug in the PBS schedule. A drug may be "a"-flagged as substitutable for a listed PBS drug with different "finished product" stability, meaning different shelf life or storage conditions. Once a generic drug which contains the same active ingredient has been accepted as "a"-flagged, it has been determined that it is sufficiently bioequivalent to the originator medicine. 7 The decision to allow generic substitution if a named drug is "a"-flagged is in the unfettered discretion of the prescribing doctor. There are no other detailed regulations or guidelines directing that discretion. Once the doctor indicates that there is to be no substitution, a pharmacist must dispense the prescribed drug and may not substitute one that is "a"-flagged on the PBS. If substitution is permitted and the pharmacist intends to substitute an "a"-flagged drug, the pharmacist has a duty to provide an appropriate explanation about the substitution to the patient. A prescription will identify the name of the patient and the name of the prescribing doctor. It will specify the name of a prescription drug and the relevant dosage for that particular patient. When a drug is prescribed by a doctor, the doctor may specify the brand name of a particular drug or may identify that drug by its non-proprietary name, which does not distinguish between particular brands. If the doctor prescribes a drug by brand name, the doctor may choose, in his or her discretion, to tick a square box which appears on the standard prescription form. If the doctor ticks this box, the pharmacist who dispenses the drug to the patient may not substitute any "a"-flagged products for the named brand. If the doctor does not tick the box, the pharmacist may substitute an "a"-flagged product for the drug named if the patient consents. 9 A "brand premium" is the difference in price between the brand drug and the generic. If the doctor writes a prescription naming a drug or more than one drug on a prescription and ticks the box, the pharmacist will not be able to dispense a generic form for any drug on the prescription. This means that the patient pays a brand premium, if such a premium applies to that drug. 10 It is clearly in the originator company's commercial interest to persuade doctors to tick the box to prevent substitution of its brand drug. Coversyl is primarily used for the treatment of hypertension and heart failure and to reduce the risk of heart attack (myocardial infarction or cardiac arrest) in patients with established coronary artery disease. Perindopril has the effect of lowering blood pressure by blocking the activity of angiotensin-converting enzyme ('ACE') in the plasma and at the tissue level. Coversyl is the leading ACE inhibitor in Australia. Approximately 360,000 patients are currently being prescribed Coversyl. 12 Since 1992 perindopril has been sold in Australia by Servier under the brand name Coversyl as an erbumine salt ('perindopril erbumine'). That formulation was listed on the PBS. GenRx distributes a generic form of the perindopril erbumine salt ('GenRx perindopril product'). GenRx's perindopril product formulation is included in the ARTG. 13 Before Servier's main patent for perindopril expired, Servier substituted an equivalent salt form ('perindopril arginine') for the highly successful perindopril erbumine salt ('the salt switch'). 14 Coversyl was initially registered for the treatment of hypertension. On 17 June 2005 Coversyl, in the perindopril erbumine form, was approved by the TGA for the indication of stable coronary artery disease and, on 16 January 2006, Coversyl in the perindopril arginine form was approved for the same indications. 15 The conditions for which Coversyl is prescribed are very common, in particular with elderly patients and patients with type 2 diabetes. These patients are commonly prescribed a number of medications which include Coversyl, as part of a broad, long-term treatment regime. 16 In the case of hypertension, the treatment regime is almost always long-term and a patient will remain on Coversyl for a number of years or indefinitely. Repeat prescriptions are therefore required. A Coversyl treatment regime involves taking a pill daily. Failure to follow the treatment regime will not normally cause the patient observable symptoms. Patient compliance with a long-term treatment regime such as Coversyl can be important for successful treatment. Factors which inhibit patient compliance with hypertension treatments may include patients being required to take a number of different medications for other conditions, patient forgetfulness and the asymptomatic nature of hypertension. Professor McLachlan, a Professor of Pharmacy (Aged Care) at the University of Sydney, said that adherence to medication with long-term therapy can be difficult for patients of all ages and especially for the elderly. GenRx says that there was no clinical rationale for the salt switch. GenRx says that the motive for the salt switch was to protect Servier's market from other perindopril products and to make it difficult for impending generic manufacturers to sell competing products after the patent for perindopril erbumine expired. Servier says that the original reason for the salt switch is not relevant and that it preceded the representations the subject of these proceedings. However, while as GenRx concedes, Servier was entitled to take the action that it did to carry out the salt switch, Servier's commercial interests, rather than a clinical rationale, appear to be the reason. In any event, any such attempt was unsuccessful because GenRx's perindopril erbumine product did become "a"-flagged as substitutable for both "old" Coversyl (perindopril erbumine) and "new" Coversyl (perindopril arginine). In approximately August 2006, Servier commenced supplying new Coversyl. From 1 October 2006, brand substitution was permitted for new Coversyl, subject to a doctor's endorsement on the prescription that this not occur. 18 A TGA listing will include a shelf life period for a registered drug as packaged, based on stability data supplied by the applicant for registration. The TGA approved a three year shelf life for new Coversyl in the perindopril arginine form, whereas old Coversyl in the perindopril erbumine form had an approved shelf life of two years. 19 Servier began marketing perindopril arginine in Australia in approximately June 2006. Servier asserts clinical equivalence of the two salt forms and stressed clinical equivalence in its advertising of new Coversyl. Servier has also entered into an agreement with a generic manufacturer pursuant to which that manufacturer is licensed to sell a generic perindopril erbumine product. In addition, Servier continues to market and sell Coversyl Plus, which is a combination of perindopril erbumine and indapamide (a diuretic). 20 New Coversyl requires a new dose amount to deliver the same amount of perindopril. The dosages 2, 4 and 8 mg of perindopril erbumine are equivalent to the dosages 2.5, 5 and 10 mg of the perindopril arginine. The active amount of perindopril in the equivalent dosages of old Coversyl and new Coversyl is the same. The different dosages reflect the difference in weight between the erbumine and arginine salt forms. The amount of perindopril taken by the patient remains the same, as does the number of times a tablet is taken per day. The packaging and getup of new Coversyl is different from that of old Coversyl. A new bottle replaced blister packs. 21 GenRx's perindopril erbumine product is sold in a blister pack and in the same dosages as old Coversyl. 23 One particular aspect of confusion related to the change in the dosage between old and new Coversyl. This confusion was not only on the part of patients but also, for example, on the part of nursing staff. The confusion was sufficient for the Department of Health and Ageing to raise the concern with Servier in May 2007. 24 The evidence of the pharmacists Mr Oliver, Mr Thomas and Ms Crisp is that pharmacists observed substantial consternation and confusion on the part of customers caused by the change, largely due to the apparent change in dosage. Although doctors gave evidence that they counselled their patients on the apparently different dose and explanations were given by pharmacists, such as Ms Crisp and Mr Crothers, this reduced but did not obviate the general confusion that resulted from the introduction of new Coversyl. 25 As Mr Oliver, a retail pharmacist, described events, Servier sales representatives informed him that the reason for the change was the increased stability of new Coversyl. Servier did not explain to him the reason for the change in packaging, which was the subject of some complaint by his customers. It may be that the different packaging was to provide a distinction between the two products. One specific cause of complaint was the difficulty of extracting single tablets from the new bottle. 26 Servier appreciated that the salt switch was likely to cause confusion and took steps to address it. When Servier introduced new Coversyl it conducted a campaign to explain to doctors the biological equivalence of the two products in the context of the different dosages and packaging. However, Servier drew a distinction between its new Coversyl product and old Coversyl. The message was that they are not the same. Servier initially heavily promoted the fact that its perindopril arginine was not substitutable for its perindopril erbumine and that a new prescription would need to be written by doctors. Servier told doctors that the new formulation has improved stability, reflected in a longer shelf life and that old Coversyl would be removed from the PBS from 1 December 2006. As a result, doctors were educated that the two forms of perindopril were not substitutable. The promotion of new Coversyl to doctors, which preceded the advertisements the subject of these proceedings, referred to the new formulation, the reason for the change in dosage and contained the statement "Every script for Coversyl is a commitment to R & D in Australia". 27 In October 2006, Servier informed pharmacists that, from 1 December 2006, new Coversyl and old Coversyl would be "a"-flagged as substitutable and that pharmacists would have the ability to switch patients from the old formulation to the equivalent dose of the new formulation. 28 As a result of Servier's strategy of listing new Coversyl and delisting old Coversyl, a number of patients on perindopril erbumine were changed to perindopril arginine. There was a need for doctors and pharmacists to assist patients to overcome the confusion caused by that change. 29 However, the confusion caused by the introduction of new Coversyl is not, directly, the subject of these proceedings. It preceded the present campaign directed against substitution of new Coversyl by generic perindopril erbumine products but it provides the context for and background to the campaign. This is particularly the case with elderly patients, with patients with cognitive impairment and with patients taking multiple medicines for serious chronic illness. However, it should also be noted that confusion will not automatically occur with generic substitution. Professor McLachlan notes that brand changes generally may not cause major confusion. For instance, in a hospital setting or, as the medical practitioner Dr Jackson noted, in a nursing home, medicines are often administered by healthcare professionals and not by the patient themselves. 31 Risk of confusion can be reduced by prescription of the same brand, although brand change is not necessarily itself a cause of confusion, especially with counselling. Patients are generally familiar with brand substitution, although constant change between brands can itself cause confusion. Confusion can be reduced by using the chemical name of the drug but many if not most prescriptions are written using the brand name. Some patients rely on the shape, colour and size of the tablet to assist them in recognising the drug. Patient confusion as to brand equivalence can give rise to "double dosing". In the case of perindopril, double dosing could result in serious medical consequences for a patient. Patient confusion can also result in non-compliance. Successful patient compliance is assisted if the patient taking a daily tablet does so as a matter of routine. 32 Any confusion on the part of patients for whom generic medicines are dispensed may be minimised or removed by an appropriate explanation by the doctor or pharmacist. To use the expression of some of the witnesses, confusion can be "managed". That may well explain why pharmacists feel able, within their professional obligations which include counselling, to dispense generic substitutes for brand drugs. However, whether or not pharmacists or Professors of Pharmacy such as Professor McLachlan, are of the view that generic substitution necessarily causes confusion or that pharmacists can overcome any confusion, the advertisements the subject of these proceedings are directed to medical practitioners. It is the doctor who makes the initial decision whether to permit substitution. The pharmacist then decides, if permitted to do so, whether to substitute a generic product for a branded product. At that stage the pharmacist, as explained by Professor McLachlan, considers the patient's understanding of the medicine and the risk of medication misadventure as well as the age of the patient, any cognitive impairment, whether the patient is taking multiple medicines and the consistency of brands for patients on long-term therapy. While both doctors and pharmacists may play a part in "managing" the confusion if patients are given a generic form of a drug, that confusion would not necessarily arise if substitution were prevented. 33 In the case of generic substitution for new Coversyl, the additional factors were the salt switch and the characteristics of the class of patients for whom perindopril was prescribed. All generic substitutions have the potential to cause confusion on the part of patients. Doctors are or should be aware of this. Doctors would also be aware that, apart from the counselling that they provide, pharmacists are well used to dispensing generic substitutes and counselling patients accordingly. 34 Servier says that patients liable to have been confused by the salt switch would be further confused by another change. Servier says that further confusion would be reduced by keeping patients taking new Coversyl on that drug. Servier not only accepts that there was confusion from the salt switch, it also relies on it and says that further confusion would be caused by permitting generic substitution by the old form of perindopril with its previous dosage and old packaging. Servier says that the confusion caused by the introduction of new Coversyl had been corrected and that the relevant advertising campaign was to prevent further confusion arising from the "a"-flagging of perindopril erbumine products which could now be substituted. On 27 November 2006 Servier sent a letter to doctors stating that from 1 December 2006 generic perindopril erbumine products would be available substitutes for new Coversyl and encouraged the doctors to tick the no substitution box on prescription forms to avoid patient confusion. 36 At about the same time, presentations were made by Servier representatives to doctors by which Servier informed doctors that substitutes were available and exhorted them to consider ticking the box on their prescriptions to prevent that happening. A slide used by Servier to train its representatives in the content of those presentations included the statement: ' PBS listed generic brands of perindopril 2, 4, 8 mg December 1 st 2006 ' followed by ' GenRx perindopril, Terry White Perindopril and Chemmart perindopril '. The document was headed: ' Tick the box for New Coversyl... ' and a ticked box appeared next to the words "brand substitution not permitted". The slide also referred to new Coversyl's improved stability and Servier's investment in Australia. 37 Servier also began an extensive advertising and marketing campaign. Because of the "a"-flagging of generic products for new Coversyl, a doctor could continue to exercise his or her discretion to prescribe GenRx's perindopril erbumine product in substitution for Servier's perindopril arginine. Servier's marketing campaign was directed to this discretion. Servier distributed a stamp to some 3000 doctors for use on prescriptions and placed four advertisements in medical publications (together 'the advertisements'). The stamp and the advertisements are the subject of these proceedings. 38 Servier maintains that its marketing campaign has as an objective the therapeutic benefit of obtaining better patient compliance by avoiding confusion associated with substitution. Servier's marketing evidence suggests that this was not the only object of the campaign, which was also directed to preventing generic substitution in Servier's interests. Servier is entitled to conduct such a campaign as long as it does not contravene the Act. However, GenRx alleges that Servier has contravened ss 52 , 53 and 55 of the Act in relation to the stamp and the advertisements. 40 Although Servier has given undertakings in relation to the stamp and two of the advertisements, GenRx seeks permanent injunctive relief, the recall of the stamp, corrective advertising and damages. 41 The parties directed the evidence and submissions to the issue of whether the representations in the stamp and the advertisements were misleading and deceptive under s 52 of the Act. While the fourth further amended statement of claim ('the pleading') also alleges breaches of ss 53 and 55 of the Act, no submissions were directed to the separate issues that may arise in connection with breaches of those sections. I shall consider the case as presented. That document is a collection of reports from Servier's representatives of their communications with medical practitioners and pharmacists. 43 Servier denies the relevance of the entries in MFI-3. Servier also submits that the entry is hearsay and that the maker of the statements (the Servier representatives) could not have had personal knowledge of the matter represented (the state of mind of the doctors). Otherwise, Servier relies on s 135 of the Evidence Act 1995 (Cth), on the basis that any probative value of the document is outweighed by the fact that the entries in it are misleading or confusing and unfairly prejudicial to Servier. Servier says that, had the particular passages in MFI-3 proposed to be relied on been raised prior to the final day of hearing, it would have had the opportunity of identifying and calling the appropriate witnesses to explain the entries. Servier also says that the submissions GenRx wishes to make in reliance on MFI-3 were not fairly foreshadowed in the course of the trial nor made the subject of cross-examination. 44 The prejudice to Servier outweighs the relevance of the summarised reports by Servier representatives of their conclusions from meetings with medical practitioners and pharmacists, being some but not all of the entries in MFI-3. The tender of MFI-3 is refused. • Once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, including the astute or the gullible, the intelligent or not so intelligent, educated or not educated and men and women of various ages and vocations (citing Puxu Pty Ltd v Parkdale Custom Built Furniture Pty Ltd (1980) 31 ALR 73 at 93 per Lockhart J). • Evidence that some individual has in fact formed an erroneous conclusion is admissible and may be persuasive, but is not essential. Regardless, such evidence does not itself conclusively establish the conduct to be misleading or deceptive, the test is objective and one the court must determine for itself. • It is necessary to inquire why any proven misconception has arisen (citing Hornsby Building Information Centre v Sydney Building Information Centre (1977) 140 CLR 216 at 228). It is only by this investigation that the evidence of those who are shown to have been led into error can be evaluated and it can be determined whether they are confused because of misleading or deceptive conduct on the part of the respondent. When I discuss doctors, pharmacists and patients, it is in the context of these principles. If the doctor ticks the box, the pharmacist may not dispense a generic form of the prescribed drug, whether or not there is a generic form "a"-flagged on the PBS. There is no provision for or need for the doctor's initials next to the box. 47 Servier distributed a stamp to doctors from December 2006 to March 2007. Approximately 10,000 of these stamps are in existence, of which about 3,000 have been distributed. Servier says that the stamps were distributed as part of its campaign to inform doctors that generic products would be available to be substituted for Coversyl and to encourage them to prevent substitution by providing a pre-ticked box for use on prescriptions. 49 The stamp is intended to be used on prescriptions in addition to, or in substitution for, the brand substitution box on the standard form prescription. Prior to the issue of the stamp, only one stamp had been issued by an originator company for use on prescriptions, the Zoloft stamp. The stamped prescription would be given to and seen by the patient and handed to the pharmacist. The pharmacist would then determine whether he or she was permitted to dispense Coversyl or an "a"-flagged substitute. 51 After GenRx sought interlocutory relief in these proceedings ( GenRx Pty Limited v Les Laboratoires Servier (2007) 71 IPR 606) , Servier undertook not to distribute the stamp further and has issued to doctors a second form of stamp. Brand substitution not permitted for COVERSYL. 2. αBrand substitution not permitted for COVERSYL. 3. Brand substitution for New COVERSYL is never permissible. 4. There are no other perindopril products substitutable with New COVERSYL. 53 GenRx submits that the stamp conveys an impression of a bulk, blanket prohibition on substitution for Coversyl. That impression, GenRx submits, is reinforced by the use of the passive voice in the stamp. In that regard GenRx contrasts the second stamp, which uses the active voice and makes it clear that it is the doctor's decision not to permit substitution. GenRx accepts that Servier is entitled to attempt to persuade doctors to tick the box. However, GenRx submits, in the stamp and in each advertisement Servier has represented that there is some regulatory prohibition on generic substitution of Coversyl. GenRx submits that those seeing the stamp will be misled into thinking the stamp, with a pre-ticked box, comes from a regulatory body such as the TGA. GenRx says that the stamp therefore represents that there is a regulatory reason why there can be no substitution for Coversyl and that doctors who accept this will use the stamp to convey that message to the pharmacist. 54 Servier characterises the proposition advanced by GenRx as a campaign that represents to doctors or pharmacists that there is no "a"-flagged substitute for Coversyl. If that were so, Servier points out there would be no need to tick the no substitution box on a prescription. Accordingly, Servier submits, GenRx's case amounts to an attack on a single exhortation which is simultaneously "tick the box" and "there is no need to tick the box". This, Servier says, makes a nonsense of GenRx's proposition. 55 Servier raises the compelling argument that, as its evidence showed, it engaged in a campaign to inform doctors that there was a permissible substitute for Coversyl arginine and to persuade them to tick the box to prevent substitution. This was the opposite of attempting to persuade them that there were no substitutes available. If doctors were of the view or were led to believe that there was no permissible substitution, there would be no reason for them to affix the stamp or tick the box. 57 This is not a case of representations alleged to have been made to specific individuals. GenRx's case is that the representations in the printed stamp and in the advertisements are made to the public or a section of the public. A prescription written by a medical practitioner provides information to the pharmacist and to the patient for whom the prescription was written. The sections of the public to whom the stamp representations are directed are medical practitioners (doctors), pharmacists and patients who take or who are prescribed new Coversyl. 58 No reason has been advanced to sub-divide these groups into any sub-classes or areas of specialisation. The question is whether the advertisements would be likely to lead to a misconception arising in the minds of that section of the public to whom the conduct, or silence, has been directed. Where, as here, the representations are made to various classes of the public, the characteristics of the members of that class are relevant in order to determine whether a misconception is likely to arise from the conduct alleged ( Campomar at [98]---[103]; Astrazeneca at [34]). The question is whether a not insignificant number of doctors, pharmacists or patients will be misled ( ConAgra Inc v McCain Foods (Australia) Pty Ltd [1992] FCA 159 ; (1992) 33 FCR 302 at 380-381 per French J; National Exchange Pty Ltd v ASIC (2004) ATPR 42-000 at [70]). It is therefore necessary to assess the reactions or likely reactions of the members of each class to whom the conduct was addressed ( Campomar at [105]). The representations are to be tested by their effect on ordinary and reasonable persons within those groups ( Campomar at [102]). Doctors are familiar with their right to instruct pharmacists, by ticking the box, not to substitute for a prescribed brand drug. This is normally done by ticking the box or, in the case of a prescription for a number of drugs, specifying the drug or drugs to which the tick applies. They are familiar with "a"-flagging and the fact that, without instruction, pharmacists can and do substitute generic drugs. Doctors would also be well familiar with advertising and marketing campaigns by drug companies, including originator companies, in relation to brand drugs and generic substitution. 60 Pharmacists are or should be aware of the requirements of permissible brand substitution. Pharmacists would be aware that doctors may choose to endorse a prescription so that brand substitution is not permitted. 61 Doctors may not have and do not need to have detailed knowledge of which drugs are "a"-flagged on the PBS. Pharmacists are aware of "a"-flagging. If a pharmacist is not immediately aware of whether a drug is available for generic substitution or of the identity of drugs "a"-flagged to a prescribed drug, the information is readily available on computer databases or in the published PBS listing in the "Yellow Book". The PBS is available online and is embedded in pharmacy dispensing software. Pharmacists presented with a prescription for Coversyl would be familiar with the fact that, if there is a compound "a"-flagged against Coversyl, it could be dispensed in fulfilling the prescription, with the consent of the patient, unless the doctor had indicated that substitution was not to occur. 62 Generic manufacturers commonly supply generic "a"-flagged substitutes for innovator drugs at prices cheaper than those charged by originator companies. Coverysl is not subject to a brand premium. That is, Coversyl and the GenRx perindopril product are sold at the same price to the patient. While price may be an important factor in a decision by a doctor to tick the box, it is not relevant to Coversyl. 63 Doctors may decide not to permit brand substitution at all. Some doctors make this decision for all drugs they prescribe. From the evidence of doctors in these proceedings, the reasons for coming to this decision may vary. Those taking generic medicines would have given consent to substitution and so would be familiar with the fact of generic substitution. However, there is no suggestion that the ordinary and reasonable patient was aware of the regulatory regime governing substitution of brand drugs. There is no suggestion that the patients were knowledgeable about "a"-flagging. There is no good reason to conclude that patients were conscious of the doctor's decision to tick the box on the standard form of prescriptions to prevent substitution of the prescribed drug. Were the representations conveyed by the stamp misleading or deceptive? There is no reason for a doctor to use the stamp other than to indicate that there is to be no brand substitution for Coverysl. The doctor would use it for the same purpose as ticking the box on the standard prescription, to direct the pharmacist to implement his or her decision not to permit brand substitution. Doctors would understand the stamp to be a direction to pharmacists not to permit brand substitution for Coversyl. The stamp would be seen as a tool to give that instruction. As Dr Lambie, a general practitioner, explained, it could be useful where more than one medication is prescribed on a single prescription form and the doctor makes a decision whether to permit brand substitution on some but not all medications. However, there is nothing in the text of the stamp to suggest that the stamp was to be used on prescriptions for multiple drugs only. Nor am I satisfied that doctors, let alone pharmacists and patients, understand it that way. 66 The ordinary and reasonable doctor would not be misled by the printed text of the stamp. He or she would not be led to believe that it meant that there was some regulatory inhibition on brand substitution. If the doctor thought that there was no permitted substitution or some regulatory proscription on substitution, there would be no need to use the stamp. The doctor is not required to inform pharmacists of PBS or TGA requirements. The doctor would be aware that the pharmacist is under the professional obligation to be aware of those requirements, insofar as they relate to dispensing of drugs. It is the pharmacist who, in consultation with the patient, decides whether there will be brand substitution, if such substitution is not prohibited by the doctor. 67 The doctor to whom the stamp was directed was the doctor writing the prescription for new Coversyl. There was no evidence that, in the ordinary course, other doctors would see or be likely to see a stamped prescription handed by a doctor to a patient for presentation to a pharmacist. There was no evidence that other doctors would, in the ordinary course of medical practice, see the stamp on a doctor's desk or that they would use it to see the stamped text. 68 The stamp, as printed, would not mislead or deceive, or be likely to mislead or deceive doctors as alleged. Servier submits that the stamp, as used, evokes the printed instruction on all standard form prescriptions and that the stamp conveys no more than the ticked box on the standard prescription. 70 It is not common for doctors to fix a stamp covering a prescribed drug to a prescription. Only one other manufacturer has issued a stamp, for Zoloft. It conveys a different message and does not name the drug. The text of the stamp goes beyond a mere ticked box. The differences between the stamp for Coversyl and the ticking of the standard box on a prescription convey different messages to the pharmacist. In addition, the doctor may forget to initial the ticked box printed in the stamp and this may not be noticed by the pharmacist. Indeed, the absence of initials may indicate to the pharmacist that the stamp conveys something other than the normal, ticked box on the standard prescription form. 71 A doctor who has a general preference for originator products over generics or who applies his or her mind to the decision to tick the box for a particular patient, would be able, to the knowledge of the pharmacist, simply to tick the box. There would be no need for the stamp. The stamped message is in absolute terms and specifies Coversyl. This would suggest to an ordinary reasonable pharmacist who is unaware of Servier's reasons for providing the stamp, or unfamiliar with the stamp, that there is a special reason not to permit substitution of Coversyl. It is also likely to suggest that that reason applies generally and not just to the particular prescription bearing the stamp. 72 These factors outweigh the proposition advanced by Servier that the use of the stamp facilitates the instruction to the pharmacist not to substitute for Coversyl in a prescription for multiple drugs. First, there is no evidence that the stamp is used only in that context. Secondly, doctors frequently write prescriptions for multiple products and, in the experience of pharmacists, routinely tick the standard box with any additional notation necessary to limit the instruction to Coversyl. Thirdly, doctors who do not support generic substitution would tick the standard box on a prescription for single or multiple drugs. 73 I do not accept Servier's contention that pharmacists would be so familiar with the PBS listings, by reason of the electronic data or the Yellow Book, that they would reject any representation that contradicted a PBS permitted substitution. I accept the reaction of a pharmacist called by GenRx, Ms Crisp, as a reasonable reaction of an ordinary pharmacist. Ms Crisp understood that the instruction conveyed by the stamped prescription presented to her by a patient was that the doctor did not wish substitution for Coversyl. However, she ' was confused ' by the stamped message as to whether it meant that it was never permissible to substitute a generic perindopril product for new Coversyl for any patient or whether it was not permissible to substitute when filling that particular prescription. This was reasonable as there could have been a change in the status of "a"-flagging against new Coversyl. She was also confused as to whether substitution was not permitted because the generic products were not therapeutically equivalent or bioequivalent to new Coversyl or because the doctor had directed that substitution was not to occur in this case. Ms Crisp said that she was confused as to whether the Coversyl stamp meant that substitution was never permitted or only not permitted in this instance. 74 The use of a stamp, rather than the usual method of ticking the standard box on the prescription, made Ms Crisp think that the stamp meant something different. Ms Crisp did not understand that the stamp was a tool to encourage doctors to tick the box. 75 The doctor who had placed the stamp on the prescription did not tick the box and just applied the stamp. Ms Crisp cannot recall if the doctor initialled the box. Although Ms Crisp acknowledged that she did appreciate that the applied stamp was a substitute for the standard box for ticking on the prescription, she thought that the stamp must mean something other than the normal ticking of the box. She had checked the permissible substitution in the Yellow Book and telephoned the prescribing doctor to find out whether he thought that there was no bioequivalent generic or whether he did not wish a generic to be dispensed to that patient. She was not ultimately deceived but she was misled by the stamped prescription. Accordingly, Ms Crisp was not simply "caused to wonder" by the stamp but she was misled sufficiently to take some action in relation to the stamp. 76 The absolute nature of the stamped direction, together with the novelty of use of a stamp for the purpose, is likely to cause confusion and mislead pharmacists, as it did Ms Crisp. 77 Mr Jackson, a consultant pharmacist and part-time community pharmacist, explained the logical steps that a pharmacist faced with a prescription containing information that was not clear would take. He spoke of the assumption that substitute drugs for Coverysl must be available if the doctor had indicated no substitution, of checking the Yellow Book and of telephoning the doctor before coming to any conclusions. This does not, however, necessarily equate to the reaction of a busy pharmacist in ordinary practice, reflected in Ms Crisp's evidence. 78 On objective analysis, such as in a courtroom, Ms Crisp may well have realised that each prescription is a separate instruction and that a doctor cannot instruct pharmacists generally and universally. However, for her and for other pharmacists in the ordinary course of pharmacy practice, this does not prevent confusion arising from the use of the stamp which misleads pharmacists as to its purpose. The fact that Ms Crisp had cause to double check the PBS listing confirms that she, acting reasonably, was misled by the stamped prescription into thinking that there was a general prohibition against brand substitution for Coversyl. 79 It is not necessary for GenRx to establish that Ms Crisp, or anyone else, was actually misled or that she took steps consequent upon her misunderstanding ( Astrazeneca at [33]). However, it is relevant that Ms Crisp laboured under an erroneous assumption as to the substitutability of new Coversyl, arising from the use of the stamp issued by Servier and used by the prescribing doctor ( Astrazeneca at [36]; Taco Bell at 202). I am not satisfied that Ms Crisp's assumption was extreme or fanciful. To the contrary it was, for a busy pharmacist who dispenses numerous different drugs daily, a reasonable reaction on the part of an ordinary and reasonable pharmacist. The stamp did not simply cause confusion or wonderment ( Campomar at [106]), it misled Ms Crisp. It caused her to take remedial action, without which she would have continued to believe that brand substitution for Coversyl was not generally permitted. Accordingly, Ms Crisp laboured under an error ( Taco Bell ). 80 The doctor may not have initialled the stamped message on the prescription presented to Ms Crisp. Servier says that it is not liable for any representation conveyed without initials, as there is no evidence that Servier encouraged or instructed doctors to use the stamp without initials. The presence or absence of the doctor's initials affects or may affect the obligation to carry out the instruction. The evidence does not establish that it affects the representations conveyed by the stamp. However, Servier designed the stamp and must have been aware of and intended its use. In those circumstances, by encouraging the use of the stamp, Servier must have accepted the likelihood that the doctor would simply apply the stamped message without the further action of initialling it. There is no evidence that Servier took any action to prevent or minimise such occurrences. If the doctor forgot to initial the stamp, the pharmacist who did not notice that absence would accept the incomplete direction and decline to substitute an "a"-flagged drug for Coversyl. As Dr Lambie, a general practitioner who gave evidence for Servier said, his experience is that pharmacists overlook or do not see the ticked box in a substantial number of cases and that box is present on all standard prescription forms. A pharmacist may well miss, as Ms Crisp did, the fact that the stamp provides for a doctor's initials and fail to note whether the doctor had initialled that box. Indeed, the example of a stamped prescription in evidence was not initialled by the doctor. The absence of initials and the fact that a pharmacist may not look for them may be explained by the fact that the standard ticked box does not require initials. This only adds on the confusion engendered by the stamp and increases the likelihood that pharmacists will be misled and deceived as to its true imprint. 81 The representations conveyed by the stamp misled or deceived or were likely to mislead or deceive pharmacists. I see no sufficient reason for coming to such a conclusion. There may be some patients who would obtain a little, a moderate amount or a lot of understanding of medication to be taken. Others would put their trust in the doctors and pharmacists charged with making the decisions in their interest. It is one thing to inform oneself about one's medication. It is another to come to an understanding about substitution of bioequivalent drugs and the regulatory system that governs it. 83 Mere confusion on the part of patients is not sufficient to establish a contravention of s 52 of the Act. Where there is no evidence of actual misleading, the question raised by the pleading is whether patients were or were likely to have been misled by the use of the stamp on patient prescriptions ( Campomar at [106]; Astrazeneca at [38]). 84 Patients on perindopril include, as noted, many elderly people on multiple medications who had already been confused by dosage and packaging changes resulting from the salt switch. For some the confusion may not have resolved. Some would have initially been taking old Coversyl and some would have been taking generic perindopril erbumine. Of the latter, there would have been conversion to new Coversyl after the delisting of old Coversyl. Patients seeing the statement on the stamped prescription would have been likely to be further confused and misled into believing that there was another change to the availability of the medication generally which affected the ability to purchase a generic substitute for perindopril arginine, not limited to the particular prescription. 85 Such confusion was recognised by Dr Barlow, a doctor who gave evidence for Servier. He expressed the opinion that, if the patient were confused about the meaning of the stamp, he would expect the patient to seek clarification from the prescribing doctor or the pharmacist. That may or may not occur. The clarification may or may not overcome the confusion. The stamped prescription was still likely to mislead patients. 86 The representations conveyed by the stamp were likely to mislead patients for whom perindopril was prescribed. Servier submits that any representations conveyed by the use of the stamp on a prescription are not representations conveyed by Servier. This is because, Servier says, while it supplied the stamp with the intention that it be used on a prescription, the decision to use the stamp was a matter for the independent discretion of the doctor. 88 Servier distributed the stamp as part of its campaign to have prescriptions issued that would not permit pharmacists to substitute generic perindopril products for new Coversyl. The message on the stamp was devised by Servier. There can be no dispute that, in distributing the stamp and placing the advertisements, Servier tried to influence doctor's prescribing of perindopril compounds. Servier's suggestion that its responsibility is limited to the distribution of the stamp, unused and closed, is untenable. The stamp was clearly provided for use and intended by Servier to be used to print the text of the stamp and to communicate such representations as it conveys. The language of the stamp was devised by Servier. Servier seeks to avoid liability for the representations conveyed by the stamp as used. It cannot do so. The stamp was given to doctors by Servier's representatives who urged doctors to use it. Servier is directly liable for the misleading representations by putting the stamp into circulation in circumstances where it was intended to be used ( Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 30 ; (2002) 55 IPR 354 ; Johnson & Johnson Pacific Pty Ltd v Unilever Australia Ltd (No 2) (2006) 70 IPR 574). 89 Servier is liable for the representations conveyed by the printed stamp both directly by its distribution of the stamp to doctors for use and accessorially for use of the stamp by the doctors. In each case, GenRx accepts that the advertisements were directed to medical practitioners who read the medical journals and that the representations in the advertisements were made to medical practitioners and that this is the class of persons allegedly misled. The Medical Observer is a weekly medical trade publication for Australian general practitioners and allied health professionals and has a circulation of around 23,000 nationally. Similar advertisements have been published in other professional magazines. COVERSYL perindopril arginine...αTick the box... BRAND SUBSTITUTION NOT PERMITTED. 2. COVERSYL perindopril arginine... COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR INVESTMENT IN AUSTRALIA. 4. COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR ALL PROFIT TO RESEARCH. 5. COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR PATIENT & DOCTOR SUPPORT. 6. COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR IMPROVED STABILITY compared to perindopril erbumine. 7. Brand substitution for New COVERSYL is never permissible. 8. There are no other perindopril products substitutable with New COVERSYL. 9. Investment in Australia is relevant to the substitutability of New COVERSYL as against perindopril erbumine products. 10. Investing profits in research is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 11. Patient and doctor support is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 12. Improved Stability is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 13. Improved stability and/ or Increased Shelf Life is a distinction with significance to doctors, wholesalers, pharmacists or patients who prescribe, distribute, dispense or consume perindopril products. 14. Increased Shelf Life is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 95 Doctors who read medical journals would be familiar with advertising for different drugs. The first banner advertisement would be recognised by doctors as an advertisement for Coversyl. Although it is in small type, there is an "elucidator" ( Astrazeneca ) that Servier has placed the advertisement. The statement "BRAND SUBSTITUTION NOT PERMITTED" appears directly next to the red box containing a tick and the exhortation "tick the box". The hypothetical ordinary or reasonable medical practitioner is familiar with the tickable box adjacent to the words "BRAND SUBSTITUTION NOT PERMITTED" appearing on standard prescription forms and its purpose. A doctor appreciates that he or she has the option to tick that box when writing a prescription for a specific brand of drug and that, if ticked, the pharmacist is not entitled as a matter of law to substitute another brand of drug for that which appears on the prescription form. A doctor reading the advertisement as a whole would know that Coversyl is a branded product which, without the exercise of the doctor's discretion to tick the box, can be substituted by "a"-flagged generics. 96 The first banner advertisement is an exhortation to tick the box and would be read as such. The doctor would associate the advertisement with the box on the standard form of prescription which he or she can decide to tick. He or she would understand that the advertisement was urging the doctor to tick that box as part of the completion of the prescription for Coversyl. I do not accept that it would be read or understood by a doctor to represent that brand substitution for Coversyl is never permitted or permissible. It does not say that the doctor cannot instruct that there be no substitution, or that the doctor is not permitted to allow substitution, or that "a"-flagging has not been or is not permitted. There is no suggestion of a Government or TGA source. The fact that the box is pre-ticked is not sufficient to suggest that a regulatory body has made a decision not to permit substitution. 97 There would be no need for an advertisement or for the doctor to tick the box if there was no "a"-flagged generic, or substitutable generic, drug for Coversyl. The advertisement does not represent that there are no substitutable drugs or that brand substitution is not permitted, in the sense that the doctor could not permit such substitution. Doctors would not be misled into thinking there is some regulatory bar to brand substitution for Coversyl. 98 Alleged representations numbered 3 to 6 and 9 to 14 of the first banner advertisement representations are not made in the first banner advertisement. When the first banner advertisement was published it was published together with the first whole page advertisement (see [101]). That is, in all cases a publication which contained the first banner advertisement also contained the first whole page advertisement, although the first whole page advertisement has also been published independently of the first banner advertisement. The evidence does not establish that a doctor reading the first banner advertisement would also read the first whole page advertisement and combine the representations made in the two advertisements. There is no good reason to so combine them. 99 The remaining representations alleged for the first banner advertisement are not made out. Doctors would not be misled or deceived or be likely to be misled or deceived by an understanding that the first banner advertisement represented that there was some bar, regulatory or otherwise, to brand substitution for Coversyl. 100 The representations in the first banner advertisement are not misleading or deceptive. COVERSYL perindopril arginine...αTick the box... BRAND SUBSTITUTION NOT PERMITTED. 2. COVERSYL perindopril arginine... COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR INVESTMENT IN AUSTRALIA. 4. COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR ALL PROFIT TO RESEARCH. 5. COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR PATIENT & DOCTOR SUPPORT. 6. COVERSYL perindopril arginine... THERE IS NO SUBSTITUTE FOR IMPROVED STABILITY compared to perindopril erbumine. 7. Brand substitution for New COVERSYL is never permissible. 8. There are no other perindopril products substitutable with New COVERSYL. 9. Investment in Australia is relevant to the substitutability of perindopril arginine as against perindopril erbumine products. 10. Investing profits in research is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 11. Patient and doctor support is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 12. Improved stability is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 13. Improved Stability and/ or Increased Shelf Life is a distinction with significance to doctors, wholesalers, pharmacists or patients who prescribe, distribute, dispense or consume perindopril products. 14. Increased Shelf Life is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 103 On 11 April 2007 the Court made interim orders that Servier be restrained from further placing for publication the first whole page advertisement or any further advertising making reference to the "improved stability" of Coversyl, until final determination of the matter. 105 GenRx does not provide evidence to demonstrate that some of the factual assertions in the advertisements are incorrect or inaccurate. 106 Servier does reinvest its profits in medical research and development, including research and development in Australia. Servier engages in the education and training of clinicians and researchers in the therapeutic areas relevant to its pharmaceutical products. 107 GenRx argues that doctors rely on current publications such as Medical Observer Weekly to inform them of changes in the PBS system and other matters such as urgent drug recalls. GenRx submits that doctors will be misled by the first whole page advertisement into thinking there is some regulatory bar to brand substitution for Coversyl, such as the TGA or PBS having decided not to allow substitution, for the reasons set out in the advertisement. GenRx submits that the pre-ticked box indicates, in context, that someone other than the doctor has made the decision not to permit substitution. Further, GenRx submits that the advertisement conveys a representation to the effect that, because of its conduct in, for example, investment in Australia, Servier has obtained an advantage from the government, namely a prohibition on generic substitution for Coversyl. 108 The first whole page advertisement would be seen by doctors as an advertisement for Coversyl. The advertisement is clearly exhorting and seeking to persuade doctors to exercise their discretion to tick the box on the standard form of prescription. It relies not only on the characteristics of the drug but also on matters related to the actions of the drug's manufacturer, that may be relevant to the doctor's decision to tick the box. 109 The expression "BRAND SUBSTITUTION NOT PERMITTED" is placed directly next to and associated with the ticked box containing the exhortation to "tick the box". Doctors would recognise the expression in that association as a direction to tick the box on the standard form of prescription, to instruct the dispensing pharmacist not to substitute a generic drug for the branded Coversyl. 110 In Astrazeneca the Full Court considered whether advertising flyers that were sent to general practitioners regarding a particular asthma medication were misleading or deceptive under s 52 of the Act. The flyers contained references to a clinical study and its results. The Court noted that in order to determine whether any breach of s 52 had occurred, it was necessary to determine whether the conduct would be likely to lead to a misconception arising in the mind of that section of the community to whom the conduct was directed (at [34]; [37]). The Court noted that the representations in the advertisement were not made to identified individuals or to the public at large (at [35]) but to ' ordinary or reasonable members of the community of general practitioners throughout Australia ...'. The representations as claimed were not misleading or deceptive when viewed, in their entirety, as marketing documents directed to that class (at [24]; [42]). It can be assumed that the class of medical practitioners would, as in Astrazeneca , have some knowledge of clinical trials and that the class would accordingly view such material in a different fashion to the public at large. 111 I do not accept that the references to non-clinical factors would be understood by doctors as referring to regulatory matters. Doctors, by reason of education and experience, would understand that drugs are publicly available as a result of expenditure on research by innovator or originator companies. These are factors of importance to some medical practitioners (see [63]). GenRx submits that, although it is apparent that some of the reasons are not clinically based, doctors would be misled into thinking the reasons are ' reasonable or proper reasons to take into consideration when prescribing Coversyl '. They may be so led but it would not be misleading. Doctors are entitled, in their discretion, to take into account matters that are clinically related, although not specifically concerning the medication for that patient. For some ordinary and reasonable doctors, such as Drs Barlow, Ferrari, Flecker and Lambie, investment by originator companies in Australia and the undertaking of research, funded by profit on existing drugs, are important, reasonable and proper reasons for ticking the box to prevent generic substitution. Doctors would understand the factors of "investment in Australia", "all profit to research" and "patient and doctor support" as linked to the company that manufactures and sells Coversyl and not as factors relevant to regulatory decisions. They would understand that they were being asked to take those factors into account in forming the decision whether or not to tick the box on the prescription. 112 These representations, in the first whole page advertisement, are not misleading as alleged. That plainly asserts a clinical benefit, in the sense that the product retains its activity over a longer period. GenRx submits that doctors will be misled into thinking that there is some regulatory bar to brand substitution for Coversyl for the reason of "improved stability" or that improved stability is a real and relevant distinction between new Coversyl and other perindopril products. Underneath the reference to "improved stability" it is stated that it is compared to perindopril erbumine. It is intended to convey to doctors that it is a benefit of new Coversyl, of which the doctor should take account. GenRx says that, although it may be literally true, improved stability is in fact a ' non-benefit ' and that reference to it is therefore misleading. GenRx accepts that perindopril arginine has a higher rated shelf life but says that it is irrelevant because, practically, the product is not stored for as long as the shelf life of perindopril erbumine. 114 GenRx submits that stability of the product could be seen by a doctor to be relevant to regulatory decisions but it has not been demonstrated that that is so or that, as one of four factors, it would lead a doctor to conclude that brand substitution was not permitted for some regulatory reason. 115 Perindopril arginine is less hygroscopic than perindopril erbumine. It absorbs less moisture from the atmosphere. This is the basis of the statement that it is more stable. Servier says that one of the reasons for the change to the arginine salt was reported cases of degradation of the erbumine salt which could be traced to likely poor storage at high temperatures and in humid conditions. 116 Coversyl is almost always prescribed on a monthly basis, though often the prescriptions include five monthly repeats which are dispensed one per month. It is a commonly dispensed drug and the evidence of Ms Crisp, which was not contradicted, is that it is unusual for stock of Coversyl or Coversyl Plus to remain in the pharmacy for much longer than a month. There are standards in place to ensure that pharmacists do not dispense medicines with a short expiry date. Accordingly, where shelf life is well over 12 months, shelf life is not an issue. The evidence does not suggest that there was any actual or perceived problem with the shelf life of old Coversyl. The shelf life of the erbumine product, the fact that prescriptions were generally filled monthly, the checks by pharmacists of expiry dates and the turnover of the product explain why the pharmacists who gave evidence did not experience any such problem or need to return expired stock. 117 Dr Barlow, called by Servier, understood "improved stability" to mean ' improved shelf-life of perindopril arginine salt over the perindopril erbumine salt '. Dr Barlow considered that there will be cases where the patients do not keep the product in the conditions recommended by the manufacturer. However, he confirmed that he would expect that, in most cases, Coversyl would be kept by patients in appropriate conditions and be used in less than a year. While patient stockpiling may occur, proper practice by doctors and pharmacists would ensure that patients do not stockpile the medication. It would be unusual for this to occur. 118 The evidence and submissions concerning possible problems with stability was largely speculative. That included the possibility that patients might stockpile perindopril at holiday homes which they visited occasionally. It was also contrary to the evidence from doctors and pharmacists that there were no problems or perceived problems on the part of doctors or pharmacists as to the stability of perindopril erbumine. Dr Ferrari, also called by Servier, said that he regarded the issue of stability as unlikely to be of concern. I accept that as a reasonable medical view. 119 If the stability of perindopril erbumine was not a genuine concern of doctors or pharmacists, the improved stability of perindopril arginine is not a factor relevant to the decision to tick the box to prevent the substitution of new Coversyl by perindopril erbumine. It is, for clinical purposes, a "non-benefit". The first whole page advertisement represents that there is a genuine improvement, or benefit, or superior product performance of new Coversyl over its generic substitutes. The representation is that this is a reason for the doctor to prevent generic substitution. That representation is likely to mislead doctors into ticking the box. 120 Accordingly, the reference in the advertisement to "improved stability" is, in the context of the first whole page advertisement, misleading or likely to mislead medical practitioners. Brand substitution for New COVERSYL is never permissible. 2. There are no other perindopril products substitutable with New COVERSYL. 3. Investing profits in research is relevant to substitutability of New COVERSYL as against perindopril erbumine products. 4. COVERSYL perindopril arginine... NOW INDICATED FOR STABLE CORONARY ARTERY DISEASE. 5. COVERSYL perindopril arginine...αTICK THE BOX: BRAND SUBSTITUTION NOT PERMITTED. 6. COVERSYL perindopril arginine... NOW INDICATED FOR STABLE CORONARY ARTERY DISEASE...αTICK THE BOX: BRAND SUBSTITUTION NOT PERMITTED. 7. COVERSYL perindopril arginine... αTICK THE BOX: BRAND SUBSTITUTION NOT PERMITTED... α ALL PROFIT TO MEDICAL RESEARCH. 8. COVERSYL perindopril arginine... NOW INDICATED FOR STABLE CORONARY ARTERY DISEASE...αTICK THE BOX: BRAND SUBSTITUTION NOT PERMITTED... α MINIMISE PATIENT CONFUSION. 9. COVERSYL perindopril arginine... αTICK THE BOX: BRAND SUBSTITUTION NOT PERMITTED...αMINIMISE PATIENT CONFUSION. 10. Previous COVERSYL was not indicated for stable coronary artery disease. 11. New COVERSYL has only recently been indicated for stable coronary artery disease. 12. There are no other perindopril products indicated for stable coronary artery disease. 13. There are no other perindopril products substitutable with New COVERSYL for stable coronary artery disease. 14. Patient confusion will necessarily arise from substituting any perindopril product not bearing the COVERSYL brand for New COVERSYL. 15. Patient confusion will necessarily arise from substituting generic perindopril erbumine products, including but not limited to [GenRx's perindopril products], for New COVERSYL. 16. Patient confusion will necessarily arise from substituting generic perindopril erbumine products, including but not limited to [GenRx's perindopril products], for New COVERSYL because only perindopril arginine is indicated for stable coronary artery disease. 17. Any patient confusion, however arising, will be minimised if doctors tick the "brand substitution not permitted" box on a prescription, so as not to authorise substitution of generic perindopril erbumine products including, but not limited to, [GenRx's perindopril products], for New COVERSYL. 123 GenRx's complaint about this advertisement is that medical practitioners will be misled into thinking that Coversyl has only "now" been indicated for stable coronary artery disease rather than in June 2005 when it was so indicated and that no other brand of perindopril product is indicated for that disease. To the extent that GenRx also relies on the reference to "minimise patient confusion", I will deal with it in discussing the next advertisement. There is no elucidation of the date of indication for stable coronary artery disease. 125 The message conveyed by the second whole page advertisement is that there is a new indication for which Coversyl can be prescribed and that the new indication has been validated by an extensive trial, the Europa trial. 126 Medicines Australia is the industry body for pharmaceutical companies in Australia. The Medicines Australia Code of Conduct states at clause 1.6 that the word "new" must not be used to describe any product, presentation, or therapeutic indication that has been available and promoted for more than 12 months in Australia. 127 In the Europa trial, perindopril treatment was shown to lead to significant reduction in death from heart or blood vessel problems, non-fatal myocardial infarction and cardiac arrest in patients with stable disease of their coronary arteries. Coversyl has been on the market in Australia for many years for its initial indication, hypertension. The Europa results led to approval by the TGA of a further indication for Coversyl, for the treatment of patients with established coronary artery disease who are stable on concomitant therapy and have no heart failure, that is, for stable coronary artery disease. 128 A number of doctors gave evidence of their understanding of the reference to the Europa trial as the indication for stable coronary artery disease. Dr Barlow was aware of the Europa trial and had heard of the results in 2005. Dr Ferrari was also aware of the trial from the time the results were published in 2003. Dr Barlow's understanding on reading the advertisement shown to him by Servier's solicitors was that the Coversyl arginine salt is ' presently approved ' by the TGA for this specific indication or ' presently indicated ' for treatment of stable coronary artery disease. He did not understand it to mean that Coversyl has only recently been approved for stable coronary artery disease. Dr Ferrari saw the ' underlying message ' that if doctors were not presently using Coversyl for the treatment of stable coronary artery disease, they ought to be. Both of those doctors were familiar with the Europa study and understood the advertisement from that perspective. While Dr Flecker, a general practitioner, was also aware of the Europa trial from 2003, Dr Lambie, a general practitioner was not. 129 Readers not aware of the Europa trial prior to reading the advertisement and those who did not bring the results of that trial to mind when they read the advertisement would conclude that it was perindopril arginine, or new Coversyl, that had the further indication in relation to stable coronary artery disease. For example, Dr Lambie, called by Servier, concluded from the advertisement that there was a new indication for Coversyl. Doctors who appreciated that the advertisement was for perindopril arginine and who were aware that this was the new form of Coversyl, would conclude that the new indication was for that new form and not for perindopril erbumine. By using "now indicated" the advertisement links the further indication of hypertension only to new Coverysl. That is misleading. Alternatively, for a doctor not aware of the Europa trial, the advertisement represents that the new indication was approved after that trial. Servier draws attention to the reference to the 2003 publication of The Lancet in which the trial was published. That appears as an elucidator. However, regulatory approval for an indication consequent upon the results of a trial would occur some time after publication and no such time is indicated. A medical practitioner would form the view that the indication was approved some time after the trial and its publication. In the absence of any other statement as to the time between publication of the trial and regulatory approval for the new indication, the word "now" indicates and represents that the indication is of quite recent application. 130 Ordinary and reasonable doctors so misled would not be insignificant in number or proportion. I am not satisfied that ordinary and reasonable doctors, including general practitioners not specialised in hypertension and the mechanisms of blood pressure regulation, would generally have been aware of the Europa study and so discount the message otherwise conveyed by the advertisement, as did Drs Barlow and Ferrari. Indeed, Dr Flecker acknowledged that doctors might have thought that Coversyl was only listed in relation to its previously established indication of hypertension. The fact that some doctors reading the advertisement might be aware of the Europa trial and its results, or were otherwise aware that perindopril erbumine had been indicated both for hypertension and for stable coronary artery disease since 2003, does not preclude the statements in the second whole page advertisement being misleading ( ConAgra at 543 per French J). 131 It follows that the representation conveyed by the second whole page advertisement is misleading or likely to mislead doctors in its reference to "now indicated for stable coronary artery disease". By linking that statement to perindopril arginine, the advertisement represents that perindopril erbumine is not so indicated. That also amounts to a misrepresentation, as perindopril erbumine has been so indicated since 2005. 132 Servier has undertaken not to place for publication any advertisement which contains the words "Now indicated for stable coronary heart disease" or any substantially similar phrase which contains the word "now", until determination of this matter. COVERSYL perindopril arginine... MINIMISE PATIENT CONFUSION FROM GENERIC SUBSTITUTION: TICK THE BOX. 2. Patient confusion will necessarily arise from substituting any perindopril product not bearing the COVERSYL brand for New COVERSYL. 3. Patient confusion will necessarily arise from substituting generic perindopril erbumine products, including but not limited to [GenRx's perindopril products], for New COVERSYL. 135 GenRx submits that doctors will be led to think that confusion will necessarily arise from brand substitution and that the source of the confusion is the availability of generic versions of Coversyl. 136 Doctors reading the advertisement would understand that patient confusion can be caused by a number of different factors. In the case of prescriptions for new Coversyl, those factors included pre-existing confusion caused by the salt switch. While the circumstances of individual patients would vary, a medical practitioner would know that, if he or she had not previously ticked the box when prescribing old Coverysl, the pharmacist may or may not have substituted a generic. That patient may since have been placed on new Coversyl. All of these factors have the potential to cause patient confusion. If the doctor ticked the box, one such factor would be removed and the potential for confusion reduced. 137 The advertisement is an exhortation to doctors to tick the box on the standard prescription form. That is made clear by the picture of that form in the advertisement. The advertisement suggests that patient confusion will be minimised if brand substitution for Coversyl is not permitted by the doctor. Servier maintains that its attempt to prevent generic substitution was, at least in part, motivated by a desire to prevent or minimise further confusion on the part of patients. 138 GenRx argues that Servier's reliance on the confusion caused by the salt switch is unacceptable, as it was Servier that caused that confusion. However, there was no prohibition on that action. The confusion that resulted did exist and preceded the marketing campaign the subject of these proceedings. 139 Doctors understand that patient confusion can be caused by a number of different factors. Drs Barlow and Flecker understood the reference to "minimise patient confusion" in the second banner advertisement to refer only to the confusion caused by brand substitution. Doctors cannot, Dr Barlow says, remove all sources of confusion on the part of patients. One source that can be removed by the doctor is any confusion caused by generic substitution. It is that action to which the advertisement is referring. 140 The doctor would be aware that confusion could be overcome or reduced by explanation and counselling by the doctor or the pharmacist. The doctor would also be conscious of the need to minimise patient confusion in order to maximise compliance and reduce the risk of double dosing. Medical practitioners would be quite capable of understanding the various factors bearing on the decision to tick the box. Such a person would understand that the manufacturers of Coversyl were exhorting them to do so. 141 The doctor reading the second banner advertisement would not read it as saying that patient confusion would necessarily arise from substitution. He or she would understand that the exhortation was to remove one potential confusing factor. That may not be necessary for all patients. The doctor could form the view that the benefit of substitution outweighed any confusion. If the doctor wished to permit substitution and minimise confusion, the course was open, in accordance with normal practice, to explain the substitution to the patient. 142 The second banner advertisement is not misleading as alleged. GenRx recognises the limitations placed on re-opening after evidence and submissions are concluded but submits that the proposed evidence is of ' considerable significance ' in the case. Further, it is evidence of which GenRx was not aware and, GenRx submits, would cause no prejudice to Servier. Servier does not seek to file evidence in answer if leave be given but opposes leave being granted. 144 The proposed evidence relates to Servier's actions in seeking to set aside the "a"-listing of perindopril arginine products against perindopril erbumine products. This would preclude substitution of new Coversyl. GenRx says that this reinforces its submissions as to the representations conveyed by the stamp, the first banner advertisement and the first whole page advertisement. That is, it reinforces the alleged representation that brand substitution is not permitted, as a regulatory matter. 145 Servier's actions the subject of the application to re-open postdate the issue of the stamp and the publication of the advertisements the subject of these proceedings. 146 I do not see that the proposed evidence has any or sufficient relevance to the issues in this case. There is no suggestion that the witnesses or other doctors, pharmacists or patients would have been aware of Servier's proposed actions. Servier's intent was at all times to prevent "a"- flagging of its new Coversyl product. That is accepted. The proposed evidence does not affect the determination of these proceedings sufficiently to permit the evidence to be led at this stage. 147 The application to re-open should be refused. GenRx also seeks a declaration that Servier, by publishing the advertisements and distributing the stamp, falsely represented that its goods had superior characteristics in contravention of s 55 of the Act. 149 At the hearing GenRx did not address ss 53 or 55 of the Act except to point out two matters. First, that subs 53(c) uses the word "benefit" and prohibits representations that ' represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have '. Secondly, that the classes of alleged misleading conduct include a representation that the product has a difference where, it submits, any such difference is not a distinction of significance and is accordingly not a benefit ( Janssen Pharmaceutica Pty Ltd v Pfizer Pty Ltd (1985) 6 IPR 227). No further submissions in relation to these matters and no other submissions in relation to these sections were made by GenRx or by Servier. 150 No submissions were directed to the other criteria in those sections. No submissions were made as to whether, if Servier were found to have contravened s 52, it would follow that subs 53(a) and (c) or s 55 would also have been contravened. Accordingly, I do not propose to deal further with these allegations. The stamp representations are not likely to mislead or deceive medical practitioners. • Servier is liable for the stamp representations and has thereby contravened s 52. • The first banner advertisement representations are not misleading or deceptive or likely to mislead or deceive medical practitioners. • The first whole page advertisement caused to be published by Servier contains a representation as to improved stability that is likely to mislead or deceive medical practitioners, within s 52 of the Act. Servier has thereby contravened s 52. • The second whole page advertisement caused to be published by Servier contains a representation in relation to the indication for Coverysl for stable coronary artery disease that is likely to mislead or deceive medical practitioners, within s 52 of the Act. Servier has thereby contravened s 52. • The second banner advertisement representations are not misleading or deceptive or likely to mislead or deceive medical practitioners. I direct that the parties submit orders to give effect to these reasons for decision within 14 days. I certify that the preceding one hundred and fifty two (152) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | misleading and deceptive conduct under s 52 of the trade practices act 1974 (cth) stamp distributed to be applied to doctors' prescriptions containing statement "brand substitution not permitted for coversyl" publication of four advertisements in medical publications advertisements variously contained other statements regarding drug each statement considered class of persons to whom stamp representations made includes doctors, pharmacists and patients ordinary and reasonable doctors would not be misled by stamp stamp could cause confusion for and mislead pharmacists and patients servier liable for representations contained in stamp by distributing stamp and accessorially liable for use by doctors representations in advertisements made to doctors representations do not misleadingly refer to government regulatory considerations representation "tick the box" in advertisements not misleading in context of generic substitution representations as to "improved stability" misleading representations as to "minimise patient confusion" not misleading statement that product "now indicated" for coronary artery disease misleading where indication several years old use of "now" implies indication is new contravention of s 52 trade practices |
The defendant ("Samsun") is a company incorporated in South Korea. It caries on the business of providing, inter alia , ocean freight forwarding services. On 6 March 2009, the Seoul Central District Court, 3rd Bankruptcy Division, Korea made an order on the application of Samsun that its petition to commence rehabilitation proceedings be granted. The Korean court appointed the plaintiff ("Mr Hur") as the receiver of Samsun. The nature of the order of the Korean court is more akin to the effect of Chapter 11 of the United States' bankruptcy laws, rather than an order under Part 5.3A of the Corporations Act 2001 (Cth) for the administration of a company's affairs. This application was filed on 13 March 2009 when the matter came on for urgent interlocutory relief. On that date, Stone J made orders that pending the final hearing or further order, no person may enforce a charge on the property of Samsun and certain other orders pursuant to articles 19 and 21 of Schedule 1 of the Act. The hearing today is the final hearing of the application. The orders made by Stone J provided for advertisements to be published in accordance with rule 15A.6 of the Federal Court (Corporations) Rules 2000 . I have evidence before me that those orders were satisfied and there is evidence that none of the known creditors of Samsun within this jurisdiction wish to be heard today on the final hearing of the application. The principal matter which arises is dealt with in article 17 of Schedule 1. The Korean proceeding is to be recognised if it is a foreign proceeding in accordance with the definition contained in article 2 of Schedule 1 and if Mr Hur is a person who was appointed in the Korean proceeding to administer the re-organisation of Samsun's assets or affairs or to act as a representative in the foreign proceeding. Section 5(1) defines Model Law to mean the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law, set out in the Annex to the United Nations General Assembly Resolution A/Res/52/158, the English text of which is set out in Schedule 1 to the Act. Article 2 of Schedule 1 sets out the definitions which apply. The court may require a translation of documents supplied in support of the application for recognition into an official language of this State. The court is entitled to presume that documents submitted in support of the application for recognition are authentic, whether or not they have been legalized. In the absence of proof to the contrary, the debtor's registered office, or habitual residence in the case of an individual, is presumed to be the centre of the debtor's main interests. 2. The provisions of articles 15, 16, 17 and 18 do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist. Paragraph 1 (a) of the present article does not affect the right to commence individual actions or proceedings to the extent necessary to preserve a claim against the debtor. Paragraph 1 of the present article does not affect the right to request the commencement of a proceeding under [identify laws of the enacting State relating to insolvency] or the right to file claims in such a proceeding. There is also a practice note dealing with these applications. The practice note is Practice Note No 29. I am satisfied that Mr Marshall's affidavit provides the necessary evidence to satisfy the requirements of the Act. In particular, I am satisfied that under article 17(1), the Korean proceeding is a foreign proceeding within the meaning of article 2(a). It may not be entirely clear as to what is meant by a "collective" judicial proceeding, but I do not think that anything turns on that. What is important is that the Korean proceeding is a proceeding relating to insolvency in which the assets and affairs of Samsun are subject to the supervision of the Korean Court for the purpose of the re-organisation of that company. This is made clear by the terms of the order of the Korean Court dated 6 March 2009 and the reasons for the decision of that court. I am also satisfied that Mr Hur is a foreign representative who is entitled to make this application. This is because Mr Hur is a foreign representative within article 2(d) because he is the person who has been appointed as the receiver of Samsun. Mr Hur is an officer of Samsun and this demonstrates the analogy of the orders to Chapter 11 of the American bankruptcy laws rather than to an order under Part 5.3A of the Corporations Act . I am therefore satisfied that Mr Hur is a person who is applying for recognition in accordance with article 17(1)(b) of the Act. I am also satisfied that the application meets the requirements of paragraph 2 of article 15. This is because Mr Marshall has annexed to his affidavit a certified copy of the decision of the Korean court commencing the foreign proceeding and appointing Mr Hur as the foreign representative. I am also satisfied that the provisions of article 17(1)(d) apply because the application is made to this Court as a court of competent jurisdiction. In addition, I am satisfied that the Korean proceedings should be recognised as a foreign main proceeding because it is taking place in the State where Samsun has the centre of its main interests. Article 16, paragraph 3 is set out above. There is evidence in the affidavit of Mr Marshall that Samsun's registered office is at the Ima Building, 146-1 Susong-dong, Jongno-gu, Seoul, Korea. Accordingly, the effect of article 17, paragraph 2(a) is that the proceedings be recognised as a foreign-main proceeding because it is taking place in South Korea where Samsun has the centre of its main interests. There are a number of other procedural provisions which are required to be satisfied. These are set out in section 13 of the Act and article 15, paragraph 3 of the Schedule. Mr Marshall's evidence establishes that to the best of his knowledge, there has been no appointment of a receiver within the meaning of section 416 of the Corporations Act , or a controller or a managing controller within the meaning of section 9 of that Act, in relation to the property of Samsun, and there are no other proceedings known to Mr Marshall under chapter 5 or section 601CL of the Corporations Act . Mr Marshall is aware that there are applications of a similar nature that have been made in the United States under Chapter 15 of Title 11 of the United States Code , in England under the Insolvency Act 2000 , and in Singapore and Belgium. I have been provided with a minute of the order made by Mr Justice Morgan of the High Court of Justice on 12 March 2009. His Lordship recognised the Korean proceedings as a foreign main proceeding in accordance with the Model Law and made orders under article 20(1) and 21 of the Model Law. The proceedings in the United States, the United Kingdom, Singapore and Belgium are ancillary to the Korean proceedings. I am satisfied that the provisions of rule 15A.6 for notification of known creditors have been complied with. It seems to me to be appropriate to make orders under article 21, paragraph 1 and I will do so. Accordingly, I will make orders in terms of the short minutes of order provided to me by Counsel for the plaintiff which I will sign and date and place with the court papers. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application under cross-border insolvency act 2008 (cth) korean insolvency proceeding recognised as a foreign proceeding and a foreign main proceeding pursuant to the model law on cross-border insolvency contained in schedule 1 to the cross-border insolvency act corporations |
The Second Appellant is her stepson. 2 The First Appellant arrived in Australia in May 2004 and made an application for a Protection (Class XA) Visa. She claimed to be a refugee. An application was also made by the Second Appellant, that being an application made as a family member but not asserting a personal claim to be a refugee. The fate of the Second Appellant's appeal depends upon that of the First Appellant. 3 The applications were rejected by a delegate of the Minister on 25 November 2004. An application for review was lodged with the Refugee Review Tribunal on 16 December 2004. The Tribunal by way of its decision dated 2 June 2005 affirmed the decision not to grant the protection visas but that decision was set aside by the Federal Magistrates Court on 2 May 2006 and the matter remitted to the Tribunal. By way of a second decision dated 11 January 2007 a differently constituted Tribunal again affirmed the decision not to grant protection visas to the Appellants. 4 On 17 August 2007 the Federal Magistrates Court dismissed an application to review the second decision made by the Tribunal. 5 The Appellants now appeal to the Federal Court. The Tribunal decision is affected by apprehended bias. 2. The Tribunal failed to comply with the Migration Act 1958 s. 425. 3. The Tribunal lacked the authority or power to make the decision. The Respondent Minister does not oppose the first two grounds being now considered; the third ground is opposed. " Section 415 sets forth the powers of the Tribunal. Their purpose is to free tribunals, at least to some degree, from constraints otherwise applicable to courts of law, and regarded as inappropriate to tribunals: Minister for Immigration & Multicultural Affairs v Eshetu [1999] HCA 21 at [49] , [1999] HCA 21 ; 197 CLR 611 at 628 per Gleeson CJ and McHugh J. Such an obligation is different to that discharged by superior courts and may be more onerous: Minister for Immigration & Multicultural & Indigenous Affairs v SGLB [2004] HCA 32 at [73] , [2004] HCA 32 ; 207 ALR 12 at 33. It operates according to inquisitorial procedures. This feature of the Tribunal's operation casts obligations upon it that are different from, and in some respects more onerous than, those applicable to more traditional bodies acting according to the more passive decision-making virtues of adversarial trial. See also SAAP v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 24 at [111] ---[123], 228 CLR 294 at 330---3 per Gummow J. As correctly noted by the Federal Magistrate, the task of the Tribunal was to undertake a " proper, genuine and realistic consideration [of] the merits of the case ": SZEJF v Minister for Immigration and Multicultural & Indigenous Affairs [2006] FCA 724 at [39] per Rares J. The task of this Court is to ensure that any decision of the Tribunal is a decision authorised by the 1958 Act; the task of this Court is not to review the merits of the decision reached: Cf Applicant VEAL of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 72 at [16] , [2005] HCA 72 ; 222 ALR 411 at 416 (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ). 8 The task of the Tribunal is also to discharge its functions in a manner both free from bias and in a manner which is seen to be free from bias. The principles to be applied when considering an allegation as to apprehended bias are clear; difficulty, however, is frequently encountered in the application of those principles to the facts in issue. The tribunal does not administer public justice. The elements which affect the public confidence in the adjudication of disputes by an independent and impartial arm of government (in the broad sense) and which may be seen to inform what might be said to be freestanding norms of conduct and behaviour by judges conducting public hearings are not necessarily as easily transposable as strict obligations of administrative decision-makers acting in private. The tribunal here must investigate the facts for itself unaided by counsel presenting the parties' cases, to the degree and extent it thinks appropriate. The tribunal which has to reach a state of satisfaction may want to test and probe a recounted history. It may have particular matters troubling it for resolution, which require questioning and expressions of doubt which are entirely appropriate, but which if undertaken or said by a judge in open court in adversary litigation might give rise to an apprehension of a lack of impartiality. [20] At least in the absence of the identification of some prejudice or interest in the tribunal, for a complaint of apprehended bias based on the conduct of the tribunal in its procedure and the dealing with material before it in its reasons to be meaningful, it must carry with it an assertion of the apprehension of a possibility of predisposition. That is, the predisposition of the tribunal towards a result, other than a result reached by an evaluation of the material before it in a fair way with a mind that was open to persuasion in favour of the person in question. Unless that be demonstrated, it is hard to see how a decision-maker has failed to conform to standards of procedural fairness. Such an approach accords with the need for neutral and fair decision-making, without imposing on decision-makers in an administrative context the burden of behaving at all times as would a judge in public in the deployment of judicial power. [21] The enquiry is not directed to the personal thought processes of the decision-maker. It is directed to his or her conduct "objectified" through the prism of what a fair-minded and informed observer would reasonably apprehend ... It goes without saying that a conclusion, from all the materials, including the decision and the reasons for decision, that a fair-minded informed observer would reasonably apprehend a lack of impartiality in the sense discussed, does not carry with it the conclusion that there was a lack of impartiality. It was accepted by the Respondent Minister that if that conclusion was reached, the Tribunal's decision was vitiated by jurisdictional error. 10 This conclusion is reached upon the basis of a review of the transcript of the proceedings before the Tribunal as reconstituted. The transcript records a number of exchanges soundly basing a conclusion as to apprehended bias. 11 Thus, for example, a recurring concern being advanced by the Tribunal to the First Appellant was the proposition that Christianity was a fast-growing religion in Nepal and that there was no evidence that " proselytisers are being persecuted or gaoled ". A series of questions advancing this concern of the Tribunal was put to the First Appellant. Well, the point is the Christian churches are growing, okay? So proselytising is working, okay? There must be some kind of culture of people talking about Christianity and people listening, because Christian numbers in Nepal are increasing. Okay? But there's no evidence that proselytisers are being persecuted or gaoled. So the point is --- let me try and bring it back to you --- why can't you go back to Nepal and be part of one of the greatest and fastest growing religious phenomena in the country? Is that what you're saying? INTERPRETER: I was a proselytiser. MR HARDY: Look, non-Christians are becoming Christians in Nepal at a phenomenal rate. It's the fastest growing religious change in the country. Christians are on the increase, okay, and they weren't Christians before, the ones who are becoming Christians. So someone must be showing them how to be Christian. [NBMB]: Yeah. MR HARDY: Okay, and from what we can see it is these evangelical churches that are claiming the most success, you know, the proselytising churches. So why aren't they in gaol? They must be proselytising in an inoffensive way. INTERPRETER: They are in gaol but it's not in the record. Indeed, it was the very task of the Tribunal to seek the response of the First Appellant to its concerns. But the above exchange provides a basis, as do other exchanges in the transcript, for apprehending that the Tribunal had formed its own view, even a firmly held view, that proselytisers were not encountering the persecution being contended by the First Appellant. The exchanges also provide a basis for apprehending that the responses being provided by the First Appellant were not being properly considered. Comments by the Tribunal member, such as his comment that " they must be proselytising in an inoffensive way ", provide a basis for a " fair minded and informed bystander " to conclude that, to the contrary, the evidence of the First Appellant was being summarily, if not cynically, dismissed. 13 It is considered that there is in the present proceedings a reasonable apprehension that the Tribunal exhibited a " predisposition ... towards a result, other than a result reached by an evaluation of the material before it in a fair way with a mind that was open to persuasion in favour of the person in question ": NADH v Minister for Immigration & Multicultural & Indigenous Affairs , supra , at [20]. 14 This conclusion is only reinforced by the refusal of the Tribunal to adjourn or postpone its hearing to enable a witness to be called on behalf of the First Appellant, a Pastor David Boyd. This witness, it is understood, was proposed to be called to give evidence as to the First Appellant's " Christian commitment and also the situation for Christians in Nepal ". The request for the adjournment was made on 24 July 2006 and dates provided as to the time when he would be unavailable to attend. The Tribunal unquestionably has a discretionary power to adjourn proceedings: Migration Act 1958 (Cth), s 427(1)(b). Decisions as to whether or not hearings should be adjourned are largely within the discretion of administrative decision-makers. Relevant to the exercise of that discretion by the Tribunal in the present context is the legislative direction that it must conduct its review in a manner which " is fair, just, economical, informal and quick. " Procedural decisions of tribunals such as the Refugee Review Tribunal should not be lightly disturbed. Of present concern is not the decision in fact made to refuse to adjourn the proceedings; of present concern is that the refusal to do so only goes to reinforce an apprehension as to a lack of impartiality. Of itself, the refusal to adjourn the proceedings may have assumed little relevance; in context, however, it is yet a further factual basis upon which an informed bystander may question the impartiality of the Tribunal. The evidence sought to be called was not of marginal relevance but a matter of central relevance to the issues sought to be pursued by the Appellants. 15 A review of the transcript also provides a basis for an informed observer concluding that the Tribunal was becoming anxious to confine the explanation being provided by the First Appellant or indeed concerned as to the manner in which it was approaching its own task. Thus, for example, at one point the Tribunal was questioning the First Appellant as to why she did not seek an explanation from her migration agent and her statement that " there was no point in making an application ". So did this conversation take place? Because this is about your life and death here, and you didn't ask him why? INTERPRETER: What I told --- why I couldn't get protection, because he said to me that in --- because no-one can get it because your case will fail. If you apply to the skilled migration you've got right age and I don't --- I found a number on my point that can --- I can get from my age because of my cooking skill, and if I've got one sponsorer it will be easy for you to get permanent resident here. So you don't need to apply for protection visa. After that I came to Lockman. I told him, because I was advised that to apply for migration, skilled migration, if I applied for a refugee application it would be unsuccessful. After that, then, we went again to understand further and we went, four people, Lina, Lockman, my husband and myself. We asked and we asked and we asked to apply for protection but again we were advised that not to apply for because of unsuccessful. Then I was advised that he needed one sponsor that he could help my case. After that we came back home. He called me on the phone --- I mean, he phoned me and then talk about that, that I found a sponsor to help you, and asked to go to Parramatta, that he had made an appointment to see the man, and then there is a restaurant that you can go to a restaurant where we met him. After that, Lockman took me over there. Then we talk about it and he said yes. The owner of the restaurant agreed that he could help me. After that, we left Pawar. After that, when we understood that he said that we already applied, he had already applied, and you could --- and you had been successful. It's been applied. And (indistinct) you could go, and you could return within month. At that time, Lockman Limbu was (indistinct). After that, my husband went. After two or three weeks after he left the application was rejected but the Pawar didn't tell us, and visa was not in my passport at that time and it was going to be expired. When I went in they said to me that I have the letter, it is rejected, and the letter --- there was only two days left, and what you have to do, and he told me that whatever he could, do it. MR HARDY: Can you wind up this a little bit soon? Yes, go on. No, no, I can't do anything with that. How can it be that they're in gaol and it's not on the record? Where does your investigation come from? INTERPRETER: - - - I didn't understand to --- yes. MR HARDY: You're speaking very, very fast, okay? Maybe I am too. Yes. But also, the interpreter is. So it might have become --- it might have just got a little bit jammed, yes. Tribunal members must be free to control their own procedures and to confine, when appropriate, evidence being given. Further, given the importance of the issues being addressed by the Tribunal, it must be recognised that it may not only be the applicant in those proceedings who may experience distress but also Tribunal members themselves may understandably exhibit a degree of frustration. It is necessary always to bear in mind that an applicant for refugee status is, on one view of events, engaged in an often desperate battle for freedom, if not life itself. But those difficulties are to be confronted by the Tribunal in the execution of its tasks, not by a court that is asked to review the way in which the Tribunal reached its decision. A comment to " wind it up " undermines that confidence. So, too, does another exchange when a Tribunal member observed: " Do I have to squeeze information from you... ? " Not only could the First Appellant's confidence in the impartiality of the proceedings have been undermined by such exchanges, the fair-minded observer would also be similarly concerned. Even though it may be accepted that a Tribunal member, in the context of an inquisitorial review, may well frame questions differently to the manner in which questions may be asked by counsel or judges in judicial proceedings, the manner in which these questions -- and other questions -- were pursued was inappropriate. It is of obvious importance that a Tribunal member remains, and is seen to remain, measured in the manner in which a hearing proceeds and is not seen to rush questions and answers such that an informed observer may justifiably form a view that the Tribunal is not carefully seeking and considering the evidence being adduced in a measured and careful manner. 18 It is accepted that a reasonable apprehension of bias must be " firmly established ": Re JRL; Ex parte CJL [1986] HCA 39 ; (1986) 161 CLR 342 at 352. It is also accepted that it is not sufficient if the reasonable bystander merely " has a vague sense of unease or disquiet ": Jones v Australian Competition & Consumer Commission [2002] FCA 1054 at [100] , 76 ALD 424 at 441. And the question as to whether a reasonable apprehension of bias has been " firmly established " must also necessarily take into account the manner in which the legislature has directed the Tribunal to carry out its functions (ie s 420 of the 1958 Act) and the inquisitorial nature of the review being undertaken. 19 Further submissions relied upon by the Appellants focussed upon lengthy questions being put to the First Appellant and her expressed lack of understanding. Submissions also focussed upon an exchange between the Tribunal member and the First Appellant as to what was stated by the Tribunal to be an " inconsistency " in evidence. Those submissions are rejected. Although there are instances where long and perhaps complex questions were being asked of the First Appellant, a review of the transcript also records the Tribunal member thereafter attempting to address the lack of understanding being expressed by the First Appellant. Further, to the extent that the perceived " inconsistency " was the subject of questioning, the oral submission made during the hearing that the questioning evidenced the Tribunal " going out of its way to find an inconsistency where none existed " is rejected. 20 It is thus considered that the appeal should be allowed by reason of a reasonable apprehension of bias. Considered as a discrete ground, and not as a further way in which a reasonable apprehension of bias may be supported, the ground is rejected. 22 The opportunity was extended to the Appellants to " give evidence and present arguments relating to the issues arising in relation to the decision under review " within the meaning of s 425(1). That section confers upon an applicant an opportunity to " appear before the Tribunal to give evidence and present arguments "; the section does not confer upon an applicant a unilateral right to secure an adjournment of proceedings so that some particular evidence of a witness is in fact available. So long as an applicant has been given a meaningful opportunity to " give evidence and present arguments ", even if it is not the particular evidence which an applicant may prefer, there has been no breach of s 425. The issues being inquired into by the Tribunal, it is considered, were clearly identified with the First Appellant and she was given an opportunity to expand upon those issues. See SZBEL v Minister for Immigration & Multicultural & Indigenous Affairs [2006] HCA 63 at [47] , 228 CLR 152 at 164---7. LEAVE TO RAISE GROUND 3? The Appellants correctly accepted that they would require leave to rely upon the third proposed Ground of Appeal , that being a ground not raised for resolution before the Federal Magistrate. 24 Although the First Respondent opposed the granting of leave, Counsel quite properly had in Court those documents which answered the Notice to Produce and those documents were made available to the Appellants. Ultimately those additional facts which were relevant to the further ground, should leave be granted, became the subject of a " Note of Facts Agreed ". By means of that Note it became common ground that the Senior Member who in fact reconstituted the Tribunal had an appropriate delegation from the Principal Member to exercise the powers conferred by s 421 and/or s 422 and that s 422A(2) of the 1958 Act had not been complied with. 25 The course pursued at the hearing was to reserve the question as to whether leave should be granted and to hear submissions on the additional ground. 26 The resolution of the appeal in favour of the Appellants in accordance with their first Ground of Appeal necessarily has the consequence that it is unnecessary to further consider the fate of the additional further third Ground of Appeal, should leave be granted. Submissions were, however, made in respect to both the granting of leave and the substantive ground and it may be prudent to address both matters briefly. 27 The additional ground not pursued before the Federal Magistrate is a contention that the Tribunal on the second occasion had not been properly constituted. 422 and 422A . (b) There is no evidence that the Tribunal was reconstituted in accordance with these provisions. The Tribunal therefore lacks the authority to make the decision. 28 It was not disputed that the Court has ample power to allow both an amendment to a Notice of Appeal (see Federal Court of Australia Act 1976 (Cth), s 28(1)(b) ; Federal Court Rules (Cth), O 13, r 2) and to allow further evidence, if appropriate, on the appeal (Federal Court of Australia Act 1976 (Cth) s 27). The power is to be exercised in an appropriate case: see White v Minister for Immigration & Multicultural Affairs [2000] FCA 232 , 96 FCR 511; SZBLY v Minister for Immigration & Citizenship [2007] FCA 765 , 96 ALD 70. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The Court may grant leave if some point that was not taken below, but which clearly has merit, is advanced, and there is no real prejudice to the respondent in permitting it to be agitated. Where, however, there is no adequate explanation for the failure to take the point, and it seems to be of doubtful merit, leave should generally be refused. In our view, the proposed ground of appeal has no merit. There is no justification, therefore, for permitting it to be raised for the first time before this Court. 2) Is there an acceptable explanation of why they were not raised below? 3) How much dislocation to the Court and efficient use of judicial sitting time is really involved? 4) What is at stake in the case for the appellant? 5) Will the resolution of the issues raised have any importance beyond the case at hand? 6) Is there any actual prejudice, not viewing the notion of prejudice narrowly, to the respondent? 7) If so, can it be justly and practicably cured? 8) If not, where, in all the circumstances, do the interests of justice lie? 31 In the present appeal there is no satisfactory explanation as to why the ground was not pursued before the Federal Magistrate. The now Appellants were represented in that Court. The explanation now provided to this Court is simply that a " different mind " has now conceived an argument not previously contemplated. 32 Considerations in favour of granting leave undoubtedly include the absence of any factual dispute between the parties and the further additional facts necessary for the resolution of the appeal being within a very confined compass. The serious consequences attendant upon a wrongful refusal of a protection visa also supports the grant of leave. 33 Notwithstanding such considerations, it is considered that leave should be refused. There may be little -- if any -- prejudice to the Respondent Minister if leave were granted. But simply for a " different mind " to devise a new basis for challenge is not considered sufficient to warrant the now Appellants departing from the manner in which their case was presented to the Federal Magistrates Court. 34 Moreover, it is considered to be a particularly unmeritorious course for a legally represented party to participate in Tribunal proceedings, to take no objection to the then constitution of the Tribunal, and to thereafter raise the issue --- not before the Federal Magistrates Court --- but in this Court. Having participated in the Tribunal proceedings after it was reconstituted, questions also arise as to whether the Appellants had thereby waived any entitlement to challenge the manner in which it was constituted. Presumably no such argument would have been pursued by the Appellants had they been successful before that Tribunal. No submission, however, to this effect was relied upon by the Respondent Minister. It is, however, considered relevant to also take such considerations into account when refusing leave. 36 The Respondent Minister contends that the authority to reconstitute the Tribunal was conferred by either s 421 or s 422 of the Migration Act 1958 (Cth). The contention advanced on behalf of the Appellants was that there was " no evidence that the Tribunal was reconstituted in accordance with " ss 422 and 422A . The Minister accepts that no steps were taken in accordance with s 422A(2). The Minister's position was simply that s 422A was not the section relied upon; the authority to reconstitute the Tribunal was that conferred by ss 421 or 422 . (2) The Principal Member may give a written direction about who is to constitute the Tribunal for the purpose of a particular review. (2) If a direction is given, the Tribunal as constituted in accordance with the direction is to continue to finish the review and may, for that purpose, have regard to any record of the proceedings of the review made by the Tribunal as previously constituted. (3) In exercising powers under this section, the Principal Member must have regard to the objective set out in subsection 420(1). 37 The Appellants' contention was that the member of the Tribunal who constituted the initial Tribunal could not be said to be " not available ". Given the common ground between the parties, no question arose as to the authority of the delegate who exercised the power of the " principal member " to reconstitute the Tribunal. 38 The submission of the Respondent Minister in respect to s 421, it is considered, should be accepted. 39 The decision of the Tribunal as initially constituted had been set aside by the Federal Magistrates Court. Where such an order is made, " justice is in general better seen to be done if the Court or the Tribunal is reconstituted for the purposes of the rehearing ": Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 at 43. See also Australian Trade Commission v Underwood Exports Pty Ltd (1997) 49 ALD 426 at 427. The " usual position [is] that remission to a differently constituted tribunal is the ordinary way to proceed ": Industry Research & Development Board v IMT Ltd [2001] FCA 85 at [40] . 40 There is no reason to impose any constraint upon the power conferred by s 421(2). The decision of the initial Tribunal having been set aside, the exercise of the power conferred by s 421(2) thereafter arose for consideration. It is a power that can be exercised from time to time: Acts Interpretation Act 1901 (Cth), s 33(1). The discretion to be exercised by the Principal Member -- or his delegate -- was a discretion to be exercised in light of all the circumstances, including the order of the Federal Magistrates Court and what is recognised as " justice being seen to be done . " Section 421(2) confers a power of appointment upon the Principal Member -- or his delegate: Minister for Immigration & Multicultural Affairs v Wang [2003] HCA 11 at [40] , [2003] HCA 11 ; 215 CLR 518 at 532 per McHugh J. In the present proceedings, that power was exercised by a person with an appropriate delegation. 41 Further, for the purposes of s 422, a member of a tribunal may " not [be] available " where (for example) his or her term of appointment has expired: Cf Re Briggs and Australian Taxation Office (No 1) (1986) 86 ATC 2034 at 2040. Nor is that expression confined to circumstances in which a tribunal member has died (eg, Re Hulls and Department of Social Security [1990] AATA 198 , 21 ALD 322 at 323; Re BHP Petroleum Pty Ltd and Collector of Customs, Vic [1987] AATA 13). The expression also extends to those situations where a tribunal member has resigned (eg, Re Ljubo Mihajlovic and Snowy Mountains Hydo-Electric Authority [1990] AATA 293 at [9] ; Re Mcintyre and Repatriation Commission [1990] AATA 225 at [2] . But these are not the only circumstance in which a member may " not [be] available. " Although it is not necessary to resolve the point, a member may also " not [be] available " where an order is made quashing the decision of the Tribunal as originally constituted. For the purposes of s 422(1)(b), it is considered that the member constituting the initial Tribunal may thereby become " not available ". Any contrary conclusion may involve embracing a proposition that a member remains " available " even though " justice in general is better seen to be done " if that member did not further participate in any rehearing. This construction of s 422(1)(b) may be further reinforced when consideration is given to the terms of that provision, namely a member ceasing to be available " for any reason . Having considered the additional ground, and having concluded that it should be rejected, the decision to refuse leave to amend is only further reinforced. 44 In the present appeal the Appellants have been successful. But some time and costs would inevitably have been incurred by the Respondent Minister in preparing for the application for leave to appeal and the resolution of the further Ground of Appeal , should leave be granted. On the application for leave, the Appellants have been unsuccessful. They have also been unsuccessful in respect to the second of their Grounds of Appeal . 45 It is considered that an appropriate exercise of discretion is that the First Respondent should pay 75% of the costs of the Appellants. Leave be granted to file the Amended Notice of Appeal dated 19 February 2008. 2. Leave to raise Ground 3 in the Amended Notice of Appeal be refused. 3. The orders of the Federal Magistrates Court as made on 17 August 2007 be set aside. 4. The Second Respondent review, according to law, the decision of the First Respondent made on 25 November 2005 refusing the applications of the Appellants. 5. The Second Respondent for the purposes of conducting that review be differently constituted. 6. The First Respondent is to pay 75% of the costs of the Appellants of and incidental to the appeal. | refugee review tribunal apprehension of bias test to be applied leave to raise a new ground of appeal refused migration act 1958 (cth) s 425(1) does not confer upon an applicant a unilateral right to secure an adjournment of proceedings so that particular evidence can be presented s 425(1) complied with as long as applicant is given a meaningful opportunity to give evidence and present arguments administrative law migration law |
It is located approximately half way between Katherine and Kununurra. The Ngaliwurru and Nungali Peoples, represented in these proceedings by Alan Griffiths and William Gulwin, have lodged an application for a native title determination in respect of certain land and waters located within the town boundaries. The application is opposed by the Northern Territory of Australia, and by the Amateur Fishermen's Association of the Northern Territory ("AFANT"). 2 For the purposes of this judgment, the town of Timber Creek must be distinguished from the creek which flows within the town, after which the town is named. All references hereafter to Timber Creek will be to the town, while references to "the Creek" will be to the waterway that runs through it. 3 Timber Creek lies along the south bank of the Victoria River. The Creek is a tributary of that river, and joins it near the head of the tidal reach. A map of the general area surrounding Timber Creek is appended to these reasons for judgment as Schedule A1. A closer view of that area is appended as Schedule A2. 4 Much of the terrain surrounding Timber Creek is spectacular. Escarpments and gorges are carved into sediments from the many rivers and creeks in the area. The landscape has been shaped by volcanic activity and erosion. 5 The Victoria River area is generally described as a "mecca" for fishing. It has some of the best and biggest barramundi to be found in the Northern Territory. Barramundi can be caught all year round, though the best time is said to be between late March and late May, coinciding with the end of the monsoon season. There are also a number of other tourist attractions in the area. These include river cruises, wildlife parks, scenic flights, lookouts and walks. 6 This case concerns a claim for a determination of native title relating to a very small area, the entirety of which falls within the boundaries of what is by now an established town. It raises for consideration a number of the issues that frequently arise in native title cases, but also the operation of s 47B of the Native Title Act 1993 (Cth) ("the NT Act "). That section has recently been the subject of judicial consideration, but its limits have yet to be fully explored. It has the potential to overcome the effect of any acts that might otherwise have extinguished native title. Each application is brought pursuant to s 61(1) of the NT Act . 8 The first application, D6016 of 1999 ( Alan Griffiths on behalf of the Ngaliwurru and Nungali Peoples v Northern Territory ) was filed on 10 December 1999. The area claimed was Lot 47 Timber Creek, being described as an area proposed for compulsory acquisition by notice dated 3 September 1999. The application was brought as a defensive measure, in anticipation of an act by the Northern Territory government that might otherwise have defeated any claim to that land. 9 The second application, D6008 of 2000 ( Alan Griffiths and William Gulwin on behalf of the Ngaliwurru and Nungali Peoples v Northern Territory ) was filed on 11 May 2000. The area claimed comprised Lots 97-100, 109 and 114 Timber Creek, being described as areas proposed for compulsory acquisition by notices dated 2 February 2000. This application too was brought as a defensive measure. 10 The third, and most comprehensive application, D6012 of 2000 ( Alan Griffiths and William Gulwin on behalf of the Ngaliwurru and Nungali Peoples v Northern Territory and Anor ) was filed on 18 July 2000. The area claimed was described as other claimable land within the town boundaries of the town of Timber Creek, specified to be Lots 1-9, 22, 33, 35, 37, 49, 56-57, 65-74, 80, 87, 101-108, 110-113, the waterway of Timber Creek including its beds and banks, and Special Purposes Lease 00494 (Lot 16), owned by the Conservation Land Corporation. 11 As initially formulated, the third application included a claim to that part of the Victoria River, and its bed and banks, which lay within the town boundaries. However, shortly before this trial began, the claimants were granted leave to exclude the Victoria River from the ambit of their claim. 12 Although the three native title determination applications presently before the Court have never, at any stage, been consolidated, they were, with the consent of the parties, heard together. By agreement, the evidence in each application was treated as evidence in the others. 13 Initially, the Commonwealth was joined as a respondent to each application. However, in August 2003 it withdrew from D6016 of 1999 and D6008 of 2000 once it was satisfied that it had no interest in the land claimed in those proceedings. In January 2005, the Commonwealth withdrew from D6012 of 2000 after the claimants made it clear that they no longer proposed to pursue a claim to the Victoria River, or its bed and banks. 14 AFANT is a body that represents the interests of amateur fishermen in the Northern Territory in pursuing their recreational and sporting activities. It was joined as the third respondent to proceeding D6012 of 2000. With the withdrawal of the Commonwealth from that proceeding there is no longer any designated second respondent. For convenience, AFANT is still named as the third respondent. As previously indicated, it is brought in the names of two senior representatives of the Ngaliwurru and Nungali Peoples, Alan Griffiths and William Gulwin. 16 The Further Amended Application was amended pursuant to leave granted well into the course of the trial. Nothing of any consequence turns upon these amendments. In substance, what occurred was simply that the description of the apical ancestors of the "native title claim group" was altered in order to reflect the evidence that had been given in the trial. 17 Section 61(2)(a) of the NT Act provides that an application for a native title determination may be made by a person or persons authorised to make that application by a "native title claim group". Section 61(2)(c) provides that the person, or persons who are so authorised are jointly designated, in the singular, as "the applicant". 18 In the present case neither Mr Griffiths' nor Mr Gulwin's authority to make this application as the persons authorised by the native title claim group to do so is disputed. 19 Invoking s 223(1) of the NT Act , the claimants say that, according to the traditional laws acknowledged, and the traditional customs observed, the Ngaliwurru and Nungali Peoples have, by those laws and customs, a connection with the claim area that gives rise to native title rights and interests recognised by the common law of Australia. They say that the connection of the claimants with the claim area arises through spiritual, religious, physical and historical associations, through biological, classificatory or adoptive descent through the four grandparental lines, and through processes of succession. They say that the claimants have communal rather than individual rights and interests in relation to the claim area. 24, 20 June 1975). A map of Timber Creek showing each Lot claimed is appended to these reasons for judgment as Schedule B. That is said to be subject only to "Schedule U of this application". However, for reasons that are not immediately apparent, no such schedule is in fact appended to the application. 23 The Further Amended Application states that title searches have been made in relation to Lots 6, 33 and 49, and that there were no titles issued in relation to any of those Lots. It alleges that the Ngaliwurru and Nungali Peoples were, and are, traditionally, the owners of the land and waters that are the subject of these proceedings. It asserts that the Ngaliwurru and Nungali Peoples have exercised the native title rights and interests described in the preceding paragraph "from time immemorial". It says that they, and their ancestors, have, by their traditional laws acknowledged, and their traditional customs observed, maintained a connection with the claim area from well before the date on which the Crown acquired sovereignty. In relation to the Northern Territory, the year of sovereignty was 1825. 26 The pleading states that the claim area is merely part of a much larger area of land and waters owned and occupied by the Ngaliwurru and Nungali Peoples since before the acquisition of sovereignty. It states that a number of important sites both within and surrounding the claim area have been recorded and/or registered under the Northern Territory Aboriginal Sacred Sites Act 1989 (NT). It says that the claimants' traditional connection with the land, going back to the time of their ancestors, is demonstrated by archaeological findings that establish long standing habitation of the area. It asserts that some of this evidence goes back to a time well before the first Europeans came into contact with local indigenous people. 27 The pleading then sets out detailed particulars of the traditional laws and customs that the claimants say the Ngaliwurru and Nungali Peoples have long observed. These include a common kinship system, observance of common laws relating to land tenure, and traditional usage of land and waters. In addition, it provides particulars of activities currently undertaken by the claimants within the claim area. Apart from occupying the land, they are said to hunt and collect animals, fish and other food, to share, trade and exchange resources, to conduct ceremonies, to restrict the access of outsiders, and to care for the land and waters in accordance with spiritual and social obligations. They are also said to bury the dead on the land, to maintain traditional knowledge of the land and waters, and to pass that knowledge on to younger generations. 28 It is important to note, as the pleading recognises, that Timber Creek, and much of the surrounding countryside was, at one time, subject to pastoral leases. The terms upon which those leases were granted varied somewhat. Some might be regarded as "exclusive" while others would perhaps be characterised as "non-exclusive", in the sense in which those expressions are used in the NT Act . 29 Irrespective of whether the pastoral leases were exclusive or non-exclusive, they would normally have extinguished any native title rights and interests that might otherwise be held by the claimants. However, the claimants contend, in their pleading, that s 47B of the NT Act applies to the claim area. If that is so, any extinguishment of their native title rights and interests that might otherwise result from the creation of any prior interest through pastoral leases is required, by that section, to be "disregarded". 30 In this judgment, by reason of s 47B , questions of extinguishment will be addressed against a different statutory background than might otherwise be the case. There are over one hundred such documents. A number of them are quite lengthy, and copiously footnoted. 32 It may be useful, at this stage, to provide a brief overview of the type of material contained within this folder. 33 For example, Document 1, " Hidden Histories ", written in 1991, contains what its author, Professor Deborah Bird Rose ("Professor Rose"), Professor of Prehistory and Anthropology at the Australian National University, describes as "Black Stories from Victoria River Downs, Humbert River and Wave Hill Stations". 34 Document 2 is described as a "Log Book of Bradshaw's Run". It contains a number of extracts from hand written notes regarding the activities of Mr Fred Bradshaw, a pastoralist, contemporaneously made in 1894. 35 Document 4, " Dingo Makes Us Human --- Life and Land in an Aboriginal Australian Culture ", by Professor Rose, contains endnotes from her valuable account of the life of aboriginal people in the Victoria River area prior to, and after, initial contact with Europeans in the latter part of the nineteenth century. 36 Document 7 is of particular significance to these proceedings. It consists of extracts from the field notes of a renowned anthropologist, Professor W E H Stanner ("Professor Stanner"), written in 1935, after had undertaken an expedition to the country around Victoria River Downs in 1934. Professor Stanner is, even today, regarded as one of the leading figures in indigenous anthropology, and his work features heavily in the anthropological reports prepared by the experts who gave evidence before me. 37 Also featured in the folder of History Documents were a number of papers on different subjects written by Darrell Lewis. Mr Lewis is a graduate in pre-history from the Australian National University, having graduated with honours in archaeology in 1983. He then enrolled in a Masters degree in archaeology at the same university, and completed a thesis on the rock art of the Victoria River district. He prepared as report based upon field and archival research into the history of that region which he had carried out over a 27 year period. He is married to Professor Rose, and assisted her in the preparation of her book " Hidden Histories ". He has, since the early 1970s, carried out research into the ethnography and rock art of the Victoria River district, and has written extensively on the history of the region. 38 Of particular importance, given the issues in this case, are the earliest extant records of European explorers, namely those of Augustus Gregory dating back to his expedition in 1855. There are a total of twenty-one separate extracts from Gregory's notes, and they shed considerable light upon conditions in the area at the time. His discussion of his contacts with the "blacks" around Stokes Range near the eastern banks of the Victoria River is particularly illuminating. 39 There are many other primary sources, old and new, contained in the folder of History Documents. I have read them all, and had regard to them in preparing these reasons for judgment. I do not think that it is necessary to refer to them in any detail. The historical record is not, of itself, a focal point of dispute between the parties. Broadly speaking, the history of the area is uncontentious. 40 European knowledge of the Victoria River district was gained gradually, over a period of time, from the earliest explorations until settlement. The first European contact occurred in the early 1500s, when Portuguese seafarers compiled what was known as "the Dieppe map" . In 1644, Abel Tasman sailed the northern coastline, but left no records of significance so far as these proceedings are concerned. In 1819, Phillip King was sent on a mission to explore the Victoria River. However, he failed in that endeavour, and there is nothing to be gleaned from any records of that mission. 41 In 1839, Captain John Wickham and Lieutenant John Stokes explored the lower Victoria River, in the course of their survey of the northern Australian coast. However, they did not remain in the area for long, and left no records that are of any great utility to this case. However, there is recorded, in Stokes' notes, an account of a native village located one mile southwest of the Victoria River containing "thirteen huts of paper bark". In addition, Stokes recorded a party of aborigines crossing the river, heading downstream. He said that there was a "large local population". He saw other signs of indigenous occupation, including the remains of a fire, and burnt off areas. 42 Captain Wickham's reports led to the expedition of Augustus Gregory in 1855, to which I have already referred. During that expedition, a depot camp was established on the southern bank of the Victoria River, just below where Timber Creek is now located. The expedition paved the way for the arrival of the pastoralists that was to follow. 43 Gregory's expedition is interesting in other ways. He sailed from Queensland to the Northern Territory, and along the Victoria River. He was shipwrecked in the area now known as Timber Creek. Legend has it that Timber Creek was given that name because Gregory had to cut down a large amount of timber in order to make repairs. The site of Gregory's camp can still be visited, and some of his carvings can be seen on one of the Boab trees in Timber Creek. Over an eight month period he explored much of the region, and helped to open it up to others. He left a detailed published account of his expedition in his journal. It described indigenous people as having frequently visited his camp, and on one occasion as having displayed hostility. Shots were fired, and one man was slightly wounded. In addition, there are diaries and letters of expedition members who record contact with indigenous people at the camp. 44 The major result of Gregory's exploration was to make known the tremendous extent of prime grazing land in the region. Lewis comments that one of the ensuring mysteries of European settlement is that this "pastoralists' bonanza" remained untouched for almost 30 years thereafter. That is not to say that there was no significant European contact before the arrival of the pastoralists. In 1865, Captain Hutchinson, on behalf of the South Australian Government, explored the northern coast in search of a suitable location for a settlement. In 1867, Captain Francis Cadell visited the Victoria River area. However, neither he, nor Captain Hutchinson, saw any advantage in attempting permanent settlement in this region. Forrest came overland from the Kimberley region. By the time he and his men reached the Victoria River district they were starving, and many were ill. They had little or no contact with the local indigenous inhabitants. They left no records that are of any great assistance in this case. 46 It was at about the time of Forrest's expedition that the first pastoral leases in this area were granted. However, the actual stocking of any of the various holdings did not commence until several years later. The first permanent European settlement occurred with the establishment of several cattle stations. These included Delamere in 1881; Wave Hill and Victoria River Downs ("VRD") in 1883; Ord River in 1884; Auvergne in 1886; Newry in 1888; Bradshaw in 1894 and Inverway in either 1894 or 1895. 47 After the arrival of the first permanent European settlers, Timber Creek became an important port. It served that purpose until some time in the 1930s when the construction of roads in the region made the port redundant. 48 In 1890 a local store was opened at a place known as Gregory's Depot, upstream from Victoria River Depot. This was the closest source of supply to the surrounding cattle stations, and provided a stopover point for travellers to replenish their supplies. 49 Indigenous inhabitants of the area soon found themselves being excluded from their traditional lands by various cattle station owners. Initially, cattle grazed on only a relatively small portion of the total leasehold areas. However, as herds grew and pastoralists become more familiar with the country, the area under their control widened. This increased pressure upon local indigenous groups. Within a few years, those aboriginal persons who had not been killed, in a hopeless conflict with white settlers, were forced out of their traditional lands, and into the bush. 50 During these early years of settlement, relations between the local indigenous groups and the European settlers ranged from open warfare, and massacres, to what was at times friendly cooperation. However, the unstable relations between the indigenous groups and the pastoralists soon made it obvious that there was a need to maintain law and order. In 1897 the Timber Creek police station was first built. It remains in place today. 51 In the early 1900s, some station managers began to encourage aboriginal people to settle at the various homesteads and outstations. A number made the transition. However, while the open conflict may have ended, cattle spearing and theft from station stores and unoccupied camps continued. This situation quickly degenerated into a kind of guerrilla warfare, with aborigines striking opportunistically and then retreating into rough range country. 52 For the first decade or so after settlement ("post-contact") there was little, if any, peaceful interchange between pastoralists and aborigines. Most station work was done by whites, or by indigenous persons brought in from distant regions. Eventually things began to change. The general level of hostility decreased, and was replaced by conflict of a more sporadic nature. Peaceful contact became more regular, and by 1905 most stations had established aboriginal camps at homesteads and outstations. Gradually local aborigines mastered the various skills required for cattle work. 53 During the period when aboriginal people were "coming in", they were employed variously as station hands, domestics, or as labourers whose job it was to transfer stores from ships that came along the Victoria River to shallow-draught vessels. They were also employed as teamsters, responsible for taking supplies to the various stations. 54 It must be remembered that throughout this period, all aboriginal people were under the control of a Chief Protector of Aborigines. See generally, The Northern Territory Aboriginals Act 1910 (SA). This resulted in laws such as the right to remove 'half caste' children. It also meant that indigenous persons were subjected to restricted travel and forced labour. They had no right to vote, and no right to receive an education. Although these laws provided that the Chief Protector (and under him, the police), were responsible for the welfare of aborigines, in practice it was usually the station manager or other white station employees who exercised day to day control over their lives. 55 The police were also responsible for issuing rations to those indigenous persons who regularly camped near the police station. While the records regarding this practice were not always well kept, it is believed that it continued until approximately 1979. 56 As indigenous people became increasingly involved in station work, the station economies became gradually more dependent on their labour. The period from roughly 1920 to 1960 saw little change in their conditions. The stations operated on the open range system of cattle grazing. During the dry season cattle were mustered for ear marking, branding, and other tasks. At the beginning of the wet season the stock camps closed down and most station employees were laid off. Aboriginal workers usually returned their clothes to the station store, were provided with basic provisions, and returned to the bush, walking across country to visit relatives and engage in traditional ceremonies. 57 Mr Lewis, who appears to have put together the folder of History Documents, and who produced the "History Report" upon which much of this summary is based, also wrote a short introductory history of the region in 1997. It is entitled " A Shared History --- Aborigines and White Australians in the Victoria River District Northern Territory ". Some refused ever to "come in", living out their lives in the rough back country of the stations. Others spent time in station camps, or in station employment and then returned to the bush, moving freely between the two modes of life. 59 Many of the stations in the Victoria River district were large and, for much of their history, owned by overseas operators, such as Vesteys. These overseas based owners were, for years, reluctant to invest in fencing, or other improvements. Without fencing, it was difficult to control cattle, or to improve bloodstock. Consequently, cattle on the stations were more like wild animals than domestic beasts. Stock work resembled hunting rather more than husbandry. 60 World War II impacted only slightly on the Victoria River district. Although the town of Katherine was bombed by the Japanese, no homesteads in the vicinity of the Victoria River were attacked. Nonetheless, there was a small military presence at Timber Creek. Trenches were dug, and the local police hid important records and stores, in case of invasion. 61 One effect of the war was that many white station employees and drovers enlisted in the armed forces. This left a shortage of stockmen. Indigenous persons began to play a greater role in the cattle station economy, and some were put in charge of stock camps for the first time. Victoria River district aborigines became aware that improved work conditions were possible, and aspired to a greater degree of equality than had hitherto been the case. However, when the war ended, station life for aborigines reverted, more or less, to what it had been in earlier times. 62 In 1966, local dissatisfaction on the part of indigenous persons finally came to a head at Wave Hill. Aboriginal employees walked off the job, and camped in the Victoria River bed. Initially they demanded full wages and improved conditions before returning to work. However, these demands were soon overtaken by others, including in particular a demand for land rights. By 1972, aborigines from other stations had joined the strike. 63 This action caused turmoil in the regional station economy. Ultimately, indigenous persons gained independence from the stations, and began to receive full wages. The stations themselves reorganised their economies, spending more on fencing and other infrastructure, and relying increasingly on technological advances rather than on large numbers of low paid stockmen. Consequently, far fewer aborigines came to be employed than had previously been the case. 64 Until the 1970s, all land in the Victoria River district had been held under some form of European title, generally pastoral leases or, annual pastoral permits. In addition, some of the land was Crown land, in the form of town commons, stock routes and stock reserves. In 1973, the Commonwealth Government acquired Kildurk Station, which was later renamed Amanbidji. It subsequently turned over that land to the indigenous community as aboriginal freehold land. 65 The Wave Hill strikes also contributed to the enactment of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ("the Land Rights Act "). This resulted in some indigenous groups gaining grants of land in the northern Victoria River region. For example, Fitzroy Station, Innesvale Station, the Stokes Range north of Jasper Gorge, and Jasper Gorge itself, Mistake Creek, part of Wave Hill, and the Hooker Creek Aboriginal Reserve all came under aboriginal control. Gaining title to this land enabled the local community to avail itself of infrastructure which included housing, electricity and schools. 66 Mr Lewis, upon whose work I have based a good deal of this brief historical account, comments that the strikes of the late 1960s and early 1970s, and the rise a of land rights movement, led to resentment by white cattlemen towards aborigines. In some instances, indigenous persons found that they were no longer able to live on the stations, and that they were forced to move to the nearest town. Alternatively, they moved to aboriginal living areas such as Daguragu and Yarralin. Ultimately a generation of young indigenous persons grew up with little or no experience of station work, few prospects of meaningful employment, and the attendant social and economic problems that this entailed. 67 According to Mr Lewis, conditions began to improve after the mid-1980s. Old resentments began to die away, and the number of indigenous persons working on the stations steadily increased. In addition, education standards began to improve. By 1997, indigenous health workers, teaching aides, and police aides were being employed in the region. Indeed, in that year, four of the eight Timber Creek Town Councillors were indigenous persons. That made Timber Creek the only town in Australia that was governed by a council with an equal number of indigenous and non-indigenous representatives. 68 In 1983, a primary school was established at Timber Creek. Initially only indigenous children attended. Local non-indigenous children undertook their studies through other means. The first non-indigenous child was enrolled in 1992. By 1997 virtually all local non-indigenous children attended the school. In addition, an Aboriginal Community Police Officer was assigned to the local police station. 69 Mr Lewis concludes that the historical record clearly shows that aborigines have been associated with the Timber Creek area from the time of the first European explorers and during the entire period of European settlement. He says that there is no reason to believe that the aborigines encountered by the explorers and early settlers were not the ancestors of the aboriginal people living in the area today. He notes that indigenous people strongly identify with particular tracts of country, and that Stanner recorded a long standing connection between the Nungali and Ngaliwurru peoples with Timber Creek as far back as 1934. He says that the association of these people with Timber Creek has been maintained throughout in spite of early violent contact with Europeans. He also comments that since the successful land claim over Timber Creek in 1985, strong communities have developed in the area. He adds that despite over 100 years of European settlement, traditional languages are still spoken, ceremonies performed and traditional foods and medicines harvested. People know where the travelling and localised Dreamings are active, and have taken steps to map and register sacred sites. Traditional trade links still operate. As well, people remember and recount their history. Young men's initiation ceremonies are performed regularly. In his view, there is much about the manner in which the local community goes about its daily life that reflects long standing traditional law and custom. Those findings relate to land that immediately surrounds Timber Creek, but not the town itself. That is so because the Land Rights Act does not encompass claims to land situated within towns. The findings are said to be of particular importance not merely because of the proximity of the areas concerned, but also because they relate basically to the same indigenous groups as are claimants in the proceedings before me. 71 The claimants acknowledge that any findings made by the Aboriginal Land Commissioners must be qualified having regard to the fact that they were made under the Land Rights Act , a statutory regime that differs significantly from that of the NT Act . Under the Land Rights Act the primary issue is whether a particular claimant, or claimants, can demonstrate "traditional Aboriginal ownership", as that expression is defined in s 3(1) of that Act. That section provides, in substance, that unless the contrary intention appears "traditional Aboriginal owners" in relation to land means a "local descent group" of aboriginals. That group must have common spiritual affiliations to a site on the land that places the group under a primary spiritual responsibility for that site, and for the land. The group must be entitled by aboriginal tradition to forage as a right over the land. 72 The key term, "traditional Aboriginal owners" is not a term of art. It is rather a creature of statute. Under the Land Rights Act , claimants are not required to establish either continuity or historical links with the land . Indeed, it has been held that by reason of the definition of "Aboriginal tradition" in s 3(1) , the Land Rights Act deals not so much with "traditions", in the sense of immutable customs handed down from ancestors, but rather with the observances, customs and beliefs actually practised by a particular community at the time of the relevant inquiry. 74 The position under the NT Act stands in sharp contrast. The claimants must show that they are a society united in and by their acknowledgment and observance of a body of laws and customs; that the present day body of accepted laws and customs is, in essence, the same body of laws and customs acknowledged and observed by their ancestors (adapted to modern circumstances); and that the acknowledgment and observance of those laws and customs has continued substantially uninterrupted by each generation since sovereignty in 1825. 75 There are four determinations under the Land Rights Act that are of particular significance so far as the claimants are concerned. Those findings were all generally favourable to the indigenous groups that instituted the land claims. Section 86 of the NT Act renders them admissible in these proceedings as "the transcript of evidence in any other proceedings before ... any other person or body": Risk v Northern Territory of Australia [2006] FCA 404 per Mansfield J (at [431]-[432]) (" Risk "). Its original intention was to claim only the Timber Creek Commonage Reserve ("the Reserve"). However, before the inquiry commenced the application was twice amended so as to include all those parts of the bed and banks of the Victoria River between the eastern and western boundaries of the Reserve which did not form part of the town of Timber Creek. At a later stage of the inquiry, the claimants withdrew so much of the claim as related to the bed of the river, and its northern bank. However, they maintained the claim to the southern bank, immediately adjoining the Reserve. 77 There were 163 claimants in all. They were presented as one group, comprising six sub-groups, each of which was associated with a separate tract of land. During the course of the proceeding, the senior members of the sub-group identified the country with which that sub-group was associated by referring to a focal site, and by associating that tract of land with a named male person. 78 Commissioner Maurice noted that it appeared from the genealogies and evidence associating past generations with one tract or another that the predominant, if not exclusive, principle for recruitment to the sub-group was patrilineal descent. The only exception was that of a single sub-group, designated sub-group A, whose patriline had died out in comparatively recent times. 79 An anthropologist with considerable experience in land claims, Dr Ian Keen, described the claimants in that land claim as a "cognatic kin group". Commissioner Maurice accepted that description as apt, but considered it unnecessary to rely upon any such concept to arrive at the conclusion that the claimants now formed a "local descent group" within the meaning of the Land Rights Act . The two senior members of sub-group A can, and to my mind do, rely in part upon succession to the country of their deceased mother's father. All those in the succeeding generations can point to descent through the patriline or the matriline or both, and that, I am satisfied, is the principle of descent which has been operating for two or three generations among this group. The tract of land with which it was traditionally associated included the western three-quarters of the claim area, and the whole of the land comprised within the boundaries of Timber Creek. When the claimants referred to that tract of land, they invariably described it as "Lamparangana's country". Its focal site was described as "Makalamayi", in the north-east corner of the town area. The Commissioner described this as an important site, associated with the Snake, Stingray, Shark and Barramundi Dreamings. 81 The evidence before the Commissioner was that Lamparangana had died about 30 or 40 years prior to the hearing. That meant that he probably died some time in the late 1940s or the early 1950s. This was within the living memory of at least the more senior claimants, many of whom appeared to have known him. The genealogies prepared for the purpose of the hearing showed some four generations below Lamparangana. He was said to have had only one child, a son, who had been killed whilst still young. He was also said to have had a brother, Mangaramawuk who had a daughter, Clara. She in turn had two children, Alan Griffiths and Pat Jatjat. They were both claimants in the Timber Creek Land Claim as were their children and grandchildren. 82 Alan Griffiths was the only member of sub-group A to give evidence in the course of the Timber Creek Land Claim. He said that he was born and raised on his father's country, at VRD. As a young boy, he had regularly visited Timber Creek with his parents. By the 1980s, he and his family lived in Kununurra, and had done so for some years. However, he maintained that it was his custom to visit Timber Creek annually, with his sons. 83 Mr Griffiths' claim was based substantially on his direct genealogical links to Mangaramawuk, his maternal grandfather. The other claimants clearly regarded him as one of the traditional owners of Lamparangana's country and, so it appeared to Commissioner Maurice, to the rest of the claim area as well. He noted that she lived at Yarralin, an Aboriginal community located on VRD, about 150 kilometres by road from Timber Creek. She was married to a patrilineal descendant of sub-group D, which had its focal site at Wantawul. Although she had spent a good part of her life on VRD, she was well known to most of the other adult claimants. Indeed, she had lived at Timber Creek until about a year or so before the Timber Creek Land Claim Report was completed. Her husband had been employed as a tracker by the Timber Creek police. He said that there was a strong affinity between Little Wally and Lamparangana. Before he died Lamparangana was reputed to have asked Little Wally to take over his, Lamparangana's, country. Darby also gave evidence before the Commissioner, and was regarded as an impressive witness. The Commissioner found Darby to be a man who strongly identified with the claim area, and its still rich mythology. Apart from Darby and his children, the only other member of sub-group B was his deceased sister's son, Georgie Jones. 88 The Commissioner then turned to sub-group C. Its focal site was Yanturi, on the Victoria River. Two members of that sub-group gave evidence, saying that they took Yanturi country from their father. One of them, Jo Kulpitala, when tested as to his knowledge of places on his "Yakpali" (father country) was able to demonstrate an extensive knowledge of the sites and Dreamings in the claim area. The Commissioner concluded that the members of this sub-group had strong spiritual affiliations to the various sites and the surrounding country, and that they played a leading role in the ritual and ceremonial life of the claimant group. 89 Sub-group D had as its focal site Wantawul, which was east of the claim area. There was evidence that Wantawul was associated with the Caterpillar Dreaming, itself a manifestation of the rainbow snake. Evidence was given by Paddy Bullita, the senior spokesman for the sub-group, who said that his country was Yanturi. He said that members of his generation traced their membership of the sub-group through the patriline. He said that he took country from Lamparangana, who had taught him the Dreamings. The other main witness was Darby's mother, Dinah Maylinti, Little Wally's wife. She said that she took country through both her father and mother and, in relation to Timber Creek, through Little Wally. 90 Sub-group E had as its focal site Maiyalaniwung, well to the south of the claim area. It had as its main speakers two sisters, Violet and Nida. Violet described Maiyalaniwung as her father country. Their father, Takawuk, eventually came to live at Timber Creek where Nida was born. The sisters said they came into contact with members of the other sub-groups, including Lamparangana. It was he who had taught Violet about his country. Violet said that all the claimants looked after Lamparangana's country. In her case that was because she had grown up there. 91 The last of the sub-groups was sub-group F. The father country for this sub-group was Kuwang, better known as Stokes Range. It lay well to the east and south of the claim area. Three patrilineal members of that sub-group spoke during the hearing. They were Big Mick, Little Mick and Bardi. They were all the sons of Big Wally. The Commissioner described Big Mick's knowledge of the sites and mythology, not only of the claim area but of the entire region, as "unsurpassed". 92 The Commissioner visited many sites in the claim area that were said to be of historical significance. He noted that there were marked concentrations of sites in the valleys associated with the Victoria River, Timber Creek and, to a lesser extent, Line Creek. He concluded that the narratives conveyed by the senior claimants showed that they believed that various mythological creatures of the Dreamtime had passed through various locations, and left something of their essence behind in the places they had visited. They also believed that the spirits of these Dreamings still inhabited the land, and that they were most powerful at those places where they had stopped. 93 The claimants were questioned about their personal Dreamings. These were described as kuning and ngulu, the former being inherited patrilineally, and the latter inherited matrilineally. Ultimately, the Commissioner considered the evidence regarding these matters to be somewhat obscure. He did not find it necessary to come to any firm conclusions regarding this evidence. The same seems to apply to the distant country centred on Yanturi, but no clear picture emerged for that centred on Wantawul or Kuwang". He said that he could not find any smaller collection of the claimants who might rightly be identified as having responsibilities of a higher order than the rest of them. Firstly, they do identify particular tracts of land with six identifiable patriclans. Secondly, because of the influences and constraints placed upon them over the past 100 years or so by European settlement, Lamparangana's country must have developed outstanding economic and religious significance for them. Thirdly, at least in that period, secondary rights in and responsibility for country traditionally derived from mother or her male relatives, for co-residence, from marriage and possibly from other sources must have had great significance. Dr Keen's categorisation of the six sub-groups as together constituting a cognatic kin group serves to emphasise the underlying familial ties that justified the oft made assertion that all the family --- meaning all the six sub-groups --- were looking after the country now. Fourthly, people asserted a right to Lamparangana's country in common with other claimants, not by asserting their membership of a group, but by calling upon blood or affinal connections with him. Fifthly, Lamparangana was the last of the line. From what I can gather of the nature of the man, he too must have been very concerned about who would look after the country when he was gone. Sixthly, Little Wally and Takawuk were short on patrilineal descendants to ensure the survival and continuity of the group. Seventh, eminent men like the fathers of Jo and Duncan, the two Micks, and Paddy Bullita had been dispossessed in the sense that their father country had been taken over by the pastoralists and was now no longer as accessible to them. For their culture to survive it was necessary to accord equal status to the larger cognative kin group. I strongly suspect that the catalyst for this was the need to recognise a successor to Lamparangana's country. Alan Griffiths was among the claimants. 96 Justice Olney indicated in his report that he had avoided the temptation to enter upon a critical analysis of the anthropological evidence presented to him. He said that to have done so would have produced a layman's opinion of issues about which the professionals were unable to reach unanimity, and thus tend to clothe with authority valueless and irrelevant conclusions. He observed that this had materially prejudiced the presentation of the claimants' case. 98 In summarising the claim, Justice Olney said that it had been particularised in a report prepared jointly by Professor Rose and Mr Lewis, (to whose various works I have previously referred). He cited, in particular, those parts of the report that had been prepared by Mr Lewis which provided an historical perspective of the area in question. 99 Justice Olney then set out the evidence concerning the claimants' relationship to the land which was the subject of the claim. He noted that the claimants (and other indigenous persons in this region) perceived the geographical landscape as a living entity with which they were in daily and life-long interaction and communication. They accepted willingly the obligation to care for the land, and believed that their relationships with country involved mutual rights and responsibilities. At the same time, they believed that this relationship was reciprocal. Country had an obligation to care for its people. The claimants said, for instance, that in their own country they would not go hungry. They also said that their country would not harm them provided they took proper care. They saw themselves as caretakers of a relationship of trust deriving from the Dreaming and passed on to them by their immediate forbears. 100 After setting out several fundamental aspects of the "Dreaming", as the claimants used that term, Justice Olney distinguished between the patrilineally inherited relationship, or kuning, and the wider "Dreaming" frequently used by the claimants which encompassed matrilineal identities as well. He summarised the local descent groups that together made up the claimant group, noting that within a number of those local descent groups, the senior men had demonstrated an extensive knowledge of the country, and a willingness themselves to take responsibility for mythology, ritual, ceremonial life, and the protection of the sacred sites. 101 Justice Olney concluded that the claimants had established that they were the traditional Aboriginal owners of the land, and that the strength of their attachment to that land and their common spiritual affiliations to various sites had been cogently demonstrated in a number of different ways. The claim was brought in 1986. It was determined by Justice Olney, as Aboriginal Land Commissioner, on 28 June 1990. 103 The claim area included most of Stokes Range, known by the claimants as Kuwang. The claimants' language identity was described as Ngaliwurru, although the land under claim did not constitute the full extent of Ngaliwurru country. According to Justice Olney, the Ngaliwurru people had maintained extensive ties with neighbouring language groups. Their country was said to be adjacent to that of the Nungali to the north, and to the Jaminjung to the north-west. 104 After outlining the history of the area, Justice Olney stated that the Ngaliwurru distinguished four types of kin at the grandparent level. Certain kin were classified together. For example, a person's mother's sister was classed as "mother" (rather than aunt), and a father's brother as "father" (rather than uncle). All claimants were related through marriage and descent. 106 Justice Olney analysed in some detail the matrilineal and patrilineal affiliations in the area, known as ngulu and kuning respectively. He noted that there were three claimant groups, Kuwang, Wanimiyn-Yiritjpinti and Maiyalaniwung. The members of these groups all had common spiritual affiliations to, and responsibility for, sites of significance on three corresponding countries within the land claimed. Each group also had secondary responsibilities for, and affiliations to, the whole of the area. The three countries in the claim area were not, however, strictly bounded. 107 Recruitment to the claimant groups was via descent through any of the four types of kin at the grandparent level. Intermarriage between groups meant that claimants were often members of more than one group. Children who were members of groups at the lower levels of genealogy were frequently spoken of as "coming in" as claimants through their mother or father. Recruitment by adoption was also valid. 108 Justice Olney observed that the term "Yakpali mululu" was frequently used to describe members of the group. It applied to individuals with seniority, and could also be used to include all group members affiliated to specific areas of country in a primary spiritual way. 109 Justice Olney concluded that the claimants had a responsibility to care for and protect sites in the claim area. They were expected to perform ritual to keep the country strong, and to seek knowledge about country and how to impart that knowledge. All members of the local descent group had the right to speak for country. This involved discussing the Dreamings, talking about the history of the country and calling the names of places within the country. Only those with the proper relationship to country could speak for it. All members of the local descent groups had the right to forage over their respective countries. What distinguished some of them as "Yakpali mululu" was their right to deny others access to certain foraging areas. Foraging also involved the collection of materials required to make goods such as boomerangs, hardwood shields, and ochres which formed part of the "Winan" or trade, which moved goods along clearly authorised paths through the claim area. The Commissioner went on to observe that only claimants had the right to water the heads of strangers, ensuring their proper introduction to the country, and to its ancestors. 110 Ultimately, Justice Olney concluded that there was overwhelming evidence to support a finding in favour of the three groups of claimants who were said to be the traditional Aboriginal owners of the claim area. He said that these three groups could, for practical purposes, be regarded as a single coherent group having common affiliations and common aspirations. The claimants had demonstrated a strong attachment to the land, and ought to be recognised, under the Land Rights Act , as traditional owners. 112 The land the subject of claim No 137 was Northern Territory Portion 785. Its northern boundary was the Victoria River, on the opposite side of which was Northern Territory Portion 3686 (Bradshaw Station), the subject of a pastoral lease. In the north-west, the subject land was bounded by Northern Territory Portion 3122 which was vested in the Myatt Aboriginal Land Trust. To the west and south-west were two Portions known as Gregory National Park. 113 The land the subject of claim No 140 was the bank of the Victoria River adjacent to the land the subject of claim No 137, together with the bed of the river to the mid line. 114 Justice Gray carefully noted the requirement under s 3(1) of the Land Rights Act that that in order to meet the definition of a "traditional Aboriginal owner", the claimants had to establish the existence of "a local descent group of Aboriginals ...". That description is apt to include the instances of patrilineal descent, patrifiliation and matrifiliation among the Kungarakany claimants. The first is, as was indeed recognised in a number of reports, although the underlying principle of recruitment to a group must be some form of descent, that need not be seen in a biological sense, and persons not claiming biological affiliation may be adopted into and become part of the group. Thus the principle of descent should be interpreted not solely in a biological sense. Secondly, the words "deemed to be relevant by the claimants" may be misinterpreted by some. What has to be found is the existence of a group, recruited by descent, possessing ties to the land and otherwise satisfying the criteria set out in the definition of "traditional Aboriginal owners". The particular principle of descent in operation will depend upon the circumstances of the particular case. It may be that, in a particular area, the Aboriginal people of that area have adopted the principle of matrilineal descent; in another area, there may have been adopted some other principle of descent. The point is that the principle of descent will be one that is recognised as applying in respect of the particular group. Further, there is no reason the particular principle of descent traditionally operating may not change over time. That is what Toohey J meant when his Honour used the words: "... a principle of descent deemed relevant by the claimants. A person is recognised as taking country from both his or her father's father ('kakung country') and his or her mother's father ('jawajing country'). Responsibility and rights for kakung country and jawajing country are generally considered to be of equal importance. Sometimes, there are assertions of rights and responsibilities to father's mother's country ('ngapuju country') and mother's mother's country ('jaju country'). This is particularly so when strict adherence to rights to kakung and jawajing country alone would give rise to a risk of a descent group becoming extinct, or so vestigial as to leave too few people to exercise proper responsibility for country. It is also the case when the actual attachment of people to ngapuju or jaju country is so strong as to result in the acceptance of those people as part of the group with traditional responsibilities for, and rights to, that country. In some circumstances, I have regarded it as appropriate to recognise as members of a local descent group those who claim through their fathers' mothers and those who claim through their mothers' mothers. There are cases, however, in which the evidence does not support the proposition that these wider claims should be upheld, usually because the circumstances in which they would be recognised by the claimants generally as having sufficient strength are not present. It is plain that the recognition of the rights of people to the country of all four grandparents as a matter of course would result in the disappearance within a relatively short time of any notion of separate groups with responsibility for different areas of land. The way in which the claim was put indicates that the claimants have not been so generous in affording recognition of traditional rights. After identifying these groups (some of which coincide broadly with the various claimant groups in the proceeding before me, including Makalamayi, Wunjayi, Yanturi and Wantawul), he found that although there were seven identifiable areas of land, each associated with a descent group, the reality was that responsibilities were viewed as shared on a much less strict basis. There was considerable overlapping of the areas of land associated with the different groups, and a sharing of Dreamings. 118 In relation to the group described as Makalamayi, Justice Gray observed that there were no living patrilineal descendants of those whose country was claimed by members of that group. He found that Lamparangana had been a highly respected and active custodian of the country to which that group laid claim. Indeed, it was often referred to by the claimants as "Lamparangana's country". 119 Justice Gray found that Lamparangana had no living descendents. His brother, Mangaramawuk, was survived by two grandchildren, Alan Griffiths and Pat Jatjat. He concluded that both were entitled to membership of the Makalamayi group through their jawaji. He said that he was conscious of the strength of the connection which other descent groups had to Lamparangana's country. 120 Justice Gray described Makalamayi country as being based heavily on the town of Timber Creek, and the land held by the Myatt Land Trust. Its major Dreaming was the Wirip, or Dingo. He found that the evidence established clearly that the members of each of the seven descent groups identified earlier in his report had spiritual affiliations to sites both on and near portions of the land claimed. Those affiliations were common to the members of each group. In many cases, they were also held in common with members of other groups. 121 Justice Gray found that members of the groups ranked equally in their obligations and rights, whether they had acquired membership through their fathers, or through their mothers. He found that the claimants possessed a high degree of knowledge of the sites on the land claimed, and the Dreamings relating to them. That knowledge was at its strongest among the more senior claimants, but it was clear that they regarded it as important to pass on the knowledge to younger members of the group. 122 Justice Gray also found that the claimants demonstrated continued commitment to ceremony and ritual. A number of the senior claimants had maintained strong connections with the land the subject of the claim during their working lives. Some of the claimants desired to live on the land that was the subject of claim No 137. However, whether they lived in the claim area or not, a substantial number visited it on a regular basis, and camped there whenever they were able to do so. Justice Gray assessed the claimants' attachment to the land as "very strong indeed". 123 In his overall summary of the claim, Justice Gray considered it important to note at [1.11] that counsel for the Northern Territory, in his closing remarks at the hearing, had volunteered that both he, and those instructing him, could not have failed to be impressed with the evidence which had been adduced from the claimants regarding their ownership of the land under claim. 125 Section 223 of the NT Act is the critical provision. The section defines both native title, and native title rights and interests. I shall consider their effect upon the issues raised in these proceedings later in these reasons for judgment. It is useful, however, at this stage, to refer to several leading cases that must be understood in order to appreciate the significance of the evidence, both lay and expert, that was presented before me. 128 In Western Australia v Ward [2002] HCA 28 ; (2002) 213 CLR 1 (" Ward HC") the High Court dealt with a claim for a determination of native title in relation to an area of approximately 7900 km 2 within the East Kimberley region. The claim area included land and waters in the north of Western Australia and some adjacent land in the Northern Territory. The application included a claim to the right to maintain, protect and prevent the misuse of cultural knowledge. Some of the land within the claim area was subject to existing pastoral leases, but most was previously the subject of pastoral leases which had been abandoned, forfeited for non-payment of rent or non-compliance with lease conditions. 129 The High Court made it plain that where claims are made under the NT Act for rights defined in that Act, the determination of native title rights and interests was to be governed solely by the Act, and not by loose analogy with concepts developed from the common law. 130 On the question of extinguishment, the High Court held that the NT Act provided for the partial extinguishment or suspension of native title rights. Native title rights and interests could usefully be seen as a "bundle of rights", the individual components of which might be extinguished separately. The use of that metaphor had the advantage of drawing attention to the fact that there may be more than one right or interest, and also that there may be more than one type of right or interest. Not all rights and interests were capable of full or accurate expression as rights to control what others may do on or with the land. Questions of extinguishment first required the identification of the native title rights and interests alleged to exist. Whether rights defined in the NT Act have been extinguished by a grant of rights to third parties or an assertion of rights by the executive government required a comparison to be made between the legal nature and incidents of the right granted or asserted and the native title right asserted. 131 Relevantly for present purposes, the High Court held that s 225 of the NT Act , which provided that a determination of native title should include "the nature and extent of any other interests in relation to the claim area" required "the public right to fish" recognised by the common law to be recorded as an "other interest" within s 225(c). In that case any exclusive right under traditional law and custom to fish in tidal waters had been extinguished because such a right was inconsistent with public rights of navigation over and fishing in those waters. 132 The High Court said at [89] that the expression "possession, occupation, use and enjoyment ... to the exclusion of all others" in s 225(e) of the NT Act was "a composite expression directed to describing a particular measure of control over access to land". It went on to observe that to break the expression into its constituent elements was apt to mislead. In particular, to speak of "possession" of the land, as distinct from possession "to the exclusion of all others" would invite attention to the common law content of the concept of possession, and whatever notions of control over access might be thought to be attached to that concept. As the High Court noted in Ward HC at [52], the "rights and interests" so described are those that find their origin in law and custom that predates sovereignty. In other words, they owe their origin to a normative system that is separate and distinct from the legal system of the power acquiring sovereignty. That normative system is constituted by the traditional laws acknowledged, and the traditional customs observed, by the indigenous peoples concerned. Such rights and interests do not necessarily correspond with rights and interests familiar to lawyers today. It will generally be preferable to express those rights and interests by reference to the activities that may be conducted, as of right, on or in relation to the land or waters. 134 It is of course necessary to ensure that a determination of native title complies with the requirements of s 225. In particular, s 225(b) provides that it must state the nature and extent of the native title rights and interests in relation to the claim area. 135 In Ward HC, the High Court held that where in relation to some parts of the claim area, native title rights and interests that were found to exist did not amount to a right (as against the whole world), to possession, occupation, use and enjoyment of land or waters, it would seldom be appropriate, or sufficient, to express the nature and extent of the relevant native title rights and interests by using those terms. That of course is a matter that must be borne in mind in the event that a finding of native title is made in the present case. 136 In Members of the Yorta Yorta Aboriginal Community v Victoria (2002) 214 CLR 442 (" Yorta Yorta" ), the High Court made it plain at [33] that all elements of the definition of native title in s 223(1) must be given effect. First, the rights and interests may be communal, group or individual rights and interests. Secondly, the rights and interests consist "in relation to land or waters". Thirdly, the rights and interests must have three characteristics: (a) they are rights and interests which are "possessed under the traditional laws acknowledged, and the traditional customs observed", by the relevant peoples; (b) by those traditional laws and customs, the peoples "have a connection with" the land or waters in question; and (c) the rights and interests must be "recognised by the common law of Australia". It requires not only the identification of the laws and customs said to be traditional laws and customs, but, no less importantly, the identification of the rights and interests in relation to land or waters which are possessed under those laws or customs. These inquiries may well depend upon the same evidence as is used to establish connection of the relevant peoples with the land or waters. This is because the connection that is required by par (b) of s 223(1) is a connection with the land or waters "by those laws and customs". Nevertheless, it is important to notice that there are two inquiries required by the statutory definition: in the one case for the rights and interests possessed under traditional laws and customs and, in the other, for connection with land or waters by those laws and customs. Section 223(1)(b) requires consideration of whether, by the traditional laws acknowledged and the traditional customs observed by the peoples concerned, they have a "connection"' with the land or waters. That is, it requires first an identification of the content of traditional laws and customs and, secondly, the characterisation of the effect of those laws and customs as constituting a "connection" of the peoples with the land or waters in question. No doubt there may be cases where the way in which land or waters are used will reveal something about the kind of connection that exists under traditional law or custom between Aboriginal peoples and the land or waters concerned. But the absence of evidence of some recent use of the land or waters does not, of itself, require the conclusion that there can be no relevant connection. Whether there is a relevant connection depends, in the first instance, upon the content of traditional law and custom and, in the second, upon what is meant by "connection" by those laws and customs. This latter question was not the subject of submissions in the present matters, the relevant contention being advanced in the absolute terms we have identified and without examination of the particular aspects of the relationship found below to have been sufficient. We, therefore, need express no view, in these matters, on what is the nature of the "connection" that must be shown to exist. In particular, we need express no view on when a 'spiritual connection' with the land (an expression often used in the Western Australian submissions and apparently intended as meaning any form of asserted connection without evidence of continuing use or physical presence) will suffice. Their Honours focused, in particular upon the need for evidence of "connection". Secondly, upon acquisition of sovereignty over a particular part of Australia, the Crown acquired a radical title to the land in that part, but native title to that land survived the Crown's acquisition of sovereignty and radical title. What survived were rights and interests in relation to land or waters. Those rights and interests owed their origin to a normative system other than the legal system of the new sovereign power; they owed their origin to the traditional laws acknowledged and the traditional customs observed by the indigenous peoples concerned. As the claimants submitted, "traditional" is a word apt to refer to a means of transmission of law or custom. A traditional law or custom is one which has been passed from generation to generation of a society, usually by word of mouth and common practice. But in the context of the Native Title Act , "traditional" carries with it two other elements in its meaning. First, it conveys an understanding of the age of the traditions: the origins of the content of the law or custom concerned are to be found in the normative rules of the Aboriginal and Torres Strait Islander societies that existed before the assertion of sovereignty by the British Crown. It is only those normative rules that are "traditional" laws and customs. If that normative system has not existed throughout that period, the rights and interests which owe their existence to that system will have ceased to exist. And any later attempt to revive adherence to the tenets of that former system cannot and will not reconstitute the traditional laws and customs out of which rights and interests must spring if they are to fall within the definition of native title. His Honour noted, inter alia, that the reference to "communal, group or individual rights and interests" required attention to be focussed upon whether there existed a "society" out of which a body of laws and customs could be said to be acknowledged and observed. The reference to "traditional laws acknowledged and traditional customs observed" was intended to be understood as meaning rules having normative content and not just observable patterns of behaviour. A traditional law or custom was one that would have passed from generation to generation of a society, usually by word of mouth and common practice. The normative system under which the rights and interests were possessed had to be a system that had a continuous existence and vitality since sovereignty. Demonstrating the content of traditional law and custom might well present difficult problems of proof, and much might turn on the evidence led. However, the demonstration of some change to, or adaptation of, traditional law or custom, or some interruption of enjoyment or exercise of native title rights or interests between sovereignty and the present, would not necessarily be fatal to a native title claim. 142 RD Nicholson J went on to say, with respect to the reference to "connection", this might well depend upon the same evidence as was used to establish rights and interests in relation to land or waters which were possessed under traditional laws and customs. However, the NT Act required two separate inquiries. A right or interest possessed under traditional laws and customs, but unrelated to land or waters could not assist a claimant for native title. In some cases, the way in which the land or waters were used would reveal something about the kind of connection that existed under traditional law or custom between indigenous persons and the land or waters concerned. It was wrong to see indigenous connection with land as reflected only in concepts of control of access to that land. 143 Finally, his Honour noted that the reference in s 223(1)(c)(2) "recognised by the common law of Australia" was to be understood as serving two purposes. The first was a requirement for refusal of recognition to rights or interests which, in some way, were antithetical to fundamental tenets of the common law. The second was to emphasise the fact that there was an intersection between legal systems, and that the intersection occurred at the time of sovereignty. Thus, the native title rights and interests that were the subject of the NT Act were those which existed at sovereignty, survived that fundamental change in legal regime, and now, by resort to the processes of the new legal order, could be enforced and protected. 144 In Risk , Mansfield J observed that the High Court's decision in Yorta Yorta imposed a requirement of continuity on both the aboriginal society, and on the acknowledgement and observance of the traditional laws and customs that are claimed to give rise to the rights and interests under the NT Act . In this context, 'society' is to be 'understood as a body of persons united in and by its acknowledgment and observance of a body of laws and customs': at [49]. If the society ceases to exist, then so too do its traditional laws and customs, from which rights and interests arise: at [50]. Once a society has ceased to exist, it is not possible for descendants of that society to take up again the 'traditional' laws and customs as those expressions are used in the NT Act : [51]-[52]. If the content of the former laws and customs is later adopted by some new society, those laws and customs will then owe their new life to that other, later, society and they are the laws acknowledged by, and customs observed by, that later society , they are not laws and customs which can now properly now be described as being the existing laws and customs of the earlier society. The rights and interests in land to which the re-adopted laws and customs give rise are rights and interests which are not rooted in pre-sovereignty traditional law and custom but in the laws and customs of the new society. ... The key question is whether the law and custom can still be seen to be traditional law and traditional custom. Is the change or adaptation of such a kind that it can no longer be said that the rights or interests asserted are possessed under the traditional laws acknowledged and the traditional customs observed by the relevant peoples when that expression is understood in the sense earlier identified? He concluded that, in the case of the Larrakia people, in the Darwin area, a combination of circumstances had, in various ways, interrupted or disturbed their continued observance of, and enjoyment of, the traditional laws and customs of the Larrakia people that existed at sovereignty. Accordingly, the current Larrakia society, with its laws and customs, had not carried forward the traditional laws and customs of the Larrakia people so as to support the conclusion that those traditional laws and customs have had a continued existence and vitality since sovereignty. That case, which adopted a construction of the section that was favourable to the claimants, was the subject of an application by the Northern Territory for special leave to appeal to the High Court. On 19 May 2006, special leave was refused. 149 Because s 47B negates the effect of prior acts of extinguishment if the section is applicable, it is of fundamental importance in a case involving past pastoral leases, such as the present. I shall return to the interpretation to be accorded to the section later in these reasons for judgment. Some of those witnesses were cross-examined on minor matters of detail. Others were questioned with a view to eliciting material thought likely to assist the respondents when they later came to deal with the anthropological evidence. 151 A total of fourteen witnesses gave evidence on site at Timber Creek. Some evidence was given in confidential session. That evidence concerned men only, and was given on a restricted basis. For that reason, it will be necessary to refer to it in only the most general of terms. 152 A sealed transcript of the restricted evidence has been retained pending any appeal against this judgment. During the course of these hearings, several site visits were undertaken. A detailed outline of those site visits is set out at Schedule C to these reasons for judgment. 154 The witnesses called on behalf of the claimants were, essentially, elders of the Ngaliwurru and Nungali Peoples. Their evidence is summarised below, on a thematic basis. The only exception to that is Alan Griffiths, whose evidence was by far the most important in support of the claimants' case. His evidence is set out in some detail in its own right. 156 Mr Griffiths was born in 1933 at VRD. His father was Old Brumby or Kajungmawuk. His mother was Clara, Mangaramawuk's daughter. Mr Griffiths was raised at both VRD and Timber Creek. 157 Mr Griffiths said that every year, during the wet season, Lamparangana (or on occasion, Violet Paliti), would bring him to Timber Creek from VRD so that he could meet up with his relatives. As they passed various sites along the way, his paternal grandfather, Old Jabiru, and his father, Old Brumby, would name those sites and explain their significance. 158 Mr Griffiths named some of the people who lived at Timber Creek when he was a young boy. They included Old Takawuk (Violet Paliti's father), Old Wanampuru (Darby's father), George Mawadgap (Jerry Jones' father), Old Wajaka (Violet's husband), Old Jungarijin (Lamparangana's sister), and Mutpuyula (Jo Lewis' grandfather). Some of these people lived at the homestead, some at the shop, and some at the stock camp nearby. 159 Mr Griffiths described a number of the traditional skills that he had been taught as a child. He said that had been taught how to make a boomerang, and a didgeridoo. He spoke of corroborees at the Old Depot, and of the practice of Winan ("exchange of goods") that was prevalent at the time. He described Winan as "a hard law" that had to be done correctly, through "the right people". He said that the practice continued right up to the present time, going through the senior man for each group. They came from Mutpura to Karangpuru to Makalamayi. Stone spears were brought along the same track from the "Gulugulu mob", while bamboo spears were brought from Daly River. 161 Mr Griffiths said that he was responsible for organising Winan in his country. In his absence, either Jo Lewis, or Jerry Jones, or one of Mr Griffiths' sons, Chris or Kenny, would act in his place. 162 Mr Griffiths said that he had taught his children how to make didgeridoos. He had also taught them to hunt in the traditional manner, spearing kangaroo, catching porcupine, and diving for turtle. He had taught them how to draw their country. He himself was an accomplished artist, having been taught the art of Aboriginal painting by his grandfather, Mangaramawuk. Indeed, one of his paintings, depicting Timber Creek, was tendered in evidence before me. 163 Mr Griffiths said that he had never been to "white fellow school". As a young man he had worked at VRD, and later at other stations in the area. In about 1980 he moved to Kununurra, where he now lived, and featured as a commercially successful artist. The reason that he had settled in Kununurra was because his wife, Peggy, an accomplished artist in her own right, was Gadjerrong, and Kununurra was close to her country. He insisted, however, that he visited Timber Creek regularly, in his own words, "to check up on country". 164 Mr Griffiths said that he had married "the right way" by which he meant "the right skin". His was an arranged marriage, made at VRD. He outlined some of the customs associated with traditional relationships. You keep sideways or you might have someone between you if you are both sitting down. If you are giving something to her you pass with two hands but don't look directly at her. He described his country as Makalamayi, and said that it went up to King Billabong, and out to Gilwi. Beyond King Billabong was Jamijung country, near Bradshaw. He said that Maiyalaniwung and Makalamayi joined up at Nine Mile (not far from Gilwi). Maiyalaniwung was Violet's father's country, and Wunjaiyi joined up at Line Creek. He described Timber Creek as a junction for people, and referred in that context to Yanturi and Wantuwul. 166 Mr Griffiths said that if he wanted to go to Yanturi country he would first speak to Jo Lewis or Josie Jones. He said that he could fish there, but would not catch any fish unless he "sang out". He could sing out to that country because he knew the old people there, and because Jo Lewis' father had been married to his sister, Pat's, daughter. For that reason Jo Lewis could come to Makalamayi, sing out, and camp there. She took that country from her father, who had died when Mr Griffiths was about ten years old. 169 Mr Griffiths said that under traditional laws and customs, he could neither sell the land at Makalamayi, nor give it away. The country belonged to the people. It had to be passed on to the children. He said that Lamparangana had taught him these laws and customs, and that he was responsible for ensuring that they were maintained. In his absence, Jerry Jones was in charge. Mr Jones would telephone him if any problems arose that required his attention. Aboriginal law means it's always my country and I come back for meetings whenever they talk about the country. If I don't come back, I send someone from my family to represent me. He said that he was responsible for protecting the Dreamings in the area. He described some sites as dangerous, and said that they had to be avoided. He explained again, as he had done during the earlier site visits, the importance of the head wetting ceremony. He said that other members of his family, including Jo Lewis, Josie Jones and Jerry Jones, were also able to carry out that ceremony. 172 Mr Griffiths next explained funeral customs in the area. He said that when someone died their name would not be spoken for anything up to five or six years. He said that this was a law from the Dreamtime. He made it plain, however, that he could not speak openly about these matters as there were women present. 173 Mr Griffiths explained initiation ceremonies ("young man business"), and pointed out that these ceremonies, which had been conducted by his people for generations, were still held today in and around Timber Creek. 174 Mr Griffiths then spoke of the various sites to which the Court had previously been taken. He said that Lamparangana had shown him the various Dreamings at those sites, and explained again their significance. He also spoke of the traditional foods that were available in the area. 175 With regard to the languages used at Makalamayi, Mr Griffiths said that he was fluent in Ngaliwurru. He said that he could speak only a few words of Nungali, though he maintained that he could understand that language. He described Nungali as a "heavy" language, and Ngaliwurru as "light". He said that he spoke Jamijung at Bradshaw, and that he spoke various other languages at other locales. He said that "the special language" for Makalamayi was Nungali, and that the Shark had "made that language". He attributed Ngaliwurru to the Barramundi. 176 Mr Griffiths said that merely because a person could speak a particular language did not make that person "Yakpali mululu". By that he meant that if an indigenous person came to Timber Creek, say from Alice Springs, and happened to speak Ngaliwurru that did not mean that he owned country. 177 Under cross-examination, Mr Griffiths identified on a map the rough boundaries of the different country groups that together make up the claimants in these proceedings. He was taken to his witness statement, and asked about the language used in each of the countries to which he had referred. For example, Violet Paliti's father's country was Maiyalaniwung. The language for that country was Ngaliwurru. Old Darby's country was Line Creek. Its language was also Ngaliwurru. So too was the language of Wanimiyn, the country of Jerry Jones and his father. 178 Mr Griffiths said that Lamparangana's sister's country was Makalamayi. Its language was Ngaliwurru/Nungali. He said that Jo Lewis' father's country was Mutpuyula. Its language too was Ngaliwurru/Nungali. 179 Mr Griffiths was then asked about the evidence he had given in the Kidman Springs hearing. As previously indicated, Justice Olney, found that he was a "traditional Aboriginal owner" of the land in question, as were his children, and his sons' children. However, Justice Olney found that his daughters' children were not "traditional Aboriginal owners". That was because grandchildren could take country from their father's father, but not from their mother's father. I should indicate that this line of questioning was of no real assistance, so far as the present proceedings are concerned, given that the test of a "traditional Aboriginal owner" differs so markedly from what must be established under the NT Act . 180 Mr Griffiths then said that he believed he was about 15 or 16 years of age when Lamparangana died. He said that after that, neither he nor his family came to Timber Creek for a number of years. He acknowledged that he had never, at any stage, actually lived in Timber Creek. He also acknowledged that his sons had all been initiated at Kununurra. When asked whether the "business" was done differently at Kununurra, he replied "same mob, same business". 181 Mr Griffiths said that he had left VRD in about 1957. His said that his grandfather (by which by which he plainly meant Lamparangana) had told him to look after Timber Creek, and to protect it against sickness. 182 Mr Griffiths said that he and other members of his family had received compensation when a bridge was built over the Victoria River which damaged the Dingo Dreaming site. He also said that a young man who had bought the causeway (to which the Court had been taken on a site visit) had subsequently died. 183 When questioned at some length about the languages that he spoke, Mr Griffiths accepted that he knew only a little Nungali. He said he spoke some Nungali to Josie Jones, and to Jo Lewis. He said that Lamparangana had spoken both Ngaliwurru and Nungali fluently. 184 Mr Griffiths was then questioned in more detail about Lamparangana. He confirmed that Lamparangana was actually his great uncle, his grandfather Mangaramawuk's older brother. He said that he had obtained his Dreamings from Mangaramawuk. 185 Mr Griffiths acknowledged that, shortly before the Timber Creek Land Claim in 1985, he had checked the names of some of the Dreamings with Old Jo Lewis. He accepted that this was because he was uncertain about several of them. He maintained, however, that he had never forgotten the Dreamings themselves, merely the locations of some of them. He said that his mother's Dreaming was Wirip (the Dingo). This was his Dreaming as well. 186 Mr Griffiths was questioned at some length about a meeting that took place some time after Lamparangana's death. The meeting concerned who would take responsibility for Makalamayi. He said that under traditional law, when someone in Lamparangana's position died, there had to be discussions about who would succeed him in looking after country. He said that he recalled one meeting in Kununurra, and possibly another at Timber Creek, on this subject. Those who attended included people from Bradshaw, Yanturi, Gulugulu, Wantawul, Kuwang and Maiyalaniwung. He said that it was agreed by those who attended that he and his sister, Pat would take over the care of Makalamayi. 187 In re-examination, Mr Griffiths agreed that he had some difficulty in remembering exact dates. In part this was because he had never learned to count years or months. He confirmed that his grandfather, Mangaramawuk, was one of four brothers and that he had died when Mr Griffiths was still very young. His best recollection was that Lamparangana had had no children of his own. Josie Jones, who is the sister of Jo Lewis, and the wife of Jerry Jones, explained that she took Makalamayi through her connections with Myatt, which was Ngaliwurru land. However, her kakung country, from her father's father, was Yanturi. 189 Mrs Jones said that if someone wished to build in Makalamayi, they would have to "seek permission". It's ok to live away from your country, it's still your country, I can't change that. She said that the bridge had been moved to a different location to protect the Frog Dreaming. She agreed that she had been paid compensation in relation to this matter, and that she was one of a small group, including Alan Griffiths, Jo Lewis and Larry Johns, who had decided how much everyone should receive. 192 Under cross-examination, Mrs Jones agreed that she followed Yanturi, and that it was to that country that she was strongly connected. Indeed, she accepted that in both the Timber Creek Land Claim, and in the Fitzroy Land Claim she had been found to be a traditional owner of Yanturi, but not of Makalamayi. 193 She described Mr Griffiths and his sister Pat as having "a great say" over Makalamayi. They took that country as their jawajing, or mother's father's country. Their mother, Clara, had taken Makalamayi as her kakung country. Mrs Jones did not know whether any of the old people, still alive, took Makalamayi as their kakung country. 194 Mrs Jones acknowledged that her connection with Timber Creek arose principally through language. She agreed that had never met Lamparangana. She understood that Lamparangana had had one son, but believed that that son had not had any children of his own. 195 Lorraine Jones is the daughter of Jerry and Josie Jones. She was born in 1974 and brought up at Bradshaw. She later moved to Timber Creek, and was educated there. She subsequently moved to Myatt, and worked for three years as an assistant teacher at the school at Timber Creek. In 1996 she joined the police force, and in 1999 she became a community police officer based in Timber Creek. 196 Lorraine Jones said that she took country from both her mother and her father. Yanturi was her jawajing, or mother's father's country. Her mother and her uncle (Jo Lewis) were the "main people", still alive, responsible for Yanturi. She said that she assisted her mother in looking after country, and that she passed on her learning about tradition to the younger people in the area. She described her mother as a "senior ceremony woman". 197 Ms Jones said that the traditional owners among the Ngaliwurru people were the Darby clan, the Griffiths family, Jo Japati (her grandfather) and Duncan McDonald. She said that by "traditional owners" she meant that these people's families and elders regarded them as such. 198 Christopher Griffiths is Alan Griffiths' son. He said that his father's country was Makalamayi, and his mother's country was Miriuwung. He said that his father had told him that VRD would be his country. However, he knew that his father often had meetings in Timber Creek, and that Makalamayi was also his country. He said that he had a "sense of feeling" that he belonged to both VRD and Makalamayi, but acknowledged that he knew little about the area around Timber Creek. He said that he had attended five meetings at Timber Creek in the previous year. He said that his community expected him to take a greater role, in the future in looking after his country, and that he intended to move to Timber Creek at some stage soon. 199 Pat Jatjat is Alan Griffiths' half sister. She lives at Yarralin, an outstation at VRD. She is older than her brother but does not know her exact age. She said that she took VRD as her country from Old Brumby who, though not her father, had raised her. She said that Makalamayi was Lamparangana's country, and that he stayed there all the time. She did not know whether it was his kakung country. She agreed that VRD was her "number one country", but said that she came to Makalamayi on a regular basis. When she was very young, Old Darby had told her that she took Timber Creek as her country through her mother, Clara. She remembered Lamparangana well, as she already had three children when he died. She described him as having been blind. 200 Sammy Darby said that he lived at Muruning (One Mile), just outside Timber Creek. He said that his kakung country was Wunjaiyi. The language there was Ngaliwurru. He said that he could not sell, or give either his Dreaming, or his country, away. He said that before his father (Old Darby) had died, about four years earlier, he had taught him about "50-50". Lamparangana and Old Darby "were in Winan together 50-50". Lamparangana had assisted Old Darby in ceremony, and they each shared the same Dingo Dreaming. Lamparangana had said to Old Darby that they should "go 50-50 for this country", and had asked Old Darby to look after Makalamayi after he died. 201 Mr Darby said that the Dingo Dreaming stopped in Makalamayi, and did not extend into Wunjaiyi country. He said that Old Darby had spoken Ngaliwurru, while Lamparangana spoke only Nungali. Asked more about "50-50", he agreed that Lamparangana had meant this to imply that they would jointly look after the country. He acknowledged that neither he, nor Old Darby, were traditional owners of Makalamayi, though he said that their countries were located close by each other. 202 Mr Darby was questioned in some detail about his use of the term "country". I should be brought in when matters are discussed about the country. In the same way that Lamparangana and Darby were 50/50, I go with Jerry and Alan but because they are a bit older and know the country well they might speak up first but I have to still be included. That's important. Jerry Jones' country was Wanimiyn. Mr Darby's grandmother's country was Wanimiyn but he was not a traditional owner of that country. Jerry Jones and Alan Griffiths came for meetings about Wunjaiyi country. He said, "everyone comes" for meetings. But he acknowledged that this did not mean that they shared that country. 204 In re-examination, Mr Darby said that he recalled having attended a meeting about the bridge over the Victoria River. He had done so because Old Darby would have attended any such meetings. Old Darby had told him that their countries were "joining together", and that Lamparangana had said this. He said that those who attended the meeting were the "Ngaliwurru people". If the army wanted to build a bridge at Wunjaiyi, the "Ngaliwurru mob" would attend the meeting to discuss it. When asked who constituted the "Ngaliwurru mob" he said "the Makalamayi mob, the Yanturi mob, Wantawul mob, Wanimiyn mob and Violet's mob". 205 Jerry Jones is the husband of Josie Jones. He was born in 1939, and brought up at Timber Creek. He said Stoke Ranges (Wanimiyn) was his kakung country. Ngaliwurru was the language for Wanimiyn. It was also the language for Violet's country, and for Kuwang. He said that they were "the same mob". 206 Mr Jones said that Alan Griffiths had asked him to look after Makalamayi. That was because he had grown up in Timber Creek, and knew the place well. His own Dreaming country was Wanimiyn. He said that he had been raised by Old Darby, whose country was Wunjaiyi. 207 Mr Jones said that he had known Lamparangana. He said that he was about ten years old when Lamparangana died. That would have been in about 1949. He knew that Lamparangana had told Old Darby "to go 50-50" on Makalamayi country. Old Wally had told him that Old Wally's daughter, Lily, was Lamparangana's wife. Through the marriage of Lamparangana and Lily, the two countries had been brought together. Old Darby had looked after Makalamayi while he was alive in much the same way as Mr Jones did for Alan Griffiths. 208 Georgie Jones is Jerry Jones' half brother. His kakung country is Wanimiyn, and his own country is Wunjaiyi. Little Wally was his mother's father. Old Darby was his mother's older brother. 209 Mr Jones said that Sammy Darby's kakung country was Wunjaiyi, and so he spoke first for that country. Mr Jones was "back up". He said that he could not give his country away, and that it would pass to his children. He said that he conducted head wetting ceremonies at Wunjaiyi, and that he spoke to the various Dreamings in the language for their particular country. He said that both Wanimiyn and Wunjaiyi were Jaminjung country, and described Jaminjung and Ngaliwurru as being "the same". We are the same mob. We are not too far out for country, we are close up country. Wantawul mob close up. I have family with Wantawul. We have all the same dreaming like barramundi dreaming. We have all same dreaming that keeps us mob together. He said that the Barramundi Dreaming passed through all those countries, and finished at Yanturi. Those four countries got together for meetings because they were connected by that Dreaming, and they all wanted to make sure that the Dreaming was not hurt, even if it was on someone else's country. 211 Deborah Jones is Jerry Jones' daughter. She was born in 1971, and brought up at Fitzroy station. She then moved to Bradshaw, and later to Timber Creek. She was taught about Timber Creek by old Jo Lewis, who was her mother's father, and also by a cousin, Duncan McDonald. She said that Timber Creek and Yanturi were both her country, and that she took Wanimyn from her father. She took Makalamayi as her jawajing country through her mother's father, Jo Japati. She also took Yanturi as her jawajing country. Wanimyn, on the other hand, was her kakung country. She said there was nothing unusual about a person having three countries. Accordingly, she took Wanimyn, and looked after and protected Makalamayi and Yanturi. 212 Jo Lewis Nyapat was born at Coolibah Station some time between 1942 and 1945. His father, Old Jo Lewis, took as his country Yanturi. Nungali was the language for Yanturi. His jawajing was north-west Bradshaw. Jaminjung was the language for Bradshaw. He took Wantawul from his father's mother. 213 Mr Lewis said that Yanturi was his country because it was his father's country. He was "for that country", and could not sell it or give it away. He said that there were five mobs that came together for Timber Creek. They all followed the same rule for the Dreaming. Together with his sister, he "backed up" Alan Griffiths. He also referred to the Eleven Mile mob, Violet, the Darbys, the Paddys and William Gulwin. He said that Alan Griffiths could not talk without the others, though it was Alan Griffiths who owned Makalamayi and took it from the Dreaming. 214 Doris Roberts (also known as Doris Paddy) was born at VRD in 1955. She came to Timber Creek as a young child. Her father, Old Tracker George, was a police tracker at Timber Creek. Her brother was Roy Herrington. 215 Ms Roberts said that she and her husband, Laurie, had lived at Timber Creek since 1987. Her children and grandchildren were all educated at Timber Creek. Her kakung country was Wantawul, of which she was Yakpali mululu. Her jawajing was Top Springs. She said that she was "with Josie's mob", Yanturi, because they were "close up country". She said they were "50-50". She said they came in for family, and for Dreaming. She described Alan Griffiths as her "boss", and said that he was "in front for Makalamayi". She said that Wantawul came in with Makalamayi because of their shared family, and Dreaming. She said that Wunjayi was Old Darby's country, and was now Sammy Darby's country. She went behind Sammy Darby for that country. 216 Ms Roberts said that she collected bush tucker. She also gave a detailed description of the traditional customs that she still followed. She fished at Timber Creek, and described various Dreamings in the area. She had been through women's business, and continued to teach young girls the various ceremonies involved. She said that she had basically stopped at Timber Creek all her life, and that she could walk around that country without having to ask permission. She had backed Alan Griffiths up regarding the bridge over the Victoria River. She had to be there because she was for Wantawul, and Mr Griffiths was her cousin's brother, her family. She spoke Ngaliwurru, Jaminjung, Kriol, English and Ngarinman and understood Nungali. 217 Under cross-examination, Ms Roberts described kakung country as the "highest country", and jawajing as "a bit lower". She said that her family "came in for Makalamayi" because of her grandfather's second brother. She could not state his name because her brother had the same name, and culturally a sister could not state the name of her brother. 218 William Gulwin is Pat Jatjat's son and Alan Griffiths' nephew. He was born at VRD in 1947. He said that Wantawul was his kakung country which he took from his father's father. Makalamayi was his jawajing country which he took from his mother's father. VRD was his mother's country, through her mother, Clara. 219 Mr Gulwin said that Roy Harrington, his brothers and sisters, and Larry Johns were all "for" Wantawul country. Wantawul had come in for Makalamayi because of family. He described Yanturi and Wantawul as "50-50". He said Jo Lewis was for Yanturi, as was the mob at Myatt. They were "a big mob", and Wantawul was "close up with them" because they were "the same river". 220 Mr Gulwin said that if no one else was around he could also speak for Makalamayi. He could do so because his uncle, Alan Griffiths, took Makalamayi through his mother's father. He knew the dangerous places because Alan Griffiths had pointed them out. He could perform head wetting at Makalamayi if neither Alan Griffiths nor Jerry Jones was available. He could also call out to the spirits. He did so in Ngaliwurru/Nungali. 221 Mr Gulwin said that he had received compensation when the bridge over Victoria River was built. His children had received payment as well. He said that he could recall a meeting regarding a diamond mine. Alan Griffiths had said that the mine could not proceed because it was too close to a particular site. The mine did not proceed. 222 Roy Harrington is Doris Roberts' brother. He was born in 1951 at Mululu, an out station on VRD. His father was Tracker George. He said that his kakung country was Wantawul, through his father's father. He said he was a Yakpali mululu for that country. He said that he came in for Makalamayi through Lamparangana, his grandfather's brother. All the time people meet together and claim as one because dreaming close up. We share ceremony all together. We have winan with each other right through. Nungali/Nungalwurri [ Ngaliwurru ] all joined up with one winan, no fence. 224 Violet Paliti was born at Timber Creek. She is older than Alan Griffiths but does not know her exact age. Her mother was Ruby Katang, and her father was Jacky Jacky. 225 Mrs Paliti grew up at Timber Creek. She married Tiger Wajaka. As a young woman she worked at the Timber Creek Depot as a domestic, and later was employed in that capacity at the Timber Creek police station. 226 She said that Alan Griffiths took Makalamayi through Clara, and her father. She said that she was together with Alan Griffiths' country because of Winan and also through their shared Ngaliwurru/Nungali language. She had been through women's business, and had attended ceremonies at Kununurra, Timber Creek, and Gilwi (Eleven Mile). She had received compensation resulting from the construction of the bridge over the Victoria River. She said that as a young girl she was shown the Centipede Dreaming, and told not to touch that place. She recalled that old Lamparangana himself had given her that warning. She had also been told about the Wirip Dreaming and the Shark Dreaming by Lamparangana, whom she described as "Alan's granddaddy". She said that Lamparangana was "the boss one for Timber Creek". 227 She said that she spoke Jamijung, Ngaliwurru, Ngaringman, English and Kriol, and could understand Nungali. She identified various berries, and other bush tucker, she had collected and used over the years. 228 Under cross-examination, Mrs Paliti said that Lamparangana had taken Makalamayi from his kakung. She had known him well, as she was already an adult while he was still alive. She had also known Mr Griffiths' mother, Clara, well. She insisted that Ngaliwurru and Nungali were the same language, and that Lamparangana had been "boss" for the Ngaliwurru and Nungali people. She is the sister of Jo Lewis, and as previously indicated, is married to Jerry Jones. Her daughters, Lorraine and Deborah also gave evidence before me. 230 Mrs Jones said that she regularly fished at Timber Creek, and in the Victoria River. She caught shark, catfish, barramundi, salt fish and stingray. She also went to the water hole to catch bream and bait. She collected bush tucker around Timber Creek. During the wet season she would gather gungaberry, which she described as a sweet berry. She spoke of eating the flower of the water lily, and of gathering bush yam, sugarbag (honey) and fruit off the trees. 231 Mrs Jones said that she hunted goanna, bush turkey and kangaroo. She said that she could fish at Timber Creek at any time she wished. If, however, a white person wanted to go on to the land, he or she should ask permission first so that the important sites could be pointed out. She said that she collected white ochre from near the burial site. That ochre was used at ceremony time. 232 She said that she had been taught by both her father and her grandfather that prior to initiation boys were not allowed to eat barramundi. She had passed this on to her children as well. She said that under traditional law, she could not get too close to her brother. She could talk to him, but had to maintain a safe distance from him. 233 Mrs Jones also spoke of burial customs. She said that when she approached the graves, she was required to sing out in Ngaliwurru to tell the spirits that she was coming. Her grandfather, Sandy, was buried in the burial ground which had been the subject of a site visit. She said that Lamparangana was also buried there, as was Lamparangana's sister. She knew the Centipede Dreaming. She and Jerry had helped erect the fence around that site after the land claim. It was a registered site. If anyone touched the stone, a big mob of centipedes would descend upon them. She said that anyone whose picture was painted on that stone, and whose name was spoken, would die. 234 Mrs Jones said that her ngurlu (totem spirit) was the sugarbag which she took from her mother. She described in some detail a women's ceremony that she had attended. She said that she also attended those parts of men's ceremonies that were open to women. She said that she regarded it as her responsibility to look after all of the sites in the area, and to teach the children about the various Dreamings. She said that some places were dangerous, while others were not. 235 Lorraine Jones said that her Dreamings were Possum and Sugarbag. She had received them from the Dreamtime, through her father. They were Dreamings for her father's country. She knew that the special Dreaming for Yanturi was the Barramundi. This was her mother's Dreaming. She had no special Dreaming for Makalamayi. She knew that the Wirip had travelled through Timber Creek, but did not know whether it came from another country. 236 Christopher Griffiths said that he had been initiated at Kununurra, after he finished primary school. He said that, in due course, his own sons would be initiated as well. He had been taught about the Dreamings, but had neglected these teachings while at school. However, he had returned to them recently. He acknowledged that his first marriage had not been in accordance with traditional custom. His first wife was not "promised", but rather someone he had met himself. Indeed, he agreed that his first marriage had been "wrong way" and that he had been required to do ceremonial payback. This involved sitting with and showing respect to various elders. However, his second marriage had been "right way". 237 Mr Griffiths said that he had been through a head wetting ceremony at the Humpyback Dreaming Site in November 2004. 238 Pat Jatjat said that her special Dreamings were "egg belong snake" and "jiriki" (wind). 239 Jerry Jones spoke about "jamaran", which he described as being "like an oath on the bible". He said that every person had a jamaran. He gave an example of one in what he termed "heavy" language. He then gave a further example, and sang Lamparangana's jamaran, which he described as "the noise made by the shark". He said that Sammy Darby's jamaran was shark. 240 Regarding fishing, Mr Jones said that "whitefellas" caught fish, and often threw them away. This was not the "blackfella" way. There was a rule from the Dreaming that said that you had to eat what you caught. However, this was not a major problem, provided the fishermen stayed away from special sacred sites, and did the right thing. 241 Deborah Jones said that she knew about the Dingo Dreaming. She described how the dingo travelled along the hill in Timber Creek and stopped at the waterhole near the Wayside Inn. She said that the name "Wirip" was Ngaliwurru, and that she was permitted to go to that site because she had to protect it. 242 Ms Jones also knew about the Centipede Dreaming. Old Darby had warned her not to touch that Dreaming because "big mob centipede come out even if you dust with leaf". She spoke of the Spider Dreaming, the Shark Dreaming and the Barramundi Dreaming. She described the bush tucker that she ate and how she fished, and hunted in traditional ways. She said that she could do head wetting, and had done it in her mother's country. She said that her father had been born at Timber Creek, and that it was her desire to help look after it. Her mother, Josie, and Alan Griffiths had told her that she would have to look after Timber Creek if they were to become sick. 243 Jo Lewis said that he had been through an initiation ceremony when young, and that such ceremonies were still held. There had been one at Kununurra the previous year at which Alan Griffiths had presided. He described the various Dreamings that he had been taught. These included the Barramundi and Dingo Dreamings. He also knew about the fight between the Shark and the Stingray that had taken place at Makalamayi. 244 Mr Gulwin said that he had gone through an initiation ceremony at VRD. All of his children had been through similar ceremonies. He had attended a ceremony at Myatt several years before. He said that Alan Griffiths was the main person for ceremonies in that area. He knew the ceremony area at Timber Creek, near the burial ground. 245 He said that he had been taught about the Dingo Dreaming at Makalamayi by Alan Griffiths, and by Old Darby. He also knew about the Centipede Dreaming. He fished and hunted in the area. 246 Roy Harrington described the various Dreamings at Makalamayi, noting that the Barramundi Dreaming was shared with Wantawul and Yanturi. He said that his relatives were buried behind the Timber Creek police station. He said that Lamparangana was buried there as well. Sometimes he fished at Timber Creek. He was entitled to fish or hunt at any time on his own country. The impression that she conveyed was that a number of words in each language were pronounced differently, though the words themselves were the same. 248 In addition to Ngaliwurru and Nungali, Mrs Jones said that she spoke Kriol, English, and Jamijung, and that she understood Ngaringman, and Murrinpatha. When asked whether she had ever heard anyone speak Nungali she replied that her parents had spoken it, though not to her. She said that she understood Nungali, and that she regarded Ngaliwurru and Nungali as the same language, though spoken with different accents. 250 Pat Jatjat said that she spoke Ngaliwurru, Ngaringman and English. She could also speak and understand a little Jaminjung. She described Nungali as "too rough". 251 Jerry Jones acknowledged that some words in Nungali differed from those in Ngaliwurru. For example, sugarbag was "wanjagan" in Ngaliwurru, and "janunitjbari" in Nungali. However, he maintained that both Ngaliwurru and Nungali were essentially the one language. 252 Georgie Jones described Jaminjung and Ngaliwurru as "the same". 253 Jo Lewis spoke Nungali, Ngaliwurru, English and Kriol. He said that he and Jerry Jones could speak to each other in Nungali. He described Nungali and Ngaliwurru as "heavy" and Jaminjung 'a bit lighter". However, he said there were no real differences between them. 254 William Gulwin said he could speak Ngaringman, Mudpurra, and Ngaliwurru, and that he could understand a little bit of Nungali. He said that if one person spoke Nungali, and the other Ngaliwurru, they would be able to understand each other. 255 Roy Harrington said he could speak Jaminjung, Ngaringman and English, and understand Ngaliwurru and Mudpurra. He said Ngaliwurru was "plain talk" while Nungali was "a bit heavy". 256 Violet Paliti spoke Jaminjung, Ngaliwurru, Ngaringman, English and Kriol. She said she could understand Nungali. 258 Dr Palmer is a consultant with Appleby Consulting Pty Ltd. He holds a PhD in Anthropology from the University of Western Australia, and also has several other degrees. He is a Member of the Australian Institute of Aboriginal and Torres Strait Islander Studies, a Fellow of the Australian Anthropological Society, and was between 2001 and 2003 an Executive Committee Member of that body. He is the author of six books and approximately fifty articles dealing with indigenous matters. He has presented numerous papers at conferences relating to indigenous people. 259 Dr Palmer was previously employed by the Northern Land Council between 1982 and 1985. Throughout that period, he visited Timber Creek on a number of occasions. He also assisted the Northern Land Council from 1996 to 1998 in relation to the Keep River National Park Native Title Claim, which was itself a part of the Miriuwung-Gajerrong Native Title Claim. 260 Neither the Northern Territory nor AFANT challenged Dr Palmer's professional qualifications, or his capacity to comment upon anthropological issues involving indigenous people. Nor did they attack his credentials to speak as an expert on matters of law and custom that were of singular relevance to the Ngaliwurru and Nungali Peoples. 261 Ms Asche is employed as a Senior Project Officer Native Title in the Anthropology Branch of the Northern Land Council. She holds an MA in Anthropology from the Northern Territory University, as well as a number of other degrees. She is a Fellow of the Australian Anthropological Society. She has taught anthropology at the Northern Territory University, and been a Project and Research Officer with the Northern Land Council for some time. She has published at least one paper on the subject of aboriginal affiliations and land use patterns in the Timber Creek area. She has also written broadly on anthropological issues arising from Native Title Claims. 262 Dr Palmer and Ms Asche prepared a report dated October 2004 in support of the claimants in these proceedings. Although described as a "joint report", Dr Palmer was acknowledged to be the senior anthropologist, and the major contributor. He took particular responsibility for collecting data on matters relating to spiritual life, sites, ritual and belief. He also took the lead role regarding questions of land ownership and the way in which rights to country "were articulated through social processes". 263 Ms Asche nonetheless played a significant role in the preparation of the report. She took primary responsibility for those chapters dealing with genealogical data, and also focused upon the connection which the claimants maintained with the claim area. 264 Dr Palmer and Ms Asche said that they took joint responsibility for all aspects of the report, and that they agreed in all of its conclusions. 265 As indicated, the anthropological evidence in this case was the major area of contention between the parties. It is useful, therefore, to set out in some detail the conclusions reached by Dr Palmer and Ms Asche. A good deal of that time was spent at Timber Creek. However, the authors also visited surrounding communities at Kununurra, Bulla, Yarralin and Pigeon Hole. In addition, Dr Palmer spent approximately thirty-eight days undertaking archival research. Ms Asche then undertook an additional thirty days of field work in preparation for her particular areas of responsibility. Obviously, an enormous amount of time and effort was put into the preparation of the report. 267 The authors acknowledge the immense assistance gained from earlier anthropological work carried out in the context of the various land claims brought under the Land Rights Act between 1985 and 1992. They utilise the data gathered for those earlier cases, and expressly state that they have built upon it, with a view to updating it, and checking its currency and integrity. 268 The authors discuss in some detail their methodology. They say that they carried out many interviews in order to check genealogical data and collect materials relevant to the culture, laws and customs of the Ngaliwurru and Nungali Peoples. In addition they say that they visited various sites and areas of importance within or adjacent to the claim area. They carried out these visits in order to check the location of places of importance to the claimants, and to document their significance further. 269 Dr Palmer and Ms Asche say that, having been based in Timber Creek for some weeks, they were also able to participate in other activities. These included fishing or going on expeditions which were described as "characteristic of participant observation techniques employed by anthropologists in attempting to gain insights into a culture". The work of Ms Asche in and around Timber Creek meant that she was well-known to the claimants. She said that this had been particularly advantageous in developing her understanding of kinship and consanguineal links which she regarded as providing one of the principal structures that characterised the community. The authors refer to the journals left by the early European explorers, and to the historical material (contained in the folder of History Documents discussed earlier in these reasons for judgment). They note, in particular, the work of the first anthropologist to visit Timber Creek, the Reverend J.R.B. Love, who spent time in the area between 1912 and 1914. They conclude, however, that his work is of little utility because he did not engage in research that was sustained and rigorous. 271 Of greater significance was the work of Professor Stanner who has previously been mentioned. Professor Stanner was the first anthropologist to carry out detailed empirical research in the area. As a young man he visited Timber Creek for about a week in August or September 1934. As previously indicated, his field notes were included in the folder of History Documents tendered before me. Those field notes assume considerable importance in this case. 272 In Professor Stanner's account, he described both the Ngaliwurru and Ngaringman communities, attributing the country of the former to the area "roughly between the Depot [Timber Creek] and Victoria River Downs, inside the great left-hand curve of the Victoria River in this area". 273 The Depot to which he referred was established in the early 1890s. It consisted of a store, and hotel, adjacent to a jetty that provided a landing from the Victoria River. The Depot was located approximately five kilometres north-west of Timber Creek, not far from the present airstrip. 274 Professor Stanner worked with the Ngaliwurru at VRD. However, he cut short his field work there in order to visit Timber Creek. He said that he did so because "the bulk of the Ngarinman were at Victoria River". Dr Palmer and Ms Asche point out that the reference to "the Ngarinman" was plainly erroneous. In context, Professor Stanner undoubtedly meant the Ngaliwurru. 275 Professor Stanner also gave a detailed account of the Jaminjung. Dr Palmer and Ms Asche say that Professor Stanner was likely to have carried out his research into the Jaminjung while he was at Timber Creek. 276 Professor Stanner wrote two important articles resulting from his field work. The first, in 1936, dealt with "kinship and totemism". The second, in 1937, set out in detail the names of those whom he had interviewed during his visit to the region. It appears that most of his data was taken from the Port Keats area but there were some references to the Jaminjung in the context of his discussion of Timber Creek. 277 Professor Stanner discussed the division of "tribal territories" into "countries" (Yakpali). He employed two terms in this context, "local group" and "horde". Dr Palmer and Ms Asche criticize that analysis as incomplete. They conclude that his use of the term "horde" was intended to encompass more than one local descent group. 278 Professor Stanner acknowledged that his field work had been less than satisfactory. Nonetheless, he recorded a tenurial system amongst the Jaminjung whereby sets of individuals comprising descent groups were attached to country through "totemic principles". He concluded that the groups that used the country (and so might be assumed to have had rights to do so) were made up of several local or sub-groups. 279 According to Dr Palmer and Ms Asche, Professor Stanner's analysis of totemism among the Jaminjung represents the most obscure aspect of his work. I have read this material, and I agree. It would be pointless, for present purposes, to attempt to synthesise his views upon this subject. The significance of his work on this issue, so far as this case is concerned, lies in the fact that he visited Timber Creek fifty or so years after European settlers first occupied this region. By the time Professor Stanner arrived, the lifestyles of the indigenous inhabitants must already have undergone considerable change. Yet his work disclosed some key aspects of indigenous culture that offered a view into the traditional pre-contact systems of law and belief that probably held sway not just among the Jaminjung, but also among their close neighbours, the Ngaliwurru and Nungali Peoples. 280 Dr Palmer and Ms Asche next analyse the linguistic research that has been undertaken in relation to Jaminjung, Ngaliwurru and Nungali. They note that all three languages are regarded, linguistically, as part of the same language family. They refer in particular to a leading paper upon this subject, JE Bolt, WG Hoddinott and FM Kofod, " An Elementary Grammar of the Ngaliwurru Language of the Northern Territory " (unpublished manuscript, AIATSIS, Canberra 1971). They observe that the three "languages" are described, in one study, as mere "dialects" of the one broader language: JR Cleverly, " A Preliminary Study of the Phonology and Grammar of Djamindjung " (MA thesis, University of New England 1968). 281 Dr Palmer and Ms Asche rely heavily upon a more recent linguistic study by EF Schultze-Berndt, " Simple and Complex Verb in Jaminjung . A Study of Event Categorisation in an Australian Language" (PhD. thesis (2000), Catholic University of Nijmegen, Nijmegen, The Netherlands). In their view, this thesis confirms that Jaminjung and Ngaliwurru are "closely related" being part of the Jaminjungan language family, and "more distantly" related to Nungali, which is said to be "almost extinct". 282 Turning again to the previous anthropological research undertaken in the region, Dr Palmer and Ms Asche say that, in their opinion, much of this work is relevant to the present case. A number of the claimants in the various land rights claims dealt with between 1985 and 1992 happen also to be claimants in the proceedings now before me. Moreover, the land the subject of those claims surrounds, or is at least closely proximate to, Timber Creek. 283 Dr Palmer and Ms Asche note that the Kidman Springs/Jasper Gorge Land claim concerned an area some forty-five kilometres south-east of Timber Creek. The anthropological submission filed in support of that claim, (which was prepared by Professor Rose and Mr Lewis, both acknowledged experts in their field), identified six country groups (one of which, Kuwang, extended into the Stokes Range claim), whose members had been found to have rights as traditional Aboriginal owners in the earlier Timber Creek Land Claim. 284 Professor Rose and Mr Lewis described what they termed "primary" rights to country. These rights rested with those who claimed rights to country "through the principle of cognatic descent", a concept that will feature heavily in these reasons for judgment, and to which I shall return. Senior members of this group had responsibility for "speaking" for country. They also had the right to grant or withhold permission for others to use the country. 285 The implication of what Professor Rose and Mr Lewis had to say was that there existed also "secondary" rights, which regrettably they neither described, nor defined. However, according to Dr Palmer and Ms Asche, it was significant that Justice Olney, as Land Commissioner, concluded that a number of individuals were traditional owners of more than one country. Dr Palmer and Ms Asche regard that conclusion, involving as it does the recognition of overlapping interests, as the natural consequence of a system that recognised cognatic descent. 286 Dr Palmer and Ms Asche say that in their opinion the most substantial piece of anthropological research relevant to the Timber Creek region is that undertaken by Professor Rose. She worked at Yarralin between 1980 and 1982, and returned to the area on many occasions thereafter. 287 In her book Dingo Makes Us Human (to which I have previously referred), Professor Rose cites ethnographic material that Dr Palmer and Ms Asche regard as relevant not just to Yarralin, but also to Timber Creek. Her book includes sections on Aboriginal spirituality, the Dreamings, and relations with the natural world. It provides a detailed account of kinship, and the duty to look after country, as well as a duty to have regard for the wellbeing of visitors. 288 Importantly for present purposes, Professor Rose concludes that rights to country in the Victoria River region are, and have for many years been, inherited cognatically. Dr Palmer and Ms Asche describe a cognatic system of descent as one where there may be "multiple affiliations" to country. Indeed, indigenous people may have ownership rights in "a number of different countries". They may be "fifty" or "50/50" (share equally), especially where there is a shared Dreaming affiliation. 289 Dr Palmer and Ms Asche note Professor Rose's comment that, usually, a person can live in, hunt in, and take active care of, only one country at a time. Professor Rose observes that this principle has been modified somewhat by the greater access that indigenous people now have to modern transportation. 290 Professor Rose describes marriage as a mechanism whereby countries may be linked. She concludes that since countries in the Victoria River district are, and have been, exogamous (exogamy is the custom of marrying outside the tribe or other social unit, and should be contrasted with endogamy), and rights to country pass by cognatic descent, control and direction of marriage choices is a key means by which subsequent rights to country can be constrained. 291 After carefully considering the past anthropological research at Timber Creek, Dr Palmer and Ms Asche conclude that there is a basic consistency between Professor Stanner's early work, and the work of later anthropologists such as Professor Rose. They conclude that Professor Stanner's research, though undertaken some fifty years or so after European settlement, indicated that traditional beliefs and practices remained strongly in place. In their view, the anthropological data, and the ethnography, indicate an enduring continuity of belief and practice which developed from a fundamental cultural system that underpinned the society in question. 292 Dr Palmer and Ms Asche recognise that there are no contemporaneous records to which they can turn in order to obtain a comprehensive account of the pre-contact cultural practices followed by earlier indigenous inhabitants of the region. They say that it would be unrealistic to expect any such records to exist. Certainly, the early explorers of the region said little that survives about the lifestyle and customs of the indigenous inhabitants at the time. However, such snippets of information as are available from this period paint a picture that is broadly consistent with that described by Professor Stanner during the course of his visit to the region. 293 In summary, Dr Palmer and Ms Asche are of the view that that the claimants observe the same, or substantially similar, customs, laws and practices, as did the indigenous inhabitants of the region at the time of, and prior to the acquisition of sovereignty. Dr Palmer and Ms Asche are also of the view that they share essentially the same beliefs. They see the claimants as people who regard themselves as having certain important things in common. Many live in, or close to, Timber Creek. Some live in the town itself while others live on adjacent outstations and settlements. These include One Mile (one mile south of Timber Creek police station), Myatt (six kilometres south of the town), and Gilwi (fifteen kilometres south-east of the town). Dr Palmer and Ms Asche recognise that a number of the claimants live well away from Timber Creek, for example at Yarralin, Pigeon Hole, Bulla and even Kununurra. However, in their view, Timber Creek remains the focal point for all of the claimants. It is to Timber Creek that people travel when attending meetings of any consequence regarding land rights or native title. In addition, Timber Creek is itself an important centre for religious practices. 295 Dr Palmer and Ms Asche describe the claimants as a "social formation", the members of which identify themselves by use of a range of referents. The community is "bounded", with rules for recruitment and exclusion. As with all social units, its membership will change over time. However, the "originating referential criteria for its existence are constant, being founded in religious belief, and concomitant practice". 296 For the claimants, identification is typically by reference to one of several named areas of country, or "estates". These areas are commonly called Yakpali. A person is linked to a particular country by descent. Those who trace common descent and common affiliation to the same country together comprise "a group". Anthropologists generally call these groups "descent groups". 297 Dr Palmer and Ms Asche say that, at Timber Creek, a descent group member generally cites both matrifiliation and patrifiliation as a source of spiritual attachment to country. Therefore, in their view the system can be characterised as a "cognatic descent system". 298 As previously indicated, in a cognatic descent system people often claim affiliation with several countries. A person might also demonstrate attachment to country by referring to matters other than descent. For example, an association with country can be reinforced by reference to spiritual beings of the Dreaming who are thought to be connected with the country in question. These spiritual beings, or "Dreamings", perform actions that result in both physical and spiritual modification to the countryside. A member of a country group will have a special spiritual tie with that country's Dreaming. Since some Dreamings range widely over the landscape, their spirituality can encompass more than one country. 299 Dr Palmer and Ms Asche say that shared Dreamings and ties of kinship are also complemented by exchange relationships developed through the practice of a ritualised trade known as Winan. This creates a particular relationship between trading partners, often of neighbouring countries, characterised by reciprocal obligations. 300 According to Dr Palmer and Ms Asche, there is an ideology that responsibility for and use of a grouping of countries is a matter for the members of a social unit consisting of an amalgamation of a number of country groups. They describe this social unit as "the applicant community". However, they recognise that members of that community use a number of different names when referring to themselves, depending upon the circumstances, and the context of the discussion. 301 Their reasons for concluding that the claimants share a culture and identify with each other include the common understandings regarding their relationship with the natural world, and their participation in activities founded upon a shared spiritual belief. The claimants have characteristics that are similar to those of other indigenous communities in the Victoria River district. However, aspects of their beliefs can also be found in varying forms throughout indigenous societies in many parts of Australia. 302 The authors say that, for the claimants, a belief in the Dreaming is fundamental to any discussions about land, human relationships and customary practices. At Timber Creek, the concept of the Dreaming is expressed by the term "puwaraj". That term has a number of meanings, depending on context. It refers in one sense to a period of time, long ago, when things were different to the way they now are. During that time, super beings roamed the earth and performed numerous activities now recounted in narrative and song, and rehearsed in ritual. The Dreaming beings often metamorphosed, and became places or sites. However, they could also be understood to have continued their travels. Their spirituality remains potent, and the areas with which they were directly associated are regarded as inviolable. 303 Dr Palmer and Ms Asche also say that the Dreamings are supernatural forces that cannot be altered, directed or controlled by humans. They have about them the immutable quality of law. That is why the rules and ways of doing things that are believed to have been ordained during the Dreaming are often referred to as "the Law". Social institutions, including principles of descent, are believed to be the product of the Dreamings. So too, it is said, is the very language used within the claim area. 304 Puwaraj is manifest not only at sites in the landscape, but also through the reproduction of certain designs used in ritual. In that context, these are described as "photographs" indicating that they are both reproductions of something real (the Dreaming) and a way of representing it symbolically. In substance, the system of rights relating to puwaraj indicates that within the cognatic descent system there is, at least in ritual dealings, a priority accorded to country claimed through patrifiliation (whether father's father or mother's father). 305 Dr Palmer and Ms Asche say that they can discern other features that link the claimants to each other, and to various places and things. These include the practice of exchanging or adopting the same name. They observe, from the genealogical data, that the use of ancestral names is common among the claimants. So too is the allocation of country names. Another set of common referents is the shared totemic beliefs among the group. For example, Alan Griffiths' ngulu is a small bird called ninipi. That happened to also be his mother, Clara's mother's ngulu. At one time it was considered that people of the same ngulu should not marry. Though that prohibition was no longer regarded as absolute, respect for ngulu animals remains important. 306 Similarly, the authors conclude that the claimants all regard themselves as having inherited from their fathers, and from their father's fathers, a kuning. Alan Griffiths' kuning is a goanna. Jerry Jones' kuning is a sugarbag. Though a person can eat his or her kuning, they might "feel sorry" for it, and choose not to do so. The authors note that this kuning lore was documented as far back as the 1930s by Professor Stanner. 307 All the claimants interviewed by Dr Palmer and Ms Asche spoke a form of English that one linguist had classified as "Creole" (commonly spelt 'Kriol"). Indigenous languages that were typically associated with a particular area or region were, however, an important means of establishing an identity. 308 Earlier research at Timber Creek had identified the local indigenous community as speaking one or more of three languages, Jaminjung, Ngaliwurru and Nungali. As previously indicated, some linguists regard these merely as dialects, and part of a single language group. However, Ngaliwurru is said to have more in common with Jaminjung than with Nungali. The claimants themselves recognise the three languages as simply different ways of speaking, but regard Ngaliwurru and Nungali as "the same". Ngaliwurru is described as "light" and Nungali as "heavy", "a bit rough", and "a bit deep". However, regardless of what language the claimants speak, the people are said to be "all the same". 309 Dr Palmer and Ms Asche note that, according to the claimants, all three languages were brought to the area by "Dreaming beings". The attribution of language to place by Dreaming is encapsulated in song. Language goes with country, consistent with the Dreaming narrative. For example, Nungali is said to have originated at Yanturi, north-east of Timber Creek, and to have progressed down towards Gilwi. Jaminjung is said to be located primarily north of the Victoria River. Generally, Makalamayi is believed to be associated with Nungali. Indeed, Lamparangana and his brothers were often described as "the Nungali mob". 310 When asked by Dr Palmer and Ms Asche about the difference between Ngaliwurru and Nungali, Mr Griffiths' response was that they were "all the same". Indeed, the facility with which almost all of those who were interviewed rolled the two languages into one was a feature of their discussions. The conflation of the two languages led to some confusion over the identity of country. In essence, these languages are understood to be different, but at the same time to be the same. At the very least, they are closely linked. 311 Given the few remaining people who can speak Nungali, Dr Palmer and Ms Asche regard any distinction between it and Ngaliwurru as essentially devoid of practical utility. It is entirely apt, in their view, to describe the claimants in this case as the "Ngaliwurru and Nungali Peoples". Nothing of any consequence turns upon the subtleties of linguistic differentiation. That is because a person's status as "owner", or Yakpali mululu, is not dependent upon that person's capacity to speak the language with which that person's country is formally identified. 312 The authors recognise that there are parts of Australia where language groups are so closely linked to particular territory that it is appropriate to classify the members of those groups as something akin to "tribes". However, in their view, this does not hold true for Timber Creek. Given the looseness of linguistic analysis in the area, and recalling Professor Stanner's accounts of the country as being associated with the three languages typically used, they conclude that language can only be regarded as a broad indicium of social grouping. 315 In any event, as Dr Palmer and Ms Asche emphasise, language is but one of a number of ways by which the claimants identify themselves. In their report, they note that the claimants live in households comprising extended family groups. They say that, in their opinion, there is a recognised system of kinship, and shared ancestry, whereby every individual is assigned one of eight subsection terms (also known as the "skin system") at birth. That system operates in conjunction with the kinship system. When the two are combined, they enable all known members of a community to understand their relationships to one another. 317 The report comments upon the specific ways in which people are expected to act towards particular kin. For example, an open and jocular relationship is acceptable with the mother of one's mother. However, a brother and sister cannot look at each other, speak directly to each other, or sit together. Neither can speak the other's name, even to a third party. There is also a prohibition upon looking at, or speaking directly with, one's mother in-law. 318 Dr Palmer and Ms Asche note that all of the claimants with whom they had spoken knew their subsection term and regarded the system as vital to their being. They accepted what they were told, largely on the basis that, while checking genealogies, the claimants were able, without exception, to provide their own subsection terms, those of their forbears, and of their children and other relatives. They regarded the use of kinship relationships, and subsection terms in this way as consolidating the homogeneity of the community. 319 Dr Palmer and Ms Asche regard Winan as the next unifying characteristic of the claimant group. They see it as involving more than simply the exchange of needed items. Rather, Winan is said to be founded upon spiritual principles. They note that Timber Creek is regarded, even today, as an important centre for this ritual trade. According to Jo Lewis, Winan was formerly conducted at the Old Depot, currently the site of the Timber Creek airstrip. The area where Timber Creek now stands was in a strategic position, on the banks of a major river, relatively close to desert environments to the south, and tropical coastal areas to the north. Myatt too was said to be a centre for Winan activity, and that remains the case. As recently as 2003, spears were still being traded down from the north (presumably from Daly River). 320 According to Dr Palmer and Ms Asche, the Winan route is not a matter of choice. It was ordained in the Dreaming. In Timber Creek it was the Dingo (Wirip) that first carried the commodities now characteristically traded along this route. The movement of goods along the "Winan road" was not a matter of traversing distance, but of cementing relationships. 321 It should be noted that there is a good deal more to Winan than this cursory description, drawn from the joint report, can explain. There are ritual and ceremonial aspects that were the subject of the restricted evidence led before me, and to which I cannot refer openly in these reasons for judgment. 322 In conclusion, on this aspect of "taking country", Dr Palmer and Ms Asche observe that the areas of land identified by the claimants as Yakpali, are often rendered in English as "countries". Some anthropologists, including Professor Stanner, prefer to adopt the term "estates". In the area of Timber Creek, it is often the case that particular countries will be named, for convenience, after a spiritually important, though not necessarily very central, site. 323 Dr Palmer and Ms Asche note that the term "Yakpali" is often used in conjunction with a possessive form, for example, "Lamparangana's country". They conclude that the indigenous inhabitants of Timber Creek understand the land to belong to a particular group whose members are all related through consanguinity. Those inhabitants regard rights to land as being gained principally by descent. However, they recognise that a senior member of the group will often be nominated as a point of reference for the group as a whole. However, this is not the case at Timber Creek. There a "country" tends not to be defined with precision. Indeed, the authors are at pains to point out that there is no word in Ngaliwurru for "boundary". Limits of country are defined by reference to both a place (meaning a site), and the knowledge of spiritual matters over which an owner has legitimate authority that relates to that place. Such rights stem from the Dreamings. For example, the right to use a Dreaming design, to recount a narrative, or to sing the songs about the country, is the prerogative of those affiliated to the country, pursuant to the normative system that operates in the particular area. 325 The authors emphasise, therefore, that at least with regard to Timber Creek, the concept of "country" should not be confused with the idea of a bounded estate. Ownership of country cannot be understood in any isolated geographic spatial way. Those who exercise the rights of owners do so in a broader context. 326 It is for that reason, according to the report, that the claimants listed five countries, and their constituent country groups, when they identified their rights to the Timber Creek town site, and adjacent areas. As a consequence, they identified the members of these five country groups as, together, making up the native title claim group. 327 The authors single out one country, Makalamayi, for detailed consideration. As previously noted, Timber Creek falls entirely within Makalamayi. Indeed, Makalamayi is named after a significant site at the junction of Timber Creek and the Victoria River. 328 The authors say that, according to tradition, Makalamayi is associated with three brothers: Niyamo Yam, Mangaramawuk and Lamparangana. They say that it is hardly surprising that the accounts of Lamparangana's life vary greatly. They note that there is some evidence to suggest that he had a son, Albert Yiwarangana, who was shot and killed long before Lamparangana died. However, as previously mentioned, other accounts suggest that Lamparangana had no children. 329 The authors say that it seems clear that Niyamo Yam had no children. However, Mangaramawuk had a daughter, Clara, who was, of course, the mother of Alan Griffiths and Pat Jatjat. Alan Griffiths' rights to Makalamayi pass to his children. Pat Jatjat's son, William Gulwin, is linked to Makalamayi through his mother, and then through her mother. However, Mr Gulwin generally emphasises his links to Wantawul, rather than Makalamayi. Wantawul is his country through his father, Donley Tingiamkari. 330 Though the claimants focus heavily upon Makalamayi, they identify four other countries, in relation to which they claim native title rights and interests. 331 Dr Palmer and Ms Asche say that, to the immediate east of Makalamayi is Wunjaiyi, named after an important site at the junction of Line Creek and the Victoria River. The senior claimants from Wunjaiyi are the children of Old Darby, including in particular, Sammy Darby and Georgie Jones. Without labouring the evidence concerning matters of genealogy, the links between Wunjaiyi and Makalamayi are clear. Old Darby's sister was married to Lamparangana. After Lamparangana's death, she married George Tajpajani, who was Georgie Jones' father. 332 East from Wunjaiyi is Yanturi --- named after an important site in the Victoria River. The senior claimants connected with Yanturi include Jo Lewis and Josie Jones. She, of course, is married to Jerry Jones. They have direct patrilineal links to a man called Mutpuyula. 333 Many members of this same group are also genealogical members of Wantawul, which is located further east of Yanturi. Wantawul is named after a large hill which is located a short distance north west of Fitzroy Station. The authors note that the senior claimants from Wantawul include Larry Johns, Roy Harrington, Doris Paddy and William Gulwin. 334 There is little point in going through the elaborate detail of the genealogies prepared by Dr Palmer and Ms Asche on behalf of the claimants. Two sketch genealogies were included in the report itself, and a number of others were tendered as an appendix to that report. However, the evidence given by a number of the older claimants suggests that the genealogies are, broadly speaking, reliable. That conclusion is also supported by the evidence given in the four land claims brought under the Land Rights Act , transcripts of which were also tendered in these proceedings. 336 Dr Palmer and Ms Asche say that it is clear that Yanturi and Wantawul are closely linked. Indeed, Justice Gray in his report as Land Commissioner concluded that these two countries, or estates, had been essentially amalgamated. 337 Dr Palmer and Ms Asche note that there is a history of Wantawul women having married Yanturi men. Both Yanturi and Wantawul are adjoined, along the Victoria River, and at Bradshaw Station. They are linked by the same Dreamings, and assert affiliations to ancestral beings that are common to both countries. The importance of this, so far as the present proceedings are concerned, is that Yanturi and Wantawul are linked through those Dreamings to Makalamayi and Wunjaiyi. 338 South and south-west of Makalamayi is Maiyalaniwung, sometimes known as "Violet's country". The country name comes from a particular site located south of Makalamayi. The senior claimants from Maiyalaniwung are Violet Paliti and Nida Kalikari. Maiyalaniwung is linked to Wunjaiyi through Sammy Darby's mother. 339 As previously mentioned, these five countries, Makalamayi, Wunjaiyi, Yanturi, Wantawul and Maiyalaniwung have all featured in earlier land claims. There was a good deal of evidence before Commissioner Maurice in the Timber Creek Land Claim regarding the links between them. His characterisation of each country, drawn from the evidence given in that proceeding, is broadly consistent with the views expressed by the authors of the joint report in the present case. 340 One thing that Dr Palmer and Ms Asche are firmly convinced of is that the only way in which indigenous persons can take country at Timber Creek is via the principle of descent. They say that no one can be regarded as a Yakpali mululu except in accordance with that principle. 341 They point out, however, that Timber Creek may be unusual in that the custom among the indigenous inhabitants of the area is to recognise descent through either the patrilineal or matrilineal line. 342 In other words, according to Dr Palmer and Ms Asche, affiliation to country in Timber Creek can be established in one of four distinct ways. A person can take country through his or her paternal grandfather, paternal grandmother, maternal grandfather or maternal grandmother. They characterise the first two principles of descent as "patrilineal", and the second two principles of descent as "matrilineal". It should be noted that they regard an adoptive relationship as equivalent to one that is consanguineal, provided, of course, that the adoption is socially sanctioned. 343 Dr Palmer and Ms Asche say that a system such as this, whereby land passes through either the male or female line is usually described by anthropologists as a cognatic descent system, or in short, a cognatic system. They say that during the course of their extensive fieldwork, however, the majority of the indigenous persons that they interviewed spoke of their father's father's country, which they termed their "kakung", and their mother's father's country, in relation to which they used the term "jawajing". Alan Griffiths told them that, for him, his jawajing country "comes first", but that there was a choice and that "no one way was right". They described claims to jawajing as "indirectly patrilineal", filation being via the female line for, potentially, only one generation. This is somewhat confusing, given that this relationship is in fact matrilineal. It should be noted that not all of the claimants agree with Alan Griffiths. For example, Jo Lewis and Josie Jones told Dr Palmer and Ms Asche that they regarded jawajing country as being in some respects subsidiary to kakung country. They tended to name their father's country when asked for their country, putting it first when enumerating their ties to land. 344 Dr Palmer and Ms Asche note that although some claimants, initially at least, appear to be reluctant to describe their rights and interests as having passed to them through the matrilineal line, they also state that matrilineal inheritance is recognised, and that an interest in country can be gained by reference to one or more of a number of other principles. 345 The authors observe that Alan Griffiths, for whom Makalamayi is his jawajing country, acknowledges that his claim, in that capacity, has to be inferior to any claim that might be brought by an indigenous person for whom Makalamayi would be their kakung country. However, there was no one who could make any such claim. Accordingly, a jawajing claim, which was patrilineal, being the highest extant claim, and recognised as such by all those with an interest in the claim area, would ordinarily prevail. 346 A number of the indigenous persons who gave evidence before Commissioner Maurice referred to their countries by reference to male ancestry only. They listed themselves, and members of their patriline, first, when responding to questions about responsibilities for sites, and their links with country. However, according to Dr Palmer and Ms Asche it was significant that these same witnesses also recognised matrilineal inheritance, and indeed, recognised that an interest in country might be able to be gained by other means as well. 347 The anthropological evidence before Commissioner Maurice in the Timber Creek Land Claim was that the country groups in relation to Timber Creek were patrilineal "in their upper levels". However, that evidence went on to suggest that these country groups included the offspring of women, as well as men, at least at "the middle and lower levels". The evidence suggested that, in general, a patrilineal bias existed, but a wider cognatic descent principle was also recognised. Indeed, that wider cognatic system was said by the claimants who gave evidence in that proceeding to have been operating for at least two or three generations. 348 Commissioner Maurice concluded that, there had been a gradual breakdown of the patrilineal descent system, in its pure sense, at Timber Creek. He considered that, over time, equal status had been accorded to the "larger cognatic kin group". Whatever the precise dynamics of that process, he was satisfied that there was a group made up of the patrilineal and matrilineal descendants of six old world patriclans who, together, constituted the local descent group and, as such, had undifferentiated, and hence primary, spiritual responsibility in relation to the claim area. 349 Dr Palmer and Ms Asche say that a series of questions developed from Commissioner Maurice's findings which, together, raised the issue of whether there had been a significant change in the way in which country groups were now recruited. Is there evidence that this was so? Does the change to a cognatic system indicate a fundamental alteration to the manner of recruitment to the country group? Does 'patrilineal bias' indicate a preference for claiming patrifiliation founded upon historical principles? They say that until approximately twenty or so years ago, there was undoubtedly an assumption among anthropologists that country groups were patrilineally recruited. However, evidence produced as a result of extensive research into land claims has shown that this may not in fact have been the case. In addition, it is now clear that rights to country can be gained in a number of ways, patrilineal descent being but one. 351 For Dr Palmer and Ms Asche it is particularly significant to note that the evidence presented in the various land claims concerning the area around Timber Creek was consistent, and supported the view that cognatic descent had become a common principle by which people expressed affiliation to country. They consider that it is possible that demographic, social and economic changes resulted in a change to the way in which patrifiliation was regarded. None of the Land Commissioners who considered the evidence relating to descent in those cases, with the possible exception of Commissioner Maurice, had concluded that there was anything unusual, or untoward, about the notion that a cognatic system had developed, and been recognised, at some point prior to sovereignty, and certainly prior to European contact. 352 Dr Palmer and Ms Asche emphasise that patrifilial descent was, and still is, an important means whereby people in Timber Creek affiliate to country. For men, at least, knowledge of country is gained through ritual induction and instruction. These are the prerogatives of a father, and not of a mother. Having said that, however, it is also possible that a young man can gain knowledge about his mother's country from his mother's brother. Indeed, there are recorded instances of this having occurred. In other words, though the operating principle in relation to gaining rights to country is that of descent, this can operate either through the patriline or the matriline. 353 In any event, the principle of descent must be complemented with the requisite knowledge of country to enable any rights to country to be realised. However, and in our view, the normative system underpinning the acquisition of rights to land has not changed, only its emphasis. They say that the data that they have collected, as well as the material that was been put before the Commissioner, suggests that the integrity of the country groups remains strong, and is a fundamental component in any characterisation of the land owning system in the area. More specifically, they reject any notion of a collapse of an earlier traditional system where country groups operated independently into some different, more cohesive, social group, operating under a new normative system. 355 Dr Palmer and Ms Asche point out that in a cognatic system there is, theoretically, an ever increasing range of countries available for claim through filiation, as each generation succeeds its predecessor. That is because, in a cognatic system, a child can claim filiation to each of the four countries of his or her grandparents. Theoretically, each grandparent would also be able to claim filiation to the country of each of his or her grandparents. In other words, the number of countries would increase exponentially with each generation. 356 The authors stress, however, that the possibility of such exponential growth is more apparent than real. In practical terms, although people can claim rights to more than one country, the number of countries they can assert as their own is severely constrained. Genealogical memory is shallow, so it is unlikely that anyone will remember the country filiations of forbears higher than four generations above themselves. Moreover, most people tend to stress the country of one forbear, generally, though not always, their kakung country, and to neglect others. The reason is simple. It involves little more than the recognition of the practical reality that filiation to country involves more than just an assertion of a relationship. It requires relevant knowledge of the country in question. A person has a finite capacity to gain such knowledge, given that it has to be accompanied by at least some period of residence, and familiarity with relevant sites. There is a limit to the amount of knowledge of this kind that can, in practice, be absorbed. This explains why people tend to focus upon the area where they live, or at least upon the area that adjoining it, when they make claims to country. More distant regions, which can be linked through filiational attribution only, therefore become less important. It follows that a cognatic system, though more likely to be flexible than a patrilineal system, will nonetheless still not be entirely open ended. 357 Dr Palmer and Ms Asche emphasise that in matters relating to country, not all are equal. While cognation might be a sine qua non of ownership, it is by no means sufficient. In particular, knowledge of ritual practice, leading to standing within the community, is essential when considering any claim to take country. Since it will normally take many years to attain the relevant knowledge, status within an indigenous community is often a reflection of age. An example proffered was William Gulwin's reluctance to speak about matters relating to Makalamayi, deferring to his mother and his uncle because of their vastly greater status. 358 Dr Palmer and Ms Asche observe that claimants sometimes rest their affiliation to country on a number of other referents apart from cognation. For example, those who share Dreamings, or engage in Winan, or have an alliance developed through name exchange, may call upon their relationship to legitimate the adoption of a role in the affairs of a country to which they have no ancestral connection through descent. Such claims will not earn the attribution of Yakpali mululu, which is reserved for those who gain country though descent. Nonetheless, they may give rise to native title rights and interests. 359 The authors say that Jerry Jones provides a useful example of this principle in operation. As previously indicated, he is regarded as an important person at Timber Creek. However, Timber Creek is not his kakung country. Rather, Wanimiyn, which is situated south of Coolibah Station, near Stokes Range, fulfils that role. Mr Jones is not filiated to any of the forbears belonging to the five countries that are the subject of focus in the report. Nonetheless, he has considerable standing within the Timber Creek community, based upon his knowledge of ritual and spiritual matters. In that regard, he follows his father who was also a ritual leader at Timber Creek. As previously noted, Alan Griffiths has appointed him his deputy, relying on him to look after Makalamayi in Mr Griffiths' absence. 360 Of course, Jerry Jones lives at Myatt and is married to Josie Jones. Her kakung country is Yanturi. As previously noted Yanturi and Wanimiyn are closely associated. Jerry Jones has a connection to Yanturi through Dreamings, and through his marriage. His children claim Yanturi through their mother, and Wanimiyn through him. His connections with Yanturi and Wanimiyn, and his detailed knowledge of ritual practice in Makalamayi, taken together, explain why Mr Jones has attained the status that he has at Timber Creek. These include access rights, exclusion rights, rights that relate to intellectual property, and "use and benefit rights". The authors identify various duties as well. These include a duty to protect country, a duty to care for country, and a duty to care for visitors. 362 Dr Palmer and Ms Asche note that Alan Griffiths referred to the Ngaliwurru and Nungali people "sharing" Makalamayi. Mr Griffiths said that the members of each of the five country groups in question could enter the other countries freely, without asking permission of anyone. The only constraint applied to women who would have to ask first in order to make sure that they did not contravene any secret ritual business. Members of other groups, including, for example, the Ngaringman, would need to ask first, unless they were travelling for Winan, in which case, they could enter Ngaliwurru and Nungali country freely. 363 The authors point out that Sammy Darby said that he could go anywhere in Makalamayi without asking permission. He said that he was free to hunt, fish and gather food. When asked about other countries, such as Yanturi, he said that, as a courtesy, he would let the senior owners know, but that he might do so only after he had been there. Dr Palmer and Ms Asche conclude that Mr Darby's reticence had more to do with protocols, and respect for the spirituality of the countryside, than with any actual requirement to ask permission. 364 Jerry Jones told Dr Palmer and Ms Asche that he regarded himself as being entitled to fish, camp, hunt, take ochre, and induct strangers in Makalamayi. He said that those who were not members of the Nungali-Ngaliwurru community were expected to ask permission before doing any of these things. 365 In the authors' view, all members of the claimant group were entitled to use the resources of the claim area. However, that entitlement was tempered by "a spiritual reality" which explained why some people were reluctant to venture too far into country without the guidance of others. For strangers, such guidance was essential. In effect, asking permission was irrelevant because to go somewhere unknown, without that guidance, would be to court disaster. 366 The report concludes that the claimants share a belief that many places in the countryside are dangerous. The authors provide a number of examples of this. In their words, the countryside is "a minefield of deadly spirituality". 367 When it comes to the claimants' right to control intellectual property relating to Makalamayi, this is said, in the report, to be best illustrated by the use of body designs (often referred to as "photographs"), songs and narratives. These are seen as the property of the countrymen. They have the right to use them, and to allocate or licence their use to others. 368 So far as resources are concerned, these are considered to belong communally to the members of the country group in whose country they are found. Use of these resources requires the permission of the owners. Any activity that has a potentially deleterious impact on the land is expected to result in some form of compensation for the members of the country groups with an interest in the relevant area. A typical example was said to be the funding made available as a result of the building by the Australian Army of the bridge over the Victoria River. 369 A concomitant of the right to use the land is the duty to protect it. Protecting the land is seen as a way of protecting oneself. The authors say that the ability to discharge that duty has been facilitated, in recent years, by Territory and Commonwealth legislation regarding the safeguarding of sites. Similarly, although the protection of places is important, there is also a separate requirement that areas be cared for in accordance with traditional customs. For example, it is expected that there will be regular burning off thereby ensuring that the country remains open, easy to traverse, and that food and animals can be seen, thus facilitating hunting. I should interpolate that it is plain that burning off is a regular occurrence at Timber Creek, normally carried out at the end of the wet season. 370 The final duty identified by Dr Palmer and Ms Asche is that of ensuring the safety of visitors. This means that strangers must be inducted into the country so that its spirituality will not harm them. This process of induction through the ritual of head wetting has already been discussed. The authors conclude that the claimants have had a continuous and ongoing relationship with Makalamayi that long predates sovereignty. 372 Dr Palmer and Ms Asche state several bases for this conclusion. They note that many of the sites that they were shown by the claimants were recorded by earlier researchers. They refer to maps and site lists compiled for earlier land claims, and observe that these sites demonstrate a pivotal Dreaming reference. They say that the sites are more than mere places, or lists of named locations. They are to be regarded as symbolising a range of spiritual and associated imperatives. A very important part of the claimant community's culture continues to be a belief in the manifestation of Dreaming spirituality. 373 According to the report, the area around Timber Creek features three major Dreamings. These are Dingo (Wirip), a composite of different fish including barramundi, shark, stingray and catfish, and finally a hunchback figure (Humpyback or Wuguru). In addition to these Dreamings, there are several localised beings, most notable of which is the Centipede, which gives its name to the particular site mentioned earlier in these reasons for judgment. The tracks of the principal Dreamings, as they relate to the claim area, are shown in a map that is appended to the joint report. 374 Other sites are also significant. They include burial places, where the "old people" have been interred. These are described as having a continuing importance, not only out of respect for the dead, common to most cultures, but because the spirits of the dead are considered still to reside there. 375 Dr Palmer and Ms Asche comment upon what they observed of the hunting and gathering in the area. At one point, they set out various plants or other resources identified by their Nungali or Ngaliwurru names, and then discuss the current use of these products. From this analysis, they conclude that the use and knowledge of bush resources have continued to be part of the claimants' customary beliefs and practices. In the authors' opinion, the claimants have gained their understanding and knowledge of traditional matters from their elders, through oral transmission. The claimants believe that this knowledge derives ultimately from the Dreaming. They consider it to be "unchanging". This provides for a social context where knowledge is transmitted with some regard for continuity. 376 Dr Palmer and Ms Asche see further evidence of continuity in custom and tradition in the ethnographic data that emerged in the land claims of the 1980s, and as far back as the earlier work of Professor Stanner, more than 70 years ago. First the applicants assert that continuity of cultural transmission is an important aspect of the interaction between young and old. This is demonstrated in their behaviour as well as in their comments. Second, there is evidence, documented in the preceding paragraphs, that there is a continuity in the transmission of traditional knowledge and that this relates to normative values and rules which continue to provide the basis upon which the applicants frame their social interactions, their view of the world and the proprietorial interests in country. I propose to set those paragraphs out in full. It comprises five country groups whose members consider themselves to be affiliated to named areas, which are often called 'countries'. We have set down how individuals are recruited to country groups, through descent. We have indicated that, in our view, descent at Timber Creek is reckoned as cognatic, although there would appear to be some preference for claiming country via patrifiliation. One possible interpretation of this is that there has been a move away from patrifiliation over the last two or three generations, presumably as a result of the major social, economic and demographic changes that have occurred. However, the evidence from the literature is not conclusive in relation to the universality of patrifiliation for country groups. Regardless of what the situation was prior to contact with Europeans, it is reasonable, in our view, to conclude that cognation was always a part of traditional reckonings of the descent of rights in country. We have noted how matrifiliation was always accommodated within Aboriginal societies. We have argued that descent is the primary principle for reckoning membership of country groups and from all the evidence available to us, this would have been the case also prior contact. At Timber Creek today descent remains the first principle whereby membership of country groups is reckoned. We have set out the beliefs, practices, concepts and ways of doing things which we have observed and been told about during our field work. These we have identified as forming a distinctive culture that characterises the applicant community. The culture we have described is believed to have been the product of the Dreaming and is considered to be inviolable. That is to say, the traditional practices are considered to be the product of rules and are referenced to an ideal manner of conduct which was set out in the Dreaming. This is considered to be unchanging and not to be altered. It is, then, a normative system whereby contemporary action is predicated on an acceptance of prescriptive rules for action, inter-action, belief and practice. These are considered to be constant and to have their origins beyond the here and now. The five country groups are identified with five countries. This relationship is founded upon filiation by reference to descent and is articulated and brought to daily notice by reference to a range of activities which are underpinned by asserted spiritual connectedness. These include the exercise of rights and duties. The relationship between a man and woman and his or her country is identified (subject to the acquisition of certain knowledge) in terms of that person being an owner and a 'boss' for the country. It is a relationship that requires that such a person be fully acknowledged and taken into account in any dealings that eventuate with respect to that country. However, we have also shown how a quite complex set of relationships, some founded upon belief, some on kinship, some on other developed relationships, mean that an individual's relationship to his or her country is also mediated by relationships with others. Consequently, ownership of country is neither absolute or unqualified. It exists in a social context that serves to emphasise the relationship of owners and countries. The result, in our view, is that countries and country groups operate as sets, here identified as the applicant community. It is for this reason that the applicants have chosen to put forward a claim for native title, not just as one country group, but as members in common of five. It is unlikely to be the product of some form of social collapse of a society that was characterised by autonomous and hermetic patrilineal groups. We have shown by reference to other writers that local group autonomy has not been shown to be the case elsewhere in Aboriginal Australia. We have also noted that traditionally the use of country required rights to a domain of country that exceeded individual estates. Residence groups were made up of several (or many) country groups, therefore corporately they had representatives from owners of a set of individual estates. The exercise of these rights is observable in practice and includes access rights, the right to control the access of others, rights to the resources of the country, rights to the intellectual property associated with the country and the assumption of roles in ritual. Exercise of these rights is hedged round with rules and requirements, which are considered to be imbedded within the applicants' culture. This includes certain duties with respect to the land which we have set out. Consistent with these understandings rights and duties are exercised by members of the applicant community in relation to their land, in differing ways, depending on their qualifications and standing in the community. The applicants believe that the Dreaming origins of their culture and the spirituality upon which their relationship to land is predicated is, then, both past and present. It has its origins in the distant past in a time before imagining. Knowledge of these things has been handed down from generation to generation. Its contemporary spirituality is a part of lived experience and cultural practices are a part of the way of life of the applicants. From the applicants' perspective then, the rules, the ways of doing things and their whole cultural universe are based on ancient practice. They are from time immemorial. We have concluded that there is insufficient material available to demonstrate conclusively from it whether the system of laws and cultural rules which we have described were those that would have been found in the community at the time of first contact with Europeans, or prior to 1825. However, it is our view that their culture and the rules that mould it are, in all probability, based upon a traditional system that predates sovereignty. Our reasons for reaching this conclusion are that the nature of the material we have presented relating to customs and rules which characterise this community are consistent with what is likely to have been traditional practice. In this we have cited, where possible, other ethnographic data in support of that we have presented. We have also shown there to be substantial correlation between our research and that presented by other research in the land claims process, up to twenty years ago. This too would support the view that there has been a continuity of belief and custom in this community. He gained his doctorate at the University of Manchester, in 1970. He has had a long and successful academic career. It commenced with his appointment in 1961 as a research assistant at the University of Witwatersrand. He was subsequently appointed to a lectureship at Rhodes University in Grahamstown. From 1963 to 1973, he lectured in social anthropology at the University of Manchester. Between 1974 and 1977, he was a Research Fellow at the Australian Institute of Aboriginal Studies. From 1978 to 1994, he was Professor of Anthropology at the University of Western Australia. He was made an Emeritus Professor of that University in 1994. From 1995 to 1999, he was Honorary Senior Research Fellow. From 2000 to 2002, he was a sessional lecturer at Edith Cowan University, in Perth, specialising in Aboriginal anthropology. 382 Professor Sansom has, at various times, undertaken extensive anthropological fieldwork in South Africa, Libya and Lebanon. In 1974 and 1975, he undertook an 18 month study of aborigines in Darwin fringe camps and the hinterland. In 1988, he returned to that study, and spent a further seven and a half months engaged in additional field work. 383 Professor Sansom has published many papers dealing with aboriginal land rights, and has acted as a consultant in various land claims. These include claims at Utopia, Finniss River and Upper Daly. He also assisted the Warai claimants in the Wagait dispute, and has acted as a consultant anthropologist on behalf of the Northern Territory in the Ben Ward litigation (involving Keep River), the Croker Island claim, and the Murchison and Davenport Ranges claim. He was retained on behalf of the Commonwealth in relation to the Blue Mud Bay claim. 384 Professor Sansom prepared a lengthy report responding to, and critically evaluating, the report jointly prepared by Dr Palmer and Ms Asche. What follows is simply my attempt to summarise, in broad terms, what is obviously a complex, and heavily nuanced document. He confronts, directly, the conclusions reached by Dr Palmer and Ms Asche regarding the constancy, and long history of the rules of the claimants' normative system. He characterises their conclusions as "the usual ideological position encountered in Aboriginal Australia". Professor Sansom's use of the term "ideological", in this context, is no accident. He repeats that adjective on a number of occasions. He questions whether "the expert anthropologists" (by which he means anthropologists other than Dr Palmer and Ms Asche) concur with "the ideological view" that Dr Palmer and Ms Asche put forward. 386 According to Professor Sansom, the opinion expressed by Dr Palmer and Ms Asche that the claimants' culture, and the rules that mould it, are in all probability, based upon a system that predates sovereignty is, in truth, little more than a restatement of an "ideological" position. 387 Professor Sansom takes Dr Palmer and Ms Asche to task for glossing over the shift from a patrilineal system to a cognatic system, which they acknowledge has occurred, but regard as nothing more than an adaptation of an existing normative system. Professor Sansom strongly disagrees. He sees that shift as reflecting a quite fundamental change to an entirely different normative system. In other words, he sees the shift as revolutionary, rather than evolutionary, and as involving a change from one operating principle to another. 388 Professor Sansom ascribes to Dr Palmer and Ms Asche a thesis that asserts continuity in the transmission of relevant custom and tradition from 1825 to 2004. He adds, however, that he has had regard to several sources that were not available to them. He says that he regards these additional sources as important. 391 Professor Sansom's interpretation of the anthropological literature differs somewhat from that of Dr Palmer and Ms Asche. He concludes that there have been significant "shifts and changes in customary practice and traditions" in the region about Timber Creek. If his conclusion regarding this matter were to be accepted, the claimants' case would be detrimentally affected. He says that these shifts bear directly upon the ways in which members of the claimant community assert rights and interests in land. There has been a merger between two language groups, Ngaliwurru and Nungali, and a concomitant combination of what has traditionally been two separate and distinct language countries. This merger was accompanied by an amalgamation of territory. The merger was part and parcel of a general amalgamation in which land and people, and ways of speaking, had combined to provide a new and inclusive social and political identity. 394 As Professor Sansom notes, the notion that there has been a shift from a patrilineal system to a cognatic system at Timber Creek is not new. This very proposition was canvassed at length before Commissioner Maurice during the course of the Timber Creek Land Claim. The Commissioner concluded that the system that operated in 1985 was not simply to be described as cognatic, but rather one that was in the course of adaptation from a system that had been patrilineal. 395 As previously indicated, Dr Palmer and Ms Asche regard the kinship system that presently operates in and around Timber Creek as being almost, though not quite, unambiguously cognatic. The one qualification that they are prepared to make is that there appears to be some preference, on the part of the inhabitants, for claiming country via patrifiliation. Professor Sansom regards that "preference", as characterised by Dr Palmer and Ms Asche, as the last vestige of traditional patriliny. 396 Professor Sansom criticises Dr Palmer and Ms Asche for having elided a distinction between cognation as always having been a part of traditional reckonings (a proposition that he accepts might be true), and their contention that the kinship system at Timber Creek had always been cognatic. That latter contention he rejects entirely. In Professor Sansom's view, the system of kinship that prevailed at Timber Creek at the time of sovereignty was patrilineal, nothing more and nothing less. He says that that system has radically altered over time. 397 Throughout the balance of his report, Professor Sansom documents the shift to cognation, and offers various explanations for that shift. He argues that the shift is occurring "very generally" in the "Top End" and, more particularly, that it is commonly encountered in the central-north region in which Timber Creek is located. He maintains that the principle of patrilineal descent has gradually been eroded, and that cognation has given rise to a new set of norms that destroy continuity and connection with tradition and custom relating to land. He cautions against what he describes as Dr Palmer and Ms Asche's use of the "ethnographic present". By that, he means a tendency to assume that what is observed at any given time can readily be translated back, and projected forward, even if there is no empirical basis for doing so. He criticises anthropologists who present accounts of normative systems that are "self-sustaining and self-perpetuating". He is particularly critical of Professor Rose's interpretation of the cultural system of Yarralin people (upon which Dr Palmer and Ms Asche place great reliance) for just this reason. It appears that the notion of a "diachronic" analysis derives from an essay written by Professor Lévi-Stauss, the celebrated anthropologist, in 1953. By "diachronic" Professor Sansom means something akin to "historical", with the additional gloss being that diachronic studies are those concerned with the alteration of systems of action and systems of norms from one identifiable state to another. To produce a diachronic analysis the anthropologist usually proceeds by comparing successive states of a social system as these are expressed in succeeding moments of time. In other words, in his opinion, a statistical shift, once manifest, leads ultimately to a normative shift, or a change in the rules. 402 The shifts that Professor Sansom discerns involve the movement from detailed, onerous and restrictive rules to more flexible, inclusive and variable rules regarding the recruitment of groupings whose members may claim entitlements. As he notes, in the absence of any legislative rule-making body, changes in customary rules can only come about as a result of the gradual accumulation of contrary practices. In other words, considerable numbers of people no longer do things in accordance with the old ways, and these "rule breakers" get away with what might previously have been characterised as "deviant practice". He describes this as the "myth of eternal recurrence". In his opinion, anthropologists are likely to view the process differently from the participants in the relevant "jural community". Where those participants see continuity, the anthropologist will see change. Native title requires attention to history, and this puts the evidence given by contemporary indigenous witnesses into a particular timeframe. Claims of traditional ownership in land claim proceedings lack this historical emphasis. Those claims focus heavily on concepts such as "caring for country", whereas the emphasis in native title claims is on rights and interests, in relation to land or waters, possessed under traditional laws and customs. There is also the requirement to establish that those laws and customs have a connection with the land or waters, and that those rights and interests are recognised by the common law of Australia. 405 It is for these reasons that Professor Sansom regards notions such as the principle of descent as central to native title claims, but merely peripheral when it comes to claims of traditional ownership. In his terms, the discourse of "rights", which is the language of native title claims, is qualitatively different from the discourse of "responsibilities", which lies at the heart of land right claims. He characterises this shift to cognation as an equalisation between "father-right and mother-right". He describes it as a radical modification of the composition of the local group. People come to country not directly by "agnatic" inheritance, but rather by choosing among the four lines of descent that are now available at the grandparental level, or even the eight lines of descent that can be called in at the great-grandparental level. 407 Professor Sansom attaches to his report an appendix that is devoted to a consideration of social arrangements in the Western Desert. As he notes, indigenous people in that region came to land, not on the basis of patrilineal descent, but by way of cognatic connection to ancestors. He describes the Western Desert as a home to cognatic systems of kinship. Moreover, he says that in the Western Desert, cognation takes what he describes as a classic form. He says that in aboriginal studies, the Western Desert provides the exception to the rule that, in general, kinship in aboriginal Australia was patrilineal. 408 Professor Samson says that if the ancestors of the Timber Creek claimants had a cognatic kinship system in earlier times, the classic Timber Creek system would be "like that of the Western Desert". He says that in the context of the present claim, the Western Desert example could be cited in an attempt to show that cognatic kinship systems were not exceptional in aboriginal Australia. Cognation could be presented as one of the randomly occurring varieties of aboriginal kinship, and therefore as supporting the possibility that the kinship system at Timber Creek was, as Dr Palmer and Ms Asche suggest, cognatic. 409 Professor Sansom's thesis appears to be that at least in desert areas of great privation there is a need for greater flexibility in acquiring interests to land. Otherwise, tribes will simply die out. However, Timber Creek is well-watered, lush and fertile. It ought therefore to fall within the general picture of purely patrilineal descent. In his own words, Professor Stanner "provides essential facts" and "supplies the necessary theory". 411 According to Professor Sansom, Professor Stanner's findings, based upon his contact with the people of the Victoria River region in 1934 and 1935, were straightforward. Professor Stanner concluded that they were all peoples of the patrilineal totemic clan. In Professor Sansom's view, that finding remains unassailable. Indeed, it is said to have been supported by Professor Stanner's later research, published in 1965, which concluded that ownership of land in aboriginal Australia vested in the "patrilineal totemic clan". 412 Professor Sansom acknowledges that Professor Stanner qualified that finding by noting that the groups of people who moved about country together, and camped together at nightfall (the "hordes") were made up of people who would be drawn from several clans. Each would have its own agnatic core, and would move over and exploit lands held in ownership by more than one patrilineal group. 415 Professor Sansom is, however, critical of Professor Stanner's failure to appreciate that principles of succession could, and did, operate in the Victoria River region. In circumstances where a clan dies out leaving no surviving holders of primary rights in the clan estate, persons who hold secondary rights can, by due process, succeed to that estate. However, they do so by succession, and not by virtue of their secondary rights per se. 416 Professor Sansom also attacks Professor Stanner's knowledge and understanding of the Western Desert. In that regard, it should perhaps be noted that in 1934, when Professor Stanner visited the Victoria River district, he was a young man who had recently graduated in Arts, and was undertaking post-graduate research. He was not, at that time, an experienced, or particularly well-qualified, anthropologist. He could not, by then, have had any extensive contact with the indigenous inhabitants of the Victoria River district. Indeed, he would have been something of a novice when it came to fieldwork. Nonetheless, Professor Sansom regards Professor Stanner's early work as being particularly significant. He prefers Professor Stanner's conclusions to those of later anthropologists (who are less deferential towards Professor Stanner). 417 Dr Palmer and Ms Asche regard it as somewhat odd that Professor Sansom accords so much weight to Professor Stanner's views about the indigenous inhabitants of Timber Creek. They point out that Professor Stanner himself conceded that he knew less about those inhabitants than he would have liked. Indeed, he made it clear, in his early writings that he was disappointed with the lack of information that he was able to gather from the local inhabitants. He complained repeatedly of a lack of cooperation on their part. 418 Dr Palmer and Ms Asche, though they acknowledge the value of Professor Stanner's work, are critical of his analysis of the Ngaliwurru people. They regard that analysis as cursory. They are also critical of Professor Stanner's treatment of the Jaminjung which they describe as "inconclusive" and "provisional". Professor Sansom largely rejects their criticisms of Professor Stanner. He regards Professor Stanner's account of the indigenous community at Timber Creek as inherently likely to be reliable because it accords generally with what he sees as the correct regional pattern. 419 Professor Sansom is highly critical of at least some of Professor Rose's work in this area. Nonetheless, he draws upon that work, in relation to ngulu and kuning, as further support for the validity of Professor Stanner's conclusions. He also calls in aid, in support of Professor Stanner's work, the conclusions of other anthropologists who have engaged in research in parts of Australia that are somewhat removed from Timber Creek, such as East Arnhem Land. In addition, aboriginal people had been required to develop strategies of survival in the face of an overwhelming settler presence, and the takeover by settlers of their lands. 421 It should be noted that the debate between Dr Palmer and Ms Asche on the one hand, and Professor Sansom on the other, regarding the importance of the shift from patrilineal descent to cognation is by no means confined to these proceedings. Professor Sansom has been grappling with this issue for many years, as is demonstrated by the evidence that he gave to the Land Commissioner in the Upper Daly Land Claims. That evidence is discussed at [161]-[163] of Professor Sansom's report. He comments further upon this subject in connection with the Larrakia people at [164]. 422 Professor Sansom refers extensively to a recent work by Professor Peter Sutton, " Native Title in Australia: An Ethnographic Perspective " (2003). Professor Sutton's thesis was that the emergence of cognatic descent groups constituted an aspect of "post-classical social organisation", and represented a revised normative system of "post-classical kinship". Professor Sansom says that, with the emergence of cognatic kinships, two things tend to happen amongst previously patrilineal peoples. First, there is a collapse of the clan structure. Next there is a tendency for distinctly defined estate groups to disappear, and for there to be a revision of the sacred and totemic geography of a grouping identified as a "tribe" or language-owning group. Ownership comes to be claimed, not on an estate basis, but rather as ownership of a "language country" or "tribal territory". This happens because cognation diversifies and generalises interests in country, while traditional patriliny concentrates rights and interests in estates. 423 However, having made these points, Professor Sansom does not identify any factors that might indicate that such revolutionary changes have occurred at Timber Creek. Rather, he gives as examples of this process, Darwin and Katherine, both large towns, and vastly different in that respect to Timber Creek. 424 Professor Sansom first presented his thesis as to why people "go cognatic" in the Upper Daly cases of the 1980s. He notes that that thesis is now supported by Professor Sutton, whose own work cites extensively from Professor Sansom's earlier reports. 425 Put simply, Professor Sansom argues that the shift to cognation around Timber Creek was brought about, at least in part, by the "killing times" which led to a dramatic reduction in the indigenous population of the area during the forty years or so after initial contact with European settlers. Professor Stanner had commented upon that phenomenon. Professor Rose herself estimated that, over the years, somewhere between approximately 85 and 95 per cent of the aboriginal population of the Victoria River district had been lost. She noted that some of this population loss had been brought about by internecine warfare among the indigenous community, while smallpox, introduced from Indonesia by Macassans prior to sovereignty, may also have had an impact. 426 Professor Sansom concludes that the massive depletion of population suffered by the northern aborigines threatened social and human survival. Some groups were extinguished, while others survived with local social organisation much modified. In many instances, this involved disappearance of the patrilineal clan as the distinctive local group. 427 A second factor in the shift to cognation is what Professor Rose and Mr Lewis describe as a "refuge thesis". This is said to account for different death rates among the "tribes" of the Victoria River district. The peoples who survived tended to be those for whom the sandstone country of their respective homelands served as a "refuge". Sandstone country was inaccessible, and offered graziers no pasturage. People tend to remember ancestors only as far back as their grandparents, or perhaps occasionally, a single great-grandparent. Native title proceedings are distorted by the ban on recalling the names of the dead, especially those who have died in recent times. Unlike some oral cultures, there is no tradition among indigenous people of memorising lengthy genealogies, stretching back many generations. 430 The contrast between the approach of Dr Palmer and Ms Asche to indigenous oral history, and that of Professor Sansom, could hardly be greater. Dr Palmer and Ms Asche readily acknowledge that there are dangers in acting upon unsupported oral tradition. However, they have a very different view about what can provide such support. 431 Professor Sansom, on the other hand, seems to favour the consignment of oral history to the periphery. 433 Professor Sansom is perhaps on stronger ground when he outlines a number of the particular dangers associated with historical recall in evidence given by indigenous persons. These include the ban on calling the names of the dead, which is always respected in native title cases, the anthropologically accepted observation regarding the "shallowness" of genealogical recall in Aboriginal societies, and the operation of what he describes as the "hearsay rule". I should explain that this has nothing to do with the hearsay rule as an exclusionary rule of evidence, but rather proscribes the telling of stories about a person or persons that one has never met. 434 Professor Sansom argues that there exist a set of conventions that require history to be revised so as to skate over irregularities in consequential matters. These include succession to land, and the takeover by one tribe of the country of another. He claims that this set of conventions eliminates such matters from collective memory. 435 It is not entirely clear whether Professor Sansom, in speaking of "the manipulation of history", is ascribing to indigenous people a conscious desire to embellish the truth. There are indications in some of his language to just that effect. His thesis is that anything that does not fit within the template of traditional lore regarding continuity and uniformity of custom and practice, such as irregular succession to land, or immigration, or the takeover by one group of the land of another, will be expunged from the record of oral history. He goes on to say that, similarly, any major shift in the rules of kinship that may have occurred will be expunged from memory. He claims that present day indigenous persons will assert that what is in fact a reformed kinship system is no new creation, but simply an eternal endowment of law ordained in the Dreaming. 436 Finally Professor Sansom deals with calibrating "time immemorial". He accepts Professor Rose's proposition that aboriginal cultural conceptions yield an historical present of about 100 years. Anything before that is allocated to the time of the Dreamings, and is "past recall". First is the revision of the system of kinship and descent. Second is the complex merger of two previously separate language groups, their languages amalgamated, and their historically separate language countries combined into a single territory. In his view, inevitably, and in accordance with culturally enjoined tendency, things that are probably new developments are, and will be, characterised by indigenous witnesses as realities that have existed "from time immemorial". 438 Professor Sansom's conclusions, if accepted, would cast doubt upon the existence of the native title claim group, as pleaded, and therefore upon whether there are communal native title rights and interests of the type alleged. They would also cast doubt upon whether any rights and interests that are shown to exist are possessed under "the traditional laws acknowledged, and the traditional customs observed" by the claimants. Finally, they would at least substantially weaken the contention that the claimants, "by those laws and customs, have a connection with the land or waters" claimed. Dr Palmer received that report after he had gone to Timber Creek in preparation for the on-site hearing of these proceedings. By that stage he had already begun his consideration of Professor Sansom's original report, which was filed in January 2005. 440 Dr Palmer was strongly critical of Professor Sansom's report. He concluded that none of the matters raised by Professor Sansom had caused him to alter any of the views that he had earlier expressed in the joint report with Ms Asche. However, he considered it useful to set out in greater detail than he had previously done just how much time he had spent undertaking field work in the western areas of the Top End. 441 Dr Palmer pointed out that as far back as 1984 he had undertaken field work in and around Timber Creek as part of his involvement in the Timber Creek Land Claim. He had met, and worked with, a number of the senior claimants in the present case. He had also become acquainted with, and worked with, other senior men and women who had since died. 442 At about that time, Dr Palmer had also engaged in research in relation to the Amanbigji (Kildurk) Land Claim. That involved a pastoral lease some 130 kilometres south-west of Timber Creek. Dr Palmer undertook field work at Amanbigji, collecting data on the laws and customs of the claimants, and recording genealogies and sites of significance in the claim area. He estimated that he had spent a total of approximately thirty days engaged in that fieldwork. 443 Between 1996 and 1998, Dr Palmer was the senior anthropological advisor for the applicants in the Miriuwung---Gajerrong native title claim. He spent about thirty days undertaking fieldwork in the Keep River National Park, located approximately 150 kilometres west of Timber Creek. 444 In 1999, Dr Palmer conducted a series of field visits to aboriginal communities in the Victoria River district as part of a regional review of outstation resource agencies. In 2002 and again in 2003 he provided advice to the Kimberly Land Council in relation to an anthropological report prepared for a native title claim involving land in the vicinity of the Argyle diamond mine. 445 The point of all this was, no doubt, to establish that, unlike Professor Sansom, Dr Palmer had spent an enormous amount of time in the Timber Creek region over many years, undertaking extensive field studies. He had lived and worked closely with the indigenous people of the area. 446 Dr Palmer pointed out that Professor Sansom's fieldwork had been confined to studies of urban dwelling people in the Darwin region, and an involvement in three land claims as an anthropologist assisting the Land Commissioner. In none of those three claims had Professor Sansom undertaken any fieldwork. In Dr Palmer's terms, the criticisms levelled by Professor Sansom at the joint report that he and Ms Asche had prepared were all theoretically based, and derived from a grasp of relevant literature. However, Professor Sansom had no first hand study or experience of the people living at Timber Creek, or even in any of the surrounding areas. 447 In relation to the views of Professor Stanner regarding patrilineal descent, Dr Palmer accepted that the inhabitants of Timber Creek generally preferred to state their connection to country in patrilineal terms rather than through the matrilineal line. However, he repeated his earlier view that, although links to father's country were important, it was also essential to recognise that the system of descent that applied in this area was flexible. There had indeed been a shift from patrilineal to cognatic descent. However, in Dr Palmer's opinion, the normative system that underpinned the acquisition of rights to land in the area had not changed. Descent was still the key to that system. 448 Dr Palmer appeared quite irritated by Professor Sansom's suggestion that he and Ms Asche he had in some way rejected the notion that there had been a shift from patriliny to cognation. As previously noted, Professor Sansom had accused Dr Palmer and Ms Asche of believing that that there had been "179 years of stasis". That charge was emphatically denied. All that they had said was that, in Timber Creek, recruitment to a country group was by cognation. There was still a preference for patrilineal descent, whether direct or indirect. It was true that in the Timber Creek Land Claim Commissioner Maurice had interpreted this shift to cognation as symptomatic of a "breakdown" of patrilineally recruited groups. That was a view that Dr Palmer and Ms Asche did not share. 449 Dr Palmer challenged Professor Sansom's view that cognation was an altogether new way of gaining "primary rights in land", and therefore represented a fundamental change in normative system. His own opinion was that an appeal to cognation did not represent a departure from the normative system, but was, and always had been, a necessary part of that system. 450 While acknowledging the importance of Professor Stanner's work, Dr Palmer noted that it had generated intense academic debate. It is unnecessary, for the purpose of this judgment, to refer to the many papers that Dr Palmer identified as having contributed to that debate. Indeed, even Professor Sansom, one of Professor Stanner's strongest admirers, conceded that Professor Stanner had been wrong in relation to two key aspects of his work, the first relating to succession, and the second his notion that patrilineal descent operated universally throughout Australia. Professor Sansom also acknowledged that cognation was a traditional normative principle in relation to recruitment to certain country groups. However, he regarded cognation as being confined to the harsh Western Desert environment. 451 In Dr Palmer's own words, the differences between Professor Sansom and himself were largely those of emphasis and degree. Professor Sansom insisted upon seeing a shift to cognation as a fundamental departure from traditional norms. Dr Palmer saw a shift to cognation as nothing more than a change of emphasis in a normative system that remained fundamentally the same, based as it was upon descent. Dr Palmer was strongly of the view that this normative system had existed since well before sovereignty. To his mind, calling in aid Professor Stanner could not really resolve this debate. 452 I will not go through the detail of all of Dr Palmer's many responses to Professor Sansom's report. There is one response, however, that is of particular importance. Dr Palmer takes strong objection to Professor Sansom's view that oral traditions that claim to establish original or traditional practices are inherently suspect. 453 Dr Palmer acknowledges that Professor Sansom has some legitimate points to make regarding the shallowness of aboriginal genealogical recall. However, he points out that both he and Ms Asche were well aware of the research that had been done into this phenomenon when they prepared their joint report. For that reason, they had carefully scrutinised the genealogical evidence that had been presented to them, and wherever possible, sought to verify it. 454 Dr Palmer rejected Professor Sansom's notion that much of the oral history given by the claimants in these proceedings should be rejected as a form of "revisionism". He said that the accounts that the claimants had given him and Ms Asche were at least consistent with those recorded by earlier researchers. Moreover, those accounts were remarkably consistent over more than two decades. Even if there was an element of "re-writing of history" as Professor Sansom suggested, this would not negate the existence of an on-going and continuous system of normative rules. On the contrary, such a process might support the existence of such a system. It might reflect a desire by the claimants to ensure that the rules of the system were validated, despite deviations. This oral tradition is practised in the company of others who usually have senior status either in the same country that is being celebrated or in a neighbouring area. In my experience, individuals are generally unwilling to talk about country without others being present to witness the account. Again, in my experience, these discussions are often accompanied by an interplay between individuals which provides for a means of ensuring that accounts are correct --- that is consistent with corporate memory. In ritual performance, such commensuality is a significant feature of interactions. Without the presence of others, ritual performance could not take place. Oral knowledge is thus not individuated. Its presentation is subject to group correction and validation. Performance and transmission is regulated by a jural public, ensuring continuity of content. Ritual instruction is characterised as vigorous and attention is paid to ensuring that an initiate learns fully and correctly. 'Getting to wrong' is subject to sanction and is not tolerated. While oral accounts will, perhaps inevitably, suffer transmutation over time, transformation is not facilitated by the process I have here outlined. In my view, Professor Sansom has somewhat overstated the case for discontinuity when the ethnography reveals robust mechanisms that work toward continuity. Part of what he had to say in this regard was set out in an appendix to his supplementary report which addressed the men's restricted evidence that had been given on site on 9 March 2005. It is unnecessary at this stage to say anything further about that evidence, or Dr Palmer's observations concerning it. The evidence is summarised in Appendix B to the supplementary report. The witnesses whose statements were tendered were not required for cross-examination. All gave evidence concerning fishing in these waterways. Some spoke of fishing in the tidal areas of the Creek. It doesn't matter if it's the wet season or whether it's the dry. Before I go fishing I go down to Timber Creek to catch the live bait by standing on the bank and throwing in my cast net. Sometime I trawl up and down the river in my boat and at other times I stop and catch bait. I do this by pulling up alongside the bank. I then throw the anchor out onto the bank, jump out onto the bank myself and then walk along the bank and catch the bait. During the tourist season you could almost see that every day. I then jump out on the bank and throw my cast net in the water and try and catch live bait as there is big mullet up there. During the time when the competitions are on there would be at least 20-30 people casting off the banks and others in boats along the river in the application area. In substance, they spoke mainly of catching bait in those waters. They spoke of catching yabbies, also known as cherapin, by the use of pots. I then throw the cast net over them. It was something I used to do with the boys and really enjoyed it. It was a great time that we spent together. I just bait them up with a bit of meat and chuck them into Timber Creek just behind the homes. When using the opera house pots, we'd chuck them in the river and they'd sink to the bottom of the creek. We occasionally leave them in overnight to catch cherapin for our own food. I love it because it's great fun for the kids, as the claim area of Timber Creek is within 50 metres of my house to the water's edge. Other times I chuck in chook pellets and spear the cherapin from the bank. I will leave the pots in overnight and pick them up the next day. The yabbies I catch in Timber Creek are great to eat. I go to the creek known as Timber Creek and I set dilly pots or yabby pots in the actual Timber Creek itself or go water fishing for food within Timber Creek. I will do this in Timber Creek almost every time that I go and fish in the claim area. That evidence was given on 9 March 2005 in the presence of a number of male claimants, and male Court staff. It was recorded by a male transcript recorder, and only male counsel and solicitors were permitted to be present. 460 It is difficult to convey the flavour of what was said during the course of the restricted evidence without revealing the matters that required that evidence to be given in confidence. It is sufficient, for present purposes, to give only the broadest outline of what took place, and simply to set out the transcript references that contain the full details of what was said. 461 The transcript-in-confidence appears at pages 825-862. Dr Palmer later commented upon that evidence in evidence that he gave in closed court at pages 1228-1244. 462 In substance, the restricted evidence painted a somewhat different picture of the claimants' adherence to ceremonial and ritual practice than had previously been adduced. Alan Griffiths and Jerry Jones spoke mainly about initiation ceremonies ("the business"), various Dreamings (knowledge of which was confined to men), and traditional customs already discussed, such as Winan. 463 The Court was told of locations which women were not permitted to know anything about, and of the use of sacred objects that were secret, and kept from them. The Court was taken to various sites that had not been the subject of the earlier site visits. Evidence was given of the consequences that would befall anyone who revealed these secrets to women. The various rituals and ceremonies were said to date back to the Dreamtime. No objection was taken to any of this evidence. Neither Mr Griffiths nor Mr Jones was challenged, in any way, about this evidence. 464 Dr Palmer said in relation to the restricted evidence that he had had personal experience of high order rituals of the type discussed. He said that there were substantial similarities between a "second order or higher order ritual" that he had previously attended, in the Pilbara region of Western Australia and the Timber Creek ceremonies that were described. He commented upon the various rituals which young men went through before gaining adult status. He said that there was nothing in the culture of indigenous persons that was more important than the content of the initiation ritual, and the need to keep it secret from women. I'm saying it is something which is regarded as a contemporary matter and ... it has been an ongoing tradition in the claimants' understanding, of course, for as long as memory can recall. He said that based upon the "high seriousness" that was placed on their content, and the rigour with which the oral tradition was pursued in its transmission, it was likely that there had been few changes in what took place "over a very long period of time". Indeed, his opinion was that the practices that had been described had not changed significantly since well before the first white men came to this region. By that, I understood him to mean that these practices dated back to before sovereignty. 467 Dr Palmer was cross-examined regarding these matters. However, it is fair to say that the cross-examination was largely perfunctory. My firm impression was that no serious challenge was mounted to the opinions that he expressed regarding the restricted evidence. That means that I can proceed upon the assumption that they were truthful witnesses, and that any weaknesses in their evidence stemmed from problems associated with memory or powers of narration. I bear in mind, however, the possibility that there has been an element of reconstruction, albeit subconscious, in some of what they had to say. 469 Alan Griffiths, in particular, was a most impressive witness. He seemed to me to be knowledgeable, and a person whose beliefs were genuine, and deeply held. Much the same can be said of a number of the older claimants, including in particular Josie Jones, and her husband Jerry. 470 I am satisfied, on the basis of the evidence of these witnesses, supported as it is by such historical material as exists, and also by the findings of the various Land Commissioners, that the claimants in these proceedings constitute a society bound together by adherence to traditional laws and customs. I am also satisfied that the members of this claim group are relevantly linked to the claim area through ancestral ties that go back to Lamparangana, and well before his time. 471 I find that the members of the claim group continue to acknowledge traditional laws, and to observe traditional customs in much the same way as their ancestors did over many generations. I find that they continue to practise important ceremonial rites, including initiation and burial customs, in ways similar to those that were followed long ago. I find that they follow traditional practices regarding hunting and gathering of food. I find that they maintain cultural and spiritual beliefs relating to the Dreamings associated with the claim area. I find that they share a common language, Ngaliwurru, and that Nungali is, and always was, part of that language, or that it was a dialect, spoken with a different accent. I find that the practice of Winan continues, and plays an important role in their cultural and religious ties. 472 The Ngaliwurru and Nungali Peoples are an indigenous community that has traditionally been associated with one of the more remote parts of the Northern Territory. Its history is one of privation. Not surprisingly, it has not escaped the many serious social problems that afflict similar indigenous communities elsewhere. 473 Nonetheless, real progress has been made. There is much to commend in the way in which the elders seek to inculcate traditional values in the younger members of this community, balancing those values against modern needs. Important strides have been taken, in particular, in relation to education. 474 It is important to guard against viewing traditional aboriginal culture, as manifested through ceremonies and other practices, through a prism that creates an idealised picture of a society that does not, and probably never has, existed. Professor Sansom rightly cautions against such naivety. I have endeavoured to give full weight to his warning. I nonetheless remain firm in my conclusions. In my view, the claimants have satisfied the requirements necessary to overcome the first of a series of hurdles that they must overcome in order to obtain a determination of native title in their favour. 475 The real factual dispute in this case turns not upon the primary facts adduced through the indigenous witnesses, but rather upon what interpretation should be placed upon those facts. Each side relied heavily upon anthropological evidence in support of its case. In the end, I am required to decide, as between Dr Palmer and Ms Asche, and Professor Sansom, whose interpretation of those primary facts I prefer. For the reasons that follow, I accept the evidence of Dr Palmer and Ms Asche in preference to that of Professor Sansom. 476 The starting point, in my view, lies in the very real advantage that both Dr Palmer and Ms Asche have over Professor Sansom, having regard to their extensive involvement with the members of the claimant group over many years, and the empirical foundations for their joint report. Professor Sansom has had considerable experience in dealing with indigenous people in other parts of Australia, but seems to me to have had little direct involvement with those who inhabit the region around Timber Creek. His analysis is largely theoretical, and extrapolated from his work in other communities. 477 Another important advantage that Dr Palmer has over Professor Sansom is that he speaks Ngaliwurru. Professor Sansom does not. 478 Dr Palmer and Ms Asche both struck me as highly credible witnesses. Their evidence seemed to be both intelligible, and cogent. They withstood cross-examination well, and made concessions where appropriate. In particular, they seemed to me to be well aware of their duties to the Court as experts whose evidence should be given impartially. 479 My overall impression of Professor Sansom was also quite favourable, subject to several qualifications. He seemed to me at times to attribute to Dr Palmer and Ms Asche views that they plainly did not hold. This may have been because he had not considered their report as carefully as he might have done. 480 I was troubled by Professor Sansom's repeated references to the system of descent that developed in the Western Desert. That system, essentially cognatic in nature, may have resulted from the need to adapt to the rigours of perhaps the harshest environment in Australia, as he suggests. However, it does not follow that elements of cognation within a broadly patrilineal system did not also exist at Timber Creek. It should also be noted that there may be other features of traditional law and custom that are peculiar to the Western Desert. For example, in Jango v Northern Territory of Australia [2006] FCA 318 , Sackville J rejected a native title claim over land in that region, largely on the basis that the claimants failed to articulate their case in a manner congruent with the evidence they presented. His Honour commented that the traditional laws and customs of the Western Desert recognised that in certain circumstances a person could become a member of a local group, normally consisting of people recruited on the basis of common patrilineal descent, simply by being born at a place of significance to the group, at least where the person's claim was acknowledge or accepted by other members of the group. No evidence of that kind was led before me. 481 In my view, Dr Palmer and Ms Asche are justified in their criticism of Professor Sansom for according undue deference to the early work of Professor Stanner. As Professor Stanner himself observed, his research was significantly hampered by a lack of cooperation on the part of white station owners in the region. Moreover, Professor Stanner's methodology in 1934 and 1935 appears from his notes to have been essentially to work from a central location, using paid informants as the basis of his findings. It is known, for example, that the maps that he prepared were drawn on the basis of what he was told, rather than on the basis of what he observed. 482 I also have difficulties with Professor Sansom's repeated references, in his report, to work that he had previously carried out in parts of Australia far removed from Timber Creek. For example, he frequently cites his report regarding Humpty Doo, in 1974. That concerned a land claim not far from Darwin, near the East Alligator River. He regards the analysis adopted in that report as being applicable to the indigenous community at Yarralin, though it is not clear to me why that should be so. He then further extrapolates from his postulates at Yarralin to a possible scenario at Timber Creek. That further step also needs to be justified. 483 Professor Sansom's scepticism regarding the reliability of indigenous oral history (which he describes at one point as "the revisionist treatment of history that belongs to Aboriginal Australia") constitutes a serious attack upon what inferences might properly be drawn in this case. His contention is that oral history is essentially worthless (unless it is supported by contemporaneous records, necessarily produced by Europeans, or at least by anthropological findings). If that contention were to be accepted, there would be little point in bringing native title determination applications in the Northern Territory. Paradoxically, it is in the Northern Territory (where European settlement took place much later than it did in other parts of Australia, and where the impact of that settlement was mostly confined to contact with pastoralists) that the prospects of claimants being able to establish a continuous connection with the land, of the kind required by the NT Act , ought to be greatest. 484 In my view, Dr Palmer and Ms Asche are also justifiably critical of Professor Sansom for overstating the weaknesses of oral tradition in indigenous culture. The fact that the members of an indigenous community all adhere to the same basic tradition, and observe customs passed on to them by their forbears, is, of itself, significant. It tends to suggest continuity and long-standing connection. In appropriate circumstances, as where narrative is memorised in song, and therefore passed on from one generation to another largely verbatim, or where "photographs" in the form of drawings exist, a court will be entitled to infer that oral tradition is both long-standing, and, within limits, reliable. 485 Professor Sansom's largely dismissive treatment of oral tradition is not supported by any data, in the evidence before me, apart from his own assertions, and some references to other anthropological writing. To allege that the indigenous claimants who gave evidence before me had "righteously edited and manipulated" their oral histories, in circumstances where no such suggestion was ever put to them by counsel for the Northern Territory, seems to me to have been inappropriate. 486 I note that Professor Sansom did not give evidence in closed court regarding the restricted evidence that was led before me. 487 Dr Palmer, in particular, was an impressive witness. His evidence regarding the matters discussed in confidential session was powerful, and carried with it particular conviction. 488 That is not to say that I agree with everything that Dr Palmer and Ms Asche say in the joint report. As will be seen, there are parts of that report that are not supported by the evidence, and that I reject. 489 It may be convenient, at this point, to set out my findings regarding the restricted evidence led before me. 490 I am satisfied that the restricted evidence supports my conclusion that ritual observances continue to be an important part of adult life experiences among the claimants in these proceedings. 491 I find that their spiritual beliefs are both genuine and deeply held. Those beliefs and associated ritual observances provide a means whereby senior men, in particular, assert their rights to country. Ritual induction and subsequent ritual instruction provide a means whereby younger men are educated by their elders in spiritual matters, thereby ensuring continuity of belief and custom over generations. 492 It is obvious that I cannot go into detail regarding the nature of the higher order ritual practice that was the subject of the evidence. It has a secret name that is set out in the transcript of that evidence. It also involves elaborate features that cannot be discussed here. There are secret locations associated with the practices that are described, and these are conveniently set out in the restricted submission on this subject filed on behalf of the claimants. I infer that this submission was prepared by Dr Palmer. 493 I find, on the basis of the restricted evidence, that the spiritual beliefs and religious observances of the claimants remain vibrant. Mr Griffiths' sons and grandsons and Mr Jones' sons have either been inducted into the high order ritual, or soon will be. Aspects of that ritual have been passed on to the present generation of older men at least from the time of Lamparangana, and I infer, from well before that time. 494 I also accept that the oral tradition that was the subject of restricted evidence before me is subject to stringent rules for its transmission. This reduces the potential for transformation, and ensures the continuity of the normative system that it represents. 495 I conclude that Mr Griffiths is regarded by the Ngaliwurru and Nungali Peoples as a leading figure in Timber Creek in matters of ritual and ceremony. The evidence establishes that in that area, local proprietorial interests determine what a man may legitimately do in the performance of such ritual and ceremonial matters. I find that there is a normative system in place in relation to those matters, and that substantially the same normative system has existed for generations. Mr Griffiths described this as "our law". I am content to accept that as an accurate description. 496 I find that the restricted evidence, in particular, points to a link between the symbols of the higher order ritual, and proprietary interests in land. The rituals and ceremonies signal a right to a country which stems from the Dreamings. There is in place, in Timber Creek, a system of normative rules that governs a continuing ritual tradition which articulates an "owner's" rights to country. In essence, these rights pass through descent. The laws and customs upon which this normative system rests are part of a conservative oral tradition that would be unlikely to be amenable to significant change. 497 I note that Mr Griffiths gave evidence about the abundance of Dreamings in his country. Each site was said to have its own "photograph" and each was different, even though it might be associated with the same Dreaming. Each Dreaming was related to a site through narrative, song and body design and other ritual attributes. In Dr Palmer's view there was nothing to suggest that such an arrangement had not been in place for many years. He believed that it long predated sovereignty. I accept his evidence on that point. 498 I note that it was submitted on behalf of the Northern Territory that the restricted evidence in fact supported some of Professor Sansom's opinions. The central point was that patrilineal descent was an important feature of traditional custom in this region. This was said to be in stark contrast with the asserted liberal cognatic rules that now apply with respect to the transmission of land. It was submitted that this issue had been obfuscated by the claimants, and that a disjunction between the spiritual and the secular, through the "shift to cognation", as found by Professor Sansom, could be discerned. 499 It was also submitted on behalf of the Northern Territory that the restricted evidence provided some support for the contention that Winan was not a right or interest in relation to land for the purposes of s 223(1) of the NT Act . 500 I am puzzled by these submissions. They do not seem to me accurately to reflect the content of the evidence led in restricted session. In my view, that evidence provided powerful support for the claimants' case in almost all its aspects. I see no disjunction of the kind described in Professor Sansom's report. Rather, I see a deeply felt and long standing commitment on the part of the claimants to traditional laws and customs. These laws and customs have the closest possible connection to "country", and are tied geographically to the very land that is the subject of this claim. 501 In short, I reject the notion that there has been a fundamental change in the normative system that governs rights to "country" in the claim area. I find that there has been a gradual shift from a patrilineal to a cognatic system, and that this shift continues today. However, the crucial point is that rights to "country" in Timber Creek are and always have been based upon principles of descent. The shift to cognation is one of emphasis and degree. It is not a revolutionary change, giving rise to a new normative system. It sets out the considerations that the Commonwealth Parliament took into account in enacting the NT Act . It makes explicit the legislative intention to recognise, support and protect native title. That moral foundation and that intention stand despite the inclusion in the NT Act of substantive provisions, which are adverse to native title rights and interests and provide for their extinguishment, permanent and temporary, for the validation of past acts and for the authorisation of future acts affecting native title. It provides that native title cannot be extinguished contrary to the Act. The common law and the NT Act define the circumstances in which recognition will be accorded to native title rights and interests and the conditions upon which it will be withheld or withdrawn. It is a concept which operates in a universe of legal discourse. It derives from the human act by which one people recognises and thereby respects another. By the process, which it names, aspects of an indigenous society's relationship to land and waters are translated into a set of rights and interests existing under non-indigenous laws. The choice of the term "recognition" links it to the normative framework established by the common law and by the Act itself as evidenced in the Preamble. Recognition is not a process which has any transforming effect upon traditional laws and customs or the rights and interests to which, in their own terms, they give rise. The term "extinguishment" merely refers to the withholding or withdrawal of recognition of native title rights and interests where the exercise of non-indigenous sovereignty is reflected in legislative or executive acts inconsistent with such recognition. Extinguishment, like recognition, is silent on the rights and interests which arise under traditional law and custom and the relationship which they may reflect between an indigenous society and its country. The colonisation of Australia by Great Britain did not extinguish rights and interests in land held by Aboriginal and Torres Strait Islander people according to their own law and custom. The native title of Aboriginal and Torres Strait Islander people under their law and custom will be recognised by the common law of Australia and can be protected under that law. When the Crown acquired each of the Australian colonies it acquired sovereignty over the land within them. In the exercise of that sovereignty native title could be extinguished by laws or executive grants that indicated a plain and clear intention to do so --- eg, grants of freehold title. That is so notwithstanding the fact that those paragraphs were plainly based upon his Honour's judgment. 509 In Yarmirr , s 223(1) was broken up into its component parts, and was said to require the rights and interests claimed under the NT Act to meet three requirements. In other words, there had to be first an identification of the traditional laws and customs, and next a characterisation of the effect of those laws and customs as constituting a "connection" of the peoples with the land or waters in question. 511 In Alyawarr the Full Court referred to Ward HC at some length. That depends upon the content of the traditional law and custom and what is meant by "connection" by those laws and customs. As to that, their Honours expressed no view on the nature of the connection that must be shown to exist or when a "spiritual connection" would suffice. A determination under the NT Act was said to be "a creature of that Act, not the common law" (per Gleeson CJ, Gummow and Hayne JJ at [32]). They must be possessed under the traditional laws acknowledged and the traditional customs observed by the people concerned. That is they must find their source in traditional law and custom, not in the common law. The rights and interests must have the characteristic that by the traditional laws acknowledged and the traditional customs observed by the relevant peoples, those people have a "connection with" the land or waters. The source of the connection is traditional law and custom, not the common law. The rights and interests in relation to land must be recognised by the common law of Australia. They must derive "from a body of norms or normative system - the body of norms or normative system that existed before sovereignty" ( Yorta Yorta at [38]). This does not require fine distinctions to be drawn between legal rules and moral obligations. The interests may arise under both law and custom. There nevertheless must be some kind of "rules" which have a "normative content". Absent such rules there may merely be observable behaviour patterns but no rights or interests in relation to the land. After sovereignty that system of traditional law and custom could not validly create new rights or interests cognisable by the common law ( Yorta Yorta at [43]). That does not prevent the recognition of rights and interests transmitted according to rules of transmission which existed at sovereignty. Nor does it prevent the significant adaptation of traditional law and custom post-sovereignty. Any interregnum in its existence would cause the rights and interests derived from it to cease beyond revival in the eyes of the common law (at [47]). This proposition was derived from the general observation of Professor Honore that "all laws are laws of a society or group" ([49]-[50]). It followed that the rights and interests possessed under a body of laws and customs are the creatures of the laws and customs of a particular society that exists as a group which acknowledges and observes them. If that society ceases to exist so too do the laws and customs which it observed. When a society that existed at sovereignty ceases to exist and its laws and customs are adopted post-sovereignty by some new society the rights and interests to which they give rise would not be rooted in post-sovereignty laws and customs ([52] and [55]). It must be shown that the society under whose laws and customs the native title rights and interests are said to be possessed has continued to exist from sovereignty to the present day "as a body united by its acknowledgment and observance of the laws and customs" (at [89]). However, change or adaptation in traditional law and custom or some interruption of enjoyment or exercise of native title rights is not necessarily fatal to that continuity (at [83]). It observed that this section required consideration of whether the persons said to be native title holders were members of a society or community that had existed from sovereignty to the present time as a group, united by its acknowledgement of the laws and customs under which the native title rights and interests claimed were said to be possessed. This involved two separate inquiries. The first was whether such a society existed today. The second was whether it had existed since sovereignty. The relevant ordinary meaning of society is "a body of people forming a community or living under the same government" - Shorter Oxford English Dictionary . It does not require arcane construction. It is not a word which appears in the NT Act . It is a conceptual tool for use in its application. It does not introduce, into the judgments required by the NT Act , technical, jurisprudential or social scientific criteria for the classification of groups or aggregations of people as "societies". The introduction of such elements would potentially involve the application of criteria for the determination of native title rights and interests foreign to the language of the NT Act and confining its application in a way not warranted by its language or stated purposes. On occasion, as in Yarmirr these are described as "estate groups", though it is recognised that they are linked by ancestral connection. At other times they are described as "language groups". See for example Wandarang People v Northern Territory [2000] FCA 923 ; (2000) 104 FCR 380, and Neowarra v State of Western Australia [2003] FCA 1402 (" Neowarra "). 515 There have been cases where separate groups have asserted traditional rights in respect of discrete areas of land and sea, though perceiving themselves to be part of a broader community. Sometimes, as in The Lardil Peoples v Queensland [2004] FCA 298 , native title has been found to exist severally, in each of the groups identified in respect of discrete defined areas of land. On other occasions there have been native title determinations in favour of a composite community of estate holding, or language groups with appropriate territorial, economic and social links; see for example Ward v Western Australia (1998) 159 ALR 483 (" Ward first instance"), Daniel v State of Western Australia (No 2) [2003] FCA 1425 , Neowarra, and Alyawarr itself. 516 The final point of general principle to be considered at this stage is the requirement pursuant to s 223(1)(b) that the native title holders, by their traditional laws and customs, have a "connection" with the land and waters. That requirement operates in two ways. It declares, as a condition of the existence of native title rights and interests under the NT Act , that their putative holders have "a connection with the land or waters". It also requires that the connection be "by" the traditional laws and customs under which the claimed rights and interests are possessed. The drafting is opaque because the word "connection" is taken from a judgment and appears to have been applied in the statute somewhat out of context. It comes from the judgment of Brennan J in Mabo (No 2) . The word appeared in his Honour's judgment at 59, when he referred to the fact that since European settlement of Australia many clans or groups of indigenous people had been "physically separated from their traditional land and have lost their connexion with it". This is consistent with a view of connection as something wider than physical presence on the land, albeit loss of connection could be a consequence of physical separation. To observe laws and acknowledge customs which tell the stories of the land and define the rules for its protection and use in ways spiritual and material is to keep the relevant connection to the land. There is inescapably an element of continuity involved which derives from the necessary character of the relevant laws and customs as "traditional". The acknowledgment and observance, and thereby the connection, is not transient but continuing. The question of what is meant by "connection" by traditional laws and customs was not the subject of submissions in Ward HC . The majority therefore expressed no view on the nature of connection and in particular whether a spiritual connection would suffice. But that was not to say that continuity of the chain of possession and continuity of connection was irrelevant: [85]. Their Honours relied upon the passage cited earlier from [64] of the joint judgment in Ward HC . They identified the content of the traditional laws and customs on the evidence before them which included rights and obligations relating to the use of the land in the claim area. The traditional laws and customs confer rights and responsibilities on Peter De Rose over the claim area. They establish that he is inextricably linked to his country in a variety of ways. The "connection" required to satisfy s 223(1)(b) of the NTA is present. The usage in Mabo (No 2) can constitute extrinsic material to aid in the construction of the statute. The use of "connection" as emphasising a requirement to show continuity of association with the land by observance and acknowledgment of traditional law and custom relating to it gives proper recognition to its origins in the Mabo judgment. It involves the continuing assertion by the group of its traditional relationship to the country defined by its laws and customs. This relationship may be evidenced by its physical presence there but also in other ways involving the maintenance of the stories and allocation of responsibilities and rights in relation to it. The existence of connection, in the sense explained, is a condition of their existence for the purposes of the NT Act . It does not limit their content. Their content is limited by the requirement that they be rights and interests "in relation to land or waters". The words "in relation to" are words of wide import. The content of native title rights and interests may also be limited by the requirement, imposed by s 223(1)(c) that they "are recognised by the common law of native title". 520 The NT Act in its present form was, of course, enacted largely as a response to the decision of the High Court in Wik Peoples v Queensland [1996] HCA 40 ; (1996) 187 CLR 1 (" Wik "). In that case the High Court held that the grant of pastoral leases in Queensland did not "necessarily extinguish all incidents of Aboriginal title". The significance of that decision went far beyond the question of the relationship of pastoral leases to native title. It had profound implications for the concept of native title, and the notion of extinguishment generally. 521 The leases under consideration in Wik were all located in far north Queensland. Use of the land was limited to pastoral purposes only. There were no express reservations in favour of Aboriginal people. The importance of the decision lay in the criteria of extinguishment declared applicable to all forms of extinguishment. The majority (Toohey, Gaudron, Gummow and Kirby JJ) stressed the need for a clear and plain intention in order to extinguish native title. This requirement was seen as simply an application of the more general rule whereby there was a presumption against expropriation of existing rights, especially without compensation. In other words, native title was regarded as being protected by universal principles relating to the respect to be accorded to property rights. Native title could not be extinguished without a manifestation of unequivocal intent. In order to manifest such an intent, there would have to be an inconsistency between the native title rights and the rights of the grantee, of such a stark nature, that those rights could not co-exist. 522 The dissentients in Wik , Brennan CJ, Dawson and McHugh JJ, rejected this approach. However, he did observe that a finding of exclusive possession would give rise to such inconsistency. 524 The majority in Wik viewed pastoral leases as having created only the rights and obligations contemplated by the legislation under which they were granted. Accordingly, they rejected any notion that a pastoral lease could be equated with a common law leasehold interest. The minority, however, regarded the use in a statute of a term such as "lease", that had acquired a technical legal meaning, as prima facie evidence that the legislature intended the rights conferred under that instrument to bear that meaning. Thus, a pastoral lease would normally be regarded as conferring a right to "exclusive possession". Such a right was manifestly inconsistent with native title. 525 Much of the reasoning in Wik is now of historical interest only. It has been overtaken by the enactment of the Native Title Amendment Act 1998 (Cth). That Act came into effect on 30 September 1998. It amended the NT Act , with a view to validating certain grants, providing certainty for pastoralists and confirming the extinguishment of native title by freehold and most leases. Regrettably, it has also rendered the NT Act , already highly complex in its original form, extraordinarily difficult to apply. 526 The NT Act in its present form deals with the past extinguishment of native title rights and interests. It provides for the validation of all grants made between 1 January 1994 and 23 December 1996 (when judgment in Wik was handed down) over land which was formerly the subject of a freehold estate or any lease, including pastoral leases, but excluding mining leases. This validation would, in most cases, extinguish native title. It was justified on the basis that, prior to Wik , it was always assumed that native title had been extinguished by pastoral leases. 527 However, no such assumption could be made in Western Australia. Pastoral leases granted in that State differed from those in other parts of the country. For example, they generally contained an express reservation in favour of the rights of indigenous people. 528 Division 2B of the NT Act is founded upon a distinction between "exclusive possession" and "non-exclusive possession" acts. The adoption of exclusive possession as a criterion of extinguishment was criticised in both Wik and Ward HC as "obscuring" the central issue regarding extinguishment. 529 In Ward HC, the requirement of a "clear and plain" legislative intention to extinguish native title, favoured in Wik, was rejected. The test under the NT Act in its present form was said to be whether rights granted to third parties are inconsistent with native title rights and interests. This entails "an objective inquiry which requires identification of and comparison between the two sets of rights", and rejects the notion that there can be degrees of inconsistency. Two rights are inconsistent or they are not. If they are inconsistent, there will be extinguishment to the extent of the inconsistency; if they are not, there will not be extinguishment. To that extent, both Mabo (No 2) and Wik have become sidelined. The only present relevance of those decisions is the light they cast upon the NT Act . 532 However, it must be remembered that one of the elements of a valid claim to native title under s 223(1) is that the rights and interests be "recognised by the common law of Australia". Nonetheless, native title does not originate from the common law: Fejo v Northern Territory [1998] HCA 58 ; (1998) 195 CLR 96 at [46] . Its origins lie in the connection that exists between the indigenous inhabitants and the land, in accordance with their traditional laws and customs. That is because native title rights and interests are determined by the particular traditional laws and customs of the indigenous inhabitants. In other words, native title draws its content from the traditional laws and customs of the native title holders: Ward HC at [85]. 535 It has long been recognised that the connection that indigenous people have with their country is essentially spiritual: Milirrpum v Nabalco Pty Ltd (1971) 17 FLR 141 at 167 per Blackburn J, cited with approval in Ward HC at [14]. The common law can, by reference to the traditional laws and customs of an indigenous people, identify and protect the native rights and interests to which they give rise. However, when the tide of history has washed away any real acknowledgment of traditional law and any real observance of traditional customs, the foundation of native title has disappeared. There the application for a determination of native title failed because the evidence did not establish possession of tribal lands, or an observation of laws and customs based on tradition, that could provide a basis for a native title claim. In other words, the particular claimants had ceased to be a traditional indigenous community. Likewise, in Risk , Mansfield J found that the current laws and customs of the Larrakia people were not "traditional" in the sense required by s 223(1) , as explained by the High Court in Yorta Yorta . 538 As previously indicated, "native title" and "native title rights and interests" are expressions defined in s 223(1) of the NT Act . The definition contained therein is largely a reflection of how native title had been characterised in Mabo (No 2) . 539 Paragraph (c) of the definition in s 223(1) has the effect of incorporating the common law concept of native title, which may evolve, into the statutory definition. By doing so, the legislature has recognised that the law in this area will continue to be developed by the courts, and that the common law of native title will continue to be relevant in Australia. 540 In Ward HC, it was held that the first element that had to be met under s 223(1)(a) , namely that the rights and interests of the claimants are possessed under the traditional laws acknowledged, and the traditional customs observed, by the aboriginal peoples, involved a question of fact. That principle was adopted in Gumana v Northern Territory of Australia [2005] FCA 50 ; (2005) 141 FCR 457 (" Gumana "), the case involving Blue Mud Bay in north-east Arnhem Land, at [189] per Selway J. It required identification of the laws and customs said to be "traditional laws acknowledged" and "traditional customs observed", and identification of the rights and interests in relation to land or waters possessed under those laws and customs. 541 The High Court then noted that the second element, namely that the claimants, by those laws and customs, have a connection with the land or waters, bore a number of similarities with the first element. That was because the connection with the land or waters required by s 223(1)(b) had to be "by those laws and customs". However, the joint judgment emphasised that there were, nonetheless, two distinct enquiries required by the statutory definition. As previously noted at [517], in relation to the first element, the inquiry was as to the rights and interests possessed under traditional laws and customs. In relation to the second element the inquiry was into the connection with land or waters by those laws and customs. 542 Section 223(2) of the statutory definition sheds some light upon the meaning of "rights and interests" under s 223(1)(a). It does so by expressly providing, without limiting sub-s (1), that native title rights and interests in that sub-section include "hunting, gathering or fishing, rights and interests". 543 It has been suggested that the NT Act includes cultural or spiritual activities within the definition of native title. Section 211 provides for the protection of native title holders carrying on certain classes of activity. In addition to hunting, gathering and fishing, s 211(3)(d) refers to "a cultural or spiritual activity" as a class of activity that is specifically protected under the NT Act . This class of activity must, however, be done for the purpose of satisfying personal, domestic or non-domestic communal needs, and in exercising enjoyment of native rights and interests. 544 In Ward first instance, Lee J concluded that the claimants had a right to maintain, protect and prevent the misuse of the cultural knowledge of the native title holders associated with the claim area. 545 On appeal ( Western Australia v Ward [2000] FCA 191 ; (2000) 99 FCR 316 (" Ward first Full Court")) in the joint judgment of the majority, Beaumont and von Doussa JJ said at [666] that a right of this type was not a right in relation to land of a kind that could be the subject of a determination of native title. Rather, it was a personal right residing in the custodians of the cultural knowledge in question. 546 In Ward HC , the High Court rejected a challenge to this aspect of the Full Court's reasoning. In substance, it held that the right that Lee J had identified was more akin to an incorporeal right to a new species of intellectual property than an interest in land that would be recognised by the common law under s 223(1)(c). 547 It is instructive to note the final orders made by the Full Court in Ward when the case was remitted for further hearing and determination. See generally Attorney-General (NT) v Ward [2003] FCAFC 283 ; (2003) 134 FCR 16 (" A-G (NT) v Ward "). Those orders were made by consent, but after careful consideration of what Ward HC had held to be the law. They identified the land and waters of the native title determination area, the members of the "estate groups" that held native title, and the nature and extent of the native title rights and interests of the native title holders. Importantly, they were expressed as "non-exclusive rights to use and enjoy the land and waters" in accordance with the estate group members' traditional laws and customs. The word "possess" was not used, and was deliberately avoided. So too was the word "occupy". It should be noted, however, that the Court accepted, in the determination, an express right to "live on the land, to camp, to erect shelters, and to move about the land". This may be tantamount to occupation, at least in a general sense. In some cases, as in Mabo (No 2), the courts have suggested that the content of native title may "approach the rights flowing from full ownership under common law". In other cases it has been suggested that native title may involve little more than a right to come on to land for ceremonial or related purposes. 549 There is a debate as to whether native title rights should properly be regarded as proprietary. In part, this may be because native title rights cannot be assigned or sold. That may suggest that such rights are personal, or perhaps should be viewed as sui generis. In Mabo (No 2) , Brennan J observed that even usufructuary rights, which are clearly not proprietary, can be accorded recognition within the ambit of proprietary community title. However, Deane and Gaudron JJ indicated that they regarded native title rights as purely personal, and not proprietary. That was because, not only were those rights inalienable, they could not constitute a legal or beneficial estate or interest in land. Often the rights claimed would not correspond with "ownership" as that term was generally understood. Rather, what was at issue was a "special collective right" vested in a particular indigenous group by virtue of its long standing connection with and use of the land or its resources. 552 In that sense, it may not be particularly fruitful to inquire closely into whether native title is, in truth, best characterised as "proprietary" or "personal". 554 On any view, native title lies outside common law doctrines of tenure and estates. 555 Native title cannot be alienated outside the native title holding group. It can, of course, be surrendered to the Crown. Within the holding group native title can be transmitted in accordance with traditional rules, including those applicable to death and marriage. See for example Rubibi Community v State of Western Australia (No 6) [2006] FCA 82. 557 Fortunately, no issue of that kind arises in the present case. The claimants are united in asserting an identifiable community entitled to enjoy native title rights and interests in accordance with traditional laws and customs as currently acknowledged and observed. The Northern Territory, supported by AFANT, challenges their claim to be an identifiable community or group. However, it does so not so as to ensure that the correct persons are identified in any determination, as it did in Ward HC, but rather because it maintains that there is no group that meets the requirements of s 223(1). The Northern Territory relies principally upon the evidence of Professor Sansom to make good that contention. However, the statement needs some qualification. There have been instances where native title has been recognised after transference from one group to another, in accordance with traditional laws and customs. It is also possible, as the anthropological evidence in the present case makes clear, for one group to succeed to the estate of another. 560 In any event there is no real dispute in this case as to the ancestral connection between what might be termed "the original native title holders", and the present claimants. In Ward first Full Court, it was said (at [234]) that biological descent need not be patrilineal. Biological descent is plainly established in the present case. The issue that divides the parties is simply whether there has been a fundamental change in the normative system that underlies the acquisition of native title, from a patrilineal descent system to a cognatic descent system, and if so, whether that prevents the present claimants from maintaining a traditional connection with the land, in accordance with traditional laws and customs. I have already indicated why I would resolve that issue in favour of the claimants. In some cases, the question has arisen as to whether the "connection" of which s 223(1)(b) speaks must be physical, or whether some form of spiritual link will suffice. 562 This issue does not loom large in the present case. The evidence establishes that the claimants occupy the area in and around Timber Creek not randomly, or because they have happened onto it recently, but because their forbears occupied the region generations ago. The land was, and still is, a major part of their economic, cultural and spiritual life. The presence of their ancestors may not have amounted to possession at common law. It seems, on the evidence, to have been, at least in part, nomadic. However, it certainly qualified as "occupancy", in a broad sense, even allowing for the fact that other indigenous groups frequently came onto the land for ceremonial and other purposes. Although traditional connection to land can be lost by forcible removal, the evidence does not suggest that this occurred in or near Timber Creek. 563 In Ward HC, Western Australia submitted that proof of continued use of land or waters was essential to the establishment of "connection with the land or waters". The High Court rejected that contention. The joint judgment observed (at [64]) that s 223(1)(b) is not directed at how indigenous people use or occupy land or waters. Whether there is a relevant connection under traditional law or custom with the land or waters will depend, to some degree, upon the content of traditional law and custom. It will also depend upon what is meant by connection "by" those laws and customs. ARE THE ELEMENTS OF S 223(1) MET? They have demonstrated that they are a society united in and by their acknowledgment and observance of a body of accepted laws and customs. They have also demonstrated that this body of accepted laws and customs is, in essence, the same body of laws and customs acknowledged and observed by their ancestors, adapted to modern circumstances. 565 The final question to be determined is whether the acknowledgment and observance of those laws and customs has continued substantially uninterrupted by each generation since sovereignty in 1825, and whether the society has continued to exist throughout that period as a body united in and by its acknowledgment and observance of those laws and customs. 566 Native title cases are almost always fact specific. Whatever the position may be in other parts of Australia, the Ngaliwurru and Nungali Peoples who make up the claimants in this case continue to observe the ritual and ceremonial practices of their ancestors in much the same way as they always have. Those ritual and ceremonial practices are largely and inextricably bound up with the land and waters in and around Timber Creek. 567 There are many examples of this. Even putting to one side high order ritual practice, these examples include initiation rites, head wetting ceremonies, protection of sacred and Dreaming sites, traditional methods of hunting, fishing and gathering food, and the ongoing practice of Winan. 568 I am satisfied that, in 1825, the Ngaliwurru and Nungali Peoples were a society united in and by their acknowledgment and observance of accepted laws and customs. That society survived early European settlement, and continued into and throughout the 20 th Century. The claimants are the direct descendents of indigenous persons who made up that society. 569 I am further satisfied that the claimants are the direct descendents of indigenous persons who maintained a connection to the land and waters in and around Timber Creek, not just since the time of initial European contact, but at least as far back as 1825. 570 It is hardly surprising that there is no direct evidence pointing to the claimants' ancestors having occupied and used this land prior to sovereignty. Given that the first significant European contact did not occur until 1839, and that the area was not settled until the 1880s, it is scarcely likely that there would be written records relating to the indigenous inhabitants of the region that reflect conditions prior to 1825. 571 Nonetheless, as Mr Lewis has demonstrated, there are some references in the historical documents dating back to the middle of the nineteenth century which refer to the indigenous inhabitants of the area. These documents suggest that the indigenous people who occupied the Victoria River district maintained a continuing presence in the area, and were not merely transient. 572 Evidence given in the Timber Creek Land Claim in 1985, and also in the other land claims involving adjacent areas, establishes a direct connection between the claimants, and their direct ancestors, in relation to Makalamayi. That connection can easily be traced back at least as far as the latter part of the nineteenth century. If, as the evidence suggests, Lamparangana was the central figure in and around that area (to the extent that it was even known as "Lamparangana's country"), there is a clear link, along ancestral lines, between the senior claimants in these proceedings and at least the early years of Lamparangana's life. Bearing in mind that he probably died in the late 1940s, and that he seems to have lived to an old age, it may reasonably be inferred that his connection with the land goes back to 1880, or perhaps earlier. 573 For present purposes, this evidence goes some way towards satisfying the requirement of connection under s 223(1)(b). It is easily forgotten that the elderly, when they recall the events of their childhood, and what they may have been told by their grandparents, are in effect, recounting events that go back perhaps as far as a century and a half. 574 Of course what they were told will be hearsay, but it is hearsay of a kind that has been readily admitted in native title cases. In Gumana , the relevant date for sovereignty was 1788, and not 1825. Selway J concluded that the evidence tendered by the applicants of genealogies and linguistics was sufficient to establish that some of the ancestors of persons who were currently claimants were members of Yolngu society in 1788 and, indeed, well before then. It is oral evidence of a custom. It is evidence of fact, not opinion. To the extent that it consists of what Mr Gumana was told by his father and by other old people it constitutes a recognised exception to the rule against hearsay. There is nothing in the evidence to suggest that the ritual and ceremonial practices observed by the inhabitants of this area since about that time, in a largely unbroken pattern, were suddenly created, or radically transformed from what had gone immediately before. The ethnography, and the few contemporary records that are available, support the conclusion that this pattern has evolved over hundreds of years. 578 In Gumana , Selway J adopted precisely the same approach. There are a number of circumstances where it was necessary at common law to establish proof of custom dating back not just to the 18 th century, but to 'time immemorial'. Proof of copyhold was one example ... Another, ... was the proof of ancient custom as a means of establishing either prescription or ancient lost grant 'from time immemorial'. In practice, those difficulties were ameliorated by the readiness of the common law courts to infer from proof of the existence of a current custom that that custom had continued from time immemorial. As Selway J noted in Gumana (at [201]), there are a number of cases where such inferences have been drawn, although without expressly acknowledging the common law authorities which support that course. 581 In arriving at my finding that the claimants have essentially the same system of traditions, laws and customs as their ancestors did in 1825, and that those traditions and customs have been observed continuously since that date, I have had regard to the genealogies prepared by Dr Palmer and Ms Asche appended to their joint report. If those genealogies are reliable, and I have no reason to believe that they are not, they identify Lamparangana's father, Mungkawali, and his mother, Parratpawuk/Yitpali. They also identify Lamparangana's uncles and aunts. 582 Assuming that Lamparangana was taught the laws and customs associated with Makalamayi by his father, Mungkawali, or perhaps by his uncle, Minjiringikari, in accordance with the normal cultural and spiritual precepts applicable, those individuals would have had to gain their knowledge of "country" a generation or so prior to Lamparangana's birth. That takes the position back to around 1850. Those who imparted that knowledge to Lamparangana's father or uncle would have had to have gained their knowledge at or about the time of sovereignty. 583 I accept that there will be some cases where the need to go back thirty or forty years beyond the earliest extant genealogy would render the process too speculative to permit an inference of continuity or connection to be drawn. However, in the present case, the position seems to me to be different. It is known that indigenous people occupied the Timber Creek region at least as far back as the time of the earliest explorers. It is also known that inhabitants of that area adopted laws and customs that were, ethnographically, very similar to the laws and customs that indigenous people in other parts of Australia followed. A number of the ritual practices that are documented at least as far back as the latter part of the nineteenth century are, in significant respects, similar to those followed by aboriginal people since well before European settlement in this country. It would be wrong, in my view, to approach the issue of connection by turning a blind eye to these historical realities. 584 It follows in my view that the senior claimants in these proceedings have established that they are the direct descendants of a group of indigenous inhabitants of the area around Timber Creek, and that they observe essentially the same rituals and ceremonies as were practised by their ancestors more than a century ago. I infer that those same rituals and ceremonies have been followed by indigenous people who are the direct ancestors of the claimants since before sovereignty. The rights and interests that have passed on through this system of descent are, in my view, recognised by the common law of Australia, and are therefore properly to be characterised as native title. 585 Subject to determining whether the native title rights and interests that have been established are to be characterised as "exclusive" or "non-exclusive", and subject also to resolving any questions of extinguishment, the claimants have succeeded in demonstrating the elements necessary under s 223(1) of the NT Act . Many claimants reside in the area itself. Others visit it frequently. They use the land for hunting, fishing, and gathering food, and for ceremonial activities and they acknowledge and observe a body of traditional laws and customs which connect them to the land. Their ancestors acknowledged and observed essentially that same body of laws and customs. The evidence suggests that these laws and customs have been in existence for generations, since well before sovereignty. 587 The claimants share a set of beliefs that govern the rights and obligations of indigenous persons who wish to have access to, and use, the land and waters of the region. 588 These findings do not of themselves resolve the question whether the claimants' native title is, as they contend, a right to "possession, occupation, use and enjoyment of the determination area to the exclusion of all others". Both the Northern Territory and AFANT submit that even if native title is found to exist, the nature and extent of the native title rights and interests in relation to the claim area should not be "exclusive", but rather akin to rights that are usufructuary in nature. 589 If, as the Northern Territory and AFANT contend, the past grant of pastoral leases in the claim area means native title has been wholly extinguished, it would be entirely pointless to proceed to consider the nature and extent of the native title rights and interests that might have been found to exist, but for extinguishment. If, however, as the claimants contend, s 47B of the NT Act operates to require any extinguishment of native title rights and interests in the area to be disregarded, s 225(b) requires any determination of native title to include a determination as to the nature and extent of the native title rights and interests in relation to the claim area. 590 It will often be difficult to determine whether native title rights and interests are to be regarded as "exclusive", or as "non-exclusive". 591 In Mabo (No 2) , the High Court held that, on acquiring sovereignty, the Crown acquired the "radical", or "ultimate" title to land. This empowered the Crown to deal with the land, but did not of itself confer full beneficial ownership to the exclusion of native title rights and interests. In Ward HC, the High Court described native title (at [91]) as "legally fragile". It could be impaired, or even extinguished, by the Crown and, when colonial legislatures ultimately came into existence, by them exercising their sovereign rights to deal with land within their territory. 592 The NT Act , in its original form, dealt exhaustively with most aspects of native title. It made provision for the establishment of its existence, and how it might be extinguished. 593 The decision in Wik signalled an end to the comparatively straightforward regime created under the original version of the NT Act . After the amendments came into force in 1998, the process became more complex. 594 Notwithstanding the strictures in Ward HC regarding the need to focus primarily upon the provisions of the NT Act in native title cases (rather than the common law), native title, as developed by the common law, remains important when construing the Act. As previously mentioned, s 223(1)(c) provides that native title rights and interests, in order to be established under the NT Act , must be "recognised by the common law of Australia". At common law, the nature and extent of native title is essentially a question of fact to be determined from such evidence as is available regarding the traditional laws and customs associated with the claimants. Exactly the same is true under the NT Act . 595 Native title is usually communal. However, in some circumstances a claim to group or individual native title rights and interests may be brought: see Mabo (No 2) at 52, 85, 88, and 109-110. That is, the traditional laws and customs are those of the very community which claims native title rights and interests. By contrast, group and individual native title rights and interests derive from a body of traditional laws and customs observed by a community, but are not necessarily claimed on behalf of the whole community. Indeed, they may not be claimed on behalf of any recognisable community at all, but on behalf of individuals who themselves have never constituted a cohesive, functioning community. 598 It seems clear that at the heart of native title lie principles of descent. That of itself is no bar to recognition. There is no particular reason why native title should not be recognised where the evidence suggests that the incidents of that title are less extensive than rights held by the Crown, or granted to others. An example is a usufructuary right, which is generally classified as personal, rather than proprietary. However, if the incidents are more extensive than rights that the Crown holds, or can grant to others, the common law may not be able to recognise native title. In any such case, s 223(1)(c) will operate to prevent any determination in those terms. 600 Professor Butt cites an important illustration of this principle. He says that the common law rights of the Crown do not permit it to interfere with the free navigation of offshore waters or, as he puts it, the "public right to fish". Accordingly, he contends that the common law cannot recognise an "exclusive" indigenous right to fish, or for that matter an "exclusive" right of navigation in offshore waters. Nor, of course, can it recognise rights that are inconsistent with the underlying structure of the common law. He refers, in that regard to Mabo (No 2) (at 43 per Brennan J), and to Ward HC (at [21]-[22]). 601 For the same reason the common law cannot recognise rights that concern a purely spiritual relationship between indigenous people and the land. Such a relationship can provide evidence of a connection with the land, but is not itself a right that the common law can accommodate. See generally Ward HC (at [57]-[61]). 602 Having found, as I have, that the claimants have met the requirements of s 223(1) of the NT Act , it is now necessary to determine whether the incidents of the native title rights and interests that have been demonstrated are "exclusive". In other words, have the claimants established that they are entitled, as they contend, "to possess, occupy, use and enjoy the area claimed to the exclusion of all others "? A related question is whether they have established, as they contend, that they have the right to control "the access of others to the application area", and "the use and enjoyment of others of the resources of the application area". 603 If the native title rights and interests of the claimants are "exclusive", in the sense discussed above, the potential for conflict between native title and any acts of extinguishment will be greater than if those rights and interests are "non-exclusive". That is so because of the way in which the principles of extinguishment operate under the NT Act . 604 It is worth pausing for a moment to remember that at common law, extinguishment occurred when the Crown did an act that evinced a "clear and plain intention" to extinguish native title: Mabo (No 2) at 64, 111 and 196. Once native title was extinguished, it was extinguished for all time. It must be remembered, however, that there was a presumption in relation to common law extinguishment that the Crown did not intend native title to cease to exist merely through the act of acquiring sovereignty: Mabo (No 2) at 57, 82 and 184. 605 Under the NT Act , extinguishment can only take place in accordance with the requirements of the statute. The question is whether the legislature granted, or authorised the grant of, interests that were inconsistent with native title. The test is objective, and has nothing to do with any actual intent on the legislature's part. 606 As previously indicated, s 223(1) requires that the native title rights and interests that are claimed be communal, group or individual. They must be rights and interests in relation to "land" or "waters". Such a right related to information, and not to land, as that term is defined. See also Alyawarr (at [134]). 608 In some circumstances, native title will be found to be "exclusive". In such cases, the "bundle of rights and interests" that make up native title may be expressed as including "a right to possession, occupation, use, and enjoyment of the land or waters to the exclusion of all others ". Recent examples include the consent determinations made by Black CJ in both Lota Warria (on behalf of the Poruma and Masig Peoples) v Queensland (2005) 223 ALR 62 (at 65) , and Billy (on behalf of the Poruma People) v Queensland (2005) 223 ALR 447 (at 450). 609 In cases where there has been partial (though not total) extinguishment it is necessary to specify with some care the nature and extent of the native title rights and interests that have been established. This is often done by referring, in a native title determination, to those activities that may be carried out on the land or waters. They can, however, be enforced in order to prevent others from infringing them. They may also confer upon their holders a limited entitlement to control access to the land or waters in question. That limited entitlement exists essentially only for the purpose of ensuring that the primary right can be properly exercised. Such rights fall short of conferring what would normally be described as "ownership" of the land, and perhaps also any proprietary interest akin thereto. A usufruct has been described as "a personal servitude not annexed to land". It includes rights to hunt and fish on the land or in the waters over which one does not necessarily have dominion. The term "usufructuary right" commonly conveys the entitlement of an individual to use and take benefit from land belonging to another. 614 The question to be determined in these proceedings is whether the native title rights and interests of the claimants that have been established rise significantly above the level of usufructuary rights. In my view, that question should be answered both "yes" and "no". The evidence in this case establishes both usufructuary and proprietary rights. However, it falls short of establishing native title rights and interests in relation to the claim area "to the exclusion of all others". It also falls short of establishing an unfettered right on the part of the claimants to control others' access to that area, or to control others' use and enjoyment of the resources of that area. 615 It is true that some of the indigenous witnesses who gave evidence on site characterised a "Yakpali mululu" as someone who could "deny others access to certain foraging areas". For example, Josie Jones said that if someone wanted to build in Makalamayi "they would have to ask permission". She added that if a white person wished to go on to the land, that person would be expected to ask permission first. The purpose of that request would be to enable important sites to be identified, presumably so that those sites might be protected. 616 I note that Mrs Jones acknowledged that she had never told anyone not to fish in the waters of Timber Creek, or indeed in the Victoria River. She said, however, that if she had been asked, she would have pointed out to them which sites were sacred, and also which sites were dangerous. 617 Mr Harrington gave evidence regarding those who had to be consulted in relation to any activities at Timber Creek. A number of other witnesses also gave evidence about the process of consultation that had been followed in relation to a proposed mine that did not proceed because it was too close to a particular site of significance. 618 Jerry Jones told Dr Palmer and Ms Asche that he regarded himself as entitled to fish, camp, hunt, take ochre and induct strangers. He said that indigenous persons who were not members of the Ngaliwurru-Nungali community were expected to "ask permission" before doing any of these things. However, he added that he regarded seeking permission as irrelevant because, in practice, no indigenous person would wander about on the land without the guidance of a member of that community. To do so would be to court disaster. 619 There are scattered references in some of the anthropological material which hint at the need to obtain permission before going onto the land. However, in my view, these few references do not justify a finding that the rights and interests of the claimants operate "to the exclusion of all others". Rather, they suggest that there is an ingrained belief on the part of the claimants that those who come to Timber Creek will, without anything having to be said, respect the claimants' "rights to country". It is almost as if "permission" will be sought as a matter of courtesy, or form, because this is expected when a stranger passes through someone else's land. If for some reason permission is not sought, then guidance at least will be requested. 620 The evidence supporting the claimants' right to exclude others from using the waters of Timber Creek is, if anything, even weaker than that in relation to land. There is very little evidence directed to that issue. There was nothing to suggest that any attempt had ever been made to restrict access to the Creek by fishermen. There was little, if any, evidence to suggest that traditional law and custom, acknowledged and observed, would operate to restrict such access. The evidence was largely directed to use of the land, rather than the waters of the Creek. It follows that any native title rights that exist in relation to those waters will be non-exclusive. It also follows that, as a practical matter, there is little need to consider what effect, if any, the so-called "public right to fish" might have upon native title rights. A detailed folder setting out the tenure history was tendered by consent, but it is not necessary to spell out in detail what it contains. 622 It is sufficient for present purposes to summarise briefly one particular pastoral lease granted in this area. That lease is typical of all others. 623 The particular lease that I have singled out is headed "Crown Lease Northern Territory Pastoral 2189". It was granted on 14 December 1901. The lessees were Connor Doherty and Durack Limited of Fremantle, Western Australia. The lease recited that the Governor of South Australia, acting pursuant to the Northern Territory Land Act 1899 , and in the name of King Edward VII, demised some 850 square miles set forth in a plan annexed to the indenture (which included the area south of the Victoria River, near "Gregorys Principal Camp"), subject to certain reservations, for a term of forty-two years, for an annual rent of sixty-three pounds, fifteen shillings. The lessees covenanted that they would, during the lease, pay the rent, and within the first three years stock the land with at least five head of sheep or one head of cattle for every square mile. They further covenanted that they would keep the land so stocked, and before the end of the seventh year of the lease increase the stocking to at least ten head of sheep or two head of cattle for every square mile. There were other covenants of a similar nature. It appears that the claim area has not been the subject of any fee simple grants. Nor has it been the subject of any common law leases. A grant in fee simple, or a common law lease, will normally extinguish native title because the holder in fee simple has the right, essentially, to use the land as that person sees fit. That right is incompatible with the exercise of any native title right. Similarly, the grant of a leasehold interest confers upon a tenant the legal right to exclusive possession. That right, too, is inconsistent with the continued existence of native title. 626 Pastoral leases of the type that feature in this case present special difficulties. Wik considered whether extinguishment followed automatically from the grant of such leases. The High Court noted that the term "pastoral lease" described a variety of statutory tenures in which the Crown grants rights to occupy land for pastoral purposes. The pastoral leases in Wik were expressed in the traditional language of common law leases, and the legislation under which they were granted used similar terms. The "leases" in that case, unlike those in the present case, contained no specific reservation in favour of indigenous people. In addition, the properties over which they were granted were very large, far greater in area than, for example, Pastoral Lease 2189. They were also located in a remote part of Queensland, and not in or near a township within the Northern Territory. 627 As is well known, the High Court in Wik divided four to three on the result. The minority (Brennan CJ, with whom Dawson and McHugh JJ agreed), held that the pastoral lease under consideration conferred a right of exclusive possession. The legislation used terms of art such as "demise", "rent", "surrender" and "forfeiture", all consistent with the creation of a common law lease. Not only that, but the legislation also distinguished between a "lease", and a "licence" granted under it: Wik (at 76 and 80). In those circumstances, to recognise any interest, such as native title, not derived from the Crown, would "fracture a skeletal principle of land law", namely the doctrine of tenures and estates: Wik (at 92-93). 628 The majority in Wik (Toohey, Gaudron, Gummow and Kirby JJ), held that the grant of pastoral leases would not necessarily extinguish native title. Despite the use of technical terms characteristic of ordinary leases, pastoral leases were not to be equated with leasehold interests at common law. In particular, pastoral leases did not confer a right of exclusive possession: Wik (at 118, 152, 176 and 224). 629 In arriving at this conclusion, the majority considered not only the terms used in the grants, but also the historical background to the legislation authorising them, and the limited "pastoral purposes" for which the lessees had the right to occupy the land. In their view, the relevant question was whether any statutory rights that were conferred were so inconsistent with the continued existence of native title as to lead to the conclusion that such title had been extinguished. That question could be answered in the negative. 630 The decision in Wik was subsequently approved in Ward HC, a case concerning pastoral leases granted under analogous legislation in Western Australia. Once again, the High Court held that these statutory interests did not extinguish all native title rights and interests even though they were granted without the benefit of a reservation in favour of aboriginal peoples: Ward HC (at [186]). 631 As the law now stands, whether an interest granted under a pastoral lease extinguishes native title requires a comparison to be undertaken of the legal nature and incidents of the native title with the rights conferred on the lessee. This is sometimes described as the "inconsistency of incidents" test. If the incidents of the respective rights are such that native title could not be exercised without abrogating the statutory right, native title is extinguished, (at least to the extent of the inconsistency). This approach accords with the view that native title consists essentially of a "bundle of rights". If pastoral leases do not extinguish native title completely, they may nonetheless impair any native title rights that would otherwise amount to incidents of full ownership. They may thereby abrogate any "exclusive" native title rights and interests: Ward HC (at [308]). 632 It is important to remember that native title is not extinguished merely by the enactment of legislation under which rights may be granted in the future, or by conditions which deprive a grant of legal effect until they are fulfilled: see Ward HC (at [149]-[151]). Inconsistency will not be readily inferred if the grant contains qualifications or reservations that preserve the entitlement of indigenous people to continue to carry out their traditional activities on the land, as is the case with the pastoral leases granted in the Timber Creek region. Finally, it should be noted that the question of inconsistency must be determined at the date the grant takes effect. As at that date, rights are either inconsistent, or they are not. 633 Given the fact-specific nature of native title, the question of inconsistency can rarely be determined in the abstract. The nature and content of native title, and that of any statutory interests that are said to be inconsistent with that title, will vary from case to case. 634 In Mabo (No 2) , Brennan J provided some helpful examples of just how native title would be extinguished at common law. His Honour noted (at 68 and 70) that extinguishment would result from Crown or legislative vesting of land for a road, railway, or any other purpose that necessarily precluded continued enjoyment of native title to the land. 635 Ward HC held (at [214] and [217]) that a statutory dedication or reservation of land for an intended purpose, short of vesting title in the Crown or a statutory authority, did not of itself extinguish native title. However, such a dedication or reservation would certainly extinguish any native title rights that were equivalent to ownership. That was because the exercise of the power to dedicate or reserve land was inconsistent with any continuing native title right to control access to land. In other words, in such circumstances there would be partial extinguishment, which would not, however, prevent native title holders from using the land according to traditional law and custom. I am satisfied that these traditional laws and traditional customs have their source in a coherent social system that has existed, in a largely continuous form, since before sovereignty. They have been passed down from generation to generation. As one would expect, they have evolved, and adapted to new circumstances, but that has not altered their substance. 637 I am conscious of the fact that there has been some loss of language by the claimants. Nungali is no longer widely spoken, and is well on the way to becoming extinct. It is, however, closely related to Ngaliwurru, and on one view is merely a dialect of a broader indigenous language peculiar to the Ngaliwurru-Nungali people. 638 I am also conscious of the fact that adherence to ritual is no longer as strict as it once was. That is hardly surprising. In Mabo (No 2) , it was recognised that, at common law, modification of laws and customs over the years did not necessarily mean the loss of native title. The position is no different, in that regard, under the provisions of the NT Act . 639 As long as the claimants continue to observe their traditions and customs, and maintain their links with and use of the land, and waters, native title will continue to exist. It is only if the society as a whole ceases to adhere to that traditional law, particularly in relation to the use or occupation of the land, that native title will be lost. 640 Of course, the claimants are not required under s 223 to establish patrilineal descent, in its pure form, from the indigenous groups that exercised traditional rights over the claim area at the time of sovereignty. Indeed, at least in a formal sense, they need not even establish strict biological descent: De Rose v South Australia [2003] FCAFC 286 ; (2003) 133 FCR 325 (" De Rose No 1 ") (at [200] and [236]). They must, however, demonstrate a commonality of interest, based upon traditional laws and customs, and a connection with the land or waters of a relevant kind. 641 There is little direct evidence linking the laws and customs observed by the current claimants with the practices followed by their forbears at or before sovereignty. In Yorta Yorta , this proved fatal to the applicants' claim. That was because there was a significant break, over a number of years, in the proven connection between any indigenous persons and the land in question. 642 It is well established, however, that if traditional use can be traced back a long way, though not as far back as 1825, then use back to that date may be inferred: Mason v Tritton (1994) 34 NSWLR 572 (at 583, and 588-9 per Kirby P), and Neowarra (at [48] per Sundberg J). 643 There is, however, one discrete matter that still needs to be addressed. Throughout the whole of these proceedings, the Northern Territory argued that the claimants had to demonstrate not only a "connection" with the land or waters in question, but also what may loosely be described as a "causal" link. The basis for that submission was the use of the word "by" ahead of "those laws and customs" in s 223(1)(b). 644 Ward HC made clear (at [93]) that evidence that the ancestors of the claimant group occupied the land does not, of itself, establish the required connection. It also made clear, however, that s 223(1)(b) does not require proof of continuous physical presence on the land. The section is not directed to how indigenous people may have used or occupied land or waters. Rather, it focuses upon whether, the claimants, by the traditional laws acknowledged and the traditional customs observed, can demonstrate a "connection" with the land or waters. 645 It follows that s 223(1)(b) requires first an identification of the content of traditional laws and customs, and next an analysis of the effect of those laws and customs as constituting a "connection" of the peoples with the land or waters in question. Although evidence of historical presence on the land is relevant when considering "connection", native title can be found even though the physical presence on the land is neither continuous nor contemporary. 646 In Yarmirr , the High Court made it clear (at [16]) that it is not necessary that the laws and customs by which the connection occurs themselves contain mechanisms for enforcing that connection, or that they contain sanctions for breach. That is important, so far as this case is concerned, because there is a paucity of evidence before me regarding such matters. 647 In Alyawarr the Full Court observed (at [93]) that although "connection" is a prerequisite to the recognition of native title rights and interests, it does not limit or qualify the content of any rights and interests arising under traditional laws and customs. Rather, the content of those rights and interests is marked out by the requirement that they be rights or interests "in relation to land or waters". 648 Nonetheless, evidence led to demonstrate the existence of a traditional system of laws and customs may also be relevant when determining whether the requisite "connection" has been established. In this sense, although certain rights in traditional law (such as purely spiritual rights) cannot be recognised as native title rights, evidence of those rights may go to prove the existence of continuing traditional laws, or connection to the land or waters. The question under s 223(1)(b) is whether "connection" has relevantly persisted through the retention and transmission of law and custom concerning the land or waters. 650 In De Rose No 1 , the Full Court (at [326]) referred to Yorta Yorta (at [90]) as having established that if continuity of acknowledgment and observance of traditional laws and customs has been interrupted, the reasons for the interruption are irrelevant. The Full Court went on to say that Yorta Yorta also established that the reasons why acknowledgment and observance had been affected might influence the fact-finder's decision as to whether there was an absence of continuity. The same applied in relation to the question of connection. If the requisite connection did not exist, or had ended, it did not matter why that had occurred. However, in determining whether there was a connection for the purposes of s 223(1)(b) , the reason why the claimants had not sought to maintain a physical association with the land might be relevant. Ultimately, a finding of connection by traditional law and custom reflects a conclusion drawn from all the evidence of relationship between the claimants and the land or waters in question. Early accounts of settlement and occupation of the continent will be relevant in establishing connection, where they point to historical occupation from which an inference of continuity can be drawn. The evidence points strongly to a long-standing link between the Ngaliwurru and Nungali Peoples and the claim area. That relationship is grounded in traditional law and custom. It is manifested in almost every facet of life among the claimants, and in the ritual and ceremonial practices that play such a prominent role in their existence. Their connection to the land is "by" the traditional laws that they acknowledge, and "by" the traditional customs that they observe. The evidence establishes that they have maintained the necessary connection with the claim area since the time the Crown first asserted sovereignty. 653 As previously indicated, s 223(1)(c) requires that the rights and interests claimed as native title must be "recognised" by the common law of Australia. In other words, those rights and interests must fall, somehow, within the framework of the common law. On this basis, as Ward HC holds, rights to control the depiction or representation of the land cannot be recognised under the NT Act . To the extent that any such rights are claimed in these proceedings, that claim must be rejected. 654 In Yarmirr , the High Court held that a claim to native title (over the coastal seas and offshore areas) need not have been capable of recognition by the common law at the time that sovereignty was acquired, provided that the common law would recognise the rights in question now. In other words, s 223(1)(c) operates contemporaneously, and does not look to the past. 655 In summary, I am satisfied that some, but not all, of the native title rights and interests claimed in these proceedings are, relevantly, "recognised" by Australian common law. Any native title rights and interests that are not so recognised will, of course, be excluded from any native title determination that the Court ultimately makes. CAN S 47B BE INVOKED TO OVERCOME EXTINGUISHMENT? If s 47B has the effect for which the claimants contend, it is unnecessary to resolve the question whether such extinguishment would otherwise be total, or only partial. The reason is that, pursuant to s 47B , extinguishment will simply be disregarded. 657 In order to invoke s 47B a series of conditions must be met. 659 In the event that the relevant conditions are met, s 47B(2) provides that for all purposes under the NT Act , any extinguishment of the native title rights and interests in relation to the area that are claimed in the application by the creation of any prior interest in relation to the area must be "disregarded". Nor was it subject to any resumption process. 661 Two issues arise for determination. First, was the area in question was covered by a proclamation under which the whole, or a part, of the land or waters was to be used for public purposes, or for a particular purpose? Second, did one or more members of the native title claim group occupy the area when the application was made? His Honour observed (at [125]) that "occupation" of land should be understood in the sense that indigenous people have traditionally occupied land, rather than according to common law principles. He indicated that judicial authority relating to freehold and leasehold estates, and other statutory rights, might not be of great assistance in resolving this issue. He said that the use of "country" by members of a claim group in a way that was neither random nor coincidental, but accorded with the traditional way of life, habits, customs and usages of the group was sufficient to indicate occupation of the land. 663 Section 47B and its requirements were also discussed in Daniel per RD Nicholson J (at [958]-[973]), Griffiths v Northern Territory of Australia [2003] FCA 1177 per Mansfield J and Kenyon v Northern Territory of Australia [2003] FCA 1178 per Mansfield J. 664 More recently, the Full Court in Alyawarr considered in some detail the operation of s 47B. The issue arose in the context of a proclamation of a town site. The area in question concerned Hatches Creek, a proposed town site which occupied some twenty-seven hectares. The land was vacant Crown land. Although it had been set aside for a proposed town in 1953, no town had ever been established there. 665 The Hatches Creek area had been the subject of pastoral lease and grazing licence grants in the 1890s, and subsequently. It was common ground that this meant that, subject to s 47B , any native title rights that might otherwise have existed would be extinguished. 666 In relation to the issue of occupation at the time the application was made, the evidence was that Hatches Creek had no physical features or significance to suggest that it was continually occupied, in the sense of having permanent residents, at the time the application was brought. Mansfield J, the judge at first instance, referred with approval to what Olney J had said in Hayes regarding the concept of occupation. Mansfield J found that members of the native title claim group had occupied Hatches Creek, in the relevant sense, at the time the application was made. His Honour's conclusion was based largely on inference, drawing on the fact that members of the claim group lived nearby, and that they hunted on and traversed the land. For that reason, he concluded that s 47B applied to Hatches Creek, and that extinguishment was therefore to be disregarded. 667 On appeal to the Full Court, the Northern Territory contended that no finding of occupation could be made on the basis of inference alone. It submitted that such a finding could only be made if there were direct evidence to support it. The Full Court rejected that contention. 668 The Northern Territory submitted in the alternative that the inference that his Honour drew was insufficiently supported by the primary facts, as found. That submission too was rejected. Its use was consistent with its reserved purpose. His Honour was satisfied that the people occupied the relevant islands. In Daniel at [973] Nicholson J also applied what Beaumont and von Doussa JJ had said in Ward FC 1 . He equated "connection" and "occupation". He referred to United States and Canadian cases which established occupancy by reference to the demands of the land and society in question "in accordance with the way of life, habits, customs and usages of the [indigenous people] who are its users and occupiers": Sac and Fox Tribe of Indians of Oklahoma v United States 383 F 2d 991 (1967) at 998. His Honour observed in particular that "a nomadic lifestyle is not inconsistent with occupancy": (at 189). Nor was it suggested that there were no native title rights or interests subsisting in it. Given that background and the evidence of activity in its vicinity, to which he referred, his Honour was entitled to draw the conclusion that the applicants occupied it in the broad sense relevant to s 47B. His Honour cannot be said to have erred in his determination as it affected Hatches Creek. 671 The Full Court set out in some detail the history surrounding the proclamation of the Hatches Creek town site in 1953. The proclamation was made pursuant to s 111 of the Crown Lands Ordinance 1931 (NT) ("the Ordinance "). That section provided that the Governor-General could, by proclamation, constitute and define the boundaries of, inter alia, new towns, and distinguish each by a name. However, the proclamation of a township had no operative legal effect beyond satisfying a condition precedent for the grant of various types of leases contemplated by other provisions of the Ordinance. 672 The Northern Territory submitted in the appeal to the Full Court that the proclamation of Hatches Creek was a "proclamation" made "by the Crown in any capacity" within the meaning of s 47B(1)(b)(ii). The constitution of the land as a town was said to fall within both "public purposes" and to be "a particular purpose" within that section. At the time of the application all of the land was unalienated vacant Crown land. The proclamation was said not to be in the nature of a reservation or dedication which would be expected if the use of the land for public purposes were involved. Nor was use of the land for a particular purpose prescribed. A town area could be used for any number of purposes by any number of people and entities. As the Hatches Creek case illustrated, the mere fact that an area was constituted as a town, its boundaries defined and the land within it set apart as town lands did not mean that the land would be used for any purpose, let alone a particular purpose. The constitution of a town with defined boundaries might have consequences for local government administrative powers but it had no direct effect on land ownership or existing tenures. Nor did the constitution of a town mean that lands within the area so constituted would be used either for public or private purposes. On this basis it was submitted that the effect of the proclamation was not to provide that any identified area was to be used for a public purpose or for a particular purpose. The collocation "reservation, proclamation, dedication etc" is of wide import. There is no doubt that the proclamation made on 22 July 1953 was a "proclamation" within the meaning of s 47B(1)(b)(ii). To satisfy the exclusionary condition in that subparagraph however the proclamation had to be one of which it could be said that, at the date of the application, it was a proclamation "under which the whole or a part of the land ... in the area is to be used for public purposes or a particular purpose". The terms of the condition raises two issues. The first is as to the nature of the purposes for which the land is to be used. The second is whether an intention to use the land for those purposes must be shown, as a matter of fact, to exist at the time the native title determination application is made or whether it is to be ascertained by reference to the terms of the proclamation and the legislation under which it is made. The proclamation enlivened powers to grant leases for a variety of purposes. The qualification on its application in s 47B(1)(b)(ii) is no doubt intended to minimise the impact of native title determination applications on areas set aside by proclamation or otherwise under statutory authority for public or particular purposes. That limitation should not be construed more widely than is necessary to achieve its purpose. A proclamation for a broadly expressed purpose which encompasses a variety of potential but unascertained uses is not a proclamation for a particular purpose. The term "public purposes" may arguably encompass a land use planning purpose which is met by establishing a framework or condition for the allocation of private rights such as the grant of residential or commercial leases in a township. Alternatively, it may be construed as referring to purposes of a public nature such as the creation of reserves for public works or recreation or environmental protection. A narrower construction accords with a comprehensible policy that, in the public interest, prior extinguishment which might obviate public exposure to compensation claims or a future act process should be continued in force. It is not necessary in aid of the narrower construction to define its outer limits here. It is sufficient to say that the mere proclamation of a townsite, which might comprise largely private property holdings by lease or otherwise, does not define public purposes or a particular purpose within the meaning of s 47B(1)(b)(ii). The words "is to be used" import the need to identify some intention to use the subject land for the requisite purpose or purposes. The question that arises is whether that intention is to be gleaned by reference to the terms of the proclamation and its constating legislation as an intention fixed for the duration of the proclamation or whether it is to be ascertained as a matter of fact at the time of the application for a native title determination. The evidence suggests that there is little or no prospect of the Hatches Creek townsite ever becoming a town. The proclamation is in effect a dead letter even though it was said by the Northern Territory to have the effect of defeating the beneficial operation of s 47B in this case. Nevertheless although the first interpretation can yield artificial results, it does provide an objective basis for determining the question of the imputed intention associated with the proclamation. The alternative approach would require factual inquiry into whether there has been, at the time of the application, an effective abandonment, attributable to the Crown, of any intention to implement the proposed purposes of the proclamation. The latter construction is not to be preferred. The plan showed provision for a recreation area, government offices, tennis courts, a school site and what appear to be residential lots and roads. There is no suggestion that this plan had any statutory significance or legal effect. The Northern Territory could not point to evidence about its provenance. It does not impact upon the characterisation of the proclamation for the purposes of s 47B. The proclamation constituting and defining the boundaries of Timber Creek, and setting aside Crown lands within the town boundaries so declared as town lands, was dated 10 May 1975. It was made under s 111 of the Ordinance , the same provision that authorised the proclamation of Hatches Creek. The Timber Creek proclamation was published in the Commonwealth Government Gazette on 10 June 1975. 678 As the Full Court noted in Alyawarr , judges at first instance have differed on the application of s 47B to areas within the boundaries of towns constituted by proclamation. In Hayes, Olney J was content to apply the section to unalienated and unreserved Crown land in the town of Alice Springs. In Daniel, however, RD Nicholson J observed that the section would not apply to the town site of Karratha because the proclamation of a site for a town would involve "a public purpose", as well as "a particular purpose". However, because there was no claim to the town site in Daniel (which was, in any event, covered by a reserve) his Honour's comments regarding s 47B were dicta. 679 The claimants submitted before me that s 47B applied to Timber Creek because the area in relation to which the claimant application was made was not (as required by s 47B(1)(b)(ii)) covered by a "proclamation ... under which the whole or a part of the land or waters is to be used for public purposes or for a particular purpose". They argued that, as in Alyawarr, the constitution of an area as a town and the designation of Crown lands within that area as "town lands" did not give rise, in any relevant sense, to any "use" (whether intended, proposed or actual) of any part of the land or waters within the area for any purpose. 680 The claimants submitted that the Timber Creek proclamation did two things. First, it constituted the town of Timber Creek by identifying the boundaries for the new town, within which there would be both Crown land, and private land. Next, it set apart Crown lands within those boundaries as town lands. That submission followed the structure of the enabling power, as discussed in Alyawarr . 681 It was next submitted that the bare proclamation of a town could hardly be characterised as having a "purpose", at least as that term was used in s 47B. The argument was that the making of a proclamation, pursuant to the statutory framework within which the power to do so was found, made it clear that the mere declaration of an area as a town, or the designation of Crown lands in the declared area as town lands, did not mean that the declared area, or the designated Crown lands, were to be used for any public purposes, or any particular purpose. 682 The claimants submitted that s 47B is, as its title suggests, concerned with vacant Crown land. It was submitted that the exception to s 47B found in s 47B(1)(b)(ii) was plainly directed to the problem identified by the majority in Ward HC in relation to the reservation and dedication of Crown land. It was submitted that their Honours had provided an explanation for the scope of the exception (at [209]-[261]). 684 It was next submitted that the expression "is to be used" had to be given some meaningful operation. That expression implied a form of vesting control and management in reserve land, or some act by which the Crown has bound itself in some way to keep land for public use. Merely identifying an area of the town, and setting apart Crown land within that area as "town lands", was not comprehended by the exception. 685 Finally, the claimants submitted that the requirement in s 47B(1)(c) that one or more members of the native title claim group "occupy the area" at the time the application for a determination of native title is made was readily satisfied in these proceedings. Indeed, it was submitted that the evidence in support of "occupation" was far stronger in this case than the evidence led in relation to that issue in respect of Hatches Creek. Unlike the position in Alyawarr , there was unchallenged evidence before me that a significant number of members of the native title claim group resided in Timber Creek, or at least within its immediate vicinity. There was also unchallenged evidence that members of the native title claim group have used, and continue to use the land and waters within the claim area for traditional purposes. The claimants referred to the evidence of Lorraine Jones, and particularly her evidence regarding bush tucker in that regard. They also noted that a number of sacred sites are located within Timber Creek itself, and that those sites are continually visited. In Hayes , Olney J held that evidence of this kind was itself sufficient to satisfy the requirements of s 47B(1)(c). 686 The Northern Territory responded by noting that the lots claimed in the present proceeding all lie within Timber Creek, a town declared by proclamation in 1975. It submitted that by virtue of that proclamation, s 47B could not be invoked to cause acts of extinguishment to be disregarded. 687 The Northern Territory's argument focused upon the structure of s 47, and the provisions that immediately follow. 688 In broad terms, s 47 provides for prior extinguishment to be disregarded in relation to pastoral leases held by native title applicants. 689 Section 47A provides for prior extinguishment to be disregarded in relation to freehold estates and leases vested under legislation for the benefit of Aboriginal people or Torres Strait Islanders, provided that at the time the application for a native title determination is made, members of the native title claim group occupy the area. 690 Section 47B is simply the analogue of s 47A, but directed towards vacant Crown land occupied, at the time of the application, by members of the native title claim group. See generally: Strickland v Native Title Registrar (1999) 168 ALR 242 at [54] per French J, cited with apparent approval by Merkel J in Rubibi Community v Western Australia (No 4) [2004] FCA 1019 ; (2004) 138 FCR 536 at [1] . 691 Section 47 was contained in the original Native Title Act as enacted in 1993. Sections 47A and 47B , along with many other amendments, came into effect on 30 September 1998. Like s 47 , these provisions require certain acts of extinguishment to be "disregarded". These amendments were introduced, in part, as a response to Wik . That case revealed the anomalous situation that could occur if aboriginal people have been living in a particular area for some time, but could not obtain a determination of native title because of some extinguishing event that may have occurred only briefly, and a long time ago. As a result, since the 1998 amendments, claims can be made to, and determinations of native title made in respect of, areas which were formerly the subject of a "previous exclusive possession act". Such an act would ordinarily have extinguished native title, but for the operation of ss 47 , 47A or 47B . The current section 47 allows a claim for pastoral lease land, notwithstanding past extinguishment, where the claimants hold the pastoral lease. This provision will allow a claim for vacant Crown land where the claimants are in occupation of that land, notwithstanding possible extinguishment by any historical act. Counsel focussed upon the word "under" in s 47B(1)(b)(ii) as meaning "in pursuance of" or "under the authority of", the same meaning given to that word in s 3 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). 695 It was further submitted that the word "used" in s 47B(1)(b)(ii) was a word of wide ambit, whose meaning was to be distilled from context. It was submitted that, by proclamation (and by declaration), the land in question in these proceedings had been set apart as the site for a town to be called the Town of Timber Creek. By making that proclamation (and declaration) the Crown had indicated the intended "use" of the area as a town. 696 Turning to the phrase "for public purposes" it was submitted that this too was an expression of wide ambit. It would be sufficient if the purpose which was designated was one which benefited a select group or groups, in the public interest. The Northern Territory relied upon Attorney-General (NSW) v Homebush Flour Mills Ltd [1937] HCA 3 ; (1937) 56 CLR 390 (at 412-3) and Australian Tape Manufacturers Association Ltd v Commonwealth [1993] HCA 10 ; (1993) 176 CLR 480 (at 505) as support for that proposition. 697 Finally, with regard to the expression "for a particular purpose", the Northern Territory submitted that this meant nothing more than a purpose that was definite, rather than one that was indeterminate. 698 The Northern Territory supported these submissions by reference to a number of observations by RD Nicholson J in Daniel. As previously indicated, in that case his Honour considered that s 47B would have no application within the defined boundaries of a town site which had been set apart by declaration for that purpose. 699 Counsel for the Northern Territory did not have the benefit of the considered views of the Full Court in Alyawarr at the time these submissions were made. Plainly, they are at odds with the reasoning of the Full Court. As previously mentioned, Alyawarr was the subject of an unsuccessful application for special leave to appeal to the High Court. Hayne J described the reasoning of the Full Court as "not attended by sufficient doubt to warrant a grant of special leave to appeal to this Court". 700 I am of course bound by the decision of the Full Court in Alyawarr . As I was a member of that Full Court, it is hardly surprising that I regard the decision as correct. To the extent that Daniel reflects a different approach to the construction of s 47B, I must respectfully decline to follow that decision. It follows that s 47B(1)(b)(ii) is no impediment to the operation of s 47B in these proceedings. 701 Another point raised by the Northern Territory with regard to s 47B concerned the scope of any benefit that might be claimed in reliance upon that section. It should be noted that, for reasons that will be discussed later, the claimants do not rely upon that section in relation to Lots 16, 22, 33, 35 and 37. 702 The Northern Territory also challenged the claim that one or more members of the native title claim group "occupied" the specific lots identified as making up the claim area at the time each of the three applications presently before the Court was made. It submitted that it is was not sufficient simply to state, as the claimants had done, that "occupation" was established on the basis of residence in, or near, Timber Creek, and that some (unidentified) land was used for traditional purposes. It submitted that the fact that sacred sites may be located within the township in no way altered that position. 703 In my view, the claimants have clearly established that when the present applications were made, one or more members of the native title claim group "occupied" the claim area. I adopt what Olney J said in Hayes in relation to that matter. Accordingly, I find that s 47B(1)(c) is satisfied. 704 As previously indicated, there is no dispute that the requirements of s 47B(1)(b)(i) and (iii) are met. 705 It follows that, subject to the lots identified in [701] of these reasons for judgment, any extinguishment brought about by pastoral leases in relation to the claim area is to be disregar ded. 706 It also follows that it is not necessary to determine whether any such extinguishment, brought about by pastoral leases, if it did operate, would do so by extinguishing native title rights and interests in their entirety, or whether it would do so merely by extinguishing them in part. In particular, I am required to determine whether those native title rights and interests are what is sometimes characterised as "exclusive" or whether they take some lesser, "non-exclusive" form. 708 Ward HC held that native title should be characterised as a "bundle of rights" rather than an underlying "title to land". In other words, it should be seen as a bundle of separate and separable, distinct rights and interests that can be exercised in relation to a particular area (and also extinguished separately and distinctly). Thus, the legal recognition of native title gives native title holders the right to exercise the particular rights that are proved, and no others. 709 In a given case, those rights may include rights to hunt and fish, conduct ceremonies, take water and so forth. In other words, the rights may be essentially usufructuary in nature. 710 By contrast, "title to land", had that been the approach endorsed in Ward HC, would see native title as a right to the land itself, and would regard recognition of native title as giving the holders something akin to exclusive use and occupation of the land, and then simply as a normal incident of such title. 711 There is plainly scope for some rights, within the "bundle of rights" that constitutes native title, to be of a proprietary character, while others are personal, and do not entail any capacity to enforce those rights against third parties. It should of course be understood that many text writers regard the division between proprietary and personal interests as being grounded in the fact that the holder of a proprietary interest can enforce it against a person other than the grantor of the interest, whereas the holder of a personal interest can enforce it only against the grantor of that interest. See, for example DC Jackson, " Principles of Property Law " (1967) at 10. 712 It is necessary to consider the claimants' evidence in its entirety, and to determine whether it establishes as an incident of their native title rights and interests, a right not merely to use and enjoy the land in traditional ways, but also a general right to exclude others. If a right of that character exists, the native title rights and interests in this case would be relevantly "exclusive". 713 In some instances, native title claimants have succeeded in demonstrating a right to possession, occupation, use and enjoyment of the claim area to the exclusion of all others . On other occasions, native title has been found to exist, but it has not been of an "exclusive" kind. The rights in question have been held to be personal, and largely usufructuary in nature. 714 As I have already indicated, the evidence in the present case goes no further, in my view, than to establish that the claimants have been asked, on occasion, by other indigenous people wishing to come upon their land for "permission" to do so. The evidence is somewhat obscure, but suggests that these requests are made as a matter of prudence, because visitors would be at risk if they were simply to go upon the land without seeking permission, and without obtaining guidance and assistance. 715 The ongoing normative system regarding relationship to country that the evidence before me discloses does not fit the template of a right to possess "to the exclusion of all others". Nor does it suggest a general right to "control access" to the land in any relevantly proprietorial sense. In reality, the claimants seem to me to assert a right, under their traditional laws and customs, to be consulted about matters that might harm the land, and a right to veto any activity which might be detrimental. This falls well short of the broader claim that is pleaded, to possess the land to the exclusion of all others. 716 It follows that, subject to what I will shortly say regarding the special position of the waters of the Creek itself, the determination of native title that I will ultimately make will be essentially in the form of a declaration that the Ngaliwurru and Nungali Peoples hold native title, and that the incidents of that title include various rights in relation to the claim area that are "non-exclusive". I will not declare that these rights can be exercised to the exclusion of all others. 717 The claimants have clearly established that they are entitled to a determination of native title that specifies rights of a usufructuary nature. These include the right to hunt and forage in or on the land, and the right to fish in the waters of the Creek. They also include the right to engage in rituals and ceremonies upon the land, and to be appropriately consulted about, and protect particular sites located within the claim area. These rights do not operate "to the exclusion of all others". However, in the case of ritual and ceremonial practices, they may entail some limited rights to control access to the particular area being used while these activities take place. 718 My findings in this regard are intended to accord with the approach taken by the Full Court in A-G (NT) v Ward . As previously indicated, that was a consent determination in relation to the Miriuwung Gajerrong native title claim. In that case the Full Court made orders that non-exclusive rights and interests could not include a right to "occupy" the land in question. 719 My findings are also intended to accord with the approach taken by the Full Court in De Rose (No 2) . There the Full Court, having earlier concluded that the trial judge had erred in finding that native title did not exist in the claim area, held that the native title rights and interests in that area were non-exclusive rights to use and enjoy the land and waters in accordance with traditional law and custom. 720 Likewise, my findings are intended to accord with the approach taken by the Full Court in Alyawarr . There the Court affirmed the existence of native title rights over the Hatches Creek "town" area, but rejected a right to control access where possession and occupation were not exclusive. The Full Court also rejected findings by the primary judge that the right to trade existed as a distinct native title right, on the basis that there was insufficient evidence of a right of that character. Finally, it held that the right to control the disclosure of spiritual beliefs and practices should be excised from the determination because it was not a right in relation to land or waters. This issue is contentious, given the importance that AFANT places upon preserving access to those waters so that its members can continue to enjoy their long standing pastime of recreational fishing. 722 There is a preliminary question to be determined. The claimants say that although they expressly abandoned their claim to native title over the waters of Victoria River prior to the commencement of this trial, they have at all times maintained their claim to native title over the bed and banks of the Creek. The only exception to that claim which they arguably acknowledge (and even this is uncertain) is the small section of the Creek that is tidal. On one view, they accept that native title cannot be claimed over tidal waters. 723 The Northern Territory and AFANT on the other hand contend that during the course of closing submissions the claimants, through their counsel, abandoned any claim to native title over the non-tidal waters of the Creek. They say that the claimants should not now be permitted to re-agitate that claim. 724 It is necessary therefore to give consideration to both the oral and written submissions made on behalf of the claimants during the course of senior counsel's closing submissions. 725 In his written submission, senior counsel for the claimants noted that the portion of the Victoria River that was originally within the claim area was withdrawn from the claim on 7 February 2005. He made no mention of any similar concession in relation to the waters of Timber Creek. 726 The written submission went on to say that the first two applications (numbers D6016 of 1999 and D6008 of 2000) had been filed in response to a proposed compulsory acquisition of native title for the purpose of private development. Those applications covered only the portions of land subject to the proposed compulsory acquisition. These paragraphs discussed various matters such as the system of descent that has prevailed in the claim area, recruitment to the "country group", membership of the claimant community, language, the spiritual relationship to country, Professor Sansom's thesis, the shift from patrilineality to cognation, the reliability of oral accounts, and the on-site evidence adduced in support of the claimants. 729 Paragraph 80 is important. It refers to the evidence adduced on behalf of AFANT. Very little of the third respondent's statements are of direct relevance to the amended claim area following the removal of the Victoria River from the claim area on 7 February 2005. Generally the picture obtained from the statements that is of relevance to the claim area is confined to the use of the mouth of Timber Creek (which we say is tidal) and those areas of Timber Creek behind the police station and the caravan park. However, the point is not spelt out with any precision. 731 After a detailed analysis of the general principles governing native title, and a recapitulation of the evidence regarding the laws and customs of the claimant group, there are references in paragraphs 126 to 130, and in paragraph 133 to ties with "land and waters". There is then a discussion of the effect of s 47B. Otherwise the remaining lots claimed are vacant crown land. 734 The order of oral submissions had counsel for AFANT addressing the Court before senior counsel for the claimants. Not surprisingly, counsel for AFANT focussed almost exclusively upon what he understood to be an extant claim to native title over the non-tidal waters of the Creek, and its bed and banks. He submitted that even if some form of native title were found to exist in relation to those waters, his client's members should not be prevented from continuing to engage in their favourite pastime of recreational fishing in the waters of the Creek. He drew no distinction, in that regard, between tidal and non-tidal waters. 735 When senior counsel for the claimants commenced his oral submissions, I raised with him his clients' attitude to the submission that had been made on behalf of AFANT. His immediate response was that none of the amateur fishermen, whether members of AFANT or not, had any right to fish in, and around, the waters of Timber Creek. The fact that amateur fishermen had engaged in this pastime for many years was of no consequence. All that AFANT could reasonably submit was that the evidence did not support a finding that the claimants had exclusive possession of the bed and banks, as alleged by them in the pleading. 736 Senior counsel reminded me that at the point at which we had crossed the Creek heading from west to east during the course of the onsite hearings the water could be seen to be flowing. However, at other points, the water had been still. He acknowledged that at the confluence of the Victoria River and the Creek, the waters were tidal, and that Yarmirr had determined that there could be no native title right to exclusive possession over tidal waters. 737 Senior counsel then submitted that if a creek flowed through an area over which the claimants had exclusive rights, it would follow that they had exclusive rights to the bed and banks of that creek as well. He then indicated that he had arranged for his junior to conduct some urgent research in order to ascertain what the leading authorities dealing with native title had to say about "the notion of flowing water". 738 After a short break, senior counsel indicated that he could find no authority dealing specifically with this point. However, he did refer to several consent determinations in which there had been some reference to tidal waters in the context of native title. 739 The discussion ended at that point. The following day I returned to the question of access by amateur fishermen to the waters of the Creek and asked whether, on the claimants' case, their native title rights extended to closing off any fishing by anyone in those waters. Shortly thereafter, I again asked senior counsel whether he wished to say anything further about the tidal waters of the Creek. No, your Honour, as my learned junior reminds me, our claim doesn't extend to waters of any kind. We don't make a claim to the running waters. Is this a new position you've taken, Mr Parsons? I mean, have you reflected on the matter, or is it -? We've wasted a lot of time. We'll talk a bit further about that, and I'll be much clearer about that. In fact, I did have the application that my learned junior is reminding me, yes, the claim I think here refers to as Timber Creek and its beds and banks. So, yes, I do apologise. I might be wrong. Alright, we'll adjourn until a quarter past two. My instructions are, your Honour, that we've never sought by claiming the Timber Creek, and its beds and banks, to maintain a claim of exclusivity to the H 2 O. That's the historical, common law view of the matter, isn't it? I mean, it's in the - I would only be guessing. I think that's the essential point. I'm sorry, Mr Parsons, I'm trying to understand it. I'm required under the Act to identify the nature and kind and extent of Native Title interests that you claim. I don't understand what you're claiming in relation to the H 2 O, as it were. What I haven't got access to at the moment is what, in fact, the formulation of words by the, I presume, the Full Court in Ward were with respect to the Native Title rights in the Ord River above the dam. There's no dispute. There's no evidence. There's nothing to worry about. Perhaps if I can read it, it might be of some assistance. In the ordinary course a grant (including statutory grant) over an area of land includes the right to the exclusive use of the air space above it, and the land below it. See Thomas reference, and see noted the law journal. But this does not mean that the owner of the land owns everything physically on it. In the normal course, a person cannot sensibly be said to own free flowing water. What the owner has is a right to control access to that water, and to use it for his or her own purposes, similarly in relation to fish and other ferae naturae, Goodman reference. At the moment, I'm a state of confusion about it. If it's not to be abandoned, then I need to know exactly what you say the incidents of the right in question are. It's doing nothing other than complying with the law as we apparently understand it from Ward, so what we need to do is establish that. I simply don't have instructions as to those who fish there, and what, if anything, my clients say about it. I'm just not in that position to be instructed about it, and I think in the normal course, I think these things would be worked out over time. That is regrettable. It is clear that both senior counsel for the Northern Territory, and counsel for AFANT understood Mr Parsons to have resiled entirely from any claim to the waters of Timber Creek that would have enabled his clients to prevent access to those waters by anyone seeking to fish in them. It seemed to them, and it seemed to me as well, that the distinction between tidal and non-tidal waters, which had featured heavily in the earlier submissions, had been all but abandoned, and that the claimants were now no longer certain of their true position. 742 The next step in this unfortunate saga was the filing of further written submissions by the claimants regarding what they described as "the non-tidal waters" of Timber Creek. Curiously, it took some four and a half months for those further submissions to be filed. They were prepared by counsel other than Mr Parsons. The author of those submissions had not been participated in the trial of these proceedings and, it may be inferred, was retained in order to carry out this specific task. 743 The further written submissions are dated 13 September 2005. They are lengthy, and prolix. They range over a number of matters, some of which were not the subject of evidence before me. They also raise a number of issues that had not previously been addressed in oral or written submissions. 744 Put simply, the further written submissions contend that the position taken by the respondents, that the existence of riparian rights in others in relation to the flowing waters of a river, stream or creek precludes recognition of a native title right to exclusive possession, cannot be sustained. 745 After a short excursus into Blackstone's treatment of riparian rights, the further written submissions seek to resile from any concession that Mr Parsons may have made that no native title rights to exclusive possession can be maintained over flowing water. The submissions then introduce into the case a discussion of the effects of statutory intervention in relation to rights in water, ranging back to the Control of Waters Ordinance 1938 (NT) and the Water Act 1992 (NT). It goes without saying that none of this legislative material had been referred to, in any significant degree, during the course of oral submissions. 746 The further written submissions argue that the respondents' case assumes the existence of riparian rights in others, as had been the case in Yarmirr . These riparian rights derive from common law, and encompass both rights to fish, and rights to navigate the sea freely. According to the respondents, such rights are inconsistent with any possible native title right to control access to the tidal waters of the Creek. 747 The further written submissions challenge this contention. They argue that, for the claimants' native title rights to be affected by the riparian rights of others, there first have to be riparian owners, whether upstream or downstream, in the claim area. They say, correctly, that there is no evidence of the existence of any such owners in the present case. For that reason, they contend that the Court can, and should, find that the claimants have exclusive rights to the waters of the Creek, both tidal and non-tidal. 748 The further written submissions then argue that any acts of extinguishment arising out of past pastoral leases should be disregarded in relation to the waters of the Creek by reason of the operation of s 47B. 749 They next deal with an argument put on behalf of the respondents that the public right to fish (and, it might be said, freely to navigate tidal waters) precludes recognition of a native title right to exclusive possession over at least that part of the Creek that is tidal. Indeed, they go further, and challenge the very existence of a public right to fish in tidal waters. 750 The further written submissions refer to Gumana (at [61]-[69]). In that case, the principal claim was for a determination of native title in respect of an area in and around Blue Mud Bay in northeast Arnhem Land. The second claim involved a challenge to the power of the Northern Territory to issue commercial fishing licences in relation to the inter-tidal zone, and the adjacent sea within two kilometres of the low water mark of land that had been granted to the applicants under the Land Rights Act . 751 As to these two claims, Selway J found that the applicants had a native title right of exclusive possession in relation to the "land" other than the inter-tidal zone (by which his Honour meant, in essence, tidal waters), and a "non-exclusive" native title right in relation to the sea and the inter-tidal zone. Selway J followed Yarmirr , as explained in The Lardil Peoples v State of Queensland [2004] FCA 298 per Cooper J. In Gawirrin Gumana v Northern Territory of Australia (No 2) [2005] FCA 1425 (" Gumana (No 2) "), Mansfield J, after the death of Selway J, gave effect to his Honour's judgment by making appropriate orders, and formulating the determination of native title consequent upon Selway J's reasons. 752 The further written submissions filed in the present case append a copy of the applicants' written submissions in Gumana . Those Gumana submissions contain what purports to be a general account of the common law, including a reference to the significance, or otherwise, of the restraint in Magna Carta on the King's writ of defensione riparia as being somehow connected to the protection given to rights to fish as a constraint on prerogative power. However, they note that in Attorney-General of British Columbia v Attorney-General of Canada [1914] AC 153, Viscount Haldane LC observed that this was perhaps "a matter of historical and antiquarian interest only". In answer to both questions, however, in Attorney-General (British Columbia) v Attorney-General (Canada) Viscount Haldane LC explained that the right to navigate and the right to fish both have their origin in common practice from time immemorial to navigate the seas and to use a navigable river as a highway. Thus, in Harper v Minister for Sea Fisheries Brennan J, after reviewing the authorities, spoke of "the right of fishing in the sea and in tidal navigable rivers". Hence, it is not correct to assume, as the respondents do, that a public right to fish applies wherever waters are tidal. The better view is that the geographic reach of each of the right to fish and the right to navigate is one and the same, and if a body of water is not navigable, in the sense that it not the sea or an arm of the sea, it cannot be subject to a public right of fishing. When the authorities speak of a public right to fish in tidal waters of a river, the right is said to operate so far up the river as the tide in the ordinary course of things flow and reflows, and it will be a question of fact whether there is a real perceptible and sufficient ebb and flow of the tide so as to render waters tidal. If it is a broad and deep channel, calculated for the purposes of commerce, it would be natural to conclude that it has been a public navigation; but if it is a petty stream, navigable only at certain periods of the tide, and then only for a very short time, and by very small boats, it is difficult to suppose that it ever has been a public navigable channel. If it is possible to conclude that the common law rights of the public to fish and navigate have application in relation to any part of Timber Creek, on the authority of Commonwealth v Yarmirr the existence of those rights is inconsistent with the continuation of a right in the holders of native title to say who may enter the area where those rights have applied. On that basis, a question arises as to whether s 47B requires the consequence identified in Yarmirr to be disregarded. The assumption depends on establishing that the relevant part is tidal and navigable. While the answer given by Selway J in Gumana v Northern Territory is that the consequence is not to be disregarded, that answer is, with respect, wrong. If it is accepted that the rights of the applicants under traditional law and custom include the right to be asked permission and speak for country, the determination of their native title rights may be expressed as a right to possession, occupation, use and enjoyment to the exclusion of all others, and there is no basis for qualification of that right where that country includes land covered by water. The Northern Territory complained that they departed radically from the way in which the claimants had presented their case throughout these proceedings. It noted that even as late as the applicants' closing submissions, senior counsel had insisted that the claimants "make no claim to running waters". Indeed, he had stated even more emphatically, "we have never sought by claiming Timber Creek, and its bed and banks, to maintain a claim of exclusivity to the H 2 O". That was said to be the very antithesis of what the further written submissions now sought. 756 Regrettably, the heated responses of the respondents led to two further lengthy submissions being filed on behalf of the claimants. In the first, counsel denied that the claimants had in any way modified their position. What the applicants claim is a right to exclusive possession of the bed and banks on either side of the Creek. That carries with it a right to control access to the Creek. On this occasion, he acknowledged both a public right to fish, and a right to navigate in tidal waters, which, he submitted, should be dealt with as "other interests" to which the non-extinguishment principle applied. " (Footnotes omitted. 760 These further written submissions provoked an even lengthier, more detailed, and extremely hostile response from the Northern Territory, and a similarly terse written submission on behalf of AFANT. 761 The Northern Territory submitted with, I think, considerable force, that the claimants' submissions regarding native title over the waters of Timber Creek had been "dominated by confusion". It pointed out that during closing submissions, Mr Parsons had initially suggested that there was now no longer any claim to the waters of Timber Creek, and that the only rights sought were those similar to those contained in the Ward "consent determination" ( A-G (NT) v Ward ). That consent determination expressly eschewed any right to exclusive possession of tidal waters, and did not suggest that such a right could be gained "through the back door" by claiming exclusive possession of the bed and banks of any rivers or creeks, and the right to control access to them. 762 That position cannot easily be reconciled with the later submissions filed on behalf of the claimants where they seemed to be asserting exclusive rights to the waters of the Creek, both tidal and non-tidal, albeit indirectly. 763 The Northern Territory submitted that the claimants had assumed, wrongly, that a body of general evidence led in relation to their connection with, and activities upon, the land in the claim area would automatically apply to a proprietary claim to tidal waters. Though the claimants had led evidence of their own fishing activities in the Victoria River (which, as has been seen, was excluded from the claim area), and of some significant sites in the waters near the mouth of the Creek itself, there was almost no evidence of any traditional law and custom that might give rise to a finding of exclusive possession of tidal water. Indeed, it was submitted that this may be because the notion of property over flowing water would be as difficult to reconcile with Ngaliwurru and Nungali traditional law and custom, as it would be with the common law. 764 The Northern Territory's second major point in answer to the claimants' revised case regarding the waters of the Creek was that s 47B could not be called in aid in relation to those waters. That was because the section required "occupation" of the area in relation to which the application was made as a precondition to its operation. The Northern Territory submitted that tidal water could not be "occupied", at least in the ordinary meaning of that term. 765 Finally, the Northern Territory submitted that it was not a question of whether the public right to fish in, and to navigate, tidal waters brought about an "extinguishment" of native title, but rather whether the existence of such rights prevented native title from being recognised in the first place. In the absence of any indication that the rights now asserted by the claimants in relation to the tidal waters of the Creek would have been recognised by the common law of Australia, or that such rights existed at the time of sovereignty, no such rights could be recognised under the NT Act . Their Honours felt it appropriate to make explicit reference to water rights to avoid any possible dispute. In this matter the applicants contend that it is unnecessary to do so given the findings in the reasons for judgment to which I have referred. The factual issue as to the existence of such exclusive rights was ventilated by the pleadings and in the course of evidence, and resulted in the findings to which I have referred. It does not mean that they have some additional or unique form of right in respect of subterranean or flowing water on that part of the claim area within the defined section 'land and inland waters'. It means simply that, in respect of that part of the claim area they have the exclusive right to control access to the water within that part of the claim area and to use and enjoy it. It is apparent from the reasons for judgment that his Honour was not seeking to create some new or additional right to 'possess' flowing or subterranean water in a way which extended beyond that recognised in other authorities. I do not think the proposed par 4 of the proposed determination has that meaning. The term 'the land and inland waters' is defined by par 1(a) of Schedule A as a geographical area but not in terms indicating some special and peculiar interest in the waters on that part of the claim area. In my view par 4 appropriately reflects the reasons for judgment. The next step was to reach the provisional view that the public rights to fish and to navigate in the foreshore and in the rivers and estuaries of Blue Mud Bay were abrogated by the land grants under the Land Rights Act [67]-[73]. However, as noted above, his Honour then felt bound by Yarmirr FC to conclude at [80]-[87] that the grants under the Land Rights Act did not abrogate the public rights to fish or to navigate. In all that discussion, his Honour recognised that the public right to fish and the public right to navigate in the foreshore and the arms of the sea were separate public rights. That is also apparent in his Honour's consideration of whether the licences under the Fisheries Act 1988 (NT) are different in nature from the public right to fish (at [90]-[92]). That being so, there is no reason to think that his Honour intended to limit the public right to fish by reference to the navigable waters of the foreshore or of the arms of the sea simply because, by definition, the public right to navigate is confined to the navigable waters of the foreshore or of the arms of the sea. His Honour at [63] relied upon four authorities for the proposition that the prerogative rights of the Crown were subject to the common law public right to fish (and the common law public right to navigate). The first of those cases was Harper v Minister of Sea Fisheries [1989] HCA 47 ; (1989) 168 CLR 314 where Brennan J at 329-331 described the public right to fish as extending to tidal waters generally, although at one point his Honour used the expression 'tidal navigable waters'. His Honour's views were agreed with generally by Mason CJ, Deane and Gaudron JJ at 325, and by Dawson, Toohey and McHugh JJ generally at 336. In New South Wales v Commonwealth [1975] HCA 58 ; (1975) 135 CLR 337, Stephen J at 423 referred to Hale's De Jure Maris as stating that the shore between 'the flux and reflux of the tide' was subject to the public right of fishing, and Jacobs J at 489 also referred to the 'public rights of fishing in tidal waters'. Anderson v Alnwick District Council [1993] 1 WLR 1156 at 1166-1170 also referred to the public right to fish as extending to 'areas of tidal waters' without confining that right to navigable tidal waters. So too did Burchett J in Minister for Primary Industry and Energy v Davey (1993) 47 FCR 151 at 168. Attorney-General for British Columbia v Attorney-General for Canada [1914] AC 153 at 169). It is also correct to point out that his Honour in the reasons for judgment did not seek to distinguish between the extent of tidal waters affected by the public right to fish and those affected by the public right to navigate. Counsel put that, if there is a coincidence in their extent, because by definition the public right to navigate can only be in tidal navigable waters, the public right to fish was intended also equally to be so confined. The public right to navigate is necessarily confined to tidal waters which are navigable. During the course of evidence given on site, the Court had been taken to the bank of the Creek near an area known as Policeman's Point. That area was at the northern end of the Creek, very near its junction with the Victoria River. It had been obvious that at least part of the Creek was subject to the ebb and flow of tides, and that the tidal area extended a distance of at least 200 to 300 metres from that junction. AFANT submitted that it should be inferred that the Creek was a flowing waterway, at least during certain parts of the year. 770 AFANT further submitted that the discussion in the Revised Note regarding riparian rights was "essentially nonsensical". This was because such rights, by definition, would have to enure to those who had access to the Victoria River. It was submitted that there was no principle that confined the "public right to fish" to tidal waters that were also navigable. The only requirement was that the waters be "tidal". 771 Alternatively, AFANT submitted that the evidence in this case made it clear that amateur fishermen often used their boats to travel along the lower (northern) parts of the Creek, in the course of fishing, and looking for bait. It followed that the relevant parts of the Creek were not merely tidal, but also navigable, if that additional element were necessary. As the Northern Territory submitted, the position taken by Mr Parsons, in his closing address, cannot readily be reconciled with the later submissions filed on their behalf. Those later submissions contained a good deal of irrelevant material, and introduced arguments that were not based upon any evidence led before me. 773 I confess that I am still far from certain as to what Mr Parsons intended to convey when he said, repeatedly, in his closing submissions that the claimants did not maintain any claim in relation to what he called the "H 2 O". I am confident, however, that Mr Parsons intended to posit that a distinction should be drawn between tidal and non-tidal waters. He at all times acknowledged that there is a public right to fish in tidal waters, and that native title cannot impinge upon that right. He submitted that native title can exist over non-tidal waters, and seemed to be saying that native title over such waters can be "exclusive". 774 The question whether the claimants have in fact resiled from that position, and now seek exclusive native title over the waters of the Creek might be significant if I had concluded that their native title rights and interests exist to the exclusion of others. However, as previously indicated, the evidence does not support a finding of exclusivity. That makes much of the debate surrounding this issue somewhat sterile. 775 That said, the evidence supports a finding that the claimants have native title, under their traditional laws and customs, which allow them the right to fish, and to gather and take resources from the waters of Timber Creek. Insofar as those waters are tidal, these rights go no further than would be encompassed by the public right to fish in such waters. Insofar as those waters are non-tidal, the rights are non-exclusive, just as they are in relation to the land component of the claim area. The claimants have no right to prevent others from exercising similar rights in those waters. Members of AFANT, and others, can continue to fish in the non-tidal waters of the Creek because the native title rights and interests that exist in relation to those waters are non-exclusive. 776 In effect, therefore, the claimants' right to fish in the tidal waters of the Creek is coextensive with the public right to fish. It may be slightly different in relation to the non-tidal waters of the Creek, though the right does not enable the claimants to control access to those waters in any general sense. It might, however, permit the claimants to control access during specific times, as for example when undertaking any ceremonial or ritual activities in relation to those waters. However, that right exists only to the extent necessary to enable such activities to be carried out. 777 I should perhaps add, for the sake of completeness, that contrary to the claimants' later submissions, I accept that the public right to fish in tidal waters exists as part of the common law of this country. That right appears to have been guaranteed at least since Magna Carta. See generally: New South Wales v Commonwealth [1975] HCA 58 ; (1975) 135 CLR 337 (" Seas and Submerged Lands Case ") (at 419-20, per Stephen J). I also accept that being a public, and not a proprietary right, it is amenable to abrogation or regulation by a competent legislature: Harper v Minister for Sea Fisheries [1989] HCA 47 ; (1989) 168 CLR 314 (at 330, per Brennan J). 778 If it were necessary to consider the effect upon native title over the waters of the Creek of pastoral leases granted in the claim area, I would conclude that such acts of extinguishment would not necessarily be inconsistent with the exercise by indigenous people of their ordinary activities in relation to those waters: Arnhemland Aboriginal Land Trust v Director of Fisheries (NT) (2000) 170 ALR 1 (at [31], [52]-[53], per Mansfield J). The same would be true of any supposed inconsistency between a public right to fish, and a non-exclusive native title right to do so. 779 If my conclusion that any native title rights over the waters of the Creek are "non-exclusive" is wrong, and that the true position is that these rights are properly to be regarded as operating to the exclusion of all others, the end result, so far as the claimants are concerned, will nonetheless be no different. In that event, the pastoral leases that were granted over the claim area will have extinguished those rights, at least insofar as they are exclusive. The reason is simple. Section 47B will not be available because the condition that the waters of the Creek be shown to have been "occupied" at the time that the claimant application was made will not have been satisfied. There is a difficulty with the notion that the waters of a creek can be "occupied". However, even if one takes a broader view of that term, as required by the Full Court in Alyawarr , and accepts the possibility that in some cases there may be sufficient "use" of the waters, in the ways described in Rubibi Community v Western Australia [2001] FCA 607 ; (2001) 112 FCR 409, to constitute "occupation", the evidence in the present proceedings does not go far enough to meet those requirements. Occasional fishing, whether from the banks of the Creek, or from a boat on the Creek, and infrequent head wetting ceremonies, do not, in my view, connote "occupation" in any relevantly acceptable sense. 780 Accordingly, whatever analysis is adopted in relation to the waters of the Creek, members of the public have a right to fish in those waters. Insofar as the waters are tidal, that right was initially conceded by the claimants, but the concession was later retracted. Having regard to the authorities, the concession was properly made. In relation to the non-tidal waters of the Creek, the right to fish exists on a different basis. No claimant, despite their native title rights in relation to those waters, can exercise those rights to the exclusion of others. 781 I find, therefore, that AFANT's members are in no way precluded by any native title determination that this Court may make from continuing to enjoy unrestricted access to recreational fishing in the waters of Timber Creek, whether by boat or from the banks of the Creek. They have also established that the land was not covered by an existing freehold estate or a lease, or by a proclamation under which it was to be used for public purposes, or for a particular purpose. They have therefore satisfied the requirements of s 47B , save in relation to the waters of the Creek, and Lots 16, 22, 33, 35 and 37, each of which was acknowledged to be outside the ambit of that section. 783 Lot 16 is "Special Purposes Lease 00494" owned by the Conservation Land Corporation. Lot 22 is "Crown Lease Term 01923" owned by MR Millwood Pty Ltd. Lot 33 is "Occupation Licence 03317" owned by the Timber Creek Community Government Council. Lots 35 and 37 are each described in the Tenure History Folder as "Administrative Parcel[s]" and are owned by the Northern Territory Department of Lands, Housing and Local Government. It is for these reasons that these five Lots do not fall within the scope of s 47B. 784 It follows that any acts of extinguishment that would otherwise have been brought about by past pastoral leases must be disregarded save in relation to the five Lots just discussed. The position in relation to those five Lots is complicated, but it seems that native title in relation to them has been extinguished by past pastoral leases. However, it may be that the extinguishment will be only partial. It will be necessary, unless the parties can reach agreement, to hear further argument regarding these Lots before any final native title determination is made. 785 I find that (subject to the five Lots referred to above) there should be a determination of native title in favour of the Ngaliwurru and Nungali Peoples. All of the elements necessary to ground such a determination have been established. The three applications before the Court name the persons on whose behalf each application is made, or otherwise describe them sufficiently clearly so that whether or not a particular person is a member of the native title claim group can readily be ascertained. Each application therefore meets the requirements of s 61(4) of the NT Act . I also find that each application is made with the authority of the native title claim group. 786 I find that none of the applications is made in respect of any area where a determination of native title has already been made. None of the applications is therefore precluded by s 61A(1). 787 As foreshadowed, I find that none of the applications is made in respect of an area where a "previous exclusive possession act" has been done, such that a claimant application must not be made that covers any of the area: see s 61A(2). I find that s 47B operates to overcome any restriction, based upon any such "previous exclusive possession act", upon the making of any such application. 788 I find that, to the extent that the claims related to areas subject to any "previous non-exclusive possession act", and each application nonetheless asserts rights of "possession, occupation, use and enjoyment ... to the exclusion of all others", those applications are not barred by s 61A(3) because any such "previous non-exclusive possession act" must similarly be disregarded. 789 These findings do not enable me, at this stage, to proffer a draft determination of native title in these proceedings. 790 An application for a determination of native title must adequately define the native title group. Section 225 provides that any determination of native title must set out the persons or group of persons who are to hold the common or group rights comprising the native title. Both these requirements raise the difficulty of identifying the members of the group. 791 Section 56 of the NT Act overcomes this difficulty in the case of native title determinations by permitting the native title holders to nominate a prescribed body corporate to hold the land in trust for them. It is not always necessary to have native title held on trust by a body corporate. Section 56(2)(c) provides that the common law holders can elect to hold their native title personally. It will be a matter for the claimants, in this case, to determine whether they wish to proceed to nominate a prescribed body corporate. 792 In addition, having found that the claimants have established the existence of non-exclusive native title rights and interests in relation to the claim area, it will be necessary to hear the parties regarding the orders that should be made, and the precise form that any native title determination should take. 793 To assist the parties, I can indicate that I propose to make a determination that is broadly to the effect that native title exists in the areas of land and waters claimed to be depicted upon an agreed map, and described in an agreed schedule. In that determination, the terms "land" and "waters" should bear the meanings given by s 253 of the NT Act . 794 The persons who hold the communal, group and individual rights will be the indigenous persons identified as members of the native title claim group. 795 In relation to the land in the claim area, the nature and extent of the native title rights and interests of the native title holders that are possessed under the traditional laws and customs are, subject to the traditional laws and customs that govern the exercise of the native title rights and interests by the native title holders, non-exclusive rights to use and enjoy the land. As presently advised, I would prefer to avoid the use of terms such as "possess" and "occupy", particularly having regard to the observations of the High Court in Ward HC about the difficulties associated with the use of terms such as "possession" in the context of non-exclusive rights. That would not preclude a determination in the form approved by the Full Court in A-G (NT) v Ward to which reference was previously made. 796 If that form were followed, the incidents of native title should then be spelt out. These would be expected to include the right to hunt on the land, to gather and use its natural resources, including food and medicinal plants, and to have access to and use natural water on the land. They would also be expected to include the right to live on the land, to camp, to erect shelters and to move about the land, and the right to engage in cultural activities on the land, to conduct ceremonies, to hold meetings and to participate in cultural practices relating to birth and death. They would include the right to have access to, maintain and protect sites of significance on the land, and the right to make decisions about the use and enjoyment of the land by other indigenous people who recognise themselves to be governed by aboriginal traditional laws and customs. 797 I emphasise that these native title rights and interests do not confer exclusive rights. They do not confer possession, occupation, use and enjoyment of the land or waters on the native title holders to the exclusion of all others. 798 In relation to the waters in the claim area, the native title rights and interests that are possessed under the traditional laws and customs are, subject to the traditional laws and customs that govern the exercise of the native title rights and interests by the native title holders, rights to use and enjoy those waters, though not to the exclusion of all others. The rights that can be spelt out more particularly will include the right to fish, and the right to gather and use resources within the area covered by those waters, as well as the right to engage in cultural activities and conduct ceremonies in or on those waters. 799 I should emphasise that these are merely preliminary thoughts as to the form that any final native title determination should take. A determination in that form would accord generally with the consent determination made in A-G NT v Ward , which also involved non-exclusive native title rights. It would also accord generally with the native title determination made by Mansfield J in Alyawarr at first instance, and subsequently varied by the Full Court. It must be remembered, however, that in Alyawarr , the evidence supported a finding of exclusive native title in relation to that part of the determination area identified as the Town of Hatches Creek, whereas in the present proceedings, the evidence is to the contrary. It is would also be useful to consider the native title determination ultimately made by the Full Court in De Rose (No 2) , which involved non-exclusive native title, and avoided the use of terms such as "possess" and "occupy". 800 I propose to direct that each party to these proceedings file and serve an outline of contentions regarding the orders that should be made to give effect to these reasons for judgment. It would be helpful if a draft native title determination, consistent with these reasons for judgment, were to be appended. If the parties are able to reach agreement on some aspects of the proposed determination that would obviously be of great assistance. 801 Finally, I should express my appreciation to the parties and their legal representatives for the helpful and cooperative spirit in which these proceedings were conducted. The case was handled in a highly professional manner, with all sides co-operating to ameliorate the challenges of taking evidence on site. I certify that the preceding eight hundred and one (801) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. After opening addresses, the Court adjourned for several site visits. The procedure followed was that witnesses would give evidence at each site concerning its significance, and the relationship between the applicants and the area in question. The witnesses were then cross-examined by counsel for the Northern Territory and AFANT. The witnesses called on the first day were Alan Griffiths, Jerry Jones and Josie Jones. Alan Griffiths approached the creek and called out in the Nungali language. He then conducted a "head wetting" ceremony at the site. He explained that the ceremony took place at this spot because it was the place of the Dingo Dreaming. He then said that a "whitefella" had attempted to build a bridge here without permission. Jerry Jones said that if newcomers did not go through a head wetting ceremony, the Dingo Dreaming would cause death and illness. He said that this was what had happened to the man who built the bridge, Maxie Duncan. He explained that Mr Duncan had died suddenly. Under cross-examination Mr Griffiths explained that the Dingo Dreaming was his mother's father's Dreaming. He said that the dingo had travelled Miriuwung country, near Kununurra, to that place. As the dingo moved through different countries, it spoke the language of whatever country it happened to be in. Mr Griffiths indicated a place half way up the hillside. The Court Officer photographed the scene, and informed the Court that Mr Griffiths had said that this was the place where "a rock was missing, behind the house". Later, at site 5, Mr Griffiths told the Court that the rock had been part of the Spider Dreaming. It was now missing, but had formerly been located on the south side of the creek, next to the house. Mr Griffiths then pointed to another place and told the Court that the site was a hole in the ground, near a tree, made by the Spider Dreaming. Later, Mr Griffiths told the Court that this was the hat, or helmet, of the "Wirip", or dingo. He said that he still used the hat for corroborees. He said that the ceremonies were not recorded in any written form. He tapped his head, and said that ceremonies were kept there, and passed on. Mr Griffiths could not tell the Court the name of this site as it was his cousin's sister's place. He explained the Dreaming of the barramundi hunting the Wirip and the rock wallaby. He had learned this Dreaming from his "grandfather", Old Lamparangana. He said that gravel had been scraped or cleared from this area on the site of the Wirip Dreaming. Mr Griffiths had been informed of this by Mr Jones who had telephoned him. Mr Griffiths told Mr Jones to tell the person removing the gravel to stop because he was disturbing the Wirip. Mr Griffiths was asked who he consulted when decisions of that kind had to be made. He said Jerry Jones, Jo Lewis, Sammy Darby and "all the mob". Mr Griffiths then described the process of "Winan" and how bamboo spears and boomerangs were carried by foot across the country. He characterised winan as "fifty-fifty", and showed the Court a yellow rock from which was derived paint for corroborees. He also produced a flint that could be used for a spear and demonstrated how he lit fires, a practice that he had learned from Lamparangana. He said that he had taught his grandsons that same practice. Mr Jones then gave evidence. He said that he "grew up here", and that he still did the same winan that had been done for generations. He said that he taught his grandsons that winan. Under cross-examination, Mr Griffiths said that the Dingo Dreaming at this location involved the same dingo as had come from Miriuwung, and had been discussed at the head wetting ceremony. He said that a different dingo from Bullock had traversed a different part of the land, to which he pointed. In re-examination, Mr Griffiths was asked who else he consulted when making decisions such as the one relating to the removal of gravel. He answered, "my mob" which he described as including his sons and grandsons, Jerry, Sammy, Jo and William. Mr Griffiths said that Winan came through here. Mr Jones pointed out places of interest in both English and Nungali. For example, he said that Makalamayi was located at the juncture of Timber Creek and Victoria River. Josie Jones, Mr Jones' wife, gave evidence. She said that she knew all of the places that her husband had mentioned. She had learnt them when she was ten years old from "the first mob", being her parents and her mother's father. She said that she had passed on that knowledge. She pointed to a tree, which she said was used to make didgeridoos. She pointed to another tree, which she described as "billygoat plum" in Nungali, and to a third tree, which she said was ironwood. It was used for making fighting sticks, and digging yams. The roots were used for waxing the sticks. Under cross-examination, Mrs Jones said that she was taught these stories for this country from the first mob. The languages used had been Nungali and Ngaliwurru. She was taught by Violet Paliti, her mother's mother, and by her father's mother and her grandmother's sister. Doris Roberts gave evidence. She said that at site 5, she had found a white stone used for making paint. That paint, she said, was used for dancing and painting. She still used the paint from stones such as these in the ways she described. Finally, Mr Griffiths pointed to a tree, which he said was used to make marks on the skin of the chest. Young people still did this. George Jones came forward to show the markings on his chest that he said had been made in this way. He pointed out Kuminyiyung, a hill to which the Wirip had gone. He described the Dreaming of two snakes --- a cheeky snake, and a quiet snake. They had fought over poison in their teeth. He said that his grandfather had told him that the hill, Kuminyiyung, had poison in it from the snakes. In this area, miners had mined for diamonds without permission. Mr Griffiths said that he had stopped them. He was asked whether he told his children about the Dreamings. He replied, "yes, they already know. " He described another Dreaming, that of the humpyback monster. Mr Jones pointed to various sites from the lookout including the Myatt community where he and his family lived. He said the Lewis family lived there, as did Roy Harrington. He pointed to another community, Kulardi . He said that he knew the same stories as Mr Griffiths, learnt them from his elders and taught them to his sons. Under cross-examination, Mr Jones said that the humpyback monster spoke only Nungali, and no other languages. Under cross-examination, Mr Griffiths explained in more detail about the cheeky and quiet snakes. He agreed that the snakes spoke Nungali but said that if they travelled to other countries, they could speak the language of the Dreamings of those countries too. Mrs Jones gave evidence that she knew the same stories and the places that her husband had referred to at this site. She had learnt them from the old people. She pointed to places in the area where she used to hunt. She said that she obtained "tucker" from a palm she identified. A little further back towards the convoy of cars, away from the edge of the ridge, Mr Griffiths described how he and his friends used to catch birds and kill them. They made a circle of stones, which was still visible. A man would lie under branches in the middle of the circle. He would have a stick and poke it up through the branches. On top of the stick would be a feather to attract attention. They would then make smoke from the stones, attracting the birds. When the birds arrived, the man underneath would reach up and grab them, breaking their necks for food. He said that this practice is not followed to anything like the same extent now. Somewhat sardonically he noted that the younger generation hunted with rifles. He said that this meant "country" in English. He said that this site was the place of the Dingo Dreaming. The dingo came to the river; the barramundi called out to him to "turn back, it's my home". The barramundi spoke Nungali. The dingo then went to the place that had been identified to the Court on the previous day. Mr Griffiths said when the army had proposed building the bridge across the Victoria River, about three years earlier, it created a problem. However, he had allowed them to build it. Originally the army wanted to knock out the bank of the river at this site, but this was the place of the Dingo Dreaming. Mr Griffith's said that "in the early days", people did not ask permission to build on land that was the site of a Dreaming. He said that the army ought to ask permission to build structures like the bridge. In any case, he had allowed it to be built, and the army had paid him compensation. He said that he distributed the money to "all the Timber Creek mob and my mob", who he named as Jerry Jones, Georgie Jones, Christopher Jones, Stephen Jones, Kenny Griffiths and Kim Griffiths, and others. Under cross-examination, Mr Griffiths said the name of the barramundi was "Marna". It came from Jaminjung, and travelled to Ngaliwurru country, finishing at Yanturi. He said that this was his Dreaming, given to him by his grandfather. In re-examination, Mr Griffiths said that Old Lamparangana had brought him to this site and told him about the Dreaming. He said that he could not reveal the stories because there were women present, but that he would disclose them at a later hearing that would be attended by men only. Mrs Jones then told the Court that the Griffiths and Jones families, Doris Roberts' family, Larry's family, "all them mob" had been involved in the decision about the bridge. She said that she knew the story of the dingo. She supported Mr Griffiths' account of how the dingo had come to this place, and then to the site of the head wetting ceremony held on the previous day. Mrs Jones then showed the Court some eucalyptus leaves, which she said were bush medicine. She demonstrated their use. She showed the Court other leaves, which she called "Manyanyi" in Nungali. These leaves were used for rubbing on skin. She said that she had shown her children how to use them. Under cross-examination, Mrs Jones said that the Wirip Dreaming was not hers. However, she said that the Barramundi Dreaming was her Dreaming, and that it had been given to her by her father's father. Finally, Mrs Roberts showed the Court some wild rockmelon, which she called "Wanput" in Ngaliwurru. She said that she could tell the difference between those that were ready for eating, and those that were not. She said that when ripe, the fruit was eaten whole. He told the Court that the Dreaming for the site was the meeting of the shark, the stingray and the catfish from the east, and the barramundi from Makalamayi in the west. As the barramundi approached, the shark said to him, "this is my home. You go back where you came from. " However, the barramundi did not want to "go that way" so they started fighting. The flat rocks in this area were part of the Dreaming. In "early times", people had tried to take some of the rocks from the site to build a pub. Under cross-examination, Mr Griffiths said that the shark had come from Makalamayi and that it remained constantly at this site. He said that the Shark Dreaming was in Nungali. He said that he had acquired the Shark Dreaming from his mother's father. Mr Griffiths was then asked about "ngurlu" (totemic relationship or skin). He described his ngurlu as "ninipi", a little bird. He said that he acquired it from his mother. He said that "kuning" had the same meaning as "ngurlu". Mr Griffiths then said that the stingray was from Yanturi and spoke Ngaliwurru. He said that the catfish had travelled along the same path as the stingray, and also spoke Ngaliwurru. However, the shark, the stingray and the catfish could all speak both Nungali and Ngaliwurru. In re-examination, Mr Griffiths said that this site was a registered sacred site. He said that it had become registered following the major land claim in the area. Sammy Darby gave evidence. He said that he could see a crocodile on the far bank of the river eating some food, possibly a kangaroo, or maybe a fish. He knew the stories that Mr Griffiths had just relayed. He had learnt those stories, and about the sites in question from Old Darby when he was about ten years old. Jo Lewis then gave evidence. He too had heard all of the stories that Mr Griffiths had told. He had learnt them from his grandfather, Old Mutpuyula (Jo) and Old Jack Depot. He said that he had walked around Makalamayi, Kulmariniyung, Paralji, Jalalawuti, Turtpurinyi, Tilwarini, and Purumpirinyung with his grandfather. He said that there were many indigenous people in those parts. Under cross-examination, Mr Lewis said that both his father's father and his mother's father used to take him walking. He said that he spoke both Nungali and Ngaliwurru. His mother's father was from Jaminjung country. In the Timber Creek area, there were people from Nungali, Ngaliwurru and Jaminjung. William Gulwin gave evidence. He said that he had been taught by his uncle, Mr Alan Griffiths, about the Dreamings when he was aged about nine. Mrs Jones gave evidence to say that she too knew the stories from this place. She had learnt from the old people in Timber Creek about the barramundi, the shark, the Stingray and the Catfish Dreamings. The old people had shown her how to hunt and would tell her the stories. She had passed them on to her children and grandchildren. Chris Griffiths gave evidence. He said that he was still learning the stories from his father, Alan. He did not fish in this spot regularly. He could see the crocodile on the other side of the river in the water. When asked how he could distinguish a crocodile from a log at that distance, he explained that he had learned how to do so from his father. He said the name of the place was Makalamayi, and that the juncture of the Victoria River and Timber Creek was called Jalmin. He pointed to the middle of the river and said there had once been a long hollow log there. He had learnt about it from his grandfather and passed it on to his mob. He said that when his grandfather passed away the log had disappeared. Under cross-examination, Mr Griffiths said that he had learnt about Makalamayi from his mother's father. Mrs Jones then confirmed that the name of the place was Makalamayi and that the name of the log was "Jalmin". She said that she had learned about it from the old people. She said that from that point she could see the big hill called "Karnaryulumin", "Turutpurinyi", "Tilwarini", a little creek that ran to the waterhole, and "Kuninkiyung", which was a fishing spot. She said that old people used to fish there, on the other side of the creek. She said that the other side of the river was "Lawi country". Makalamayi extended down to the crossing that used to be used for foot crossings to Bradshaw station before the bridge was built. Under cross-examination, Mrs Jones said there was a Shark Dreaming at Karnaryulumin and also at Turutpurinyi. She had walked around there. There was also a Shark Dreaming in Kuninkiyung. She said that the name Lawi came from a Dreaming about a small wallaby. Both Ngaliwurru and Nungali were spoken in Lawi country. When asked whether the fishing spot had a Shark Dreaming, Mrs Jones replied that it did and that her people still fished there today. When asked how far up Timber Creek the tides went, she replied about two hundred metres from the juncture of Timber Creek and Victoria River. She said that Aboriginal people fished for turtles in Timber Creek, and that white men also fished there, but in their case, for bait fish and "tanyan" (cherrapin). In re-examination, Mrs Jones said the tides went approximately as far as the police station. The Court then moved down to the bank of Timber Creek, almost at the juncture with Victoria River. Mrs Roberts and Mrs Jones picked wild gooseberries and bush tomatoes. Mrs Jones said she first started eating bush tucker at about the age of six. Mr Alan Griffiths then pointed to a paperbark tree, which he said was used for making traditional hats. He said that it was called "Tilwarini", and was the site of the humpyback monster. Head wetting was done here for the same reason as at the site of the first head wetting --- for the Dreaming. The Dreaming had left something here, and head wetting had to be done "so country will know you", otherwise a person could suffer illness or death. As a boy, Mr Griffiths had camped at this place, in order to get his head wet. Under cross-examination, Mr Griffiths said that the Dreaming at this site differed from the Dingo Dreaming at the site of the first head wetting ceremony. He said that the humpyback had made a toilet here. He had conducted a head wetting ceremony for some of his grandchildren on this day because this was the first time they had been to this site. Mr Griffiths said that it was unusual for members of his family to fish at this site. In the wet, there was sometimes more water at the water hole. Sometimes, they might catch small perch. In addition, cherrapin might be caught at this location. Mr Jones then gave evidence. He was asked how he knew his way to this place and replied that he had known about it from the time that he was a child. His granddaughter had gone through a head wetting ceremony that day because she had never been to that site before. She was only four years old. His other grandchildren had been through a head wetting at this location. He said that he knew the Humpyback Dreaming. He said it was a very important Dreaming, and that he had learnt it from his elders. If Mr Griffiths had not been present, it would have been his role to call out to the monster. Under cross-examination, Mr Jones told the Court of the path that the monster had travelled, finishing at Maiyalaniwung, Violet Paliti's country. He said that if a person travelled to Maiyalaniwung for the first time, he or she would have to go through a head wetting ceremony there too because it was a different country. The country had to "get to know you". Mr Jones said that he came to this area often to get honey from the cave, yam and water lily. He did not like whitefellas coming here from the town to get their bait. They got their cherrapin closer to the township. you can't just walk into any European's little block of land and do what you want to do. And why they go onto Aboriginal land and do what they want to do? She said that it could be eaten as is, boiled or roasted. The fruit from the lily flower could be eaten as is. Mrs Jones showed the Court a fruit like a grape which she said was called "kiringiltji" or "kumpunyu" in Nungali. She had a smaller white version called "margarin". She showed the Court a rock called "marta" in Nungali that she said made babies strong. She would burn the rock on a fire, smash it up into a powder, mix it with some water to make a paste, and put it on the baby. He explained that this was a sacred site. An elder had told him that he was not allowed to touch the stone, otherwise he might get sick. He was not even permitted to put his hand on the stone. Under cross-examination, Mr Griffiths said that he could mark a dead person's name in charcoal. He said no one was buried at the site. It was simply a Dreaming. He explained that the barbed wire fence around the site had been erected by the Sacred Sites Authority five or six years earlier. This was because the cattle had damaged the area. Originally, there had been a grazing licence over the site. Pat Jatjat, Mr Griffiths' older sister, then gave evidence. She said that she had grown up on VRD and had heard the Centipede Dreaming from her grandfather. William Gulwin said that he knew this place as "centipede" in English and "limirin" in Ngaliwurru. The Court then moved several metres to a flatter rock embedded in the ground. Mr Griffiths said it was the head of the centipede. He pointed to two eyes in the rock to indicate the head. He said he was first shown this rock when aged about four. An elder had told him to look out for it. He said that when he died, his grandchildren would look after it. He explained that his wife was from Miriuwung country so he had been forced to leave Mr Jones in charge of Timber Creek. He said that people from pastoral leases such as Bradshaw, Daly River, Legune, Kildurk, Waterloo, VRD and Coolibah used this site. He noted that no women had gotten out of the cars to see this site because it was reserved for men. The boys who were initiated here were ten or eleven years of age. He pointed to his grandson, Sidney, who was ten years old, as an example of how old a boy would be at initiation. He said a corroboree was conducted here when Old Pankaman got sick. He had a photograph of a painting that he had painted. He said the rock had been there before he was born. Under cross-examination, Mr Griffiths said that the people that he had named from the pastoral leases were from Jaminjung, Ngaringman, Karangpuru, Ngangomeri and Ngaliwurru. He also said that the last time a children's ceremony had been conducted at this site was about thirty years ago. He elaborated further on the corroboree done for Old Pankaman. He said that this was not Pankaman's country but that he had become sick in this area so that was where the corroboree was done. Then his spirit went away. However, he did not die. He was still alive and living at Stokes Range. In re-examination, Mr Griffiths said that the fact that no kids ceremony had been done here for thirty years did not mean it was not an important site. He said that he and his family were still obliged to look after it. Indeed, he said the site was still used as a place for punishment. Mr Griffiths was also asked whether he had a song for the Centipede Dreaming. He said that he did; and that his grandfather had given it to him. He sang it for the Court. He said "kudjingka" was the word for song, and "yarinti" was the song for the centipede "when he bite you". He said he had kudjingka in his head, and that songs were not written down. Finally, under further cross-examination, Mr Griffiths said that the Centipede Dreaming was his own, given to him by his mother's father. His mother's father had also given him the Dingo Dreaming. If anyone "had" those songs, they could sing them, provided they asked his permission. Mr Jones began by indicating a stone, which he said was his mother's mother's grave. Her name was Holly. He said that some stones could not be seen because of the grass. He said that about sixty to seventy people were buried at the site. He pointed out old tracks in and out of the area. Further along, Mr Jones pointed to the grave of Tiger Wajaka from Stokes Range. He had been a police tracker, before Mr Jones' time. Mr Jones then pointed out an old mattress frame used for carrying the bodies to this site. He said the bodies were wrapped in calico for burial. He pointed to a cave and said that Old Lamparangana was buried there. His said that Lamparangana's skull was still in that cave. Mr Jones next pointed to some glass embedded in the ground and said that women used glass to cut their legs to obtain blood that was painted onto the foreheads of the corpses. The Court then arrived at a burial site. There were rocks in a ring shape. A billycan had been left there and Mr Jones explained that this was to give water to the dead. Only a son-in-law or a brother-in-law could dig a grave or bury a dead person. The same rule existed today. Mr Jones gave the names of other people who were buried at this site: Johnny, Dina (Mrs Jones' grandmother), Bullita Jack, Depot Jack, Polly (his grandmother), Sandy (Mrs Jones' mother's father), Jacky Jacky (Violet Paliti's father) and others. Mr Jones explained the term "poison cousin". He said there were certain people in one's family who you could not talk to or sit next to; for example, one's mother-in-law. He said that burials were still conducted at Myatt because burial had to take place at a registered site. He also said that burials had to be done at the "right" place --- a person had to be buried to "go back" to his or her own country. Mrs Jones confirmed that Old Lamparangana was buried at this site. She referred to him as her "mapiju", her "father uncle". She named other people buried here: Walamawuk and Pankaman, who were two sisters, Sandy (her mother's father), Lapir, Old Tiger Wajaka, Old Charlie and others. When asked whether these people were relatives, Mrs Jones answered, "Yes, relation, all Nungali people. Evidence was given regarding this community, whose aboriginal name was "Muruning". That name was taken from the Dingo Dreaming. Sammy Darby was among those who lived there. He described some of the bush tucker around his home. He identified a green plum called "jamuru". He said that by the trees on the creek, he could get bush apple when it turned orange. Women collected bush yam along the creek beds. Yams were from there from the beginning; they were left there in the dreamtime. He said there were also sugarbag trees by the creek. The name of the place was "Murlun". Once again, the Court was shown bush tucker that was collected and eaten, and told about the fish that were available from the waters of Timber Creek. There was evidence that the creek ran all year round, even in the dry season. Mr Griffiths explained how the little Blowfly Dreaming was near the big boab tree. That Dreaming continued even thought the tree was gone. He called the tree "kunama". Pointing out bush tucker, he identified a fig tree ("jalwa") and flying fox ("warpa"), which he said he still ate. Whitefellas thought they were poison, but, in reality, they were really very tasty. Explaining more about the Blowfly Dreaming, Mr Griffiths said that the fly had stopped the dingo at this site and told him it was his home, and that the dingo should turn back. He sang the "kudjingka", or song, of the dingo. Thereafter, the dingo had run back to the site that the Court next visited. He said that this was the place to which the dingo had returned when the blowfly turned him back. It was still a part of Timber Creek. The water used to be clear before the bank was built up at the site of the head wetting. There had been a rock visible at this site, but when the bank was built, it backed up the water so that it covered the rock. Mr Griffiths pointed out more bush tucker at this site. He said there were bush yam, fig trees and leichhardt trees. The leichhardt tree had yellow fruit in it. There was also a creeper that was good for eating. He said that the yam had been left by the humpyback. | application for determination of native title in and around town of timber creek by the ngaliwurru and nungali peoples society of ngaliwurru and nungali peoples existed at sovereignty in 1825 whether same society continues to exist whether shift from patrilineal system of descent to cognatic system of descent constitutes fundamental change of normative system whether current society of ngaliwurru and nungali peoples continues to enjoy native title rights and interests under traditional laws and customs whether traditional system of laws and customs has continued essentially uninterrupted since sovereignty nature and extent of native title rights and interests whether native title rights exclusive or non-exclusive extinguishment consideration of s 47b of native title act 1993 (cth) consideration of occupation sufficient to satisfy requirements of section whether s 47b can apply within a proclaimed township having regard to proclamation native title rights over tidal and non-tidal waters native title native title native title native title |
Reasons for that decision were given on 26 February 2008 and final orders were made on 22 May 2008. In that Court the respondent had commenced proceedings for payment of wages, superannuation and annual leave entitlements as well as penalties on the basis of alleged breaches of ss 718 , 722 , 728 and 824 (2) of the Workplace Relations Act 1996 (Cth). Pursuant to the orders of the learned Magistrate, the appellants were required to pay judgment sums totalling $40,014.54 to the respondent. 2 On 12 June 2008, the appellants appealed that decision. 3 On 24 June 2008, the appellants filed a notice of motion seeking a stay of the orders of the learned Magistrate until the determination of the appeal. However there is a discretion pursuant to s 29 of Federal Court of Australia Act 1976 (Cth) (the Act) and O 52 r 17(1) of the Federal Court Rules to stay a judgment. 5 The usual principle is that a successful party is entitled to the fruits of judgment and the appellants must give sound reasons to justify a suspension of that right: McBride v Sandland (No 2) [1918] HCA 59 ; (1918) 25 CLR 369 at 374. The 'special circumstances' that enliven the power to grant a stay may exist when there is a real risk that it will not be possible for a successful appellant to be restored substantially to its former position if the judgment is executed: Commissioner of Taxation (Cth) v Myer Emporium Ltd (No 1) [1986] HCA 13 ; (1986) 160 CLR 220 at 222-223. It is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour. There are other principles to be kept in mind. The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties: ... The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights of the parties before it: Attorney-General v Emerson (1889) 24 QBD 56. Where there is a risk that if a stay is granted, the assets of the applicant will be disposed of, the Court may, in the exercise of its discretion, refuse to grant a stay: cf Clyne v Deputy Commissioner of Taxation (1982) 56 ALJR 857. Sometimes as a condition of the grant of a stay, where funds are available, a court will impose on the applicant the payment of the whole, or part, to the judgment creditor: Andrews v John Fairfax & Sons Ltd (1979) 2 NSWLR 184. Even where no order is made for the payment of part of a verdict, it is not at all unusual for the Court, in the exercise of its discretion, to grant a stay on terms that the appellant give to the judgment creditor security in terms defined by the Court as appropriate to the fair adjustment of the rights of the parties. 7 In Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 the Full Court of the Federal Court followed the decision of the New South Wales Court of Appeal in Alexander v Cambridge Credit 2 NSWLR 685. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party. 8 In Henderson v Amadio Pty Ltd (No 3) (1996) 65 FCR 66 at 68 Heerey J pointed out that even though the circumstances need not be 'special' or 'exceptional' in the sense of being unusual or rare, 'the party seeking a stay needs to show some reason the stay should be granted. His Honour also had regard to the financial situation of the respondent to the application. 10 In Australian Solar Mesh Sales Pty Ltd v Anderson [1999] FCA 964 , Gyles J observed that while it was for the appellant to show the lack of reasonable probability of getting back monies paid, 'it seems to me that the appellant in order to carry that onus, would not need to do very much to throw upon the respondent, the need to show means'. Although it is not possible to state exhaustively the considerations that may be taken into account in the exercise of this discretion, it is appropriate that I mention those that bear on this application. The general rule is that a stay will be granted where there is a likelihood that a successful appeal will be rendered nugatory: Wilson v Church (No.2) (1879) 12 Ch D 454 , 458. A court will also consider the balance of convenience and the competing rights of the parties as well as whether either party will be prejudiced by the stay: The Marconi's Wireless Telegraph Company Limited v The Commonwealth [No.3] [1913] HCA 23 ; (1913) 16 CLR 384 , 386; Philip Morris (Australia) Ltd v Nixon [1999] FCA 1281 at [17] . Even though a judge will generally not be required to speculate about the appellants prospects of success, it is well established that a stay will not be granted in the absence of arguable grounds of appeal, or if the appeal is not bona fide: J C Scott Constructions v Mermaid Waters Tavern Pty Ltd (No. 1) [1983] 2 Qd R 243, 248; Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685, 695. It necessarily follows that a stay will not be granted if an appeal has no prospect of success: Australian Workers' Union v Pilkington (Aust) Ltd [2000] FCA 1169 ; (2000) 101 FCR 35 , 43. 13 The respondent contends that she has the capacity to repay the judgment sum if so ordered on a successful appeal. She relies on evidence, on which she was cross-examined, to the effect that she has an interest in real estate comprising two properties, the net value of which is said to be in the order of $300,000. There is no suggestion of any dissipation of those assets but there is certainly some doubt as to the availability in the short to medium term of the equity in the properties either by sale or against which to raise funds from which the repayment of the judgment might be effected if the appeal were successful. 14 While it is likely that the respondent has an equity in the properties which is greater than the judgment sum, there may be difficulties in either realising that equity or in borrowing against it, at least within a reasonable period of time. One of the properties is jointly owned with her husband (from whom she has separated). The other property is in the name of her husband but the respondent has lodged a caveat in respect of the interest that she says she has in the property. On the face of the matter, there may also be some difficulty in the respondent meeting repayments of principal and interest which would be due in respect of any additional loan she might be able to raise against her equity in the properties, assuming the availability of such a loan. 15 Although the primary position of the respondent is that she does have the capacity to repay the judgment sum and the judgment sum should be paid, she has indicated that she would accept the appellants placing the judgment sum in an interest bearing account pending the determination of the appeal. That seems to me to be an appropriate course. No particular prejudice in taking that course was identified by the appellants. If they do succeed on the appeal, the funds and the interest on them will be available promptly. I was not addressed in any detail by counsel for the respondent on the merits of the appeal. The respondent relies primarily on financial capacity to repay the sum concerned or alternatively, on the joint account proposed. Accordingly, for the purposes of the present argument, I will assume (without considering the arguments in detail), that the appeal is reasonably arguable. 17 In light of the doubt with the reasonably ready availability of funds to repay the judgment sum if an appeal succeeded, I consider the appellants are entitled to some limited relief. In these circumstances, as in Prestige Property Services Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2006] FCA 180 per Kenny J, it is appropriate that the appellants have a limited stay subject to conditions. The condition would be that the monies the subject of the judgment from which the appellants appeal be paid into an appropriate interest bearing account. I would not grant a complete stay of execution of the judgment in the circumstances. 18 I can see no reason why the judgment sum should not be paid into a joint interest bearing account in the name of both firms of solicitors for the parties as the respondent proposes or as an alternative measure, effectively, into the Federal Court of Australia Litigants' Fund. 19 I will order that the parties provide within 14 days a minute giving effect to the conclusion in these reasons that the appellants are to pay within 21 days from the date of this order, the judgment sum of $40,014.54 into either an interest bearing trust account in the joint names of the parties' solicitors or into the Federal Court of Australia Litigants' Fund until determination of the appeal. 20 If the parties cannot within 14 days agree on the terms of the order and orders as to costs of this application, the applicant is to re-list the matter for directions to dispose of the issues. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | application for stay pending appeal discretion to grant a stay competing rights of the parties respondent on centrelink benefits some risk of at least delay in liquidating assets if appeal successful practice and procedure |
It arises in the following circumstances. The applicant has filed an application containing a claim pursuant to ss 52 , 75B , 80 , 82 and 87 of the Trade Practices Act 1974 (Cth) ('the Act') and for breach of contract relating to the purchase by the applicant from the first respondent (of which the second and third respondents were the sole directors) of the business of a child care centre in Karrinyup. The price of $276 153 was paid for goodwill. 2 The claim is for an order for transfer of the telephone number of the business to the applicant and damages for failure to transfer the telephone number at settlement and for loss of goodwill from solicitation pre and post settlement and for failing to deliver financial records relating to the accounts of past and current customers of the business. 3 The claim for interlocutory relief relates to the first principal claim, namely an order to occasion the telephone number of the business to be transferred to the applicant at no cost to it. This therefore is an application for interlocutory relief which, at least to the extent of the first claim in the application, would be decisive of it. 4 The circumstances asserted in the statement of claim are as follows. The child care business purchased by the applicant is conducted at 21 Norman Street, Karrinyup. The business at that address was formally known as Tommie Turtle Karrinyup Child Care Centre. 5 The statement of claim asserts that around March 2005, the applicant received a written sales brochure ('the Brochure') for the sale of the child care business from a business broker. The Brochure represented that the child care business had a weekly turnover of $7250, was strong and profitable in trading and had the potential to expand. Around 21 April 2005 the applicant and another company of which the second and third respondents were the only directors --- Patson Enterprises Pty Ltd, then mistakenly thought to be the company which owned the child care business --- entered into a written contract for sale of the business as a going concern ('the Original Contract'). The representation pleaded in paragraph 10(c) as to an extra $100,000.00 per annum and 10(d) of forecast turnover of $440,000.00 were representations as to future matters for the purposes of section 51A of the Trade Practices Act . In reliance on the representation pleaded in paragraph 10 the Applicant was satisfied as to the profitability of the business and on or about 2 August 2005 a substitute written agreement was entered into identical in all material respects to the Original Contract other than the identity of the vendor was clarified and substituted as being the First Respondent. 7 Around that date the applicant was unable to arrange the transfer of the telephone number of the business into the name of the applicant because it had been transferred by or on behalf of the first respondent to the Karrinyup Child Care Centre at 22 Davenport Street, Karrinyup being the other centre in Karrinyup associated with the second and third respondents. It is alleged that prior to settlement the first respondent had eroded the goodwill of the child care business by encouraging parents to move their children to the Karrinyup Child Care Centre. 8 After pleading the allegations of engagement by the first respondent in conduct that was misleading or deceptive it is also pleaded that damages are sought from the first respondent for breach of contract for not assisting in transfer of the telephone number and in not maintaining the goodwill and profitability of the business to settlement and in derogating after settlement from the purchaser's right to obtain the full benefit of the goodwill of the business. There are other claims for breaches of contract not presently relevant. 9 The applicant's interlocutory application is supported by affidavits of Ms Ana Lara Skinner, a director of the applicant and the child care director and principal child carer for its business known as Tiny Beez Child Care (formerly Tommie Turtle Karrinyup Child Care Centre) which trades from the premises at 21 Norman Street, Karrinyup. The affidavits were sworn on 23 December 2005 and 16 January 2006 respectively. The applicant has also given an undertaking as to damages. 10 The respondents bring evidence from Ms Lina Louise Dornford in an affidavit sworn on 12 January 2006 and Mr Gerard Cyril Herbert Dornford in an affidavit sworn the same date. They are each directors of the first respondent. 11 The first affidavit of Ms Skinner brings into evidence a copy of the agreement for the sale of the business. The Vendor shall deliver to the Purchaser a proper registrable and executed transfer of the Business Name in favour of the Purchaser. Possession of the Business shall be given on the Date of Possession provided Settlement and the counting of the stock has occurred. 12 In her first affidavit, Ms Skinner deposes that there have been persistent refusals by the respondents to transfer the telephone number to the applicant with the result that she arranged an alternative telephone number. Her evidence was that in the short term this caused concern among the parents and until she changed her advertising she was in fact advertising the telephone number of a competing Karrinyup Child Care Centre. Additionally she had prepared signage prior to the settlement date which advertised the new trading name but contained the telephone number, being the number in dispute, namely 9224 1905. When the respondents refused to transfer the telephone number she incurred expense in changing the signage. 13 In her first affidavit, Ms Skinner also deposes that the telephone number in question is the subject of a listing in the Yellow Pages. In the 2005 Yellow Pages the number appeared as part of listings for Tommie Turtle Child Care Centres in Belmont, Karrinyup and Huntingdale. It appeared as relating to the premises in Norman Street. In the 2006 Yellow Pages it appeared as one of two numbers relating to the competing Karrinyup centre in Davenport Street. Her evidence was that any telephone enquiries to the number in question were being received by the competing business associated with the second and third respondents. This is in the context where the applicant has paid a substantial sum for the goodwill of the business at the Norman Street premises. 14 In her second affidavit, Ms Skinner deposes that an internet online search of the Yellow Pages for child care centres in Karrinyup shows the telephone number 9244 1905 as associated with the business at Norman Street. In fact that number would be answered by the competing business of the respondents at 22 Davenport Street. In contrast the 2006 Yellow Pages advertisement shows, as has been said, the two telephone numbers including the number in dispute. Anyone using those references and phoning 9244 1905, would not have the availability of the current phone number of the Norman Street business. 15 Ms Skinner further deposes that on taking possession of the business and having been advised by Telstra that the business telephone number had been transferred to Karrinyup Child Care Centre, they tried to arrange transfer of the number from the vendor. In the meantime she arranged a substitute business telephone number for the Norman Street business. It was then too late to advertise in the Yellow Pages. Her evidence is that the Norman Street business has the capacity to take further enrolments and that not having the telephone number previously associated with the business is critical to it, particularly at this time. She testifies that many parents are most active in seeking child care over the period from now until about mid to late February as this is the most active enrolment period for the forthcoming school year. She further deposes that some prospective parents seeking child care would still use the 9244 1905 number in an effort to contact the Norman Street business. This is because it is currently advertised in Yellow Pages online for that address. Also, there may be parents who wish to re-enrol students and who will have previous records of the address of the business. Additionally, she had distributed business cards prior to settlement on which the number in dispute had been advertised. She further states that in her experience parents looking for child care centres view the Yellow Pages and focus on a suburb. The consequence of the present modes of listing in the Yellow Pages is that the applicant has been deprived of telephone enquiries. 16 As to the steps taken by the applicant to obtain the telephone number, the evidence of Ms Skinner is that an email was sent on 29 August 2005 to the respondents' settlement agents. A further complaint was lodged by letter dated 1 September 2005. Correspondence then continued between solicitors. Following a letter of 25 October 2005 from the solicitors for the respondents to the solicitors for the applicant it became apparent that the possibility of a negotiated settlement and transfer of the telephone number in question was 'exhausted'. The applicant then had to consider the step of initiating proceedings which was not a step it took likely. During November 2005 Ms Skinner and her husband 'mulled over the matter'. Ms Skinner had further discussions with the solicitors for the applicant and in early December 2005 gave instructions for an opinion to be sought with regard to the initiation of proceedings in relation to the purchase, for damages and for the transfer of the telephone number. It was on 14 December 2005 that counsel was briefed and proceedings were filed on 23 December 2005 resulting in the interlocutory hearing on 13 January 2006. 17 The affidavit of Ms Dornford for the respondents is as follows. She deposes that the billing address had been changed and the telephone number in issue transferred prior to settlement of the sale of the business at Norman Street. On the second occasion in which she had met Ms Skinner, Ms Skinner had confirmed that she did not wish to use the business name 'Tommie Turtle' and wished to trade under the name of 'Tiny Beez'. 18 On or about 25 July 2005, Ms Dornford received a letter together with her co-director addressed to the 'Tommie Turtle Child Care Centre' from Sensis Pty Ltd in respect of the Yellow Pages advertising program and inviting them to check the particulars of their advertising. She deposed that as the representative of the applicant had advised there was no requirement for the 'Tommie Turtle' name she requested Sensis Pty Ltd to remove the Norman Street address from the 'Tommie Turtle' Yellow Pages advertisement. This was at a time when all of the special conditions of the contract had not been satisfied and it was by no means certain that the applicant would proceed with the sale. The deadline for placing advertisements with the 2006 Yellow Pages was around 22 July 2005. 19 Approximately two weeks prior to settlement in a telephone conversation with Ms Skinner, Ms Dornford advised her that the first and second respondents would be taking the telephone number 9244 1905 to the premises of Karrinyup Child Care Centre at 22 Davenport Street. Ms Skinner replied that could not be done because she had ordered signage and stationary bearing the name Tiny Beez with that telephone number. Ms Dornford advised her that she had already arranged for the Yellow Pages advertising and it was too late to change it. Ms Skinner did not say anything more about it until after settlement. In particular, no request was made by or on behalf of the applicant for the transfer of the telephone number prior to settlement. 20 Prior to settlement, Ms Dornford diverted the line, 9244 1905, back to a second line at Norman Street until the date of settlement. That second line was cancelled by her on 29 August 2005. The applicant wished to reconnect the second line and that occurred on 30 August 2005. 21 Ms Dornford's evidence is that she only became aware of the objection to the retention of the telephone number, 9244 1905, in the conversation referred to above that occurred two weeks prior to settlement. Even then the applicant had not requested the transfer of the telephone number to it and had proceeded to settlement knowing that the respondents intended to take the telephone number with them. 22 So far as the applicant seeks to attribute reduction in turnover to the transfer of the telephone number in question to the respondents, Ms Dornford says that many of the actions and policies of the applicant could have contributed to the alleged loss. 23 Her further evidence was that if the respondents are ordered to transfer the telephone number now, any customers referring to the 2006 Yellow Pages seeking to contact 'Tommie Turtle' will be put through to 'Tiny Beez'. 24 Mr Dornford's affidavit is generally supportive of the evidence of Ms Dornford. In addition he deposes that he has been told by advisors and it is his experience in business generally, that it is the responsibility of a purchaser (here the applicant) to make applications for the transfer of a business telephone number because Telstra could then make any necessary credit arrangements. No such application had been made to Telstra by the applicant prior to settlement. This directs attention to the provisions in the sale agreement, the relevant portions having been set out above. 26 It is apparent that the applicant as purchaser waived the right to the transfer of the business name provided for in cl 3. 27 The relevant provision with respect to the telephone number is that appearing in cl 4(a). The question raised by the terms of the clause is whether in fact the telephone number in question was 'an asset of the Business'. Part A of the sale agreement describes the business as the goodwill of the child care centre business carried on at 21 Norman Street, Karrinyup under the name of Tommie Turtle Karrinyup Child Care Centre. That latter name is identified as 'the Business Name'. It is clear that the business name was not an asset to be transferred at settlement. 28 The prima face position raised by cl 4(a) is, in my opinion, that there is an obligation on the respondents as vendors to deliver to the applicant as purchaser the documents and certificates establishing or providing evidence of title and ownership to the asset comprised by the telephone number being the number associated with the business. 29 The respondents state however that such cannot be the case where prior to settlement the applicant has been advised that the telephone number will not be transferred and has made no demur. The respondents have not contended that amounted to a waiver but it nevertheless relies on the evidence of non-response from Ms Skinner on behalf of the applicant to the advice that the telephone number was not included in the sale. 30 Further, there is some issue, not yet viewed with complete clarity, as to whether the respondents are disputing that any consideration passed for the telephone number in terms of the goodwill. Certainly the respondents contend that the mere reference to the amount of money paid for goodwill does not itself establish that the particular telephone number was included in the sale. 31 In my view there is a serious issue to be tried on the question of whether there was a breach of contract in the circumstances. On the face of it the contractual provisions give rise to a right, however, the full effect of the evidence on which the respondents rely cannot be determined until trial. It relies on a number of factors which are generally finely balanced. 33 First is the delay between the date of settlement and the application to the Court for interlocutory relief. The second affidavit of Ms Skinner makes apparent that the delay is not entirely explained by the time taken for exchange of correspondence between solicitors and others. Rather, there was at least a month when those involved in the applicant 'mulled over the matter'. The reality is that the business purchased by the applicant has been able to be contacted under the second line installed by the respondents prior to settlement and taken over after settlement by the applicant. Nevertheless, there is evidence that the business purchased by them is not yet fully enrolled and that this is an important time of the year for maximum access in terms of attracting enrolments. Further, the respondents make the point that as there never was any indication from them that they were willing to transfer the telephone number the delay in issuing proceedings for an injunction is not adequately explained. Further, the respondents contend that the applicant has failed to show why the transfer of the telephone number after a period of almost five months would benefit it to a degree that would outweigh the hardship to the respondents given that it was Ms Skinner for the applicant who had advised she did not wish to use the 'Tommie Turtle' name and that number has been associated with the 'Tommie Turtle' name and now with the new premises by customers. 34 Further, it is contended that the applicant has failed to show that the transfer of the telephone number would enhance the goodwill of the business to a significant degree compared to other advertising such as signs on site, newspaper advertising, electronic Yellow Pages or direct mail outs that would cause no hardship or inconvenience to the respondents. 35 Further, it is contended for the respondents that if the Court takes the view that the applicant is entitled to the telephone number in question, transferring the telephone number after such a delay when a contrary advertisement has been placed at this stage is not the appropriate remedy. 36 Therefore, it is said that the applicant must prove on the balance of probabilities that not only is it entitled to the number pursuant to the sale agreement but that it has suffered at least some damage as a result of the transfer of the telephone number to new premises in circumstances where it is not sought to retain the former business name and that there is a benefit it would obtain if the telephone number was transferred back to it after a lapse of some months which would outweigh the hardship to the respondents. The respondents submit that the applicant has not proved this to the required standards. Therefore it is said this is a case where an injunction is not an appropriate remedy, and by implication damages could be. However that is in circumstances where the online Yellow Pages displays the Norman Street address with the 9244 1905 telephone number. 39 Additionally the Davenport Street business has an alternative telephone number displayed in the printed 2006 Yellow Pages. 40 In contrast any customers referring to telephone records other than the printed 2006 Yellow Pages seeking to contact the child care business at Norman Street would get the competing business of the respondents at Davenport Street without an alternative telephone number. This could include people using the current Yellow Pages on-line, past customers using business cards and their own records of telephone numbers, persons using printed Yellow Pages from 2005 and earlier or old stationary, old notations and telephone numbers given on a referral basis. 41 The applicant submits that given the strong merits of the case for breach of contract in favour of the applicant, the risk of any confusion generated by the deliberate act of the respondents in advertising the Norman Street telephone number should be borne by the respondents given the difficulty of the applicant in assessing damages. Had the respondents retained the Norman Street address when they received the letter from Sensis Pty Ltd dated 25 July 2005, there would have been no confusion. Therefore, any confusion has been created by the deliberate breach of contract of the respondents. They, therefore, should bear the risk of any confusion. 42 The applicant also contends that the conduct by the respondents in approving the printed 2006 Yellow Pages listing at that time was done in breach of cl 13 of the general conditions of the agreement for sale which provided that the vendor was to conduct the business as a going concern until settlement in order to maintain goodwill and profitability. 44 I find these factors flowing from the submissions of both parties in relation to the balance of convenience fairly evenly balanced themselves. The thing that ultimately persuades me that the applicant should succeed is the submission relating to the strength of the case for contractual breach. If the respondents had any case to argue in terms of legal categories arising from the advice to the applicant that the telephone number was not being transferred and the progression of settlement in the face of that knowledge, they have not made them apparent at the stage of this interlocutory application. Consequently the prima facie position remains that the contract has been breached. The strength of that position is entitled to resonate in the balance of convenience. I therefore do not agree with the respondents that this is a case where the balance of convenience should nevertheless be allowed to tip in the respondents favour. This is because ultimately if interlocutory relief were not granted and the matter was determined adversely to the respondents at trial, as it will appear to be likely on the issue of contractual breach so far as it can be judged at this stage, the case for not granting any relief would have then been considerably escalated because of the reasonably longer time lapse involved to enable the resolution of the dispute at trial. 45 For these reasons I consider that the balance of convenience does tip in favour of the applicant. Consequently the interlocutory relief should issue. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | interlocutory mandatory injunction injunctions |
The question is whether the trade mark, which contains that word, should be registered. There is an endorsement on the trade mark application which provides that when the trade mark is used for items in the specification of goods other than beer, the word "Beer" in the trade mark will be changed to accord with those other items. For example, if the product were juice, the word "Beer" would be replaced with the word "Juice". The case has been conducted on the basis of the proposed registration for beer. By an application filed on 22 August 2000, Bavaria NV seeks registration of the trade mark in respect of Classes 32 and 33 for, inter alia , beer and other beverages. 22 August 2000 is the priority date of the application. Bavaria NV is a significant producer of beer both locally in The Netherlands and for export from The Netherlands. The company markets its beer and other alcoholic and non-alcoholic beverages extensively throughout the world. It also runs marketing campaigns in various countries for its products, which are sold under labels which include the word "Bavaria". Mr Antonius Swinkels, a retired member of the Board of Directors of Bavaria NV, describes the history of the "Bavarian" method of brewing beer which involves a bottom-fermenting yeast process. In the 19th century, this process was developed and applied on an industrial scale in Germany. Brewers throughout Europe travelled to Germany to learn the newly industrialised Bavarian method, returned to their own breweries and began brewing beer according to that method. The Bavarian process or method of brewing beer using cold-fermenting yeast spread throughout continental Europe including Holland. A number of breweries used the word "Bavaria", "Bavarian" or "Beiersch" in the brewery name or on their beer labels to indicate that they brewed their beer according to the Bavarian method. The Swinkels' beer brewing company built a new brewery in 1924 in which beer was brewed according to the Bavarian method. In 1925 three members of the Swinkels family formed a partnership trading under the name "Beiersch Bierbrouwerij Bavaria" which translates as "Bavarian Beer Brewery Bavaria". The partnership was later dissolved and a private limited liability company was formed. This company underwent various changes of name and, since 1996, it has been known as Bavaria NV. A trade mark which included the word "Bavaria" was registered by Bavaria NV in 1947. In 1967, it was renewed for a further 20 years until 1987. Bavaria NV does not licence other companies to manufacture its products in Australia. All products sold by Bavaria NV in Australia are manufactured in The Netherlands and exported. Bavaria NV appoints distributors to sell its products in Australia. BBA is an association registered in accordance with the laws of Germany. BBA is situated in Munich and represents the interests of its members, over 240 breweries located in Bavaria, Germany. According to Mr Newrzella, the Managing Director of BBA, the large number of breweries in Bavaria have developed over hundreds of years. Some breweries were founded several hundred years ago. According to its Articles of Association, the purpose of BBA is, inter alia , to look after and promote the joint interests of the entire Bavarian brewing trade. BBA seeks to protect the use of the terms "Bavarian" and "Bavaria" and their German language equivalents in relation to beer as signs that indicate that such goods are made in Bavaria. BBA submits that the word "Bavaria", when used in Australia in connection with beer, indicates that the beer originates in Bavaria. It also submits that "Bavaria" indicates that the beer possesses a quality, reputation or other characteristic attributable to a Bavarian origin. BBA is the proprietor in Australia, Germany and elsewhere of registered trade marks for GENUINE BAVARIAN BEER & DEVICE in respect of beer ('the Lady Bavaria trade mark'). This is a composite trade mark featuring the words GENUINE BAVARIAN BEER underneath a picture of "the Lady Bavaria", a bronze statue in Munich. Bavarian breweries exported 2.159 hectolitres of beer to Australia in the year 2000 and 9.984 hectolitres in 2006. It is not in dispute that Bavaria NV exports significant quantities of its beer worldwide and did so in those same years. It is not in issue that Bavaria is a State of Germany, that "Bayern" translates as "Bavaria" or that "Bayerisches Bier" translates as "Bavarian Beer". It is not in dispute that beer sold by Bavaria NV under or by reference to the trade mark is made in The Netherlands. It is not in dispute that The Netherlands is often referred to as Holland. BBA submits that there is a discretion to refuse to register the trade mark pursuant to s 55 of the Act and that the discretion should be so exercised. It points to s 59 of the Act and submits that Bavaria NV does not intend to use or authorise the use of the trade mark and that, accordingly, the discretion not to register the trade mark should be exercised in its favour. Neither s 55 nor s 59 of the Act were raised in BBA's statement of grounds of opposition. BBA asserts in its grounds of opposition that the trade mark also indicates that Bavaria NV's beer originates in Germany (as distinct from Bavaria, Germany) and that it has a quality, reputation or other characteristic attributable to its origin in Germany. However, the submissions of both parties focussed on the alleged connotation of origin in Bavaria and the quality, reputation or other characteristics attributable to a Bavarian origin. The parties do not dispute that it is necessary to look at the whole trade mark in context, including the size and prominence of the words, where they appear and the material surrounding the words. Clearly, in assessing the impact of the various elements of the trade mark as judged by the eye, factors such as the relative size of the letters and the prominence of the words are of importance ( Apand Pty Limited v The Kettle Chip Company Pty Limited [1994] FCA 1370 ; (1994) 52 FCR 474 at 488-489). It is well-established that the impression conveyed by the whole of the mark must be considered ( Angelides v James Stedman Hendersons Sweets Limited [1927] HCA 34 ; (1927) 40 CLR 43 at 68; Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196 ; (2004) 209 ALR 1 at [100] ). The parties have made detailed submissions as to the elements of the trade mark, which elements are essential, the connotation of the elements and the prominence, or otherwise, of those elements, including: Bavaria NV draws particular attention to the following features: Bavaria NV describes these as the "graphic elements" of the trade mark which form the non-word components of the mark and which immediately strike the eye. Bavaria NV also draws attention to the word BAVARIA across the central shield and to the word HOLLAND appearing directly beneath BAVARIA and repeated twice more within the oval border of the trade mark. Bavaria NV submits that the important features of the trade mark are the device form in which it appears, the word BAVARIA in a central banner, the words HOLLAND and BEER below the central banner and the word HOLLAND repeated twice more in the upper half of the mark. It says that, without reproducing each of these elements, it is doubtful that another trader would be found to have reproduced the mark sufficiently to infringe. Bavaria NV contends that, to the extent that the words are considered within the trade mark, the words most emphasised are BAVARIA HOLLAND BEER. It submits that the evocation of Holland is reinforced by its repetition in the upper component of the border element and says that the word HOLLAND is part of the whole that, together with BAVARIA, is immediately apparent to the eye. Bavaria NV emphasises that the trade mark application is for a composite mark where no single word or feature stands alone for the purpose of analysis. It says that, if there are words that form an essential feature of the mark, it is the composite expression BAVARIA HOLLAND. Bavaria NV submits that, while the word BAVARIA is rendered in the largest letters, HOLLAND is given immediate prominence below BAVARIA, is emphasised in the curved lines on top and below and is reinforced by repetition. BBA contends that the essential feature of the trade mark is the word BAVARIA. It says that BAVARIA, particularly in association with beer, signifies that the beer comes from Bavaria and that this representation is not dispelled by the less prominent reference to Holland. Taking the trade mark as a whole, BBA says that it conveys the overall visual impression of the brand name BAVARIA emblazoned in a banner across a coat of arms with some additional, less emphasised words, all within an oval border containing some further words. It submits that many features of the trade mark are little more than decoration or flourish and, particularly in the context of European-brewed beer, not distinctive. For example, it says that the words used in the oval border of the trade mark do not convey any particular distinctive signification. It submits that the overall impression of the composite of the additional features would not be distinctive to a consumer with an imperfect recollection. In summary, BBA submits that the only relevant features of the trade mark are the word BAVARIA as depicted in the central banner against the shield above the radiating light with the crest at the top, all within an oval border. It says that, insofar as the trade mark consists of words, the only essential feature is the word BAVARIA. It submits that the word HOLLAND beneath BAVARIA functions to identify the category of product, as does the word BEER but that these are not essential features of the trade mark. In Angelides , Isaacs ACJ characterised as "trite law" the principle that in a composite mark, however prominent a single word may be, the whole trade mark must be considered. Different considerations apply to a word mark and a mark that includes a distinctive geometric device, so that even though words may be deceptively similar, the rendition of a particular device may take the trade mark outside of deceptive similarity ( Crazy Ron's [96]-[99] and [103]). As the Full Court noted in Crazy Ron's , each case must be considered on its own facts and each trade mark evaluated. Whether a word constitutes an essential feature of a composite mark is determined by the overall impression of the mark and the prominence and character of the word in question, as well as other words and devices present. The totality of the device mark must be considered ( Sports Cafe Ltd v Registrar of Trade Marks (1998) 42 IPR 552). That is, the visual form of presentation may render two marks different. Bavaria NV draws a comparison between BAVARIA which, it says, is not (by itself) an essential feature of the trade mark, and the words CRAZY JOHN, which were held by the Full Court not to be an essential feature of a composite mark consisting of those words and a device, being a relatively large fantasy cartoon character holding a mobile telephone astride a stylised globe ( Crazy Ron's at [97]). In drawing that conclusion the Full Court pointed out that the words themselves were not especially prominent and were subsidiary to the fantasy character which occupied the dominant position in the overall image. The Full Court emphasised that it is necessary to consider a composite mark as a whole and that caution needs to be exercised in characterising words in a complex composite registered trade mark as an essential feature of the mark (at [100]). The trade mark the subject of the application did not, as it should not, contain the symbol ®. Similarly, the trade mark, as advertised, did not include the symbol of a registered mark next to the word BAVARIA. However, Bavaria NV has sold products in Australia under labels containing the ® symbol next to the word BAVARIA. The image of the trade mark that was included in the Delegate's decision also incorporated the ®. The use of the ® symbol is not relevant to an understanding of the trade mark but its presence is of some relevance to BBA's submissions on the prominence of the reference to BAVARIA. BBA submits that the placing of the ®, the indication of registration, next to the word BAVARIA on the labels indicates that Bavaria NV considers that word to be the essential feature of the mark. To my mind that positioning is equivocal. If Bavaria NV or the consumer were of the view that the word BAVARIA represents the brand name not associated with a geographical indication or place of origin, the positioning of the registration mark is neutral. However, I do accept that it draws attention toward the word BAVARIA, being the more prominent word on the label, and away from the smaller sized HOLLAND. The countries in which those trade marks were originally registered did not include Australia. In 1995, Bavaria NV began using a device on its bottles consisting of the Swinkels family crest and an associated reference to vegetation, together with the words "Bavaria Holland Beer" ('the Bavaria NV device'). The earlier format gave greater prominence to the words "Holland Beer" in comparison with the word "Bavaria". Bavaria NV has registered the Bavaria NV device in a number of countries around the world. It has also applied to register or has registered the trade mark "Bavaria Holland Beer" as a word mark in a number of countries. The trade mark the subject of the present application was developed in the 1990s and was, according to Mr Petrus Swinkels, former Export Manager and retired Chairman of the Board of Bavaria NV, first used in countries to which Bavaria NV's product was exported in 2000. Bavaria NV has applied to register or has registered the trade mark the subject of these proceedings in a number of countries including Malta, New Zealand, Canada and Malaysia. There was nothing in writing to support Mr Swinkels' evidence as all documents relevant to the period from 1988 to 1998 have been destroyed in accordance with the company's procedures. Mr Swinkels says, however, that he has a clear recollection of his visit to Australia at that time for the purpose of selling Bavaria NV's beer in this country and that he attended a Pavarotti concert while in Australia. I accept that evidence and the explanation that there is no documentary support because of the destruction of documents from that time. From approximately 1994 to 2002 Bavaria NV's products were sold to Theo's Liquor Markets and/or its predecessors. In December 2002 Theo's Liquor Markets was acquired by the Coles Myer Group and from that date Bavaria NV's beer has been distributed throughout Australia by the Coles Myer Liquor Group and stocked in outlets including Liquorland, Vintage Cellars and Quaffers. Mr Petrus Swinkels says that, from 1988 to 1995, the label under which Bavaria NV's beer was sold in Australia featured the words "Bavaria Holland Beer". Mr Swinkels says that Bavaria NV began using the Bavaria NV device on its beer sold in Australia in 1995 and that it began exporting beer featuring the trade mark to Australia in 2000. In a statutory declaration before the Delegate, Mr Frank Swinkels, Export Director and member of the Board of Directors of Bavaria NV, said that the trade mark the subject of this application was first used in Australia in 1998. BBA says that this evidence contradicts the evidence given by Mr Petrus Swinkels that Bavaria NV first sold its beer in Australia in 1988 to Coles Myer. It is not inconsistent with Mr Petrus Swinkels' evidence of the sale of products under earlier labels but is inconsistent with the evidence that the trade mark was first used in Australia in 2000. Mr Carroll, Group Merchandising Manager Administration for the Coles Liquor Group, says that he was personally involved in the decision regarding the price of beer sold under the trade mark. He says that beer sold under the trade mark was the first imported beer ever sold by Coles Myer that was imported by Coles Myer. Mr Carroll recalls that Coles Myer began importing and selling Bavaria NV's beer in Australia under the trade mark through its liquor outlets in June 2000. He has not been able to locate any records to support that recollection. He recalls that the first orders were placed by Coles Myer with Bavaria NV in February 2000 and that about 19,000 cartons each containing 2 dozen bottles were sold by about 31 July 2000. It is not clear, nor was it raised during Mr Carroll's evidence, how this fits with Mr Petrus Swinkels' evidence that Bavaria NV's products were sold through Theo's Liquor Markets until 2002. The statutory declaration of Mr Frank Swinkels seems to suggest that both Theo's Liquor Markets and Coles Myer sold Bavaria NV's products in the early 2000s before Theo's Liquor Markets was acquired by Coles Myer. Despite the evidence of the sale of Bavaria NV's beer in Australia since at least 1998, BBA says that the evidence does not establish the commencement of the use of the trade mark in Australia. However, the evidence is that the trade mark was at least used on Bavaria NV's beer imported and sold by Coles Myer prior to the priority date of 22 August 2000. It follows that Bavaria NV commenced use of the trade mark immediately prior to the priority date. Other of Bavaria NV's beer products have been marketed with associated descriptions such as "Oud Bruin", "Spring Bock" and "Pilsener", those words appearing in place of HOLLAND underneath the word BAVARIA. BBA submits that, within the trade mark application, HOLLAND underneath BAVARIA functions as a variant descriptor of the beer in the same way as, for example, "Oud Bruin". That leaves, in BBA's submission, BAVARIA as the brand for the purposes of s 17 of the Act as the sign used or intended to be used to distinguish Bavaria NV's beer from the beer of other breweries. In response, Bavaria NV points out that, in this trade mark application, the endorsement makes it clear that the only variable is the word BEER so that the HOLLAND is constant. Accordingly, products sold under the trade mark would be BAVARIA HOLLAND BEER or, for example, BAVARIA HOLLAND JUICE. There is no evidence that consumers would associate BAVARIA HOLLAND BEER with, for example, "Bavaria Malt" or consider HOLLAND as a variant descriptor. In the alternative, BBA says that HOLLAND conveys that beer sold under the trade mark is a Dutch-brewed beer under licence from persons in Bavaria but there is no evidentiary support for this proposition. Bavaria NV pays its Australian wholesale customers an amount to subsidise advertising and marketing of products featuring its label. Advertising and marketing includes sales promotions, advertising in stores, brochures and television advertisements. Some of the advertising and promotion of Bavaria NV's products in Australia and overseas has been by reference to the word "Bavaria" alone and some by reference to "Bavaria Holland". Its products have also been described as "Bavaria Beer" and "Bavaria Premium". I note that the latter product is sold under a different label from the label comprising the trade mark. The reference to the product as "Bavaria", the prominent word on Bavaria NV's labels (including the trade mark), has been not only by distributors and in advertising but also by Bavaria NV in its own historical material. Bavaria NV argues that abbreviations or alterations to the trade mark are unlikely to be helpful in considering a trade mark application, giving as an example that, if "McDonalds" is reduced to "Maccas", they are two different trade marks and the use of one is not the use of the other. It submits that, to make reference only to the aural use falls into the trap or vice described by the Full Court in the Crazy Ron's case: the substitution of a word mark for a word and device mark. Bavaria NV submits that the words in the trade mark are BAVARIA HOLLAND BEER and that those are the words which, if there were an aural rendition of the mark, would be used. Bavaria NV also draws a distinction between the use of the trade mark and post-priority date activities (eg. marketing) which make reference to "Bavaria" or "Bavaria Beer". Bavaria NV concedes that post-priority date evidence as to the use of the trade mark is relevant in order to see whether or not it would be likely to cause confusion but says that this is not the trade mark. Bavaria NV insists that for the purposes of this case, which involves an opposition to registration, the requirement to consider the use of the trade mark imports only a consideration of the use made of the trade mark as a whole and makes irrelevant the use made of one part of the trade mark in referring to Bavaria NV's goods, including the evidence of its own use of the single word "Bavaria" to refer to the beer. In Sports Cafe , the Full Court held that it was relevant to consider how a cited mark may be used informally, especially in speech, noting (at 557) the Australian tendency to shorten expressions. However, their Honours were careful (at 559) to state that, whether or not the shortened expression used for the mark may convey a certain idea, consideration of deceptive similarity needed to be made in consideration of the whole of the mark. Their Honours distinguished between a device mark which contains words on one hand and a word mark on the other. However, in considering an opposition to registration of a trade mark, care must be taken in evaluating the use of the trade mark and evidence of different ways by which the goods to which the trade mark is applied are or may be described. Invariably, a trade mark consisting of words and devices will be referred to by one or more of the words. This does not mean that the devices or other words are eliminated from consideration of the registrability of the mark. It does not mean that the consumer disregards or fails to recall the trade mark or the devices when referring to the goods in a shortened form. I accept that Bavaria NV's beer has been marketed and promoted by reference to "Bavaria Beer", "Bavaria Premium" and "Bavaria Holland" as well as by reference to "Bavaria" alone. I accept that consumers may use each of these terms aurally to refer to the beer, as a brand. However, it is the trade mark that is the subject of opposition and I do not accept that the fact of such usage of itself determines the predominant elements of the mark. The new label has been adopted internationally. This ground of opposition focuses on the capacity of the trade mark to distinguish Bavaria NV's goods from the goods of other persons. Section 41(2) requires that a trade mark be rejected if it is not capable of distinguishing the applicant's goods from the goods of other persons. BBA submits that the trade mark is not so capable. In deciding whether a trade mark is capable of distinguishing Bavaria NV's goods, it is necessary first to consider the extent to which the trade mark is inherently adapted to distinguish the designated goods from the goods of other persons (s 41(3) of the Act). If that is not determinative but the Registrar (or the Court) finds that the relevant trade mark is to some extent inherently adapted to distinguish the designated goods, s 41(5) provides for three factors to be taken into account in order to determine whether the trade mark ' does or will distinguish the designated goods or services as being those of the applicant ' [emphasis added]: the extent to which the trade mark is inherently adapted, the use or intended use of the trade mark and any other circumstances. If the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services, the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons. This introduces the requirement to look to the future use of the trade mark. In many cases this will not be relevant and the Registrar or the Court will look to past and existing use. In this case, there has been use of the trade mark since the priority date. There has been no use of the trade mark since around 2006. Mr Petrus Swinkels said during cross-examination that Bavaria NV intended to stop using the old label (that is, the trade mark) when it changed to the new label. However, he could not say whether Bavaria NV would use the trade mark again. He did not say that there would be no future use of the trade mark, nor was he asked that question. The evidence of future use is equivocal. Further, there is a grace period provided for in the Act following the registration of a trade mark (s 92(4)(b)). BBA says that the clear inference is that Bavaria NV has no intention to continue to use the trade mark the subject of the application, given Mr Swinkels' evidence that Bavaria NV changes its label every five to ten years, that the new label has been adopted internationally and that it represented an upgrading of the trade mark. Whether or not that inference is accepted, Bavaria NV does not rely upon any use or intended use of the mark for the purposes of s 41(5) of the Act nor does it rely upon prior use for the purposes of s 41(6). Rather, Bavaria NV says that the trade mark is inherently adapted to distinguish its goods. Is the trade mark inherently adapted to distinguish Bavaria NV's goods? BBA submits that the essential feature of the trade mark is the word BAVARIA, with some decorative elements of heraldry all within an oval border. BBA submits that, properly construed, the trade mark is a geographical name against a backdrop of generic heraldic symbols and is incapable of distinguishing Bavaria NV's goods from the goods of other traders. As a geographical name, BBA says that the word "Bavaria" is not inherently adapted to distinguish Bavaria NV's goods (s 41(3) of the Act), is not capable of distinguishing Bavaria NV's beer from the beer of other traders and should be rejected (s 41(2) of the Act). BBA again relies on the marketing of Bavaria NV's products as "Bavaria" and "Bavaria Beer" to say that the trade mark will invariably be shortened to such a form. BBA also relies upon the existence in Sydney of a chain of beer cafés called the "Bavarian Bier Café" which specialise in Bavarian food and beverages, in particular Bavarian Beer. Those beers are listed by reference to their trade names and not by reference to "Bavaria" or "Bavarian Beer". A number of the labels on beers from Bavaria that were in evidence stated that they were made in Munich, the capital of the State of Bavaria, rather than naming Bavaria. BBA's witness, Mr Crossland, agreed that German brewers do not usually state on their beer labels whether their products come from Bavaria. While some labels from German breweries contain the word "Bavaria", none contain the word "Holland". As there are many beer brewers in Bavaria, BBA says that it is more than likely that other persons, trading in beer and actuated only by proper motives, will think of the word "Bavaria" and of heraldic emblems, including shields, crests and sprigs of barley, and want to use them in connection with beer, including in a manner that would potentially infringe the trade mark if registered. BBA submits that Bavaria NV cannot use the word "Bavaria" and then, by putting it in an elaborate label with generic heraldic devices, acquire distinctiveness in the mark that would otherwise be totally lacking in any inherent adaptation. BBA contends that permitting registration of the trade mark gives rise to the possibility of preventing other breweries from using "Bavaria". This has led to the rejection of a word of prima facie geographical signification, particularly when it is used simpliciter and where goods of the kind for which it is sought to be registered are produced at the place or in the area ( Clark Equipment at 515-516), or if it is reasonable to suppose that such goods in the future would be produced there ( Chancellor, Masters and Scholars of the University of Oxford (Trading as Oxford University Press) v Registrar of Trade Marks [1990] FCA 175 ; (1990) 24 FCR 1 at 23 per Gummow J). This is because other traders have a legitimate interest in using the geographical name to identify their goods and it is this interest which is not to be supplanted by permitting any one trader to effect trade mark registration ( Clark Equipment at 514-515). Justice Gummow in University of Oxford came to the view that, if a court is in doubt as to the likelihood of another trader legitimately wishing to use a mark, the application should be refused (at 25). In Clark Equipment , Kitto J held that the word MICHIGAN was not adapted and was not capable of becoming adapted to distinguish earth-moving and other equipment. Similarly, OXFORD was refused for printed publications ( University of Oxford ) and COLORADO refused for bags ( Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184 ; (2007) 164 FCR 506). In each case, the registration sought was of a word mark that connoted a geographical location. Bavaria NV appears to accept that there are difficulties with the word "Bavaria" being adapted to distinguish its beer but emphasises that Kitto J's observations in Clark Equipment apply to the use of a geographical term where the word is used simpliciter or with no addition except a description or designation of the goods. It submits that its composite trade mark, which uses visual components and other geographical references, is sufficient, as it was in Sports Cafe, to distinguish its trade mark from what may otherwise be a reference to "Bavaria" as the source of the beer. Bavaria NV submits that s 41(2) does not operate to prevent any word that has a geographical meaning from being included in a trade mark. Bavaria NV says that BBA's case concentrates only on the word BAVARIA and ignores the other elements of the trade mark, including the three references to "Holland". Bavaria NV submits that, if those other elements are not ignored, the trade mark is inherently capable of distinguishing and does distinguish Bavaria NV's goods. The normal and fair use of the mark may affect and reflect the way in which the consumer evaluates the prominence of the features of the trade mark. In circumstances where Bavaria NV's beer has been marketed by reference to "Bavaria", "Bavaria Beer" and "Bavaria Holland" and it is by those names that the beer may be known, it is appropriate, in considering whether the mark is inherently adapted to distinguish Bavaria NV's goods, also to take into account that use of the trade mark ( Polo Textile Industries Pty Limited v Domestic Textile Corporation Pty Limited [1993] FCA 203 ; (1993) 42 FCR 227 at 231 citing de Cordova v Vick Chemical Co (1951) 68 RPC 103 at 105---106). BBA submits that, despite the existence of a composite mark, a conspicuous part of a label or the distinctive feature of a label can be said to be the true trade mark rather than the label as a whole, as a matter of impression. BBA submits that the imperfect recollection of the consumer may omit the specific devices used in the trade mark and the word HOLLAND and may simply recall (or notice) BAVARIA. However, as noted in [55], while a trade mark consisting of words and devices may be shortened to words, that does not mean that other words and devices are eliminated from consideration or that the consumer rejects them, ignores them, or fails to recall them. I make the following preliminary observations in relation to the trade mark and to the question whether other persons may legitimately wish to use the word "Bavaria" in connection with their goods because of its geographical reference and whether the trade mark is capable of distinguishing Bavaria NV's goods from the goods of other traders: The trade mark is not just the word "Bavaria" or, put another way, it is not used simpliciter or with no addition save for a description or designation of the goods. The use of the trade mark for beer does not save the word "Bavaria" from carrying its prima facie geographical signification. This is not a case where the goods for which the trade mark is used are remote from the geographical location where those goods are produced and with which the goods are associated (cf. discussion in Colorado at [29] per Kenny J). Bavaria is a place in Germany where beer is produced. This is likely to continue in the future. As at 2005, there were 623 breweries in operation in Bavaria. Other beer makers in Germany may want to use the word "Bavaria" or "Bavarian", on or in connection with their beer, either to signify the brewing style or to indicate that their beer comes from Bavaria. Bavaria NV does not suggest that the word "Bavaria" alone would be registrable for beer. It is unlikely that it would be as, for the reasons given in Clark Equipment , Colorado and University of Oxford , it would not be capable of distinguishing or acquiring distinctiveness for beer. Bavaria NV's beer was named partly in recognition of the fact that there is a style of beer-making associated with, or originating from, Bavaria. Bavarian breweries produce a wide variety of beers, for example blonde and dark beers, pilsener and export beers, wheat beers and diet beers. There is no uniform type of Bavarian beer. The word BAVARIA is prominent in the trade mark. If it is so conspicuously displayed on the label that the fact of its use would suggest that the beer comes from Bavaria, the question is whether the remaining elements of the mark dispel that association ( Re The Registered Trade Mark "Yanx"; ex parte Amalgamated Tobacco Corporation Limited [1951] HCA 28 ; (1951) 82 CLR 199 at 206 per Williams J). Many of the elements of the trade mark, namely the non-word elements such as the heraldry, would not, to the average consumer, indicate a particular country. A coat of arms and old-world emblems evoke Europe. Other brewers in Bavaria use the word "Bavaria" across a label with sprigs of barley and a crest. BBA says that it follows that the features and words which have been changed are not essential features of the trade mark and cannot be relied upon by Bavaria NV as distinctive elements. Removed from the present label are the words "Holland Beer" and "Lieshout Holland" around the oval border. The words "Bierbrouwerij Bavaria" have been removed from above the central banner. The words LIESHOUT HOLLAND are still present on the label but they have been repositioned and made smaller. However, while LIESHOUT HOLLAND has been made smaller, there is a more prominent colour contrast so that the overall impression of these words has not, in my view, diminished. What has changed is that one of the references to "Holland" has been removed. Despite these changes, in my view a consumer who noticed the more prominent HOLLAND beneath BAVARIA would not be affected by the fact that there is one but not two other references to "Holland" present. A more cautious consumer, who examined the label, would observe the words LIESHOUT HOLLAND in addition to the word HOLLAND between BAVARIA and BEER. Are other traders likely to wish to adopt the same trade mark or symbols or features resembling that trade mark? Bavaria NV emphasises that there was no evidence that any other trader wishes to use, or would wish to use, the word "Bavaria" in Australia together with heraldic material as in the trade mark. BBA says that the heraldic devices used by Bavaria NV are themselves broadly generic and thereby incapable of adding distinctiveness to the word BAVARIA or distinguishing Bavaria NV as the source of the beer. BBA concedes that, if it were just the Swinkels' family motto used on the label, that would be capable of imparting distinctiveness. The use of the word "Bavaria" by a number of breweries suggests that the word alone is not intended to be used to distinguish the goods or services of any particular brewery. Rather, other traders who wish to use the word "Bavaria" would rely on differentiating features, such as other words, devices and symbols, to distinguish their goods. The features of the trade mark other than BAVARIA cannot simply be dismissed as "window-dressing". This case is not about whether Bavaria NV can register a trade mark for the word "Bavaria". It is whether the trade mark, which contains BAVARIA, is capable of distinguishing Bavaria NV's goods from those of other traders, including traders who sell beer from Bavaria. On the assumption that traders of beer from Bavaria may wish to use "Bavaria" on their labels or in their trade marks, the way to distinguish their goods is to create a distinctive trade mark or label by the use of other words and devices. Bavaria NV has utilised the Swinkels family crest and other devices, repeated references to "Holland" and the prominent placing of HOLLAND below BAVARIA to draw attention to the fact that BAVARIA HOLLAND BEER is a specific product, the source of which is Lieshout, Holland. Although the matter is not without difficulty, I have come to the view that the trade mark is inherently adapted to distinguish Bavaria NV's goods. Accordingly, the ground of opposition based on s 41 of the Act is not made out. BBA points out that aspects of the trade mark have been varied or abandoned in the new label and that the trade mark is not presently in use. There is no evidence concerning the effect of past use of the trade mark or its capacity to distinguish Bavaria NV's beer, apart from an absence of complaint of confusion. There is no evidence of any intention to use the trade mark in the future. Accordingly, if the trade mark were only inherently adapted to distinguish Bavaria NV's beer to some extent, there would be insufficient basis to find it capable of distinguishing those goods pursuant to s 41(5) of the Act. Bavaria NV did not advance submissions to the contrary. The use demonstrated by Bavaria NV, the subject of evidence by Mr Petrus Swinkels and Mr Carroll, would be insufficient to enable Bavaria NV to take advantage of s 41(6) of the Act, which provides that if the Registrar finds that a trade mark is not to any extent inherently adapted to distinguish, the trade mark is taken to be capable of distinguishing the designated goods or services if the applicant establishes that because of the extent to which it has used the mark before the priority date, the trade mark does so distinguish. In the absence of evidence of the knowledge in the Australian marketplace of Bavaria NV's beer prior to 22 August 2000, the priority date of the application, the Delegate was unable to take account of the asserted reputation of that beer or whether consumers would take BAVARIA as an indication of trade source and not of geographical origin. She concluded that the prominent word BAVARIA was not qualified by the words HOLLAND or HOLLAND BEER. BAVARIA, she found, connotes that the beer is from Bavaria. Accordingly, she found that the trade mark is likely to deceive and/or cause confusion and that the s 43 ground of opposition was made out. Thus, BBA submits, there is a clear misrepresentation of origin inherent in the mark. BBA says that this primary connotation arises from the use of a place name, with or without emblems, but that the banner, shield and crest devices (as well as the barley) reinforce this connotation. The second connotation which is said to arise from the use of the word BAVARIA is that Bavaria NV's beer is of a high standard or quality of brewing consistent with beer made in Bavaria. BBA says that, even if people were unaware that Bavaria is a place well-known for beer, the use of the word BAVARIA still connotes that the beer comes from Bavaria. The evidence that Bavaria has a reputation for beer and had such a reputation as at the priority date is said by BBA to make the connotation stronger. BBA has established that tourist guides refer to Bavaria's reputation for beer and refer, for example, to the Oktoberfest beer festival held there. BBA has led evidence of the percentage of Australians born in Europe, the number of Australians who have visited Europe between 1986 and 1995, the estimated number of Australians who have visited Bavaria between 1995 and 2006 and the number of Australians who live in Bavaria. There are also establishments in Australia that promote a Bavarian theme and Bavarian beer. As Bavaria NV emphasises, s 43 of the Act requires not only that the connotation of the trade mark be established but also that, because of the connotation, the use of the trade mark in relation to the goods will be likely to deceive or cause confusion. The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself ( Pfizer Products Inc v Karam [2006] FCA 1663 ; (2006) 237 ALR 787 at [53] per Gyles J). The underlying purpose of s 43 is to prevent the public being deceived or confused as to the nature of the goods by reason of the secondary meaning connoted by the mark in question ( Pfizer at [53]). Even if there were a potential signification of geographical origin, the question is whether the use of the trade mark would deceive or cause confusion by reason of that use. Bavaria NV submits that mere assertion of the connotation that the beer originates in Bavaria is not sufficient. BBA must, it says, prove that connotation as a matter of fact, on the evidence. Whether there is a real and not a trivial danger of deception or confusion, whether use would be likely to deceive or confuse, is a question of fact based on conditions as established to apply at the priority date, although, Bavaria NV accepts, one is permitted to look at post-priority date evidence in assessing deception or confusion as at the priority date. That is, Bavaria NV says, the two questions for the purposes of s 43 of the Act are: Does the word BAVARIA have a connotation with the State of Bavaria in Germany? Would the consumer be deceived or confused by the word BAVARIA and any connotation that it refers to the State in Germany and think that Bavaria NV's beer was of Bavarian origin? Does the word BAVARIA as used in the trade mark connote the State of Bavaria? Accepting that the word alone may have that connotation the question, as I observed in [70], is whether the remaining elements of the trade mark dispel that association. As in Kettle Chip , where a separate "Smith's" logo that appeared on the appellant's packaging did not save the naming of a product "Country Kettle" from constituting passing off in relation to the respondent's product sold under the name "The Kettle Chip Co" or "The Kettle Chip", BBA submits that HOLLAND does not save Bavaria NV's product from representing a Bavarian origin or association. However, in the absence of direct evidence from consumers one way or the other, my view is that the reasonable consumer would not fail to observe the three references to "Holland" which, at least, neutralise the connotation with the State of Bavaria. It follows that if the consumer were interested in the source of the beer, an examination of the label bearing the trade mark would indicate an origin in Holland. Further, Bavaria NV submits that, so far as consumers are concerned, a reference which might connote an origin is not necessarily determinative for the consumer of the place where the beer is made. This is borne out by research which showed that the Australian consumer sees European beers generally as being from Europe but does not distinguish between different European countries. There is no basis for BBA's assertion that the Australian consumer would associate the trade mark with a State coat of arms. The evidence concerning tourism and travel does not, of itself, establish recognition by consumers in Australia of the association of "Bavaria" with beer, either by oral reference or by reference to a trade mark. The evidence does no more that form a basis from which, without more, BBA seeks to draw conclusions that Australians read such tourist guides and that those who read them or who were born in Europe or have visited Bavaria become aware of Bavaria's reputation for beer and remember that fact so that, when they see the trade mark containing the word BAVARIA, they conclude that the beer sold under the trade mark is from Bavaria. While the tourist guides may have some relevance, neither they nor the other material on population movements, alone or together, form a sufficient basis from which to draw the conclusions that BBA seeks to draw as to the connotation that would be drawn from the trade mark by the Australian consumer ( ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159 ; (1992) 33 FCR 302 at 346---350 per Lockhart J). BBA also says that Bavaria has a reputation for beer of excellence and fine quality and refers to the evidence of the required methods of brewing. However, the Bavarian method of brewing is not the same as an association with the geographical region of Bavaria. There is no evidence to suggest that the Australian consumer would be aware of the details of the Bavarian method of cold fermentation of beer or that the ingredients for the preparation of bottom fermentation beer and top fermentation beer is protected by statute, which has its roots in the "Bavarian Purity Law" of 1516. In any event, BBA does not say that these features would be known to the average Australian consumer. Rather, it submits, they support the reputation of Bavaria in Australia as a place where beer is brewed and, additionally, beer of high quality. Neither party contends that consumers in Australia would see BAVARIA and assume that the beer was brewed according to the Bavarian style or method. Bavaria NV says that the relevant class is of consumers of premium beer. BBA identifies consumers of alcohol, both beer and wine. The consumer would be over 18 years of age and, I accept, such a consumer would be likely to be literate and astute to the characteristics of the products that he or she is purchasing, "brand savvy" and discerning in his or her purchasing habits (as in Scotch Whisky Association v De Witt [2007] FCA 1649 ; (2007) 74 IPR 382 at [60] per Sundberg J). The evidence, including that of BBA's witness Mr Crossland, and Bavaria NV's marketing material, supports a price conscious consumer who chooses fashionable goods and chooses to drink premium imported beer for a reasonable price. As Sundberg J in Scotch Whisky observed at [60], confusion is mitigated by a review of product labels. I accept that the ordinary consumer in Australia would be aware that Bavaria is a State in Germany, as a matter of common knowledge. Will the consumer of Bavaria NV beer be led by the trade mark to believe that the beer comes from, or otherwise has its origins in, Bavaria and that it of a particular quality or has certain characteristics as a result? This depends on the overall impression conveyed by the trade mark. The consumer of a premium beer will be likely to be more aware of the reputation of Bavaria as a source of beer but will also be likely to be more discerning and take more care in understanding the information on the label. The evidence adduced by BBA does not establish that brewers in Bavaria, or brewers in Bavaria of beer exported to Australia, generally use the term "Bavaria" or "Bayerisches Bier" on their labels. To the contrary, only one of the German beer bottles in evidence used the word "Bayern " on its label. Mr Crossland is a retired journalist who has developed an interest in and has written about beer. Mr Crossland wrote his first feature article on beer in September 1999 and then wrote occasional columns for The West Australian . The column then became a regular (weekly) column. Much of his experience, since the mid 1990s, comes from reading books, research and articles on beer as well as personal discussions with people in the industry including brewers, retailers, wholesalers and importers. He attends beer tastings and dinners. He has written regular updates and tasting notes on beers available at micro-breweries in Western Australia and on beers available at interstate micro-breweries, as well as updates and tasting notes on imported beers. Mr Crossland accepts the history of the Bavarian method of brewing being applied across Europe as described by Bavaria NV and Mr Antonius Swinkels. Mr Crossland's opinion is, however, that while there may be a "lingering association" in Europe between lager and the Bavarian method of brewing, he does not believe that such an association is applicable to the Australian experience. Such beer brewed in Australia is referred to simply as "lager", usually with no reference to its origin. Mr Crossland's opinion is that it is not possible to isolate one feature or aspect and identify that particular feature or aspect as the defining element of Bavarian beer. It is all the features of pure ingredients, brewing traditions, experience, expertise, diversity of recipes and equipment. In his opinion, as an expert beer writer, it is those factors upon which the reputation for beer from Bavaria is based. He also describes the characteristics of Bavarian pilsener which, he says, are absent from Bavaria NV's beer. Mr Crossland gives his opinion as to the composition of the Australian consumer market for beer. He divides the category of consumer in descending order of size as "price conscious", "old school loyalists", "fashionable" and "aficionados". He agrees that there is a further category of "industry insider", being the people with whom he speaks. In differentiating between the groups that he describes, Mr Crossland says that people who are "price conscious" will buy whichever brand is on special. Mr Crossland recognises that Bavaria NV's beer is heavily marketed and advertised and that it is cheaper than imported Bavarian-brewed lagers, domestic premium and micro-brewed beers. The "fashionable" group, the fastest growing group of beer consumers, is the sector that is driving the growth of the premium beer market including imported beers. These consumers are, Mr Crossland says, influenced by fashion, brands and trends and are likely to have at least some knowledge of the quality of beer although this may be limited and would not extend to "precise details". Mr Crossland believes that the "fashionable" group may not be able to discern the difference between an overseas brand of beer brewed locally under licence and the same brand of beer brewed at the original brewery overseas. It is the group of "aficionados" who will be likely to inspect labels more thoroughly for assurance about a beer's credentials, including where it is brewed. In Mr Crossland's opinion, a significant majority of consumers fell into the "price conscious" category as at 22 August 2000, whereas since that time there has been a significant growth in the "fashionable" and "aficionado" categories. The description of a typical Bavaria drinker is a person who knows and enjoys the good things in life and likes to share these moments with good friends. A Bavaria drinker chooses to drink the quality of a premium imported pilsener for a fair and acceptable price. Overall, a Bavaria drinker is a smart purchaser, someone who enjoys a crisp and refreshing imported beer for a price just slightly higher than a top domestic . Based upon Mr Crossland's evidence, this consumer would be "price conscious" and "fashionable". Those categories together would represent about 85% of the market as at the priority date. Mr Crossland recalls three events relating to German and/or Bavarian beer that took place in Australia in 1999 and 2000. Two of those events referred to the Duckstein Brewery in the Swan Valley of Western Australia which served a Bavarian-styled lager "vaunted for its Munich origins". He refers to other beers sold since 2000 in Western Australia but, while he describes them as beers brewed in Bavaria, this does not assist in assessing the consumer's understanding of the source of those beers, let alone the consumers' reaction to Bavaria NV's beer. The fact that there has been some success of imported beer brands, including beers from Bavaria or of the Bavarian style, does not really assist. Mr Crossland is hardly the average consumer but rather a person who has a particular interest, both professional and personal, in beer and beer styles. His evidence is of an idiosyncratic nature and reflects his own opinion, based in part upon internet searches apparently conducted at least in part for the purposes of these proceedings. Mr Crossland refers to an article written by an Australian beer writer, Mr Willie Simpson, author of "The Beer Bible". Score half a point if you said "Germany" but this brand is, in fact, produced by a Dutch brewery and imported into Australia by one of our major supermarket/bottleshop chains. It's an interesting point which has prompted the Bavarian brewers to appoint an Australian legal firm to investigate the matter (and, presumably, they are pursuing it in other countries where it's available, as well). There was no evidence of the popularity of this site. There was no suggestion that this would have been the view of the ordinary consumer. Mr Yardley, a witness for Bavaria NV, is a consultant in the fields of brand management and marketing. From 1983 to 1988 he held various positions including Brand Manager with Elders IXL Wines and Spirits ('Elders'). During that time his responsibility was to manage and market Elders' imported beer portfolio which included Corona from Mexico, Stella Artois from Belgium, Becks from Germany, Miller Genuine Draught from the United States and Asahi Super Dry from Japan. As part of that role he visited retailers and took part in or reviewed the results of market research conducted on beer consumers. From 1992 he worked with Carlton and United Breweries and held various senior marketing positions. He was responsible for the management and marketing of Carlton and United Breweries' beer brands. These included Melbourne Bitter, Victoria Bitter, Carlton, Cascade, Crown and Fosters. During that period of employment he also visited retailers and took part in or reviewed the results of market research. Mr Yardley refers to the number of beers available on the Australian market that have a geographic reference in their name, such as Carlton Draught and Victoria Bitter. He says that in his experience such brands have a historic connection of some sort with the relevant geographical name. Other such beers that might be said have a geographical connotation but are not associated with a particular geographical origin are Melbourne Bitter, Matilda Bay and Kilkenny Draught. Other beer brands may be perceived by consumers as having a connection with a particular country but do not contain a geographical name. While initially produced in the country of origin these beers are now brewed in other countries. Guinness and Stella Artois are brewed under licence in Australia. German breweries also licence production in overseas countries. For example, Becks beer is brewed under licence in Sydney. During his employment with Elders between 1989 and 1990 Mr Yardley commissioned a report which assessed consumer attitudes and perceptions towards the country of origin of imported beers. The study, which took place in 1989 and 1990, concluded that Australian beer consumers perceived beers such as Stella Artois and Heineken to be from Europe but that there was limited awareness or interest in the specific countries in which they were brewed. Consumers did not distinguish between different source countries within Europe. In 1992 to 1993 Mr Yardley was involved in market research to consider consumer perception of beer brands and geographic connection. That research, conducted for the purposes of relaunching Melbourne Bitter, concluded that consumers in Sydney viewed Melbourne Bitter as a brand and did not make any overt association between the brand and Melbourne as a place. Mr Yardley was engaged in further consumer research in 2001 and 2002 that came to the same conclusion as the 1989-1990 study: that Australian beer consumers consider brands such as Stella Artois, Heineken and Becks to be from Europe, with little knowledge or interest in the individual countries with which these brands are connected. Mr Yardley says that, personally as a consumer, when he first saw the trade mark he believed that the Bavaria NV beer was brewed in The Netherlands. His professional opinion was that persons seeing the word BAVARIA in the context of the trade mark would be likely to perceive it as a brand name with no specific geographical association. I agree. Mr Crossland disputes Mr Yardley's opinion that Australian consumers associate beer from different European countries collectively as "European beers". In his opinion the market has changed. While he accepts that it may have been applicable in the early to mid 1980s, he says that by August 2000 a significant sector of Australian consumers had become more sophisticated. In his opinion they would have been aware of the reputation and quality associated with beer brewed in Bavaria. However, that personal opinion is not reflected in the consumer research. Mr Yardley's evidence, which I prefer as an indication of the reaction of the Australian consumer, leads to the conclusion that consumers would not make a connection between the trade mark with the reference to "Bavaria" on one hand and the German State or the origin of the beer on the other. There was no evidence of any actual confusion or misunderstanding by consumers of the origin of Bavaria NV's beer. While such evidence is not essential, the evidence or lack thereof can be, as it may be in an infringement case, ' of some significance ' ( Crazy Ron's at [95]). Bavaria NV's evidence, through Mr Petrus Swinkels and Mr Carroll, is that they are unaware of any complaints or queries from any customers regarding the origin of Bavaria NV's products or of any confusion as to the origin of the beer arising from the use of the word BAVARIA on the labels. Part of Mr Petrus Swinkels' role as Export Manager for Bavaria NV was to be made aware of issues raised in export markets concerning the products sold by Bavaria NV, including those sold under the trade mark. He continued to be informed of such issues when he became a member of the Board of Directors and then Chairman of the Board of Directors. Mr Swinkels says that during his entire employment with Bavaria NV he never received or was informed of a complaint or query from a customer or distributor concerning the origin of the products sold by Bavaria NV, including products sold under the trade mark. The available evidence supports Bavaria NV's submission that there is no body of consumers which has been deceived or confused, in Australia or worldwide, in a way that BBA says is self-evident. I am not satisfied that the consumer would associate the trade mark with the State in Germany. I am not satisfied that the trade mark connotes more than a European origin of the beer. I am not satisfied that the trade mark connotes that the beer has characteristics attributable to a Bavarian origin. Mr Crossland's evidence is that in his opinion Bavaria NV's beer does not have the characteristics of a Bavarian pilsener. This does not establish that Bavaria NV's beer does not have the quality of a Bavarian beer. Mr Crossland has not conducted a comparison between Bavaria NV's beer and a statistical or broad range of Bavarian beer. Mr Antonius Swinkels' evidence that Bavaria NV brews its beer in Holland according to the method introduced by Bavarian brewers over a hundred years ago is not challenged other than by way of an observation that he conducted no independent research but relied on historical material. The evidence is insufficient to establish that the Australian consumer is aware of the characteristics of Bavarian-brewed beer or would be confused or deceived by the trade mark to think that Bavaria NV's product has certain characteristics attributable to a Bavarian origin or that the product does not, in fact, possess such characteristics. Accordingly, the ground of opposition under s 43 of the Act does not succeed. Such conduct, it says, is misleading and deceptive or likely to mislead and deceive, in contravention of s 52 of the Trade Practices Act . BBA also submits that, by conveying that Bavaria NV's beer comes from Bavaria and that it has the qualities, reputation or other characteristics of Bavarian beer, there is a false and misleading representation contrary to ss 53(a) , 53 (c), 53 (d) and/or 53(eb) of the Trade Practices Act . Accordingly, BBA says that the application for registration must be rejected in accordance with s 42(b) of the Act. It is common ground that Bavaria NV beer has no sponsorship or approval from the State of Bavaria. BBA submits that if there is a representation inherent in the mark that the beer is from Bavaria and that it has certain characteristics as a result, this is not true and the making of the representation will constitute misleading conduct in contravention of the Trade Practices Act . BBA concedes that mere confusion is not sufficient to establish that the use of the mark will contravene s 52 or s 53 of the Trade Practices Act and thereby be contrary to law. The question is whether, by use of the trade mark, there would be a contravention of the Trade Practices Act by a representation that, in all the circumstances, is made by Bavaria NV to a hypothetical ordinary and reasonable member of the class constituted by prospective purchasers of beer ( Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at [102] - [103] ; Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 8) [2008] FCA 470 ; (2008) 75 IPR 557 at [89] ). Does the trade mark represent that the Bavaria NV beer originates in Bavaria or that it has a quality, reputation or other characteristic attributable to beer brewed in Bavaria? It follows from my conclusions with respect to s 43 of the Act that BBA has not established a contravention of s 52 or s 53 of the Trade Practices Act . Accordingly, the ground of opposition under s 42(b) of the Act is not made out. "Geographical indication" in relation to goods originating in a particular country or in a region or locality of that country is defined in s 6 of the Act to mean a sign recognised in that country as a sign indicating that the goods: originated in that country, region or locality; and have a quality, reputation or other characteristic attributable to their geographical origin. Section 61 was included in the Act in accordance with the Agreement on Trade Related Aspects of Intellectual Property Rights ('TRIPS'). I have been assisted by an explanation of this system by Professor Nordemann, an Attorney-at-Law admitted to practice in Germany, Dr Schulte-Beckhausen, a lawyer specialising in intellectual property law in Germany who has, since 1999, been the General Manager of the German Institute for the Protection of Geographic Indications based in Cologne and Mr Grimm, also an Attorney-at-Law admitted to practice in Germany. The factual matrix, which is not in dispute, is as follows: BBA relies upon the Lady Bavaria trade mark, the bilateral treaties and the BAYERISCHES BIER PGI to argue that "Bavaria" and "Bavarian" are geographical indications and that the trade mark contains or consists of a sign that is a geographical indication for the purposes of s 61 of the Act. BBA submits that there is and has been recognition in Germany of the Lady Bavaria trade mark as a registered trade mark since 1957 and of BAYERISCHES BIER as the subject of bilateral treaties since the 1960s and, more recently, as a PGI. BBA submits that, while BAYERISCHES BIER was entered on the European Commission register as a PGI in 2001, the priority date is 1994 (the date of the application for registration) and represents the appropriate date for recognition. The issue in dispute is whether the expression GENUINE BAVARIAN BEER and the expression BAYERISCHES BIER, which translates as BAVARIAN BEER, are geographical indications under the Act and, if so, whether they can be equated with "Bavaria" for the purposes of s 61 of the Act. "Bayern" ("Bavaria") is a noun. "Bayerisches" ("Bavarian") is an adjective. Mr Grimm points out that "Bavaria" is frequently used in trade names with respect to any kind of trade. A search of company profiles in Germany containing the term "Bavaria", conducted on 23 January 2008, revealed 649 results. The word "Bavaria" is used in restaurants and as street names. Within Germany, "Bavaria" is also used in connection with breweries and beer, on associated goods such as beer mats and on some beer labels. "Recognise" is defined in The Macquarie Dictionary (3 rd edition) relevantly as ' 4. to acknowledge formally as existing or as entitled to consideration ... 5. to acknowledge or accept formally as being something stated ... 6. to acknowledge or treat as valid '. Whether a geographical indication is recognised as at the date of application or as at the date of registration is a vexed question that, I was informed, is the subject of current consideration in European courts. In the absence of a final decision in Europe, my view would be that the mere lodging of an application to register a PGI which is not published and which must be evaluated before registration does not constitute recognition. Once registered, the date from which the recognition applies may or may not be the date of application but I am not prepared to conclude that mere application for registration as a geographical indication is sufficient to constitute recognition within the meaning of s 6 of the Act. The Delegate concluded that "recognised" meant that the sign had received some kind of acknowledgment. This, she accepted, could include registration as a certification trade mark or entry on a national or international register of geographical indications, or a finding by a court, or mention in agreements between governments. Bavaria NV submits that "recognised" within s 6 of the Act requires prior formal recognition within the relevant jurisdiction, either as a matter of law by the findings of a court, or as a matter of legislation, or by a treaty binding on the country of origin. In Lahore, Patents, Trade Marks & Related Rights (LexisNexis Butterworths, Looseleaf Service) at [55,600], the authors conclude that the requirement that the geographical indication be "recognised" includes a geographical indication that is registered in a particular country or recognised after a formal administrative process has been undertaken. This leaves open the question whether long term use short of formal recognition is sufficient. I would have thought not. It would have been simple to have defined geographical indication by reference to long term use or reputation. "Recognition" requires, in my view, something of a formal nature. In any event, the words and expressions relied on by BBA are the subject of formal recognition. This leaves open whether the recognition extends to the characteristics, as required by s 6 of the Act. Dr Schulte-Beckhausen says that geographical indications of origin are protected on three bases in Germany. First, via the Council Regulation (EC) 510/2006 which replaced Council Regulation (EEC) 2081/1992; second, in bilateral treaties; and third, by provisions for the protection of geographical indications in the German Trademarks Act introduced with effect from 1 January 1995. As to the first, protection is granted within the European Union for geographical indications that are listed in the register of the European Commission. These "register rights" are comparable with trade mark rights and are created for the registered geographical indications to protect geographical indications and designations of origin for agricultural products and foodstuffs such as beer. In Dr Schulte-Beckhausen's opinion there is no difference in the degree of protection between a PGI and a PDO. The protection extends to ' misuse, imitation or evocation, even if the true origin of the product is indicated or if the protected designation is translated '. As to bilateral treaties, German geographical indications of origin are not protected in Germany but in the territories of the contracting states (which do not include Australia). Under such a treaty, BAYERISCHES BIER is protected, for example, in France. The protection is against all modifications suited to give the same impression as the indication of origin itself or to utilise its advertising value. Since 1 January 1995, geographical indications of origin have been protected under the German Trademarks Act. Before that date, geographical indications of origin were protected on the basis of the law of competition, namely by the prohibition of deception. The protection under the German Trademarks Act is indirect, as it is the consumer who is protected from misleading use of a geographical indication of origin. According to s 126 to s 129 of an English translation of the "German trademark law" provided by Mr Grimm, appellations of geographical origin include names of places, areas, regions or countries ' as well as other indications or signs used in the course of trade for identifying the geographical origin of goods or services '. Section 127 then provides that appellations of geographical origins must not be used in the course of trade for goods or services which do not originate from that place, area, region or country if the use of such names, appellations or signs entails a risk of deception with respect to geographical origin. In the present case the name of the place, area or region is Bavaria. Under German law, for the so-called "simple geographical indications of origin", there is no connection between the quality of the product and its origin. However, the "qualified indications of origin" go beyond the "simple" indications by indicating both the place of origin and that the products have a special grade or quality due to their geographical origin. Both requirements must be satisfied for a "qualified indication of origin". It would seem that there is a question currently before the relevant courts as to whether or not the national law provides protection if a geographical indication of origin is not listed in the register of the European Commission but could be. The expert witnesses have given their own opinion as to the likely outcome of these determinations but they remain a matter for the courts. Dr Schulte-Beckhausen expresses the opinion that the use of the designation "Bavaria" for beer that is not brewed in Bavaria would constitute a violation of the German Trademarks Act but that this legislation could only be applied if there were no relevant PGI or PDO on the register of the European Commission. I have not been advised that any relevant decisions have been made. Dr Schulte-Beckhausen states that he disagrees with Professor Nordemann's statement that, because BAYERISCHES BIER is a PGI and not a PDO, it has to be assumed that BAYERISCHES BIER does not have a special quality or special characteristics. He expresses the opinion that it is decisive that there is a special quality between the reference to the geographical origin on one hand and the products claimed on the other. He says that it would have been impossible to register BAYERISCHES BIER as a PGI if this were not the case. Professor Nordemann agreed during cross-examination that the registration of BAYERISCHES BIER under Article 17 of Council Regulation (EEC) 2081/1992 meant that the conditions of proving a link between the geographical region and the quality or characteristics of the product associated with that geographical region had been met. Dr Schulte-Beckhausen supports the submission that the use of the designation "Bavaria" for beer violates the protection in Article 13 of the Council Regulation (EC) 510/2006. He bases this opinion, to the extent that it is admissible, on the fact that Article 13 protects a translation of the protected designation. He then translates "Bayerisch" as "Bavaria", although I note that "Bayerisches" translates as "Bavarian". If a geographical name qualifies for protection as a PGI under European law, the relevant information is published in an official journal. The Official Journal records that, in respect of the application for registration of BAYERISCHES BIER as a PGI, additional information was requested after the application was filed, following which the registration was granted. Bavaria NV submits that this supports its contention that the date of recognition cannot be the date of application but only the date of registration. Indeed, the Council Regulation of 28 June 2001 states that the registration shall enter into force on the day of its publication in the Official Journal. The PGI is BAYERISCHES BIER. The protected designation of origin is Germany, rather than Bavaria. Council Regulation (EC) 1347/2001 specifically noted that the Dutch trade mark "Bavaria" may continue notwithstanding the registration of the geographical indication BAYERISCHES BIER, as long as it fulfils the conditions under Article 14(2) of the Council Regulation (EEC) 2081/1992. Article 14(2) provided for continued use of a trade mark registered in good faith before the date on which application for registration of a designation of origin or geographical indication was lodged, notwithstanding a subsequent registration of that designation of origin or geographical indication, where there were no grounds for invalidity or revocation of the trade mark. BBA says that the registration of the Lady Bavaria trade mark, the bilateral treaties regarding BAYERISCHES BIER and the registration of BAYERISCHES BIER as a PGI each encompass recognition in Germany of "Bavaria" and "Bavarian" as signs that are geographical indications for beer. BBA submits that an ability to avoid recognition of a geographical indication by changing an adjective to a noun would be to avoid the obligations under TRIPS. The requirement in s 6 of the Act is that the sign recognised as a geographical indication for the designated goods must be of some significance in the country of origin. The word "Bavaria" alone is not necessarily associated with beer. Many other industries in Germany are associated with the word "Bavaria". One example from BBA's evidence is Bavaria Glas. However, it may be accepted that, within Germany, Bavaria has a recognised and significant presence in relation to beer. The Act requires that it is "the sign" that is recognised in the country of geographical origin, not the sign or any essential part of it. There is evidence to suggest that, traditionally, "Bavarian Beer" referred to beer from Bavaria or to beer made according to the Bavarian method. Mr Antonius Swinkels describes Bavarian beer in terms of its method of brewing. Beer can be brewed according to the Bavarian method in locations other than Bavaria, so that "Bavarian Beer" would not necessarily denote an origin in Bavaria. BBA submits that GENUINE BAVARIAN BEER (the words in the Lady Bavaria trade mark) and BAYERISCHES BIER sufficiently show recognition of the words "Bavaria" and "Bavarian" in relation to beer in Germany. Article 13 of Council Regulation (EC) 510/2006 provides protection to a registered PGI or PDO against translations and evocations. BBA relies upon the findings by the Higher Regional Court in Munich that a Bavaria NV label infringes the BAYERISCHES BIER PGI. Questions of infringement under European law, which include consideration of evocations, do not assist in the determination of an opposition to registration in Australia under s 61 of the Act. It is necessary to consider the following questions: Is the Lady Bavaria trade mark a geographical indication for the purposes of ss 6 and 61 of the Act? Is BAYERISCHES BIER a geographical indication for the purposes of ss 6 and 61 of the Act, either because it is the subject of a number of bilateral treaties or because it is a PGI? Does the trade mark contain or consist of a sign that is a geographical indication for beer within the meaning of s 61 of the Act? Is the Lady Bavaria trade mark a geographical indication? The Lady Bavaria trade mark was registered in Germany in 1957 and was registered/renewed under the Madrid protocol for a number of designated countries. The expression GENUINE BAVARIAN BEER (ie. the words in the Lady Bavaria trade mark) is a sign recognised in Germany to mean that the beer originated in Bavaria. I accept that this encompasses recognition that the beer has characteristics attributable to its Bavarian origin. Bavaria NV says that this does not signify that there is a sign recognised in Germany indicating that certain products have originated in a region and that they have a particular quality, reputation or other characteristic attributable to their origin. Rather, Bavaria NV says that the Lady Bavaria trade mark connotes a connection between members of an association to distinguish them from non-members. In any event, Bavaria NV does not accept that a registered trade mark under German domestic law satisfies the requirement within s 61. I accept that mere registration as a trade mark does not satisfy the requirement that the sign be not only recognised but also recognised as indicating origin and characteristics as set out in s 6 of the Act. However, in this case, the registered Lady Bavaria trade mark includes the words GENUINE BAVARIAN BEER which indicates both origin and an assertion of qualities based on origin. I accept, subject to any European Court of Justice determination to the contrary, that the Lady Bavaria trade mark is a sign that is a geographical indication recognised in Germany for the purposes of ss 6 and 61 of the Act. However, this is not the opposed trade mark. Is BAYERISCHES BIER a geographical indication? BAYERISCHES BIER was registered as a PGI in 2001 following an application by the German government in 1994. BBA says that, from the mode of the application made under Article 17 of Council Regulation (EEC) 2081/1992, which culminated in registration in 2001, BAYERISCHES BIER was already recognised and protected under German national law when the application was made in 1994. If so, as at the application date, the sign was recognised under German national law as a geographical indication and already protected. By contrast, Bavaria NV submits that it is only formal recognition, for example, by registration, which is contemplated by s 6 of the Act. The application was made under the so-called "simplified procedure" provided for in Article 17, which allowed Member States to notify the European Commission which of their legally protected names or which of their names established by usage they wished to register as geographical indications. The link between the quality, reputation or other characteristic of the product and the geographical indication was established and acknowledged by the registration, although BBA says that this link was established by the making of the application for registration. Prior to the commencement of the Council Regulations there was no system of registration of appellations of geographic origin in Germany. Professor Nordemann elaborated on reasons why, in his opinion, the German government may have applied to the European Commission for registration of BAYERISCHES BIER and commented that such a decision may have been political in nature. In any event, BAYERISCHES BIER is a registered PGI, a sign that is a geographical indication for the purposes of ss 6 and 61 of the Act. In particular, it says that the treaties are not enforceable in Germany, which means that a person seeking to establish the existence of a geographical indication would not simply be able to assert any of the treaties as proving the existence of the geographical indication. Rather, he or she would have to prove the existence of a geographical appellation pursuant to the German Trademarks Act. However, as Bavaria NV notes, the German Trademarks Act is not applicable where there is a PGI registered under European law pursuant to the Council Regulations. I am of the view that the bilateral treaties, formal agreements entered into by the German government, do constitute recognition in Germany of BAYERSICHES BIER as a sign that is a geographical indication for the purposes of the Act. In any event, as discussed above, I consider that BAYERSICHES BIER, as a PGI registered under the Council Regulations, is a geographical indication for the purposes of the Act. Does the trade mark contain or consist of a sign that is a geographical indication for goods originating in Bavaria? The answer to this question does not depend on impression or the likely impression made on a consumer. It requires the trade mark to be looked at in its totality to decide if it contains or consists of a sign recognised in Germany as indicating that the beer comes from Bavaria and that is has a quality, reputation or other characteristic attributable to its origin. The signs recognised in Germany do not equate to the trade mark. Essentially, BBA contends that GENUINE BAVARIAN BEER (from the Lady Bavaria trade mark) and BAYERISCHES BIER are geographical indications, that this establishes that "Bavaria" and "Bavarian" are also geographical indications for beer and that the trade mark contains or consists of a sign that is a geographical indication by virtue of the words BAVARIA or BAVARIA BEER (disregarding the interspersed HOLLAND). I do not accept that contention. The Act requires that the trade mark application contain a sign that is itself recognised in Germany. The recognised signs are the Lady Bavaria trade mark which includes the phrase GENUINE BAVARIAN BEER and BAYERISCHES BIER, which translates as BAVARIAN BEER. "Bavarian Beer" is not the same as "Bavaria" or "Bavarian Holland Beer". As was said by the Delegate, Bavaria is the name of a German State, while BAYERISCHES BIER refers to beer that comes from Bavaria. They are not the same. Section 61(1) requires that the geographical indication itself be contained in the trade mark. The section does not refer to a sign that is substantially the same as or deceptively similar to the geographical indication, or refer to an evocation or imitation of the geographical indication. The trade mark does not contain "Bavarian", "Bavarian Beer" or even "Bavaria Beer". One cannot just ignore the word HOLLAND that appears between BAVARIA and BEER, nor the difference between Bavaria, the name of the State in Germany, and the description of the kind of beer that has the quality that BBA contends is associated with Bavarian beer. BBA has adduced evidence of German text books published in 2002 on geographical indications which recognise the designation "Bavaria" for use with particular beers. I do not accept that evidence as sufficient for the purposes of the Act to establish that "Bavaria" when used for beer is a recognised sign for the purposes of the definition of a "geographical indication" under the Act. Indeed, BBA's submissions concentrate on various ways in which "Genuine Bavarian Beer" or "Bayerisches Bier" were recognised as signs. None of them are either "Bavaria" or "Bavaria Holland Beer", which are the signs which could be said to be contained within the trade mark. It is not a question of translation. I accept that a translation should be made for the purposes of comparison. It is not to the point that, in Germany, a Bavaria NV trade mark was found to infringe BAYERISCHES BIER as a PGI. The ground of opposition in these proceedings is based on s 61 and s 6 of the Act. As noted by the Delegate, s 6 contains no mention of a geographical indication encompassing signs which are substantially identical with or deceptively similar to a geographical indication or those that evoke or "allude to" a protected designation as, apparently from the German decision, does the law in that country regarding infringement of a PGI. The opposition based on s 61(1) of the Act does not succeed. I will, however, proceed to consider the defence provided for in s 61(2)(c) of the Act. If the BAYERISCHES BIER PGI is a geographical indication for the purposes of s 6 and s 61(1), the dates are: 1996 (the later alternative provided for in s 61(2)(c) if the priority date of 1994 applies as the date of recognition) or 2001 (the later alternative date to 1996 if the registration date applies as the date of recognition). BBA also relies on 1996 being the later alternative to the date from which BAYERISCHES BIER was the subject of bilateral treaties and the later alternative date to the date when the the Lady Bavaria trade mark was first registered. This raises two issues in relation to the date of recognition of the BAYERISCHES BIER PGI: BBA submits that Bavaria NV has not established a defence under s 61(2)(c). Essentially, BBA appears to be contending that in order for Bavaria NV to rely on the defence in s 61(2)(c) of the Act, it must show use of the trade mark in Australia before 1996 and that it has not done so. I have found that Bavaria NV first sold its beer in Australia in 1988. This date precedes all possible dates that apply for the purposes of s 61(2)(c). The beer sold in 1988 would not have been under the trade mark, as that represents the label as at the priority date of 2000. While the label under which Bavaria NV's beer was sold in 1988 would not have been the same as the trade mark, BBA concedes that the word "Bavaria" would have been used as part of the label at that time, a date before 1 January 1996. Given that BBA submits that the relevant geographical indications are contained within the trade mark due to the presence of the word BAVARIA, this is sufficient to establish use before 1996 for the purposes of s 61(2)(c) of the Act. If BBA were otherwise entitled to succeed on the ground of opposition provided for in s 61 of the Act, this ground of opposition would fail by the application of s 61(2)(c). First, BBA says that the evidence of Mr Petrus Swinkels and the change of label demonstrate that Bavaria NV no longer has any intention to use the trade mark and that the alterations to the features and words in the present label make that clear. Under s 59 of the Act, the registration of a trade mark may be opposed on the ground that the applicant does not intend to use or to authorise the use of the trade mark in Australia and BBA submits that s 59 of the Act imposes a continuing obligation of intention to use a mark. Secondly, BBA submits that the Court should exercise its discretion to refuse registration because of Bavaria NV's conduct in using the ® symbol on its products when the labels are not, in fact, registered trade marks. Bavaria NV says that there is no separate ground of opposition under s 55 of the Act and that, in deciding whether or not to register a trade mark, the Registrar (or the Court) is confined to the particular grounds raised which are provided for in ss 57 to 62A of the Act. Bavaria NV also points out that neither s 59 of the Act nor any challenge to Bavaria NV's intention to use the trade mark were raised as a ground of opposition. In these circumstances, Bavaria NV says, it cannot be expected to provide or to have provided evidence going to its intention to use the trade mark. BBA says that the question of use or intended use has always been in issue by reason of s 41(5) and s 41(6) of the Act. However, Bavaria NV chose not to rely on the application of those sub-sections for the purposes of the s 41 ground of opposition. Section 59 is a separate ground of opposition that is directed to questions of use and intention to use. Bavaria NV further submits that use and non-use are not relevant because s 92(4)(b) of the Act provides legislative acceptance of the fact that there may be a period of three years from the date of registration when there is no use of the trade mark. Bavaria NV's trade mark is not yet registered. Bavaria NV insists that the use of the ® symbol on some of its products and the different products that have been sold by Bavaria NV that do not include the more prominent HOLLAND on the label are not relevant to a consideration of the registrability of the trade mark. I do not accept that, if none of the grounds of opposition have been established, there is still a discretion to refuse to register the trade mark. The authors of Shanahan's Australian Law of Trade Marks & Passing Off (3 rd edition, Lawbook Co, 2003) express the view at [11.25] that the language of s 55 does not support the inference of any discretion. Section 55(b) permits conditions or limitations to be imposed to reflect, for example, successful opposition in respect of some but not all of the classes of goods specified. It does not add a ground of opposition. The decision to reject an application regularly made must be based upon positive satisfaction that a ground for rejecting it is made out (Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020 ; (1999) 93 FCR 365 at [47] per French J). Section 55 does not provide for an ambulatory discretion to operate on the Registrar or the Court to refuse a trade mark application which otherwise does not offend any of the particular grounds of opposition provided for in the Act which are relied upon. I shall, however, consider briefly the matters relied upon by BBA, which were raised in a rather desultory fashion and did not constitute the main attack on the trade mark. BBA relies on the evidence of Mr Petrus Swinkels that Bavaria NV changes the label for its beer every five to ten years and that its present label is different from the trade mark. There is evidence of use of the trade mark and the subsequent change of label, from which an absence of intention to use the trade mark in the future could be inferred. There is little evidence available concerning Bavaria NV's intention to use the trade mark as at the priority date or as at the hearing. This is understandable as there was no issue directed to that question in the pleadings. No lack of intention to use the trade mark as at the priority date has been established. BBA submits that there remains a discretionary factor arising from the fact that the label was changed in or around 2006. It seeks to draw an inference that this establishes a lack of intention to use as at 2006 and a lack of use and intended use as at the date of hearing. I am not prepared to draw those inferences in the absence of an opportunity to Bavaria NV to provide evidence. The evidence does not go so far as to say that, once a label is changed, a previous label is never to be used. Nor does it address the question of possible future use of the trade mark if it were registered. There was no ground of opposition based on s 59 before the Registrar, nor was it foreshadowed in the grounds of opposition in these proceedings. Bavaria NV claims that it would be prejudiced if BBA were entitled to pursue this ground of opposition and that it could have but did not adduce evidence directed to it. I accept that this be the case. I do not consider that BBA should be entitled to raise this ground of opposition, directly or indirectly, in these proceedings. As to BBA's submissions regarding Bavaria NV's use of the ® symbol on its labels, BBA says that this constitutes use of a mark that is calculated to mislead. As this matter was raised only at the hearing, Bavaria NV has not had an opportunity to adduce evidence to explain how this mistake happened. There is no evidence that any such use was calculated to mislead. I am not satisfied that this action is sufficient to deny registration in the absence of evidence as to the circumstances or an opportunity to explain how it occurred. The decision of the Delegate of the Registrar of Trade Marks be set aside. Trade mark application no. 847343 proceed to registration. I certify that the preceding one hundred and eighty-three (183) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | trade mark opposition to registration under trade marks act 1995 (cth) applicant seeks registration of composite trade mark in respect of beer and other beverages trade mark includes the word bavaria, three references to "holland" and a number of non-word elements whether trade mark capable of distinguishing applicant's goods whether trade mark inherently adapted to distinguish whether use of trade mark would be likely to deceive or cause confusion or be contrary to law evidence that australian consumers would not draw a link between the word "bavaria" and the german state as the origin of the beer evidence that australian consumers would not think that the applicant's beer has characteristics attributable to a bavarian origin whether trade mark contains or consists of a sign that is a geographical indication sign must be recognised in country of origin modes of recognition whether "bavaria" equates with recognised signs whether defence in s 61(2)(c) available whether there is discretion in s 55 of the act to refuse registration of a trade mark where no ground of opposition is made out intellectual property |
I granted leave to Oil Basins Limited ("Oil Basins") to intervene and to hear on an urgent basis its application for orders pursuant to s 413(1)(c) and (g) of the Corporations Act 2001 (Cth) ("the Act "). Substantial reliance was placed by counsel for Oil Basins on s 413(1)(c) of the Act and it will suffice if I refer to that subsection. It provides, relevantly, for the Court, in such an application as this, to make orders, where property has been or is to be transferred from, in this case, the plaintiff, to Buru Energy Ltd ("Buru"). Certain oil permits in the Canning Basin are, pursuant to an executed sale agreement, to be transferred to Buru by Arc. 2 Arc is prepared to consent to the orders sought by Oil Basins in its interlocutory process dated 7 August 2008. 5.2 The plaintiff convenes a further meeting of its members (Meeting) for the purposes of considering, and, if thought fit, agreeing to the scheme between the plaintiff and its members. 3 On Friday, 1 August 2008, Oil Basins served a writ on Arc concerning an alleged breach of obligations relating to a confidentiality and non-circumvention agreement signed by Arc in November 2006 in relation to the Canning Basin oil permits. The writ contained a general endorsement that does not disclose what the confidential information is or how the so-called breach of the circumvention clause occurred, beyond the assertion that it occurred when Arc made and completed negotiations to purchase from Golden Dynasty the shares it held in a company called Terratek Drilling Tools Pty Ltd ("Terratek"). The confidential information is said to concern both those companies. 4 The endorsement to the summons pleads that by the confidentiality agreement, Arc was not to disclose the confidential information without consent and secondly, not to circumvent Oil Basins in its dealings with any party in respect of the confidential information. I have considered the terms of the confidentiality agreement. There is no evidence whatsoever before the Court, even to suggest, that the circumvention term has been breached. The confidentiality agreement did not prohibit use by Arc with the confidential information. It is the use of that information about which Oil Basin complains, without, however, particularising that complaint. 5 Arc issued an announcement to the Australian Stock Exchange, on 4 August 2008, which was the Monday following the receipt of the writ. The company vigorously denied the claims asserted. Those present at the meeting of Arc's shareholders on the following day, 5 August, were told of the writ in as detailed terms, as were revealed to the company at that time. If the resolutions under consideration today are passed by shareholders and the Court approves the Scheme, responsibility for Oil Basins' claim would be transferred to Buru. Because of the eleventh hour - indeed a later time than that - service of the writ on Arc, it was unable to advise shareholders about the writ prior to the meeting on the 5 th directly, although it did, as I said, issue an announcement to the Australian Stock Exchange on 4 August. It is likely that at least some, if not all, of the Arc shareholders who lodged proxy votes were not apprised of the fact that the writ had been served. The adjournment sought by Oil Basins is said by it to be necessary to protect the interests of those shareholders who voted by proxy without the benefit of knowing that the writ had issued or of considering any implications referrable to how they cast their votes. There is no evidence as to how many shareholders lodged proxies, or the percentage of the total shares held by them, or indeed how they voted. 7 I observe that the scheme booklet, at section 5 , deals with Risk Factors. In a general sense then, Arc's shareholders were on notice as to this kind of risk. By way of background, Arc publicly announced its acquisition of the Canning Basin permits in question in December 2006. These were acquired from Golden Dynasty. I am not persuaded that, at any adjourned shareholders meeting of Arc, if those who did not attend the 5 August meeting, were advised that the writ had been issued and its claims rejected vigorously by the company through its board, that there is any real likelihood that they would change their vote. 9 I am concerned as to the lateness of the application by Oil Basins, and by the vagueness of its case as articulated in the papers and from the bar table. The relief it seeks in the Supreme Court is primarily for equitable relief by way of the transfer of Arc shares in Terratek to Oil Basins. For that to occur, and I am not persuaded that even triable issues have been demonstrated that, Oil Basins would of course have to pay for these shares. It is speculation to think that there will be significant or material shift in values. 10 I invited counsel for Oil Basins to explain why the adjournment was being pressed, when obviously Oil Basins has no personal standing to protect the interests of Arc shareholders. Its interests would have been served by the making of the orders sought under s 413(1)(c) of the Act . I was not given any answer which I found to be satisfactory. Oil Basins' conduct in bringing such a belated application upon a paucity of fact and without a satisfactory explanation leads me to conclude that its real reasons are for some commercial gain or advantage, by putting a roadblock in front of the progress of the scheme. It should not be allowed to succeed in that course unless of course there is, objectively viewed, a proper basis for granting the orders sought. 11 The submission of Mr Bruce was that the mere fact that the writ had been issued together with their being an endorsement might in itself be enough to cause proxy voters to change their vote at an adjourned members meeting. For the reasons that I have mentioned, I do not consider that likely to occur. However, when information provided to the court is considered, I do not regard that, in its totality, it is material in the sense that it would likely affect the way in which those proxy voters would vote. I have not been persuaded that a serious claim has been made out. The claim is vigorously denied by Arc. The overwhelming majority of shareholders present at the 5 August meeting and who knew of the writ voted in favour of the scheme. There is nothing before me to suggest that the proxy voters would do differently. For these brief reasons, in the urgency of this application, I would refuse the application stated in the alternative; namely, to adjourn the application for the approval of the scheme. The orders that I propose to make are in the terms of the amended minute of proposed orders filed by the solicitors for the applicant dated 8 August 2008. I will hear the parties on the question of costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | approval of scheme of arrangement intervener supreme court writ of summons with endorsement alleging breach of obligations relating to a confidentiality and non- circumvention agreement served by intervener on plaintiff writ served two working days before meeting of plaintiff's shareholders to approve the scheme members who attended meeting informed of writ proxy voters not so informed directly asx informed of writ before meeting allegations in writ denied by plaintiff scheme approved by overwhelming majority of members whether notice of writ to proxy voters may have altered their decision whether to vote in favour of the scheme appropriate that matter of writ was brought to the attention of the court writ did disclose triable issues plaintiff willing to consent to orders to preserve intervener's legitimate interests intervener pressed for adjournment and for orders that a further meeting of members be convened to enable proxy voters to consider terms of writ no explanation as to why adjournment being sought when intervener had no obvious interest ulterior purpose inferred. corporations |
The defendant in each matter unsuccessfully challenged the jurisdiction of the Court to have issued the summons. The prosecution of the charges was then taken over by the Commonwealth Director of Public Prosecutions (DPP). 2 On 28 August 1998, the DPP elected not to proceed with the prosecutions. The charges were then dismissed. The defendants each then made an application for costs against Mr Dunstan as the original prosecutor. On 14 September 1998, a judge of the Court ordered in each matter that Mr Dunstan pay to the defendant his costs. Under O 62 r 4(1) of the Federal Court Rules , in the absence of further orders, those costs were to be taxed. 3 The process of taxing the costs has been prolonged. The defendant in each matter lodged a detailed bill of costs for taxation on 20 February 2001. During 2001, 2002 and 2003 there have been a number of occasions when the taxing officer has conducted hearings with a view to progressing the taxation of the costs. The taxation of the costs has not progressed very far. During that process, in each matter, Mr Dunstan by motions of 6 September 2002, applied for the costs orders made on 14 September 1998 to be set aside. He alleged they had been procured through fraudulent conduct. On 13 September 2002, a judge of the Court dismissed Mr Dunstan's motion in each matter, and ordered him to pay the costs of the motions. 4 The defendant in each matter has now applied to have the costs ordered to be paid on 14 September 1998 fixed at a gross sum pursuant to O 62 r 4(2)(c) of the Rules. Each application is opposed by Mr Dunstan. 5 Mr Dunstan's submissions include that the costs orders made on 14 September 1998 should not have been made because he commenced the prosecutions in good faith. The fact is that the costs orders have been made. Mr Dunstan has already applied to have them set aside. He did so unsuccessfully. On this application, I will give effect to them. The issue is whether those costs should now be fixed in a gross sum. 6 Mr Dunstan also submitted that orders should be made that the DPP pay his costs and indemnify him for the costs he has been ordered to pay the defendants. There is no formal application before the Court to entertain that application, and the DPP has not been given notice of it. I do not propose to further consider that submission. In my view, it may do so. 8 There appears to be little doubt that the Court has power under O 62 r 4(2)(c) to order that costs be fixed in a gross sum after an order that the costs of a party be paid. Once an order for costs is made, the normal or default method of fixing those costs is by taxing them: O 62 r 4(1). It is expressed as an entitlement of the party in whose favour the costs order has been made. Order 62 r 4(2) refers expressly to circumstances where the Court orders costs to be paid. It contemplates further orders, including that instead of taxed costs the person shall be entitled to a gross sum specified in the further order. In either event, the process involves the means of quantifying the costs ordered to be paid. In the absence of a further order, the entitlement is to quantify them by taxation. The further order may change the entitlement to quantification by the gross sum. 9 Order 62 r 4(1) and (2), in my view, thus contemplate successively an order for costs, and for a means of quantifying those costs. That is a view which has been adopted by the Court, apparently without remark: see e.g. Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; Canvas Graphics Pty Ltd v Kodak (Australasia) Pty Ltd [1998] FCA 23. I can see no reason why O 62 r 4(2)(c) should not be given that effect. 10 Once that step is taken, there is in my view no reason why the further order fixing the costs in a gross sum may not be made at any stage of the taxation process, whether after a bill of costs in taxable form is lodged, or after it is partly considered. The reasons for making a further order fixing the costs in a lump sum may only emerge after the initial order for costs is made, or indeed (as here) after the process of taxation has commenced. In addition, as the gross sum costs order will almost inevitably be made on the application of the party who has secured the order for costs, it is that party's entitlement (as to the means of quantifying its costs) which may be affected by any such further order so the party entitled to costs will not be exposed to disadvantage. That view also is consistent with the breadth of the discretion as to costs in s 43 of the Federal Court of Australia Act 1976 (Cth) and in O 62 r 3(1) of the Federal Court Rules . 11 An alternative way of reaching the same outcome, where a gross sum order for costs may be made after an order for costs to be taxed, was adopted by Branson J in Brookfield v Davey Products Pty Ltd [1997] FCA 1462. In that matter, the costs order had expressly stated that the entitlement was to pay the 'costs to be taxed'. Her Honour considered that there was power under s 43 to vary the costs order so made by specifying a gross sum for costs. 12 I observe that, on 21 December 2005 when this issue was raised, Mr Dunstan did not contend that there was no power to do so. I will not repeat them. 14 The course of the taxation of costs thus far in these matters indicates that the process of taxing costs to date in these matters has been prolonged and expensive. Mr Dunstan contends that that is the defendants' fault, and so should not be in the particular circumstances a reason to fix a gross sum for costs. 15 The bills of costs lodged on 20 February 2001 totalled $20,967 (31/97) and $21,137 (32/97) respectively. An accompanying memorandum indicated that, as the defendant in each matter was represented by the same solicitor and as each matter was conducted simultaneously, many item costs had been apportioned to each bill of costs. Mr Dunstan by letter of 25 March 2001 raised a number of objections to those bills of costs. The defendants indicated that, apart from the possibility that certain claimed costs relating to discovery ought not to have been included, they disagreed with Mr Dunstan's objections. They were nevertheless prepared to have the items objected to removed from the bills of costs. That led to the bills of costs being reduced by $3808 to $17,159 (31/97) and by $3811 to $17,326 (32/97). The disputed (and conceded) items were identified. 16 The taxing officer then, pursuant to O 62 r 46(3), issued an estimate of the taxable costs by letter to the parties in each matter of 22 June 2001. The estimates were $11,990 (31/97) and $11,907 (32/97). Under O 62 r 46(3), Mr Dunstan objected to those provisional costs assessments so that process of taxation needed to be undertaken. 17 Before the process of taxation, attempts to resolve the amount of the costs in each matter by mediation were undertaken. They were unsuccessful. The taxations were then re-activated after March 2002. 18 Mr Dunstan outlined his general position by letter of 10 September 2001. He asked that the process be deferred until he was released from prison. He indicated also that he would take every point available on the taxations. It is not accepted that each alleged item was actually carried out. If the alleged item was actually carried out, it is not accepted that the alleged item was in any way connected with cases AG31/1997 and AG32/1997. If the alleged item was actually carried out in connection with cases AG31/1997 and AG32/1997, it is not accepted that the alleged item was necessary or proper. If the alleged item was necessarily and properly carried out in connection with cases AG31/1997 and AG32/1997, it is not accepted that the cost shown is in accordance with the appropriate cost schedule. It is, for instance, self-evident that upon each defendant being served with the summons in each matter, each defendant would consult solicitors, that the solicitors would consider the summons and would take instructions in relation to it, would attend the directions hearings, and the like. There may be scope to dispute that all attendances for those purposes were necessary or proper, or that all needed to take as long as they did, but not that none of them were necessary or proper. It is also self-evident that instructions were taken to challenge by motion the jurisdiction of the Court to hear the information, because Mr Dunstan was served with those documents and attended when the motion in each matter was addressed. There may be scope to assert that that work should not be allowed on a party/party taxation, but not that some such work was not carried out, and also to challenge the need for all the work done in relation to those motions. Mr Dunstan, however, signalled very early that his approach was to dispute every costs item on every conceivable ground. 19 On 20 May 2002, Mr Dunstan filed his notices of objection to the bills of costs in each matter. He claimed that the costs orders of 14 September 1998 should not have been made because the Court had been deliberately misled about material facts. It was unrealistic to raise that issue at the taxation. Any application to set aside the costs orders should have been made to a judge. A taxing officer has no power to set aside or ignore orders of the Court. The notices of objection took the four points quoted in [18] above in relation to every item in the bills of costs, and in respect of some items raised additional objections or expanded upon one or more of the objections. 20 On 29 May 2002, directions were given for the taxing process. It was to commence on 20 September 2002. On 6 September 2002, Mr Dunstan applied by motion to set aside the costs orders in each matter. On 13 September 2002, those motions were each dismissed with costs: Dunstan v Seymour [2002] FCA 1195. In the meantime, the taxations were rescheduled to commence on 4 October 2002. 21 There have then been seven attendances between 4 October 2002 and 27 November 2003 totalling 15.5 hours for the taxing of costs. There has been no progress since that date. In that time, only five of 37 pages of the bill of costs in one matter (31/97) have been taxed. That covers 45 of 326 items. The taxation of the other bill of costs (32/97) has not yet started. Mr Dunstan's circumstances have restricted the sessions to no more than two hours, and it has been difficult to arrange his availability. Some schedule sessions have not taken place, though events beyond Mr Dunstan's control. 22 I do not regard that material as supporting Mr Dunstan's claim that responsibility for the slow progress of the taxation of costs rests with the defendants. It shows that the defendants, for the purposes of the taxation, were prepared to concede Mr Dunstan's first round of objections. They did so, on the evidence, to progress the taxation. They did not thereby acknowledge that those items should not have been claimed. An issue arose as to the extent to which Mr Dunstan should have access to material the subject of legal professional privilege for the purposes of the taxation. Another issue arose as to the extent to which time spent on research should be allowed on taxation. They are common issues which arise. They do not indicate the defendants consciously claimed work done which was not done, or claimed that time was spent which was not spent. The taxing officer could adjudicate on the individual items of work claimed. Indeed, the material referred to tends to indicate that Mr Dunstan, rather than the defendants, has approached the taxation of costs in an obstructive way by disputing each item of work claimed, even to the extent of saying that the work was not done. 23 In my view, it is clear that the continued taxation of the bills of costs would be unduly protracted and unduly expensive, having regard to the amounts of the costs claim which are to be taxed. The history thus far demonstrates that. It is not necessary to identify precisely why progress has been so slow, save for the finding I have made that the defendants have not caused that slow progress by any improper conduct on their part. I see no reason why progress might be accelerated if the taxation of costs were to resume. 24 It is also clear, on the material, that the further expense of continuing to tax their costs in the normal manner would be an expense which the defendants are unlikely to recover from Mr Dunstan. I adopt my findings at [29] of the main costs judgment. That is a factor which weighs in the scales in favour of making a gross sum costs order. 25 As I said in the main costs judgment, the need to ensure that Mr Dunstan is not disadvantaged by a gross sum costs order, by such an order fixing costs at a figure higher than would be fixed on normal taxation, can be accommodated by a careful and conservative approach to the fixing of a gross sum for costs in each matter. 26 Mr Dunstan contends that it is not possible to do that in these matters because the process of taxation of costs to date reveals that, however conservative an approach is taken, there is too great a risk of fixing too high a gross sum for costs. (He also argued in relation to the gross sum costs applications considered in the main costs judgment that the uncertainty about reaching a proper gross sum in these matters should indicate that similar uncertainty should be found to exist in relation to those costs applications as well. 28 The means by which a gross sum for costs might be fixed are referred to by Kim Chapman. For reasons given in the main judgment, I generally accept his evidence. Mr Chapman's starting point in these matters has been the taxing officer's estimates of taxable costs in each matter of $11,990 (31/97) and $11,907 (32/97). That starting point firstly took out of the bills of costs all items to which Mr Dunstan initially objected on 25 March 2001. The estimates then represent about 70 per cent of the bills of costs as adjusted by the defendants' concessions and about 57 per cent of the bills of costs as lodged. 29 Mr Chapman has also reviewed the taxation of the bill of costs (31/97) thus far. He has considered Mr Dunstan's objections, the concessions made by the defendant in that matter, and has been alert to check that the work itemised does relate to the particular matter. On the basis of the taxing officer's rulings thus far, and his consideration, he considers it is unlikely that the two bills of costs will be taxed at less than the taxing officer's estimates, a total of $23,897. 30 The items to which Mr Dunstan initially objected on 25 March 2001 related in part to the discovery process, including making the relevant documents available for inspection by Mr Dunstan or his wife before the DPP took over the prosecution. Mr Dunstan in his written submissions suggests that none of that work was done, at least not in these proceedings. That is disputed in the correspondence between the parties. Although the extent of that work may not all be recoverable on a party/party basis, I think that much of it would be recoverable. They also relate to the defendants' unsuccessful motion to challenge the jurisdiction of the Court. I agree those items would not be allowed on taxation, including the conduct of the 'pre-trial conference' of 13 May 1998 (when the motions of the defendant were dismissed). They further relate to the defendants' request for particulars of the allegations. I consider that topic is one in respect of which proper costs would be recoverable. However, consistent with the defendants' concession, I do not propose to take any of those matters into account in determining the present costs applications. 31 Mr Dunstan in his written and oral submissions identified several other items which, he said, were improperly claimed. It is not necessary to address them individually at this point, as I do not consider the points made --- assuming them to be valid --- go much distance towards demonstrating that no proper or reliable means of determining a gross sum for costs is available. 32 Mr Chapman was cross-examined by Mr Dunstan. Partly that related to items to which Mr Dunstan had objected on 25 March 2001 and had been conceded. He raised with Mr Chapman the suggestion that the general care and conduct allowance had been claimed twice, but Mr Chapman did not accept that. Mr Dunstan presented to Mr Chapman his analyses of the bill of costs (31/97) which indicate that duplication. The care and consideration allowance of 20 per cent appears to have been applied to the whole bill, and not merely to the reduced amount reflecting the concessions. The concessions which were originally the subject of that uplift totalled $2089 (31/97) and $2092 (32/97), so the possibly wrongly included component of the care and consideration element is $418 (31/97) and $418 (32/97) respectively. The balance of the conceded items were disbursements, which were not subject to the uplift. It is not clear that the taxing officer's estimates made the necessary adjustment to the care and conduct allowance, although it is likely that they did so as the normal practice is to estimate the allowable costs items, and then to add the care and conduct component. As Mr Chapman did not expressly say that had been done in this case, I will out of an abundance of caution make that adjustment to the figure I would otherwise fix as a gross sum for costs. 33 Mr Dunstan also suggested to Mr Chapman that, on taxation, no costs would be allowed against Mr Dunstan in either matter from the time when the DPP took over the prosecutions until their dismissal on 28 August 1998. Mr Chapman did not agree. The short answer is that the costs orders made on 14 September 1998 ordered Mr Dunstan to pay the costs of the proceedings. Those orders related to the whole proceeding, in each matter, and not only to the conduct of the proceeding to a particular time. 34 There was nothing else elicited in cross-examination of Mr Chapman which, in my view, went in any material way to demonstrating that there was no sound basis for reliably fixing a proper gross sum for costs in these matters. 35 Upon the whole of the material and submissions, I think the process of taxing the bills in these matters thus far does indicate that the bills as prepared do in general accurately reflect the material in the files of the defendants' solicitors, and do in general reflect an attempt to identify the work attributable to the particular matter. There may be errors in those processes, but they are not shown to be so unreliable that I should not have regard to their foundation, that is the working records, as lacking in general reliability. 36 For those reasons, in my judgment, these matters are ones where the strong preponderance of material is in support of an order for gross sum costs. I propose to make such an order. In my view, an appropriate starting point is the taxing officer's estimates of 22 June 2001. Mr Chapman has reviewed the bills of costs to see the extent to which they may involve items of work not attributable to these matters, or unnecessary duplication of work, or inappropriate allowance for research and the like. Having done those tests, he considered the estimates properly allowed for such matters. Mr Dunstan's contentions, except in one respect, have not indicated any reason to depart from those estimates. The one respect, referred to above, is the further reduction I propose in case the allowance for care and conduct has been a little inflated, or more accurately not been deflated, in the way referred to. 38 I am fortified in that view by Mr Chapman's evidence that he has reviewed the taxation of costs, to the extent that it has proceeded (in 31/97). He regards the estimates as likely to be lower than would have been allowed upon full taxation, based on the taxation to date. He was not directly challenged in that opinion. There was no cross-examination which sought to present the picture that what should have been allowed on taxation on the five pages of the bill (in 31/97) which have been taxed should be significantly lower. 39 I propose to fix the costs in the gross sums of $11,200 (31/97) and $11,100 (32/97) respectively in respect of the work to which the costs orders of 14 September 1998 relate. I have reduced the estimated costs by the possible over-allowance for care and conduct, and then by a further sum simply to adopt a conservative approach which has regard to the several items and issues which Mr Dunstan raised. 40 The defendants have also claimed a further allowance in the gross sum for the costs of taxation to date, and for the unsuccessful motion to set aside the costs orders. They rely upon Mr Chapman's opinion about the costs recoverable on the bill of costs as taxed to date (in 31/97) to say that Mr Dunstan should also pay the costs of the taxation thus far as the bills of costs are unlikely to be taxed with more than 15 per cent deduction from the estimates of the taxing officer: O 62 r 46(4A). 41 The additional costs are said to be $43,616 comprising the fees of the defendants' solicitors for taxing the bills of costs to date of $27,690, disbursements for filing fees of $2400, and Mr Chapman's fees of $13,526. Mr Chapman's evidence is that those several items should be allowed at $12,000, $2400 and $5250 respectively, a total of $19,650. Those adjustments reflect his application of the approach referred to in [39]-[42] of the principal costs judgment. They allow for only one solicitor (the costs consultant) to attend the taxation. Mr Chapman's fees are reduced because the taxing officer's estimates already allow for drawing the bills of costs. The attendances on taxation have been allowed at the scale rate. 42 Mr Dunstan made no submissions to challenge those matters. I see no reason why I should not accept them, as far as they go. I would, but for two matters, make gross sum costs orders to give effect to that evidence. 43 The first matter concerns my power to deal with the costs of the taxation of costs to date. Order 62 r 46(4B) empowers the taxing officer to make an order for the costs of taxation. As it is not clear, in the circumstances, that I now have the power to make an order for the costs of the taxations, including a gross sum costs order, I will give the defendant in each matter (if so advised) an opportunity to make submissions in writing on that topic and will give Mr Dunstan an opportunity to respond before deciding that question. 44 The second matter is that the evidence does not break up the costs claimed in respect of each of the two actions, including in particular the costs of the motions to set aside the costs orders in each action. I think it is necessary that there be such a break-up of costs. The power to fix costs in a gross sum should be exercised in respect of each matter separately. That is evident from the fact that the persons in whose favour the costs are to be paid are different; it is not a joint liability to the defendants. 45 I will therefore not make any gross sum costs orders in respect of the costs of the taxation to date, or in respect of the costs ordered to be paid on 13 September 2002 in each action when the motions to set aside the costs orders were dismissed. I will give the defendant in each matter the opportunity (if so advised) to provide further evidence or submissions or both in each matter as to the relevant costs separately attributable to each, including those costs separately attributable to the two motions. I will then give Mr Dunstan the opportunity to respond. In the first place, the further evidence and/or submissions should be in writing and any responsive submissions also should be in writing. If further evidence is adduced, Mr Dunstan in written submissions may also indicate if he wishes to cross-examine the deponent and the need for any such cross-examination. I presently do not propose to order that Mr Dunstan pay the defendant the costs of taxation of those costs to date. I will give the defendant the opportunity to pursue that claim if so advised, and of course Mr Dunstan the opportunity to respond to it. I adjourn that application to a date to be fixed. I also adjourn to a date to be fixed the defendant's application for a gross sum cots order in respect of the costs ordered to be paid on 13 September 2002, and will give the parties the opportunity to further address that claim. 47 I also order in matter 32/97 that the costs ordered to be paid by Mr Dunstan to the defendant by order of 14 September 1998 be fixed in the gross sum of $11,100. I will deal with the costs of taxation of those costs to date, and the costs ordered to be paid on 13 September 2002, in the same manner as I have dealt with the like claims in matter 31/97. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | lump sum order for costs whether lump sum order should be made where taxation of costs has already commenced costs |
Ms Jones has occupied that role for seven years. The tenor of her claim is that, until July this year, her relationship with her employer was uncontroversial. However during and from July 2009 she participated in enterprise bargaining negotiations on behalf of QTAC with the Australian Services Union ("ASU"). Ms Jones claims that, since July 2009 and following communications by the ASU with QTAC, she has been the subject of an improper investigation instituted by QTAC, as well as the subject of complaints by employees both anonymous and identified, complaints by the ASU, and diary notes of another employee critical of Ms Jones but to which QTAC has had regard. Ms Jones is concerned not only by the investigation, but by the prospect that QTAC will terminate her employment in light of these events. On 16 November 2009 Ms Jones filed an application seeking both permanent and interlocutory relief against QTAC. The parties appeared before me last Thursday afternoon. Lengthy and detailed submissions were made by counsel on both sides. It is clear, however, that at this stage I am being asked only to make a decision in respect of the interlocutory relief sought. The substance of this relief is that QTAC be restrained from taking any action against Ms Jones, including terminating her employment, until the hearing of the substantive application. Mr Murdoch SC on behalf of QTAC gave an undertaking during the hearing that no action would be taken by QTAC in respect of Ms Jones' employment until delivery of my decision in relation to the interlocutory relief she has sought. In her application filed 16 November 2009 Ms Jones claimed as the legislative basis of the Court's jurisdiction to hear the application and grant both the interlocutory and final relief sought: However it became clear during the hearing that, at least for the purposes of the interlocutory relief sought, Ms Jones was principally relying on ss 340, 341 and 342 of the FW Act. I shall return to these provisions later in the judgment. It follows that it is for Ms Jones to satisfy me positively in respect of these issues. Before turning to these issues however it is appropriate to identify the precise relief sought by Ms Jones, and, in more detail, the background to this application. Damages for breach of contract. The Respondent be restrained until the hearing of the Application or further order from terminating the Applicant's employment. A substantial volume of material was also annexed to the affidavit of Ms Jones sworn 16 November 2009. As both Counsel made clear at the hearing, the material annexed to Ms Jones' affidavit supports to a significant degree the submitted chronologies. Key events leading to the filing of the application by Ms Jones were as follows: Ms Jones commenced employment with QTAC on 23 September 2002 pursuant to a five year contract. The contract was renewed for a further five years on 23 September 2007, and is currently due to expire on 22 September 2012. From August 2007 until 18 September 2009 the Chair of the Board of QTAC was Mr Colin McAndrew. Mr McAndrew was succeeded in this role by Professor Deborah Terry on 19 September 2009. Professor Terry is currently the Chair of the Board of QTAC. QTAC is a company incorporated under the Companies (Qld) Code. In February 2009 Ms Jones briefed the staff of QTAC in relation to the commencement of negotiations for a new Enterprise Agreement. On 2 July 2009 the ASU served an Entry Notice to attend a meeting on 7 July 2009. On 22 July 2009 QTAC's offer to staff was posted on the QTAC intranet site and a vote scheduled for 29 July 2009. The ASU lodged an Urgent Dispute Notification with Fair Work Australia on 28 July 2009. The following day Fair Work Australia ordered the ballot to be stopped and negotiations with the ASU to occur. The first Enterprise Agreement bargaining meeting occurred on 4 August 2009 with the ASU in attendance. On 7 August 2009 the ASU wrote to Ms Jones making a range of allegations against her. On the same day the ASU also wrote to Mr McAndrew asking that the appointment of Ms Jones as the representative of QTAC in the Enterprise Agreement negotiations be reconsidered, raising complaints against her, and seeking the appointment of an independent investigator. On 7 August 2009 QTAC received a complaint from Ms Nicola Bowes, a staff member of QTAC. On 10 August 2009 Ms Jones was informed that Ms Bowes had been appointed the ASU delegate. On 11 and 12 August 2009 QTAC received anonymous complaints against Ms Jones (which complaints were delivered to QTAC by way of the ASU). On 13 August 2009 QTAC received a complaint from staff member Danelle Bayley concerning Ms Jones. On 14 August 2009 the ASU wrote again to QTAC referencing the Nicola Bowes complaint, and noting that more complaints in relation to Ms Jones were expected. Further Enterprise Agreement bargaining meetings were held on 11, 13, 14, 19, 26 August 2009, 2 and 9 September 2009 involving Ms Jones on behalf of QTAC. On 18 August 2009 Mr McAndrew wrote to the ASU confirming that Ms Jones would continue to represent QTAC in the Enterprise Agreement negotiations. On 25 August 2009 the ASU wrote to QTAC regarding the complaints made against Ms Jones. The ASU expressed concerns at QTAC's lack of response to previous correspondence, and noted possible legal action if QTAC took no action to address issues concerning Ms Jones. On 28 August 2009 Mr McAndrew wrote to the ASU, stating that he intended to appoint an independent person to inquire into the allegations made concerning Ms Jones. On 23 September 2009 the staff vote occurred in relation to QTAC's Enterprise Agreement, with 83% of staff voting in favour. On 28 September 2009 the "Report on Grievances against CEO, QTAC, Prepared for Chair of QTAC" was provided to QTAC by Carol Watson ("the Carol Watson report"). Ms Jones met with Mr McAndrew and Professor Terry on 13 October 2009 to discuss the Carol Watson report, and was instructed not to discuss matters which were the subject of the report with any staff member. On 20 October 2009 Ms Jones' solicitors, Cooper Grace Ward, wrote to Professor Terry responding to the Carol Watson report on behalf of Ms Jones. QTAC confirmed in writing to Ms Jones on 29 October 2009 that it had no concerns in relation to Ms Jones' conduct of the Enterprise Agreement negotiations. On 30 October 2009 Professor Terry wrote to Cooper Grace Ward listing further new allegations and enclosing a schedule of relevant entries from the diary notes of Walter Williams, the company secretary of QTAC, which entries referred to Ms Jones. On 3 November 2009 Professor Terry emailed Ms Jones informing her that, in order to permit Ms Jones time to respond to allegations against her, the QTAC Board meeting (which would require preparation of papers by Ms Jones) would be postponed. On 4 November 2009 Ms Jones distributed a staff survey to QTAC staff. The following day Professor Terry wrote to Cooper Grace Ward raising allegations concerning the survey. On 6 November 2009 QTAC informed staff that they were not required to answer the survey. On 11 November 2009 Cooper Grace Ward provided a further written response to QTAC on behalf of Ms Jones containing very detailed comments, including with respect to allegations made in the Carol Watson report and the involvement of the ASU in the process. On 16 November 2009 QTAC wrote to Ms Jones, informing her that a meeting of the members of QTAC would take place on 17 November 2009 to resolve the matter. On 16 November 2009 Ms Jones filed an application in the Federal Court. Issue 1 --- Is there a serious question to be tried as to the plaintiff's entitlement to relief? It is clear that the question whether there is a serious question to be tried imports the obligation of the applicant to establish a prima facie case for permanent relief as explained by Gummow and Hayne JJ in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 at [65] . There, their Honours said the establishment of a prima facie case in this context meant it was sufficient for the plaintiff to show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. How strong the likelihood needs to be depends upon the nature of the rights the plaintiff asserts, and the practical consequences likely to flow from the order sought ( Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 at [65] , Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 622). In these proceedings there are essentially two limbs to Ms Jones' claim that there is a serious question to be tried as to her entitlement to relief. These limbs reflect the causes of action identified in the statement of claim. The first limb concerns Ms Jones' claim that she has been the subject of adverse action in relation to a workplace right under the FW Act. The second limb concerns Ms Jones' claim that QTAC has acted in breach of the terms and conditions of her employment contract. Is there a serious question to be tried as to whether QTAC has taken adverse action against Ms Jones within the meaning of the FW Act? In summary, the case submitted by Ms Jones as to the existence of a serious question to be tried can be summarised as follows: Section 340(1) of the FW Act provides that a person must not take adverse action against another person because the other person has a workplace right, or has or has not exercised a workplace right. A "workplace right" means, inter alia , that a person is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body (s 341(1)(a)), or is able to initiate or participate in a process or proceedings under a workplace law or workplace instrument (s 341(1)(b)). "Adverse action" is taken by an employer against an employee if, inter alia , the employer dismisses the employee, or injures the employee in his or her employment, or alters the position of the employee to the employee's prejudice (s 342(1) Item 1). Threatening to take such action also constitutes adverse action (s 342(2)). Ms Jones' workplace right was in respect of either: her role or responsibility in negotiating the Enterprise Agreement on behalf of QTAC: s 341(1)(a); or her participation in the process of making an Enterprise Agreement: s 341(1)(b). QTAC has taken, and is proposing to take, adverse action against Ms Jones because she has exercised a workplace right, in that: adverse action has already been taken by QTAC in relation to the commissioning and conduct of the Carol Watson report, and informing QTAC staff of the report; QTAC proposes to take adverse action in that it threatens to terminate or otherwise discipline Ms Jones because of the view QTAC takes of the Carol Watson report and the various complaints. 18 At the hearing QTAC argued very strongly that Ms Jones did not have a "workplace right" under s 340 of the FW Act. However the categories of bargaining representatives for an employer for the purposes of s 176 of the FW Act are either the employer itself or a person appointed in writing by the employer. Ms Jones is neither the employer nor a person appointed in writing as QTAC's bargaining representative. Rather, Ms Jones acted on behalf of QTAC as its agent as a natural part of her role as Chief Executive Officer. QTAC as employer remained the bargaining representative for the purposes of the FW Act. It follows that Ms Jones does not have a "workplace right" under s 340 of the FW Act. 19 QTAC's submissions are powerful and persuasive. However notwithstanding those submissions, in my view there is a serious question to be tried in respect of whether QTAC has taken and proposes to take adverse action against Ms Jones because she has exercised a workplace right. I form this view for the following reasons. 1. First, I accept the submissions of Mr Spry that, if QTAC is correct in its contention that Ms Jones was an agent of QTAC rather than its bargaining representative notwithstanding correspondence from the Chairman of the Board of QTAC identifying Ms Jones as such, it follows as a general proposition that chief executive officers or indeed executives of employer corporations would also be unable to claim the status of bargaining representative and, accordingly, entitlement to a workplace right, in similar circumstances. While it is quite possible that this is the outcome of the legislative scheme as urged by Mr Murdoch SC for QTAC, I consider that this is not an issue to be determined at an interlocutory stage of proceedings. 2. Second, as I have already noted, in a letter of 18 August 2009 to the ASU, Mr McAndrew stated that the Board had confirmed Ms Jones as QTAC's "bargaining representative". Mr Murdoch SC submitted that this reference to Ms Jones' position was in fact loose language on the part of Mr McAndrew. This may very well be the case. However in the absence of evidence from Mr McAndrew capable of being tested I am not prepared to draw this inference. Indeed, such evidence as is currently before the Court suggests that Mr McAndrew was using the term "bargaining representative" deliberately --- I note, for example, a letter from Mr McAndrew to the ASU of 28 August 2009 where he noted that "Dr Bowes appointed the ASU as her bargaining representative on 10 July" and made reference to "the 4 August meeting of bargaining representatives". In my view the facts are such that Ms Jones has demonstrated by reference to this correspondence a sufficient likelihood of success in relation to her contention that she had been appointed QTAC's bargaining representative for the purposes of the FW Act. 3. Third, I take this view concerning Ms Jones' position as the QTAC bargaining representative notwithstanding Mr Murdoch SC's persuasive submission that s 178 of the FW Act requires a formal appointment of a bargaining representative. For the purposes of this interlocutory application it is by no means clear that a formal instrument of appointment as distinct from an informal instrument of appointment --- such as reference to an appointment in a letter --- is required. Again, in my view such a serious issue is not suitable for determination at an interlocutory stage of the proceedings. 4. Fourth, I am persuaded that the commencement of an investigation into the allegations against Ms Jones and the commissioning of the Carol Watson report arguably constituted "adverse action" for the purposes of the FW Act. This is not to say that there is not force in the arguments put by Dr Jessup. Those arguments should, however, be resolved at the trial of the proceeding when the matter can be determined after comprehensive argument and in the light of all the evidence available at the trial. The laying of the charges imposes a burden on the persons charged to respond to allegations relating to their conduct as employees of the board. I do not consider that one can separate out the effect and consequence of the charges from the fact that they occurred because of the employee's employment by the board. I do not accept that a person charged is not affected in his or her employment until the charge has been proven... The laying of the charges exposes an employee of the board to a potential disadvantage in his or her employment if the charges are ultimately proven. In my view, placing to one side for the moment whether the commencement of the investigation constituted adverse action against Ms Jones, there is little evidence at this stage to support any claim by Ms Jones that the Carol Watson report was commissioned by QTAC other than in good faith. Indeed, as Mr Murdoch SC submitted, under the Workplace Health and Safety Act 1995 (Qld) QTAC is obliged to ensure the safety of its employees at work, which includes protection from workplace harassment. However it is also the case that the possible conflict of authority between Kimpton (1996) 65 IR 317 and United Firefighters (2003) 198 ALR 466 on the one hand, and Nixon [2008] FCA 467 ; (2008) 168 FCR 340 on the other, suggests another issue which warrants determination at a final hearing rather than at an interlocutory stage. In this case Ms Jones has established at least a sufficient likelihood of success in claiming that the commencement of the investigation by QTAC and the subsequent conduct of the investigation were prejudicial or disadvantageous to her position as an employee. Not only had QTAC commissioned an investigation by a third party into complaints and allegations against Ms Jones in circumstances where such complaints and allegations included anonymous complaints or, in the case of allegations by Mr Williams, were allegedly driven by motives relevant to his own position, but QTAC on 6 November 2009 informed all staff of the existence of the Carol Watson report and that it intended to respond to it. While QTAC did not specifically identify Ms Jones as the subject of the report, in my view the focus of the report would have been well-known to QTAC staff. Such publicity is invariably capable of damaging the reputation of an employee or adversely affecting her standing in the organisation (cf comments of Ryan J in Nixon [2008] FCA 467 ; (2008) 168 FCR 340 at [42] - [43] ). 5. If established, QTAC believes the conduct may amount to serious misconduct or misconduct for the purposes of your employment contract, such that QTAC is in a position to terminate your employment either summarily or on notice. The diary entries (maintained by Mr Williams) contain a number of specific examples of conduct. If the events occurred in the manner recorded by Mr Williams, QTAC would consider many of them to be unacceptable. Indeed a meeting was scheduled to take place on 17 November 2009 but postponed because of the commencement of these proceedings. In my view Ms Jones has established a prima facie case that this correspondence, and the proposed meeting, constituted threats to terminate Ms Jones' employment, which in itself is adverse action pursuant to s 342(2) of the FW Act. 6. Finally, I note: In light of these factors in my view Ms Jones has a sufficient likelihood of success in establishing her claims that adverse action taken or proposed to be taken by QTAC was because of her participation in the Enterprise Agreement negotiations, and, on the assumption (yet to be tested) that this was a workplace right, in breach of the FW Act. I consider that, in respect of Ms Jones' claims pursuant to the FW Act, there is a serious question to be tried which, if resolved in Ms Jones' favour, would entitle her to final relief. Is there a serious question to be tried as to whether QTAC has breached its contract with Ms Jones? Pursuant to clause 15.1 of the employment contract, the Applicant's employment will end on 22 September 2012, unless terminated earlier in accordance with clause 15. Pursuant to clause 15.2 of the employment contract, the Applicant's employment may be terminated summarily if she commits any act of serious misconduct as determined by the Respondent and as defined in clause 15.2. Pursuant to clause 15.3 (a) of the employment contract, the Applicant's employment may be terminated on three (3) months' notice for unsatisfactory performance or misconduct. It is an implied term of the employment contract that the Respondent will not terminate the Applicant's employment pursuant to clause 15.2 or 15.3(a) of the employment contract without reliably or properly determining whether the Applicant committed any act of serious misconduct or been guilty of unsatisfactory performance or misconduct. In breach of the implied term pleaded in paragraph [11] herein, the Respondent has failed or refused to reliably or properly determine whether the Applicant committed any act of serious misconduct or been guilty of unsatisfactory performance or misconduct. As a consequence of the Respondent's breach of contract as pleaded herein, the Applicant has suffered loss and damage. 1. First, the employment of Ms Jones has not been terminated. It was clear at the hearing that Ms Jones anticipates the board of QTAC making a decision to terminate her employment, perhaps realistically in the circumstances. However to date this has not occurred. Accordingly it is premature for Ms Jones to submit in terms of her contract of employment that QTAC cannot terminate her employment without first determining whether she has committed any act of serious misconduct or misconduct and that she is entitled to natural justice in any event. These are contentions that would properly be made in response to such a decision by QTAC, assuming such a decision is made. 2. Second, although Mr Spry submitted at the hearing that QTAC acted contrary to natural justice in respect of the Carol Watson report because Ms Jones should have been given an opportunity to respond to allegations against her before the investigator finalised the report (TS p 71 ll 21-47), I am unable to see how, in the absence of termination of Ms Jones' employment, QTAC has acted in breach of the contract of employment. While QTAC's conduct in relation to the Carol Watson report may be "adverse action" for the purposes of the FW Act, it does not appear that the commissioning of the report or convening a meeting of QTAC to consider the report constituted a breach of contract with Ms Jones. It certainly does not appear to constitute a breach of cl 15 of the terms and conditions of employment in circumstances where Ms Jones' employment has not been terminated. 3. Third, as Mr Murdoch SC correctly submitted, the relevant terms and conditions permit termination by QTAC of Ms Jones' employment by three months written notice at any time, for any reason whatsoever or for no reason whatsoever . Such provisions are difficult to reconcile with a contention that Ms Jones is entitled to natural justice in respect of a decision to terminate her employment. 4. Fourth, although Mr Spry for Ms Jones urged that the contract of employment should be interpreted as implying a term requiring QTAC to accord natural justice to Ms Jones in connection with any determination of serious misconduct or misconduct by Ms Jones, such an implied term is difficult to reconcile with cl 15.6 which specifically provides that QTAC is not required to follow grievance or other procedures in view of the seniority of Ms Jones' position. The Court does not lightly imply terms into a contract which the parties have not thought fit to express. As observed by the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 , in order for a term to be implied the following conditions must be satisfied: It must be reasonable and equitable; It must necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; It must be so obvious "it goes without saying"; It must be capable of clear expression; and It must not contradict any express terms of the contract. It is clear from the decision of the High Court in Byrne v Australian Airlines Ltd [1995] HCA 24 ; (1995) 185 CLR 410 that the same considerations apply in respect of the implication of terms into contracts of employment. In light of the detailed terms of cl 15, which provides for different grounds of termination and associated periods of notice, and a specific provision in cl 15.6 excluding review procedures in respect of Ms Jones' employment, it is difficult to see how the implication of term importing the rules of natural justice into the terms and conditions of employment can be justified on any of the conditions described in BP Refinery (1977) 180 CLR 266. Certainly there is clear authority to the contrary --- the House of Lords held in Malloch v Aberdeen Corporation [1971] 1 WLR 1578 that, absent statutory intervention, there is no rule at common law that the requirements of natural justice are incorporated into the employment relationship (per Lord Reid at 1581F-G, Lord Morris of Borth-y-Gest at 1586F and 1588D, Lord Guest at 1593G-H, Lord Wilberforce at 1595E). I agree with the submissions of QTAC that Ms Jones' terms and conditions of employment constitute a comprehensive and considered document, and that this is not a case where the parties have left substantial terms to be determined by implication. 5. Fifth, although Mr Spry submitted that the Court cannot separate the contractual arguments from Ms Jones' statutory rights under the FW Act (TS p 73 ll 4-5), in my view the Court can and should do so in this case. Indeed Ms Jones in her Statement of Claim separates the arguments, in that two separate causes of action are pleaded. 6. Finally, I am not persuaded on the basis of the material before me that, even if QTAC was required to accord natural justice to Ms Jones in relation to the investigator's report, QTAC has failed to do so. A considerable volume of material is in evidence including repeated invitations from QTAC to Ms Jones and her solicitors to respond to allegations, and examples of detailed responses by Ms Jones. On such evidence as is before me at this stage, it appears that QTAC has been at pains to ensure that Ms Jones has been provided with every opportunity to communicate with the QTAC in respect of the investigators report. It is not obvious to me that Ms Jones has been denied procedural fairness. I also note in passing that Ms Jones does not contend that QTAC is biased in respect of making decisions concerning her employment (TS p 62 ll 38-41). In these circumstances I am not persuaded that Ms Jones has demonstrated a sufficient likelihood of success in respect of her claim concerning alleged breach of contract by QTAC to justify the preservation of the status quo pending the trial. I do not think that there is a serious question to be tried in respect of this issue. Issue 2 --- Is Ms Jones likely to suffer injury for which damages will not be an adequate remedy? Ms Jones submits that QTAC proposes to take adverse action against her within the meaning of the FW Act in that there is a clear prospect that she will be terminated or otherwise disciplined by QTAC based on the Carol Watson report and various allegations and complaints. On the basis that Ms Jones would suffer an injury from this course of action, I consider that damages would not provide an adequate remedy. Discipline of a chief executive officer for allegedly creating a culture of fear or terror in the workplace, be such discipline in the form of termination of employment or otherwise, is a very serious matter. In my view it is likely that such a course of conduct would have a detrimental effect on Ms Jones' reputation and impose a stigma which could adversely affect her future career prospects (cf comments of Young J in Paras v Public Service Body Head of the Department of Infrastructure [2006] FCA 622 at [29] ). Issue 3 --- Does the balance of convenience favour the granting of an interlocutory injunction? In relation to this issue, Ms Jones submitted in summary that: In response QTAC submitted that the balance of convenience is strongly in favour of denying the interlocutory relief sought because, in summary: The QTAC submissions are, again, well-argued and persuasive. However on balance I am persuaded that the balance of convenience favours the order of the interlocutory injunction sought by Ms Jones. I form this view for the following reasons: 1. First, Ms Jones has established that there is a serious question to be tried in respect of the availability of remedies to her under the FW Act. I accept Mr Spry's submission that Ms Jones has a potential remedy now under this legislation, and that remedy would be lost if the interlocutory injunction were not granted and a decision made by QTAC to discipline Ms Jones, or terminate her employment. 2. Second, while I note the serious factors raised by QTAC militating against the grant of an injunction, I note also the serious impact of the events both past and prospective on Ms Jones, her reputation and her future career. In my view it is important that the status quo be preserved pending resolution of the substantive issues in these proceedings. 3. Third, while I note the very serious workplace health and safety issues raised by QTAC and QTAC's genuine concerns with respect to its statutory obligations, I also note that a significant element of Ms Jones' case is that the investigation process leading to the Carol Watson report was flawed because, inter alia : Issues, unresolved at this stage of the proceedings, include whether the process resulting in the findings of the Carol Watson report was sound, and the extent to which there is a genuine basis to QTAC's workplace health and safety concerns as identified in its submissions. 4. Finally, while I recognise the very important role provided by QTAC both in relation to its member universities and the community, there is no evidence before me that the QTAC workplace is dysfunctional, or that the continuing presence of Ms Jones is so distracting to QTAC staff that the organisation cannot perform its functions at this critical time of the year. While Professor Terry expresses concerns as to possible consequences unless a decision is made quickly in respect of Ms Jones (affidavit of Deborah Terry sworn 18 November 2009 paras 35-38), in my view this is insufficient to overcome the very real and serious potential prejudice to Ms Jones if an interlocutory injunction is not granted. Notwithstanding this view however, I am mindful of QTAC's legitimate concerns in relation to its workplace environment. The interests of justice would be served by an urgent trial of the substantive issues in these proceedings. Although the Court was prepared to accommodate an accelerated timetable for the hearing of the substantive issues in these proceedings matter this week, one of the parties was not able to meet that deadline. I shall therefore suggest a number of dates to the parties with a view to the matter being heard as quickly as practicable. The applicant gives the usual undertaking as to damages. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | interlocutory injunction complaints against applicant ceo by employees and union application to prevent respondent employer from taking action on basis of allegations and subsequent investigation until applicant's substantive application is heard applicant represented employer in enterprise agreement negotiations whether breach by employer of s 340 fair work act 2009 (cth) whether breach of terms of applicant's employment contract whether serious questions to be tried whether balance of convenience favours grant of interlocutory injunction potential harm to employees whether damages an adequate remedy industrial law |
The appeal by the Authority is from a decision of the Statutory Fishing Rights Allocation Review Panel ("the Panel"), which is a body established under s 124 of the FM Act. The right of appeal to this Court from a decision of the Panel is limited to an appeal on a question of law (s 161(1)). There are 209 respondents to the Authority's appeal. The first respondent is Mr Trevor Ray Gilmore. He appeared by counsel and solicitors who provided their services pro bono after a referral under O 80 subrule 4(3) of the Federal Court Rules . The Court is grateful for the assistance which they provided. A judge of this Court made orders relating to the service of the notice of appeal and supporting affidavit (without exhibits). Twelve respondents were to be served personally and the rest of the second to 209 th respondents were to be served by registered mail. Those orders were complied with by the Authority. The 135 th respondent, Mr Patrick James Clark, appeared in person. He did not attend the hearing of the appeal, but he made short written submissions in support of an order that the appeal be dismissed. None of the other respondents appeared. The right to take fish is a valuable right. The right and other rights defined in the FM Act are closely regulated by the FM Act and the subordinate legislation made under it. The FM Act defines a "fishing concession" as a statutory fishing right or a fishing permit or a foreign fishing licence (s 4). Each of those terms is defined in the FM Act. For the purposes of this case, I am only concerned with statutory fishing rights and fishing permits. The significance of a fishing concession is that it authorises activities which would otherwise be offences under s 95 of the FM Act. The nature of a statutory fishing right is described in s 21 of the FM Act and the ways in which statutory fishing rights are granted is dealt with in ss 24-31 inclusive. The FM Act also uses the term, fishing right, and that term is defined as a statutory fishing right. The Authority must keep a Register of Statutory Fishing Rights (s 44). Statutory fishing rights have a permanence not accorded to fishing permits. Fishing permits are dealt with in s 32 of the FM Act. They may be granted subject to conditions and those conditions may include a condition that limits the quantity of fish which may be taken (s 32(7)). Fishing stocks are limited and from time to time the Authority fixes a total allowable catch for a particular species of fish in a particular fishery. A person's entitlement to take a particular quantity of fish may be expressed in units to accommodate the fact that the total allowable catch is likely to vary from year to year. The Authority may make plans of management under the FM Act. They are legislative instruments under the FM Act ( Lamason v Australian Fisheries Management Authority [2009] FCA 245 at [149] - [150] per Spender J). The process by which plans of management are made and the information or material they may contain are dealt with in ss 17-20 inclusive of the FM Act. A plan of management is relevant in this case and it is the Southern and Eastern Scalefish and Shark Fishery Management Plan 2003. The plan commenced on 1 October 2003 and it has been amended twice. I will refer to it as the Management Plan. The FM Act deals with the granting of statutory fishing rights. There are a number of steps involved in the process. In a case where a grant of a statutory fishing right is not to be conferred by auction or tender, the FM Act provides that the relevant management plan will set out the procedures for determining the person to whom a grant is to be made available (s 29(3) of the FM Act). There are a range of decisions the Authority is required to make under the FM Act. A number of them may be reviewed by the Administrative Appeals Tribunal ("the Tribunal") under the Administrative Appeals Tribunal Act 1975 (Cth). Section 165 of the FM Act grants rights of review from decisions of the Authority. The decisions which may be reviewed include a decision by the Authority under s 32 of the FM Act, that is to say, a decision to grant a fishing permit or a decision to impose a particular condition on a fishing permit. There is a particular type of decision made by the Authority under the FM Act which may be reviewed by another administrative review body. The Panel is given the particular function of reviewing decisions mentioned in subsection 23(1) of the FM Act, being decisions made by the Authority (and another body which is not relevant for present purposes) as to the person or persons to whom the grant of a statutory fishing right in a managed fishery is to be made. A decision of that nature and involving the first respondent and a large number of other persons is relevant in this case. For the calendar year 2006, the first respondent held a fishing permit under s 32 of the FM Act. The first respondent's permit was subject to a condition as to the quantity or quota of fish, being gummy shark and school shark, which may be taken. In June 2007, the Authority made a decision which had the effect of translating the first respondent's quota to statutory fishing rights. The decision also affected the entitlement of other fishers. The decision was made by the Authority by applying the formula contained in the Management Plan. The first respondent sought review of the decision by the Panel. However, his complaint was not with respect to the formula; rather, he complained that the quota attached to his fishing permit for the calendar year 2006 and, indeed for previous years, was incorrect. He claimed that his quota should have been higher than the quota recorded on his fishing permit and therefore the translation of his entitlement to statutory fishing rights should have been higher. Subject to an error acknowledged by the Authority, the Authority denied that the first respondent was entitled to a higher quota than that recorded on his fishing permit for the 2006 calendar year. In any event, the Authority contended that, on a review of a decision mentioned in s 23(1) of the FM Act, it is not open to the first respondent to agitate a complaint about a condition attached to his fishing permit for the 2006 calendar year dealing with the quantity of shark he could take. The Panel accepted the first respondent's arguments and substituted a different decision for that made by the Authority. In the amended notice of appeal, the Authority alleges that the Panel's decision raises the following four questions of law. Whether the Panel has jurisdiction under the FM Act to make a decision which is inconsistent with the applicable fisheries management plan in respect of the decision under review by the Panel. Does the Panel exceed its jurisdiction under the FM Act if, in reviewing a decision to grant statutory fishing rights pursuant to a fisheries management plan made under the FM Act, the Panel misunderstands and misconceives the effect of a decision of the Administrative Appeals Tribunal in a review related, and material, to that being undertaken by the Panel. Does s 150(1) of the FM Act authorise the Panel to vary a condition on an expired fishing permit, so as to alter the operation or effect of a provision in a fisheries management plan which takes as its basis the terms of a condition on a fishing permit as expressed at a particular date? The Southern and Eastern Scalefish and Shark Fishery incorporates the Commonwealth Victorian Inshore Trawl Fishery, the South East Trawl Fishery, the Great Australian Bight Trawl Fishery and the Gillnet, Hook and Trap Fishery (formerly the South East Non Trawl Fishery and the Southern Shark Fishery). The Management Plan was designed to replace a management regime based on the issue of fishing permits under s 32(1) of the FM Act. The statutory fishing rights referred to in the Management Plan (see, for example, s 6(c)) represent a translation from existing permit-based interests and, as I have said, they allow the holder to take a certain proportion of the total catch of various quota species. For convenience, I will refer to statutory fishing rights as SFRs. In terms of the regulation of the fishing industry, there is a difference between "input" controls on the taking of fishing stock and "output" controls. An input control involves measures such as restrictions on the equipment which can be used or on entry into a particular fishery, and an output control involves a limit on the quantity of fish which can be taken. Until the 1990s, the fishing industry was regulated by input controls. For example, in the Southern Shark Fishery, there were limits on the length of gillnets which could be used and the number of hooks which could be deployed. There was then a move to output controls and this move included the attaching of conditions to fishing permits issued under s 32 of the FM Act which limited the proportion of the total allowable catch which could be taken by the holder of the permit. The proportion was defined by reference to Individual Transferable Quotas or ITQs or, to use the terminology used in the Management Plan, quota units. The system involving ITQs was introduced on 1 January 2001. In some respects, it was a controversial exercise because it involved operators moving from a system where there was no direct limit on allowable catch to a system involving limits on allowable catch. A method of calculating the number of ITQs or quota units to which a particular operator was entitled needed to be devised. Initially, the method adopted by the Authority was based on the operator's catch history during the period from 1994 to 1997. The higher the operator's catch during that period, the higher the operator's proportionate allocation of the total allowable catch set for the entire fishery. This method of calculation was adopted following a recommendation by an Independent Advisory Panel. The Hon K Jenkinson QC was the Chair of the Independent Advisory Panel. On 10 January 2001, a Mr Horst Fischer was issued with a fishing permit which had a quota allocation calculated in accordance with his catch history. He challenged the Authority's decision in the Tribunal on the ground that the policy applied by the Authority in determining the quota allocation was unfair because it ignored the fact that, in practice, permits were transferred and had a capital value. Mr Fischer was successful before the Tribunal and an appeal to this Court by the Authority was dismissed ( Re Fischer and Australian Fisheries Management Authority [2002] AATA 857 ; (2002) 71 ALD 665 ; Australian Fisheries Management Authority v Graham [2003] FCA 231 ; (2003) 127 FCR 436). I will refer to those proceedings as the Fischer No 1 proceedings. The Tribunal's decision meant that the Authority had to take a different approach. Before discussing the approach taken by the Authority, it is necessary to make reference to a buy-back scheme undertaken by the Commonwealth in 2001. The buy-back scheme was introduced in 2001 and, under the scheme, the Commonwealth made offers to buy back fishing permits held by operators who did not wish to participate in the move from regulation by input controls to regulation by output controls. Prior to the introduction of quotas, operators were given the opportunity to take part in a buy-back scheme. AFMA established an adjustment assistance program for those who did not wish to change to the proposed scheme of output controls. Under the scheme operators were paid $8000 per gillnet unit for gillnet permits and $25 per hook for hook permits. Forty permit holders took part in the scheme. They gave up their fishing permits but they retained the right to allocation of quota. However, the quota could not be utilised otherwise than by transfer or by acquisition of a fresh fishing permit. Under the new scheme the quota allocated could be sold to someone with a permit. Although the buy back does not amount to an open market it was voluntary and does provide some evidence of the value of permits severed from the quota entitlements about to be introduced. I note that at the time of the buy-back the Jenkinson panel had already announced its proposal that quota should be based on catch history. His participation in the scheme included an application by him dated 6 February 2001 to surrender his fishing permit in the Southern Shark Fishery pursuant to s 32(9) of the FM Act. On the same day, that is, 6 February 2001, the first respondent executed a Deed of Release. Under the SSFIDP financial assistance is provided to former Commonwealth SSF permit holders who satisfy specified eligibility criteria including the surrender of their permits. Recipients of financial assistance under the SSFIDP are entitled to retain, sell or lease any school and gummy shark ITQs allocated in respect of their surrendered shark permits. However, a recipient of financial assistance will not be entitled to any further claims against the recipient's surrendered shark permit or its associated catch history in relation to any other species. 2.2 The giving of the Payment to the Recipient does not in any way affect the right of the Recipient to retain any school and gummy shark ITQ allocated to the Recipient by AFMA and to sell or lease that school and gummy shark ITQ in the future. The Authority commissioned a report addressing the appropriate method of determining a fisher's entitlement to ITQs or quota units. An Independent Allocation Review Panel for the Southern Shark Fishery ("Review Panel") was established. The Hon Mr J Lockhart QC was the Chair of the Review Panel. The Review Panel provided a report dated 4 September 2003 to the Authority. Details of the formula, including worked examples, are set out in Section 6.1 of the report. In doing so they forfeited their right to fish for shark commercially although, under the terms of the buyback, they retained their quota allocated on the basis of catch history. The Panel believes that AFMA should confirm the legal status of those fishers who have surrendered their permits but which have allocated quota. In the absence of information to the contrary, it could reasonably be concluded from the above-mentioned contract that those fishers will be treated in accordance with the Panel's quota allocation proposal as set out in Table 6.8 in Section 6.1 (i.e. adjusted quota based on catch history but nil quota on the basis of permit value). Table 4 --- 2004 unit and kg calculations from 2001 units details your new allocation based on 2001 units. This is 5276 gummy shark units and 861 school shark units. Then your 2001 unit allocation was converted to 2004 units. This includes a reallocation adjustment for 2003 following the decision in the Fisher case. As you surrendered your permit to the buy-back a factor of around 16% (varied slightly between species) was deducted for the value of the permit. Your correct 2004 unit allocation is 4545 units of gummy shark and 797 units of school shark. This represents 3563.97 kg of gummy shark and 467.53 kg of school shark. The Authority's adoption of the recommendations of the Review Panel meant that the value of a fishing permit would also be taken into account in determining a person's entitlement to ITQs or quota units. For those fishers who had participated in the buy-back scheme, the value to be attributed to the permit was nil. The new policy resulted in a reduction of the first respondent's entitlement and this reduction was in the order of 16 per cent. Mr Horst Fischer and Mr Graham Tapley applied to the Tribunal for review of the quota allocations allocated to them for the 2004 calendar year. Their ground was that "the decision should have allocated quota wholly by reference to the permit itself, taking no account of catch history, or should have placed much less emphasis on catch history" ( Re Fischer and Australian Fisheries Management Authority ; Re Tapley and Australian Fisheries Management Authority [2005] AATA 936 ; (2005) 41 AAR 417 at 421 [12] per Downes J). I will refer to this proceeding as the Fischer No 2 proceeding. The first respondent was added as a party to the application for review. They challenge quota allocations for the year 2004 for gummy and school shark allocated to Horst Fischer and Graham Tapley. No grounds specific to Messrs Fischer and Tapley are relied upon. Messrs Fischer and Tapley say that the quota should not be determined by reference to the quantity of shark they had caught in the past. They say that equal quota should be awarded to all operators holding the same permits. I have found that the quota system under review by which quota calculations are based partly upon equality between permits, representing the right to fish, or access entitlement, and partly upon catch history, is the preferable way to allocate quota. I have also found that the way the two have been integrated are the appropriate and preferable methods. Under the Fischer and Tapley proposal he would not be entitled to any quota because he no longer has a permit. Persons who took part in the buy-back were informed they would be entitled to quota. The quota allocation under review will give persons such as Mr Gilmore an entitlement to quota although less than under the Jenkinson Panel scheme. The system under review seems to me to be appropriate for persons who took part in the buy-back. By a notice in the Commonwealth Gazette of 21 December 2006, the Authority invited interested persons to apply to be registered as eligible persons for the grant of SFRs for shark species under the Management Plan. The notice was given under s 24 of the FM Act. After the registration period had closed, a register of persons eligible for the grant of SFRs was finalised. By letter dated 18 June 2007, the first respondent was advised by the Authority that it had made a provisional grant of shark quota SFRs to eligible persons including the first respondent. The provisional grant followed a decision by the Authority that the first respondent satisfied the condition for registration as an eligible person for the grant of a quota fishing right and a determination as to his entitlement. The first respondent was advised of the total number of SFRs provisionally granted to each eligible person under the Management Plan and the composition of that number, including the shark quota SFRs granted to him. He was provisionally granted 4,352 units in relation to gummy shark and 748 units in relation to school shark. Finally, the Authority's letter to the first respondent dated 18 June 2007 advised the first respondent of his right to apply to the Panel for a review of the decision. On 19 July 2007, the first respondent made an application to the Panel for review of the decision by the Authority. He contended that his unit allocation should have been 5,429 units in respect of gummy shark and 952 units in respect of school shark. He contended that his unit allocation had been unfairly and unreasonably adjusted in 2004 as a result of the new policy of the Authority and his participation in the buy-back scheme. The first respondent contended that when he participated in a buy-back scheme he was assured his action in doing so would not impact upon "the allocation of school or gummy shark quota to [him]". He contended that the removal of approximately 16 per cent of his unit allocation was unjust. The Panel made its orders on 22 December 2008. It is common ground between the parties that the Panel was to conduct a merits review and that its task was to arrive at the correct or preferable decision. The Panel began by referring generally to its function under the FM Act and it noted that it operated separately from the Tribunal. The Panel noted the history of the matter as follows: On 16 November 2006, the AFMA announced its decision to commence the process of granting SFRs for school, gummy and saw shark in the Southern and Eastern Scalefish and Shark Fishery. Amendments to the Management Plan were effected on 20 December 2006. On 21 December 2006, the Authority published a notice in the Government Gazette to the effect that it intended to grant SFRs in relation to the Southern and Eastern Scalefish and Shark Fishery for shark species including school, gummy and saw shark, and it invited persons to apply to be registered as eligible persons. For the purposes of s 27(6) of the Management Plan, the notice period was specified to be 5.00 am on Friday, 22 December 2006. On 18 April 2007, the Authority wrote to the first respondent acknowledging his application for registration as an eligible person for the grant of SFRs for shark species in the Southern and Eastern Scalefish and Shark Fishery and advising him that he had been registered as an eligible person. On 19 June 2007, the Authority published in the Government Gazette its decision in relation to the SFRs including its allocation to the first respondent of 4,352 units in relation to gummy shark and 748 units in relation to school shark. The Panel then dealt with its function under the FM Act in more detail. There is no complaint about this section of its reasons, and I will summarise briefly what the Panel said. The Panel noted that its function was to review the decisions mentioned in s 23(1) of the FM Act, being (relevantly) decisions made by the Authority as to the person or persons to whom the grant of a fishing right in a managed fishery is to be made (s 142). (4) A decision made by the Panel takes effect when the applicant is notified of the decision under subsection 160(2). The Panel said that, having regard to s 150 of the FM Act, its function was to conduct a merits review with a view to making the correct or preferable decision. The Panel referred to s 29(3) of the FM Act which refers to the persons to whom the grant is available in cases where an auction has not been held and tenders have not been called. The Panel then made reference to two important sections in the Management Plan. Section 27 of the Management Plan deals with the conditions which must be satisfied by a person in order for that person to qualify as an eligible person for registration for a grant of various types of quota statutory fishing rights. Section 28 of the Management Plan deals with the provisional grant of statutory fishing rights to a person who is registered as an eligible person for the grant of a statutory fishing right. The Authority must make a provisional grant to the eligible person in accordance with the provisions of the paragraphs in s 28(2). The Panel set out the submissions made by parties before it. I do not need to repeat what the Panel said. The Authority conceded during the application for review before the Panel that the Register was not correct as at 22 December 2006. That was said to have been due to a "data entry problem". The Authority submitted that the correct allocation of SFRs was 4,545 units of gummy shark (not 4,352 units) and 797 units of school shark (not 748 units). The real point in contest before the Panel was as follows. The first respondent contended that his entitlement was 5,429 units for gummy shark and 951 units for school shark. In 2004, the Authority had reduced his entitlement by a figure in the order of 16 per cent by reason of his participation in the buy-back scheme. The first respondent submitted that that decision was contrary to his understanding of the buy-back scheme and unfair and unreasonable. That was, the first respondent submitted, a decision the Panel could and should correct on his application to review the decision made by the Authority in June 2007. The Panel accepted that contention. Under the Fischer and Tapley proposal he would not be entitled to any quota because he no longer has a permit. Persons who took part in the buy-back were informed they would be entitled to quota. The quota allocation under review will give persons such as Mr Gilmore an entitlement to quota although less than under the Jenkinson Panel scheme. The system under review seems to me to be appropriate for persons who took part in the buy-back. Nor does the Panel accept that by not being involved as a party to the Fischer and Tapley proceedings Gilmore is prevented from seeking the relief sought before the Panel. He entered in an agreement with the Commonwealth. He ought to have been treated as being entitled to the issue of SFR. The Authority failed to consider him as so entitled. The Authority was in error not to do so and acted unreasonably. AFMA's decision of 19 June 2007 as to the persons to whom a grant of Statutory Fishing Rights (SFRs) is to be made under the Southern and Eastern Scalefish and Shark Fishery Management Plan 2003 is set aside. Under the Panel's orders, the SFRs allocated to the first respondent were 5,429 for gummy shark and 951 for school shark. The quota SFRs for gummy shark should be 4,545, not 4,352 as advised, and the quota SFRs for school shark should be 797, not 748 as advised. During the progress of the application for review before the Panel, the solicitors for the Authority wrote to the Panel (with a copy of the letter to the first respondent) acknowledging the error and advising that the Panel had reissued the Register as at 22 December 2006 to reflect the true position. It referred the Panel to s 150 of the FM Act and asked it to give effect to the Register as reissued. The error acknowledged by the Authority was an inadvertent one. It seems to have involved some adjustments which were only partially made in 2004. The adjustments were the subject of a letter from the Authority to the first respondent dated 21 October 2004. The first respondent sought a review by the Tribunal of his fishing permit for 2001. The adjustments or need for adjustments were also referred to in the course of that review. In any event, by mistake, the proper allocation of gummy shark and school shark which could be taken was not reflected in the condition attached to the fishing permit held by the first respondent for the years 2004, 2005 and 2006. I accept that the error acknowledged by the Authority was unintended and was due to an error either in the calculation or recording of the quota units for the first respondent. There seems to me to be no reason why it cannot be corrected by the Authority and, if appropriate, by the Panel. In fact, I did not understand the first respondent to suggest otherwise. In the discussion which follows, I proceed on the basis that the first respondent's fishing permit for the 2006 year and the Register as at 22 December 2006 have been corrected to eliminate the error acknowledged by the Authority. The Authority's argument is a relatively simple one. It submits that the Panel did not have the power to go behind the first respondent's fishing permit for the 2006 year or the Register as at 22 December 2006. The Panel's only power was to apply the formula in s 28(2)(j) of the Management Plan and it did not have the power to depart from that formula on the grounds of fairness or reasonableness. The Panel erred because it considered that it had a general discretion to depart from the provisions of the Management Plan and had exercised that discretion. Although the Authority did not accept that the decision it made resulted in unfairness or unreasonableness as far as the first respondent was concerned, a lack of power to depart from the provisions of the Management Plan was the primary focus of its argument. The first respondent did not seek to argue that the Panel had a general discretion to depart from the provisions of the Management Plan where it considered it appropriate to do so. He submits that the Panel had the power to make the decision it did by virtue of the power in s 32(8) of the FM Act to vary or revoke a condition attached to a fishing permit. Under that subsection, the Panel may, for the purposes of reviewing a decision, exercise all the powers conferred on the Authority. He submits that, by reason of s 32(8) of the FM Act, the Panel was able to go behind the fishing permit and Register and, in an appropriate case, vary the allocation in the fishing permit and Register, at least notionally. The Panel would then apply the formula in s 28(2)(j) of the Management Plan to the allocation as varied. There was a good deal of debate before me as to the approach which was actually taken by the Panel. Did it take the broader approach which the Authority contends involved an error of law and which the first respondent does not seek to support, or did it take the narrower approach which the Authority submits was in any event erroneous and which the first respondent seeks to uphold? In my opinion, both approaches involve an error of law and an excess of jurisdiction. In those circumstances, it is not strictly necessary for me to consider the particular approach taken by the Panel. However, for the sake of completeness and in case there is a further appeal, I will do so later in these reasons. Neither the Authority, nor the Panel, had a general discretion to depart from the provisions of the Management Plan. The provisions of the FM Act and the Management Plan are clear. Section 29(3) of the FM Act provides that the selection process is to be carried out in accordance with the procedures specified in the Management Plan. Put another way, that means in conformity with procedures which, it is envisaged by the FM Act, will be laid down in the Management Plan. Full particulars of those procedures are to be specified in the notice under s 24 of the FM Act which starts the process whereby SFRs are to be granted (see s 25(b)). The Management Plan is quite clear in the procedures it specifies. It would have been open to the makers of the Management Plan to confer a general discretion but they did not do that. Section 27 of the Management Plan deals with eligibility for registration and does so by reference to the quota units a person is authorised to take. The authorisation to take is the fishing permit. Section 28(2)(j) of the Management Plan sets out the formula to be applied and it is even more explicit. It refers to what a person was authorised to take in the fishery in accordance with a fishing permit held by the person immediately before the end of the notice period. The matter is put beyond any doubt by s 25 of the Management Plan which links the quota units which are to be translated directly to the units specified in the permit and registered in the Register. The relevant fact is the number of quota units specified in the fishing permit and Register, not what the number of quota units might be after a review as to the merits ( Jadwan Pty Ltd v Secretary, Department of Health and Aged Care [2003] FCAFC 288 ; (2003) 145 FCR 1). I would also note that a general discretion to examine entitlement by examining the merits of a condition attached to a fishing permit may lead to delay and that does not appear to be contemplated by the process envisaged by ss 24-31 inclusive of the FM Act and the relevant provisions of the Management Plan. In my opinion, these considerations also lead to a rejection of the narrower submission that it was open to the Panel to exercise the power in s 32(8) of the FM Act. There is an additional reason why this submission must fail. The power to make a decision as to the availability of a grant of SFRs is dealt with in a different section of the FM Act (s 29(3)) from the power to make a decision to vary or revoke a condition attached to a fishing permit (s 32(8)). The decisions are subject to different review procedures, the first is subject to review by the Panel under s 142 and the second is subject to review by the Tribunal under s 165. The first respondent had the opportunity to challenge the quota allocation attached to his fishing permit by seeking review by the Tribunal. He may, in fact, have exercised that right by his involvement as a party in the Fischer No 2 proceeding. However, I do not need to decide that question because the important point is that the FM Act provides for a separate procedure for such challenge. There was a good deal of debate before me as to whether the power in s 32(8) to vary or revoke a condition attached to a fishing permit could only be exercised during the period of the permit and for a purpose related to the fishing activities undertaken, or to be undertaken pursuant to the permit. That question raises difficult issues which I will refrain from addressing because it is not necessary for me to do so. I would only say that the decision to which the first respondent referred, Shark Bay Tuna Farms Pty Ltd v Executive Director, Fisheries WA [2000] WASC 79 , is, with respect, of no real assistance because it is a decision dealing with quite a different statutory scheme (see at [30]-[41] per Wheeler J). The first respondent's submission that the Panel may, for the purposes of reviewing the decision, exercise a power or discretion conferred on the Authority even where the Authority did not exercise the power or discretion is correct: Australian Securities and Investments Commission v Donald [2003] FCAFC 318 ; (2003) 136 FCR 7 at 15 [29] - [30] per Kenny J. That is so, it seems, even where the original decision-maker, in reaching the decision it did, was not bound to consider the exercise of the particular power or discretion: Secretary, Department of Social Security v Hodgson [1992] FCA 338 ; (1992) 37 FCR 32. However, these principles do not assist the first respondent's argument because, for the reasons I have given, the Authority did not have the power or discretion to vary or revoke a condition attached to the first respondent's fishing permit in the course of making the decision it did. In my opinion, whichever approach the Panel took, it erred in law and thereby exceeded its jurisdiction. As I have said, for completeness and in case there is a further appeal, I will set out my conclusions as to the approach taken by the Panel. I bear in mind that the Panel's reasons are not to be construed minutely and with an eye keenly attuned to the perception of error: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272. The Panel was under an obligation to give each party a written statement setting out its decision and the reasons for its decision (s 160 of the FM Act). The Authority submits that the Panel was also under the obligation as to reasons contained in s 25D of the Acts Interpretation Act 1901 (Cth). I do not need to deal with that submission because I have reached a clear conclusion about the Panel's reasons without having to rely on the Authority's submission based on that section. In my opinion, the Panel did not proceed by reference to the power in s 32(8) of the FM Act. It proceeded on the basis that there was a general discretion to depart from the provisions of the Management Plan. There is no reference in the Panel's reasons to s 32(8) of the FM Act. There is no reference to the fact that the Authority did not address the power in s 32(8). There is no reference to the question whether, in those circumstances, it was open to the Panel to exercise the power in s 32(8) having regard to its powers in s 142 and s 150 of the FM Act. There is no reference to the question whether, in selecting the person to whom a grant is to be made available, it is open to the decision-maker to in effect exercise the power in s 32(8) of the FM Act before exercising the power of selection. There is no reference to the particular merits of exercising or not exercising the power in s 32(8). I have considered the matters to which the first respondent referred, including the matters in the transcript, but none of them persuade me that the Panel considered it was exercising the power in s 32(8) of the FM Act. The Panel made its decision on the basis that it was free to depart from the provisions of the Management Plan where it would be unreasonable not to do so. The Authority made two particular criticisms of the Panel's reasons, both of which are related to the third question of law it identified (see [14] above). First, the Authority submits that the Panel's statement that the first respondent was not a party to the Fischer No 2 proceeding was plainly wrong (see [51] above). The first respondent submits that this is simply a typographical error and that no party suggested to the Panel that he was not a party to that application. I think the first respondent is probably right, but I do not need to decide the point because, as I have said, the Panel has erred in law in a more significant respect. Secondly, the Authority submits that the Panel's statement that the Authority had failed to treat the first respondent as being entitled to the issue of SFRs is plainly incorrect (see [51] above). Such a statement is incorrect, but I do not think the Panel misunderstood the position, but rather expressed itself somewhat loosely. The Panel's reasons as a whole indicate that it was aware that the dispute related to the quantity of SFRs to which the first respondent was entitled. The appeal must be allowed. I will hear the parties as to the appropriate orders. I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Written submissions were filed on 12 June 2009. | appeal against decision of statutory fishing rights allocation review panel in relation to provisional grant of statutory fishing rights where respondent had sold fishing permit as part of buy-back scheme six years prior to allocation of statutory fishing rights where respondent's quota under fishing permit calculated by reference to catch history and value of fishing permit and nil value attributed to respondent's fishing permit where translation from quota attached to fishing permit to statutory fishing rights whether panel had discretion to depart from formula for translation in fisheries management plan whether panel could exercise power to vary respondent's fishing permit so as to result in altered quota of statutory fishing rights administrative law |
He arrived in Australia as a visitor on 24 October 2003. On 4 December 2003 he made an application for a protection visa to the Minister. On 4 February 2004 the Minister's delegate refused to grant a protection visa to the appellant. 4 On 17 March 2004 the tribunal received an application for review of the decision of the delegate. The appellant gave evidence to hearings of the tribunal on 24 May 2004 and 20 June 2004. 5 By a decision made on 22 July 2004 and handed down on 12 August 2004 the tribunal affirmed the decision not to grant the protection visa to the appellant. He then applied to the Federal Magistrates Court which, as I have noted above, refused his application on 29 August 2005. He described Khyber Agency as a tribal area of the North Western Frontier Province in Pakistan. The location of Khyber Agency is on the border with Afghanistan. He had obtained the degree of Bachelor of Science from the University of Peshawar in Pakistan, and following completion of his degree he claimed to have joined his family business in 1997. 7 The appellant claimed that he became involved with two of his good friends in working together in order to better people and society, especially youth, from what he said were their involvement in illegal drug usage and illegal drugs business in Khyber Agency. He claimed that he and his friends went from village to village to promote awareness among young people against drugs. He claimed that information he provided had led to the arrest of a number of people in connection with the drugs trade. That information was claimed to include intelligence which led to a major operation yielding 800 kilograms of hashish and resulted in the arrest of two leading members of a smugglers gang. The appellant produced a document entitled ' Commendation Certification ' dated 28 May 2002 from the Anti-Narcotics Force in Rawalpindi attesting to his assistance in the latter operation. He claimed that after that incident the smugglers turned against him with the collaboration of religious elements. They started propagating against him that he was an agent of Western NGOs working against Islam. The appellant said that the religious scholars made a decree against him that he was working against Islam because he was working for non-Muslims and Western missionaries and he said his life was threatened. 8 He claimed that there were several attempts to kill him including one in which when he was returning home in the evening, people opened fire on him and he narrowly escaped. He said that in January 2003 he moved to Peshawar which was the capital of the North Western Frontier Province where his father had a house and shops. He claimed to have continued his social welfare activities there and to have employed a poor Christian who had been struggling to get a job because of wide-spread religious discrimination. He said that after two months the smugglers found out where he was and they started following him with the intention of killing him. He related an incident of being beaten badly by religious fanatics when he was coming back home from his karate club because he employed a Christian and worked for an NGO which they believed was working against the Islamic religion. He said he reported this to the police but the police did nothing because the government of the province was headed by religious parties which believed that NGOs were against Muslims. 9 In March 2003 he claimed to have moved to Karachi because he feared for his life at the hands of both the smugglers and religious fanatics. In Karachi he started working in a garment factory and living with a friend, but he claimed that after two months the smugglers found out that he was living there and one night when he was coming back home from work he realized he was being followed and began to run towards his house. The person following him fired at him with a pistol but he escaped. After that incident he spoke to his karate club manager in Peshawar and told him his entire story following which he came to Australia on 24 October 2003. 10 In support of his application to the delegate, the appellant produced a document purporting to be a letter from Shelter Now International, at the address, University Town, Peshawar, NWFP. That letter was undated but asserted that the appellant had been working with that organization from 1 May 1999 as a community worker. At the hearing on 4 June 2004 the appellant submitted an article dated 1 June 2004 which appeared to come from The Frontier Star newspaper of that date. It was headed 'Tribal jirga, ulama call explanation for spreading western culture'. The article began by giving the place, Peshawar, which appeared to be the place where the report was being made. It was surrounded by other stories from Peshawar and New York all datelined 31 May. The article reported that a warning had been given to the appellant 'and his group' to appear within 15 days to explain his position on violation of tribal custom, activities to spread Western culture and provide obscenity and vulgarity in the name of rights of women in tribal areas after which stern action would be taken against them (i.e. the appellant and his group). The article reported that the appellant and his group had been charged by the tribal elders and 'Ulama' with having spread Western culture which they said was against the tribal custom and culture and also against Islam. Father of [the appellant] who was also present on the occasion told the jirga that he was not responsible for his any word or deed [sic] . The father said that his son [the appellant] had adopted company of wrong people. The jirga expressed satisfaction over the explanation of the father of [the appellant] . The appellant supplied a copy of an article which was translated as having come from 'Daily "AAJ" [Today], Peshawar of 10 November 2002', again bylined as having originated in Peshawar. It reported that at a meeting of the Organization of the United Islamic Scholars, Bara Khyber Agency, was held under the chairmanship of that committee's president which had discussed accusations against the appellant, as chairman of 'Llaywl', and his companions, four other named persons. As noted in the tribunal's reasons, 'Llaywl' is an acronym for 'Let Live And You Will Live'. We cannot tolerate the western culture and civilization here, which are totally contrary to Islam and tribal values. [The appellant] is engaged in inciting people against Islam and tribal traditions. They are spreading immodesty and obscenity in the name of broadmindedness and liberal thinking'. The tribes cannot tolerate them under any circumstances. These people are preparing people against Islam in the name of progress and liberal thinking, whereas they have some hidden agendas which are risky for our coming generation'. It found that the appellant's claims had changed over time since he had first submitted his application and his oral evidence during the hearing was somewhat confused and internally contradictory. The tribunal said that at the hearing the appellant had resiled from his key written claim to the department (scil: the delegate) that he had been a member of Shelter Now International from 1999 onwards and for that reason and for reasons which the tribunal said had been put to him during the hearing it did not accept that the letter from that organization was genuine. The tribunal said that it did not consider the letter plausible and did not accept that he had had any contact with that organization. 16 The tribunal then said that it strongly doubted that if the appellant had tried to establish his own NGO group, as he had suggested during the hearing, he would have failed to refer to it at all in his submissions to the department. The tribunal found that the appellant had made it clear that the group had only ever had a total of five members and was never officially recognized because it had insufficient membership, even if it did exist in some form. The tribunal found that on the whole it appeared that the appellant had exaggerated its importance. The tribunal member had earlier recorded that the appellant had told it that the group was called Llaywl, which was an acronym for 'Let Live And You Will Live', and that he had thought he could give all his main points in the interview. 17 The tribunal concluded that it was satisfied that the appellant objected to the drug trafficking which the tribunal accepted occurred in Khyber Agency. The tribunal also accepted that the appellant held more liberal views than some of the Pakistanis from tribes in the Khyber Agency area. The tribunal recorded that the appellant claimed to have fears of being harmed respectively by religious fanatics, drug smugglers based in Khyber Agency and tribes-people working for the smugglers. 18 The tribunal gave the appellant the benefit of the doubt and accepted that he did give some information to the police about the incident of narcotics trafficking in Khyber Agency in early 2002 leading to the 800 kilograms of hashish being seized and arrests being made. However, the tribunal found the appellant's explanation as to why the smugglers might assume that he was the source of information to lack cogency. In any event, the tribunal found that the evidence which the appellant gave as to why the smugglers wanted to harm him in order to stop him from giving information to the authorities did not satisfy the requirement in s 91R(1)(a) of the Migration Act 1958 (Cth) ('the Act') that the 'essential and significant reason ... for the persecution' be found in one or more of the five Convention grounds. 19 Significantly the tribunal found that the appellant did not report to the police that he considered himself to be at risk of any harm by the drug traffickers and that he did not claim that the police might refuse to offer him protection for a Convention reason, although he had speculated during the hearing that some police might not want to protect him because, for example, they were co-operating with the smugglers or somehow wanted to further their careers. 20 The tribunal found that it was not satisfied that the police would refuse to offer him protection for a Convention reason. It concluded that there was no Convention reason for the harm which the appellant feared he may suffer in relation to the drug traffickers. 21 The tribunal then considered the appellant's fear of being harmed by Khyber Agency-based tribal or religious leaders (the Jirga). I have noted that this group appears to have been small and ineffectual, and consider it somewhat implausible that the jirga members might have even been aware of its existence. However, I have accepted that [the appellant] holds more liberal views than some tribal leaders in Khyber Agency, and that he may have attracted their disapproval in 2002. I therefore accept that they may have imputed a political opinion to him. However, I consider the chance remote that they might subject him to harm amounting to persecution for that reason in the reasonably foreseeable future. There is no evidence that the jirga have located or threatened his family in Peshawar, or that they have any influence outside Khyber Agency at all. According to his own account, they banished him from Khyber Agency in late 2002 and he complied almost immediately, and did not return there in the subsequent ten months before he left Pakistan. He did as they asked. However, the reasons for that killing appeared to the tribunal to have been quite independent from any political or other activity of the appellant. The tribunal found that this was so and that the killing was unrelated to the appellant's circumstances. 23 The tribunal also noted the appellant had referred to the incident in which a shot was fired in Karachi noting that any harm from those associated with drug smuggling was not the subject of persecution for a Convention reason. The tribunal went on to consider whether the incident could be related to the appellant's fear of harm by religious leaders in Khyber Agency bearing in mind that he had claimed that they had ordered the killing of three people. It noted that the appellant considered that someone had been shot at two weeks before and that robbers were active in the area. It noted that the appellant had not claimed that the person who had fired the shot had said anything to him and that he was only able to speculate that the shot might have been intended for him and that it was not an ordinary criminal who was responsible. The tribunal found that on that evidence it was totally unsatisfied that the incident occurred for any reason associated with the appellant's political opinions or activities or indeed that he had been the target of it at all. Even so, the tribunal appears to have accepted that this incident occurred. 24 The tribunal then noted that the UK Home Office had reported in 2004 that unless political activists were prominent they could move to another part of Pakistan. The tribunal found that the appellant was not a prominent political activist and had already illustrated that that was so by moving to Karachi where he had lived and worked for five months before coming to Australia. The tribunal found that taking into account all of that evidence it was satisfied that he could return to Karachi in which city the chance was remote that he might be subjected to persecution for reasons of his political opinions by tribal or religious leaders from the remote Khyber Agency. 25 Lastly, the tribunal accepted the appellant's claim that he had been thrown into a canal in Peshawar by other Muslims from a local mosque and they had done that because they thought he was not a good Muslim for the reasons that he had employed a Christian in his shop and had used the term 'jihad' in a sense which offended some local sensibilities. If he returns to Karachi, where he lived for some months before he came to Australia, there is nothing to suggest that the particular circumstances which led to the assault might recur --- he will not be the employer of a Christian, and can readily use a less sensitive term than " jihad " if he again campaigns against drug trafficking. Therefore [the appellant's] fear of being subjected to persecution by " religious fanatics " is not well-founded. His Honour noted that the appellant had been directed by a Registrar at the first court appearance on 18 October 2004 to file and serve any affidavits containing additional evidence relied on including a transcript of the tribunal hearing by 20 December 2004. No evidence was ever filed by the appellant in compliance with that direction or otherwise. At no point did the appellant file any document purporting to be a transcript of the hearing either in the court below or in this court. At the hearing before me the appellant accepted that it was only necessary to refer to the tribunal's reasons and he abandoned any reliance upon what a transcript might show. 27 His Honour found that on his reading of the material before the tribunal, it had sufficiently addressed all claims of the appellant to be a refugee which had in fact been made by him. His Honour rejected the ground of appeal that the tribunal's reasoning lacked a rational or logical foundation for concluding that he was not a refugee. His Honour could find no substance in that contention. As will appear I have considerable difficulties with his Honour's rejection of this ground. 28 The appellant also contended before his Honour that there had been no proper investigation of his genuine claims. His Honour noted, correctly, that the tribunal had assessed the claims and evidence which the appellant had put forward and was not obliged to conduct a further investigation into the matter, referring to Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32 ; (2004) 207 ALR 12 at 21-22 [43] . His Honour also correctly dismissed the contention that the appellant should have been provided with specific details of general country information. As his Honour noted, s 424A(3)(a) of the Act does not require the tribunal to put these matters specifically to the appellant and in any event his Honour found that he was not persuaded that any relevant country information was not raised satisfactorily with the appellant during the hearing so as to afford him a fair opportunity to meet it. I am likewise not persuaded that there is anything in this ground for the reasons his Honour gave. 29 His Honour rejected a contention that the tribunal had acted in bad faith and that this could be established from the transcript of the hearing before the tribunal. As his Honour noted no transcript had been provided then, nor has it been now, and I agree with his Honour that there is no basis for concluding in the material before the Court that the tribunal acted in bad faith. 30 His Honour then dismissed the appeal. He alleges that his Honour failed to find an error of law, jurisdictional error, lack of procedural fairness or to grant relief under s 39B of the Judiciary Act 1903 (Cth). Why his Honour is alleged to have failed was not articulated. The notice of appeal also asserted that his Honour erred in considering the real state of affairs of his persecution in his previous country of residence and his fear of harm. The appellant's grounds also argued that the present government of Pakistan failed to protect the people's lives which is a world-wide concern today. He also complained that he would face persecution if he returned to Pakistan as there are significant levels of violation of human rights which his Honour did not consider. The notice of appeal also refers to a number of court decisions but does not specify why any decision has particular relevance to this matter. The Minister contended that this did not constitute an identifiable social group for the purposes of the Convention. I suggested in argument to counsel for the Minister that the well known anti-drugs campaigner, Donald Mackay, had been killed in Griffith, New South Wales, for his political, anti-drugs stance and that such a public position could be taken as either an expression of political opinion or membership of a social group. The Minister submitted that this would not be the case here. 33 The appellant also pointed to the way in which the tribunal had addressed his claim to have been persecuted by the tribal leaders and the Jirga who had been in Khyber Agency. He identified the two newspaper articles to which I have referred as showing that there was material before the tribunal which provided objective support for his claims. He said that there were people of strong Islamic beliefs all over Pakistan, not just in the Khyber Agency area and that the tribunal had not given rational consideration to his claim of a well-founded fear of persecution. 34 The appellant also argued that the finding that the tribunal had made, in dismissing the canal incident as evidence of persecution, was that it was unlikely to recur because he would not be an employer of a Christian and could readily use less sensitive language and avoid using the expression 'jihad' if he returned to campaign against drugs, was not a reasoning process which addressed the claim he was making. 35 Counsel for the Minister put that whatever had happened in the past, the appellant had not been found by the tribunal to have expressed the desire, were he returned to Pakistan, to employ Christians or to use provocative language in expressing his anti-drugs campaign and that therefore there was no basis upon which he could say that there was a well-founded fear that could have been found by the tribunal. The Minister relied on the findings that the appellant was not a prominent activist and that he had actually lived in Karachi for five months without difficulty. 37 It is important to recognize that the tribunal is the body created by the Parliament to conduct the review on the merits of decisions by the Minister or his or her delegate. The role of the court in proceedings such as this is to review whether in reaching its decision, the tribunal adhered to or departed from the procedure for the conduct of the review laid down in the Act or, to the extent that s 422B and Div 4 Pt 7 of the Act do not exclude them, the principles of common law. Nonetheless, as Brennan J observed in Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 662: ' [t] he distinction between method and merits is sometimes elusive. ' But, where the court is not authorized by statute to substitute its view of the merits, it must confine itself to a consideration of whether the repository of the statutory power under challenge, here the tribunal, has arrived at its decision on the merits by a procedure authorized by, and in conformity with, the enactment which conferred the power: Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 222 ALR 411 at 415-416 [14] - [16] per Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ. If the repository so acted, even if the court disagrees with the merits of the decision so reached, the court must hold that the repository has exercised lawfully the jurisdiction which it had. 38 In exercising its function of conducting a review of a decision under s 414(1) of the Act, the tribunal cannot simply act perfunctorily. Nor can it shut its ears or eyes so as to ignore, consciously or inadvertently, the claims made by the applicant for review (cf: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389 at 394 [24] - [25] per Gummow and Callinan JJ, 406-407 [86]-[87] per Kirby J, 408 [95] per Hayne J). 39 In arriving at what it considers to be the correct or preferable decision ( Wilson v Minister for Aboriginal and Torres Strait Islander Affairs [1996] HCA 18 ; (1996) 189 CLR 1 at 18) at the conclusion of its review under ss 414(1) and 415 of the Act, the tribunal must give 'proper, genuine and realistic consideration to the merits of the case' ( Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 at 292 per Gummow J, Zhang v Canterbury City Council [2001] NSWCA 167 ; (2001) 51 NSWLR 589 at 601 [62] where Spigelman CJ collected the authorities; Minister for Immigration v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 367 [138] per Kirby J. 40 So, in Re Minister for Immigration and Multicultural and Indigenous Affairs: Ex parte Palme [2003] HCA 56 ; (2003) 216 CLR 212 at 223-224 [39] Gleeson CJ, Gummow and Heydon JJ referred to the inference which is open to a court exercising the function of judicially reviewing a decision of the executive government that if the decision-maker does not give any reason for his or her decision the court may be able to infer that he or she had no good reason. 41 As Brennan CJ, Toohey, McHugh and Gummow JJ said in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272 the reasons of an administrative decision-maker are meant to inform and are not to be scrutinized upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. 42 The tribunal said that if the appellant had tried to establish his own NGO group he would not have failed to refer to it at all in his submissions to the department. Had there been no independent material to the contrary before the tribunal such a finding may have been open. 43 The tribunal said that ' it consider[ed] it somewhat implausible that the Jirga members might even have been aware of ' the existence the appellant's group. The newspaper article of 10 November 2002 was evidence that the tribunal had before it which described both him and, the group, Llawyl, by name. The tribunal made no finding that the newspaper article was not genuine or otherwise. The tribunal was required by s 430 of the Act to express reasons as founding its decision, why it was 'somewhat implausible' that the Jirga was aware of the appellant's group. Yet according to the express words of the newspaper article the Jirga, had in fact, made the very connection. The tribunal merely asserted, without referring to any basis in the evidence before it, that it, the Tribunal, found it 'implausible' or unbelievable that the Jirga made the connection it was reported to have made. This ignores the fact reported, namely that the Jirga did just that. There was no reasoning process by the tribunal for doubting this, let alone one based on any evidence. 44 Whether or not the tribunal would have made the connection were it in the place of the Jirga is entirely irrelevant to its task. The tribunal was required to consider the appellant's claim which was supported by the newspaper reports of the Jirga having made the connection, then banishing the appellant and calling on his family to explain itself. While the tribunal was not bound to accept such a claim, it was obliged to give reasons, not mere assertions, for rejecting it. But it is a circumstance which may support the inference that the tribunal is applying the wrong test or is not in reality satisfied of the requisite matters. If there are other indications that this is so or that the purpose of the function committed to the tribunal is misconceived it is but a short step to the conclusion that in truth the power has not arisen because the conditions for its exercise do not exist in law and in fact. 47 What is even more extraordinary about the deficiency in the reasoning process in the case before me is that the second newspaper article appeared, while the appellant was in Australia, on 1 June 2004 during the hearing reinforcing the fact that the Jirga was actively engaged in persecuting the appellant and his family. Again, the tribunal made no finding about the genuineness or otherwise of this article. 48 The 1 June 2004 article repeated the public condemnation, apparently in the city of Peshawar, of the appellant and his group for the political views they had expressed. Faced with two newspaper publications 18 months apart in two apparently different newspapers, one in Arabic and the other in English, the tribunal had evidence to support the appellant's claim from apparently genuine and independent sources that he had been publicly identified in the media by a religious group for his expression of political opinion and religious practices. The tribunal gave no explanation as to why it was implausible that that which appeared in the newspaper articles could have, let alone in fact did, come to the notice of the Jirga or why it was not accepted as evidence to support the claims. And, the tribunal did this in the context of then accepting that the appellant held more liberal views than some tribal leaders in the Khyber Agency and that he may have attracted their disapproval in 2002. 49 Having accepted also that the appellant may have a political opinion imputed to him by the Jirga members the tribunal then asserted, as an ' ipse dixit ' that it considered that the chance was remote that the Jirga would subject him to harm amounting to persecution for that reason in the reasonably foreseeable future. No basis was given by the tribunal for that assertion. The Jirga had issued a statement that the appellant was to be banished from the area in which he had previously lived and worked, which had been published in a contemporary newspaper in November 2002. The Jirga was reported on 1 June 2004, during the hearing before the tribunal, as requiring the appellant and his group to explain their religious and political behaviour. 50 But that is not the end of the tribunal's illogicality. It then said 'there is no evidence that the Jirga have located or threatened his family in Peshawar or that they have any influence outside Khyber Agency at all'. (I have emphasized the assertion that there was 'no evidence' which is in the teeth of the contents of the newspaper articles. The second article, of 1 June 2004, noted that the appellant's family had put up their defence, namely that the appellant 'had adopted the company of wrong people' and that the Jirga had expressed satisfaction over that explanation from the appellant's father. The second article reported that it had its source in Peshawar. It may be that the reporter was located there, but it seems clear enough that contact was made between the Jirga members and the appellant's family. Both articles are bylined from Peshawar. The tribunal gave no reasoning process as to why publication of the November 2002 article, which one might infer was in a daily newspaper in Peshawar bearing the masthead 'The Daily AJJ Peshawar', would not come to the attention of persons who knew the appellant's family who were living in Peshawar and its environs. 52 Commonsense says that that is a conclusion that must be obvious to anyone in the position of the tribunal. The tribunal gave no reasoning as to why the appellant's family would want to respond to the Jirga, if it were in fact remote from or had no impact, potential or real, on the lives of the appellant's family. To make the finding that there was 'no evidence that the Jirga had located or threatened his family' belies the fact that two public newspapers circulating in the home city of the family published over 18 months apart had named the family as, firstly, having a case to answer to the Jirga and, secondly, publishing its answer as given to the Jirga. 53 In my opinion, no reasonable person could have expressed a reasoning process in the way that the tribunal did in order to deal with this evidence. Nor did the tribunal use its investigative powers by means of s 427(1) of the Act in the way suggested by Lee J or Tamberlin J in M164/2002 v Minister [2006] FCAFC 16 at [63] - [66] , [118] by asking the Secretary of the department to investigate the newspaper articles. Moreover, the fact that the Jirga had banished the appellant from the area in which he worked and that its decree had been publicly notified in his family's home city, indicated that there was in fact persecution for a Convention reason (political opinion) of the appellant at least in the area in which the Jirga's influence extended. Whether or not that went as far as Peshawar may be a matter that was legitimately within the area of fact-finding confined to the tribunal. But the tribunal did not consider the punishment of banishment at all in assessing whether the appellant's fear of persecution was well founded. It merely noted that he had complied with the banishment and did not return to the Peshawar area in the subsequent ten months he had remained in Pakistan following it. 54 The tribunal also dismissed as evidence of persecution for a Convention reason the fact that the appellant had been thrown into the canal for what ostensibly was a motivation, by reason of his religion, membership of a particular social group or political opinion, perceived by his attackers. The tribunal reasoned that because the appellant did not suffer any serious harm and was uninjured and ' therefore [found] that it did not amount to persecution '. The fortuity that when one is attacked by 14 or 15 people and thrown into a watercourse one might not be injured sufficiently to require medical attention belies the fact that the experience which the appellant suffered was plainly intimidatory and potentially very dangerous. A mob attack by persons in Peshawar, claiming that the appellant should not have employed a Christian or expressed certain opinions based on religion or politics, was capable of supporting his claim that the influence of the Jirga and those associated with it had extended to that city and that the appellant was a target. Instead, the tribunal dismissed its findings as to this as having no effect because the appellant fortuitously, presumably, could swim and therefore did not drown, and had not been sufficiently harmed in the attack before he was thrown into the water to stop him getting out and getting away. 55 The tribunal's task was to consider whether the appellant had a well -ounded fear that he might be persecuted. It ignored the fact that an attack such as this following on from his being banished for publicly exposed and publicized reasons, could have provided a well founded fear of persecution. In my opinion no rational person could have failed to give consideration that there was a 'real chance' that he would suffer persecution for a Convention reason within the meaning of s 91R of the Act: see Chan v Minister for Immigration [1989] HCA 62 ; (1989) 169 CLR 379 at 389, 398, 407, 429; Applicant NADB of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 29 ; (2005) 216 ALR 1 at 38 [160] - [161] per Hayne and Heydon JJ . The function of an administrative decision-maker is to give genuine and real consideration to the material before it. 56 When the tribunal said that it '... consider[ed] it somewhat implausible that the Jirga members might have even been aware ...' that the appellant's group existed, it was suggesting that the claim was somewhat 'without appearance of truth or acceptability' as Lee J explained in Applicant M164/2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 16 at [44] . The tribunal gave no explanation for discounting what appeared to be newspaper articles before it in which there could have been no doubt that, if genuine, the Jirga did know of the appellant's group's existence and what is more it had sought to banish him and cause his family to account to the Jirga by reason of the appellant's and his group's activities. 57 The tribunal gave no reasons for asserting any form of implausibility of that material. It did not suggest that the newspaper reports were anything other than genuine, and if it wished to have investigated that question it could have used its powers under s 427(1)(d) of the Act to require the Secretary to 'arrange for the making of any investigation that the tribunal thinks necessary with respect to the review, and to give to the tribunal a report of that investigation ...'. (see Applicant M164/2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 16 at [62] - [66] , [90]-[92] per Lee J; [108], [113]-[119] per Tamberlin J). Likewise, the assertion by the tribunal that there was no evidence that the Jirga had located or threatened the applicant's family in Peshawar or that they had any influence outside the Khyber Agency at all is flatly contradicted by the newspaper articles, especially that of 1 June 2004 and has no evidentiary support whatever. 58 The tribunal used these findings to conclude that the applicant was not a prominent political activist and was therefore capable of relocating within Pakistan on the ground that the chance would be remote, were he to return to Karachi, that he might be subjected to persecution for reasons of his political opinions by tribal or religious leaders from the remote Khyber Agency. 59 I am of opinion that by the way in which it dismissed the objective evidence provided in the two newspaper articles, the tribunal ignored relevant material (the newspaper articles) and relied on irrelevant material (namely its bare, unsupported assertions that the objective facts demonstrated in the newspaper articles were 'somewhat implausible' and gave 'no evidence' of the Jirga's activities). That was a jurisdictional error: see Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179; Secretary of State for Education and Science v Thameside Metropolitan Borough Council [1976] UKHL 6 ; [1977] AC 1014 at 1047D-E; Minister for Immigration and Multicultural Affairs v Rajamanikkam [2002] HCA 32 ; (2002) 210 CLR 222 at 233 [27] , 241 [58], 250 [97] and SZGDB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 431 at [33] - [38] . 60 Here, procedural fairness required the tribunal to give proper genuine and real consideration to the appellant's claim that he had been persecuted by the tribal leaders and the Jirga who had been in Khyber Agency. The tribunal had noted country information on jirgas in Pakistan earlier in its decision immediately before the section headed 'Findings and Reasons'. It referred to a recent Pakistan press report which said that people in rural areas are forced to obey the orders of a jirga and that the Jirga is an institution in Pakistan's informal justice system which is condoned by corrupt officials in the police force. 61 Each of the two newspaper articles concerning the appellant showed, apparently credibly, that those tribal leaders and the Jirga were aware of the appellant, his group and his 'liberal' views and that that awareness had received publicity at least to readers of the newspapers and in Peshawar. While the tribunal said it considered ' it somewhat implausible that the Jjrga members might even have been aware of [the group's] existence ', it accepted that the appellant may have had a political opinion imputed to him. Accordingly, the tribunal accepted part of the claim, but it gave no reason for it being 'somewhat implausible' notwithstanding the apparently credible independent and only other evidence in the newspaper articles. But the fact of his presence and the, in effect, public disowning of the appellant's opinions to the Jirga, on behalf of his family, is not addressed by the tribunal. If the Jirga had not located or threatened them, then the appellant's family had no reason to recognize it or appear, through his father, before it. Moreover, the tribunal found that the appellant had been banished from Khyber Agency by the Jirga and that he had complied with its order almost immediately by moving away from where his family was to Karachi. The tribunal also had accepted the appellant's account of the attack on him in Peshawar resulting in his being thrown into a canal by Muslims from a local mosque but found that this did not amount to persecution because he was not seriously injured. If the applicant fears persecution for a Convention reason, examining whether that fear is well founded requires the tribunal to decide whether there is a real chance that the applicant would suffer persecution for a Convention reason. As pointed out [(1989) [1989] HCA 62 ; 169 CLR 379 at 389; 87 ALR 412 at 418 per Mason CJ, CLR 398; ALR 424-5 per Dawson J, CLR 407; ALR 431-2 per Toohey J, CLR 429; ALR 448-9 per McHugh J. See also Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559 at 571-5; [1997] HCA 22 ; 144 ALR 567 at 576-9; [1997] HCA 22 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ. ] in Chan v Minister for Immigration and Ethnic Affairs , reference to a real chance of persecution must not be substituted for, or be permitted to obscure the content of, the test prescribed in the Convention - whether an applicant holds a well-founded fear of persecution. It is sometimes convenient nonetheless to use the expression "real chance" as a shorthand reference to the nature of the factual inquiry being made. Usually, considering whether an applicant's fear is well founded will be assisted by considering how others, in like case to the applicant, are being, or have in the past been, treated. [Guo [1997] HCA 22 ; (1997) 191 CLR 559 at 575; [1997] HCA 22 ; 144 ALR 567 at 579; [1997] HCA 22] The difficulties of making such comparisons are obvious. But s 91R(2) gave instances such as a threat to the person's life, significant physical harassment or ill-treatment of him. 65 The tribunal dismissed the canal incident because that incident did not result in serious harm but it never considered whether such an attack, by many persons of one faith in company who were hostile to the appellant's religious behaviour and political opinion and or membership of a social group, gave rise to a 'well founded fear'. Instead the tribunal asserted, without identifying a basis that there was nothing to suggest that there would be a risk of this behaviour being repeated in the future because, so it said, the appellant would not employ a Christian and could modify his use of language to avoid the word 'jihad' in campaigning against drug trafficking. This assertion was misconceived. This is particularly so where the actions of the persecutors have already caused the person affected to modify his or her conduct by hiding his or her religious beliefs, political opinions, racial origins, country of nationality or membership of a particular social group. In cases where the applicant has modified his or her conduct, there is a natural tendency for the tribunal of fact to reason that, because the applicant has not been persecuted in the past, he or she will not be persecuted in the future. The fallacy underlying this approach is the assumption that the conduct of the applicant is uninfluenced by the conduct of the persecutor and that the relevant persecutory conduct is the harm that will be inflicted. In many -- perhaps the majority of -- cases, however, the applicant has acted in the way that he or she did only because of the threat of harm. In such cases, the well-founded fear of persecution held by the applicant is the fear that, unless that person acts to avoid the harmful conduct, he or she will suffer harm. It is the threat of serious harm with its menacing implications that constitutes the persecutory conduct. To determine the issue of real chance without determining whether the modified conduct was influenced by the threat of harm is to fail to consider that issue properly. This is the underlying assumption of the rule of law. It dismissed the appellant's claims of a well-founded fear by making mere assertions that, although he complied with the banishment imposed by the Jirga, the chance was remote that they might subject him or his family who remain in Peshawar to harm in the foreseeable future and that a physical assault on him by a large group in company was not persecution because he was not seriously hurt. 67 These assertions were unreasoned and unsupported because they ignored objective facts found and did not deal with the apparently credible newspaper articles which supported the claims. If the tribunal meant to say that because the appellant will accept his banishment he can have no fear, that involved the very mistake of which McHugh and Kirby JJ wrote (216 CLR at 490 [43]. 68 I have not overlooked that the issue of whether the appellant could relocate within Pakistan, which was also before the tribunal. However, that issue could arise only after a determination that he had a reason to relocate. The tribunal committed a jurisdictional error in dealing with the claims of the appellant. 69 And, in reaching its conclusion that the appellant could relocate to Karachi where he could live safely, the tribunal, first, considered in a jurisdictionally erroneous manner only his claim relating to the tribal and religious leaders of Khyber Agency and, secondly, said it had taken into account all of the evidence. In other words, the tribunal did not assess the claims based on the appellant being free to act in Karachi, as he would have acted without modifying his behaviour to eschew the realization of his fears. Hence, in the penultimate paragraph of its reasons when dealing with the canal attack, the tribunal's approach as described above, was to deal with the claim by reference to its (unfounded) anticipation that the appellant would modify his behaviour. That approach evinced the very error exposed in Appellant S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 216 CLR 473 at 490-491 [43] - [44] , 501-502 [82]-[83]. 70 I am satisfied, for the reasons above, that the tribunal misconceived its task in assessing whether the appellant had a well-founded fear of persecution for one or more Convention reasons and that it did not have a good reason for rejecting those claims. That is not to say that on a rehearing the tribunal might not come to the same decision but, if it does, it must do so according to law. On 27 April 2006 the Minister filed a supplementary submission referring to the affidavit to be filed relating to the documents and giving case references. 72 On 2 May 2006 the Minister filed an affidavit of that date by the district registrar of the tribunal, Mr Willoughby-Thomas, which I have admitted as fresh evidence pursuant to s 27 of the Federal Court of Australia Act 1976 (Cth) in order that the court can understand what documents in the appeal book were before the tribunal and how and when they were received by it, since this was not clear from the index and other material in the appeal book. The appellant did not object to the affidavit or its contents. In my opinion the evidence was important to ensure that the proceedings do not miscarry ( CDJ v VAJ [1998] HCA 76 ; (1998) 197 CLR 172 at 200 [104] ). 73 On 4 May 2006, the appellant filed supplementary submissions which did not respond to or address the material filed by the Minister pursuant to my orders of 19 April 2006, but raised new matter. The Minister objected to this material. I have not taken account of those submissions in these reasons because they are outside the leave which I granted ( NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 48 ; (2004) 219 CLR 90 at 159 [191] - [192] ). I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | protection visa jurisdictional error whether refugee review tribunal properly took account of evidence before it whether tribunal made proper use of investigative powers where tribunal did not take evidence into account yet did make finding that the evidence was not genuine or otherwise whether appellant could modify the conduct that caused him to fear persecution whether tribunal properly considered that relocation would protect the appellant from persecution appeal allowed migration |
The principal order made by the Federal Magistrate was an order dismissing the appellant's application for constitutional writs directed to the Minister for Immigration and Multicultural and Indigenous Affairs, now the Minister for Immigration and Citizenship ("the Minister"), and the Refugee Review Tribunal ("the Tribunal"). 2 The appellant is a citizen of the People's Republic of China and he was born in Tianjin on 10 April 1953. He arrived in Australia on 30 August 2004. On 24 September 2004 he applied for a Protection (class XA) visa. On 29 September 2004 a delegate of the Minister refused to grant his application. On 1 November 2004 the appellant lodged an application for review with the Tribunal. On 22 December 2004 the Tribunal handed down a decision affirming the delegate's decision not to grant a protection visa to the appellant. 3 On 20 January 2005 the appellant lodged an application in the Federal Magistrates Court of Australia under the Judiciary Act 1903 (Cth) and the Migration Act 1958 (Cth) ("the Act ") seeking constitutional writs directed to the Minister and the Tribunal. The appellant's application was amended on 7 June 2006 and it was the amended application which was considered by the Federal Magistrate. The details of this claim are set out in my affidavit dated 3 May 2006. In the circumstances, there was a denial of procedural fairness and jurisdictional error. 6 In the application the appellant said that he was a Falun Gong practitioner and one of the leaders of the Falun Gong movement in Hedong District, Tianjin. He described the nature of the Falun Gong movement. He said that he was detained by the police for almost one month in a detention centre in Tianjin. He said that he was tortured by the police and forced to declare not to practise Falun Gong. I suffered spiritually and economically. He entered Australia under a business visa. 8 The Department of Immigration and Multicultural and Indigenous Affairs wrote to the appellant at the Pitt Street address by letter dated 29 September 2004 advising him that his application for a protection visa had been refused. 9 The appellant's application for review by the Tribunal was dated 1 November 2004 and in it he gave the Pitt Street address as his residential address. In the statement attached to the application for review the appellant repeated the claims that he made in his application for a protection visa. 10 The Tribunal wrote to the appellant at the Pitt Street address by letter dated 2 November 2004 and provided details of how the appellant's application for review would proceed. The Tribunal wrote again to the appellant at the Pitt Street address by letter dated 8 November 2004 advising him that it was unable to make a decision in his favour on the information alone and inviting him to a hearing of the Tribunal to be held on 2 December 2004. No authorised recipient or separate mailing address are listed in the application. No response was received and the letter was not returned unclaimed. On 24 November 2004 the Tribunal checked its file and the departmental file for a more recent address and telephone number for the applicant. No telephone number is listed in the application for review. On the same day the Tribunal checked the departmental movements database to confirm that the applicant is still in Australia. The Tribunal decided to exercise the power in s 426A of the Act to make a decision on the review without taking any further action to allow or enable the applicant to appear before it. 13 The Tribunal wrote to the appellant at the Pitt Street address by letter dated 3 December 2004 advising him that the decision of the Tribunal would be handed down on 22 December 2004. His claims concerning his Falun Gong involvement, unsubstantiated and lacking in detail on important points as they are, do not provide sufficient grounds for the Tribunal to have confidence in the claimed basis for his professed fear of persecution. Nor, given the unsubstantiated and vague nature of his claims to have been harmed because of his Falun Gong involvement, is the Tribunal satisfied that he has ever suffered harm in China for this reason. In the light of all the evidence available to it, the Tribunal is not satisfied that the Applicant faces a real chance of harm amounting to persecution from the Chinese authorities because of any involvement with the Falun Gong faith, either now or in the reasonably foreseeable future should he return to China, and is not satisfied that he has a well founded fear of persecution for this or any other Convention-related reason. The Tribunal is not satisfied that the Applicant is a refugee. He said that a short time after he arrived in Australia he was introduced to a person called Songtao Lue. He explained to Mr Lue that he was a Falun Gong practitioner in China and that he feared returning to China. Mr Lue told the appellant that he would help him apply for a "refugee visa". The appellant paid Mr Lue two sums of money, $400 on or about 18 September 2004 and $350 on or about 30 September 2004. The appellant attached to his affidavit two receipts recording these payments. 16 In his affidavit the appellant acknowledged that he had signed Parts B and C of the application for a protection visa. However, in his evidence before the Federal Magistrate he denied that the signature appearing in Part C was his signature. 17 The appellant said that he did not recognise the address of 160/422 Pitt Street, Sydney, New South Wales. He said that when he arrived in Sydney he spent a few weeks living in an apartment in the city and that he lived in the apartment with Mr Lue. He said that he did not know the address of the apartment. He then moved to Auburn and lived in Auburn for about one year. In about June 2005 he moved to Cabramatta where he continued to live until this year. 18 The appellant said that some of the information contained in the statement which accompanied his application for a protection visa was incorrect. He said that he did not know that this information was in his application. 19 The appellant said that after lodging his application for a protection visa and over the following few months, Mr Lue contacted him by telephone occasionally and asked him to come into his office to sign documents in relation to his visa application. He went to Mr Lue's office and signed documents but Mr Lue did not tell him how his refugee application was proceeding. 20 The appellant said that he signed the application for review which was lodged with the Tribunal. The address in the application for review, that is to say the Pitt Street address, was not his address in November 2004 and he said that he never told Mr Lue that he lived at that address. At the time, I was unaware there was a hearing. I never received a letter from the Tribunal telling me about the hearing. Mr Lue never told me about the hearing. If I'd been aware of the hearing, I would have attended. I would have told the Tribunal that I was a Falun Gong practitioner in China and I feared persecution if I am forced to return to China. The appellant's affidavit was received in evidence and the appellant was cross-examined by counsel for the Minister. On 29 January 2007, the Magistrate delivered his reasons. He found that it was apparent from the sequence of events that letters sent by the Department and the Tribunal to the Pitt Street address came to the attention of the appellant. The Magistrate noted that the appellant did not allege any fault on the part of the Tribunal. 24 The Magistrate said that the appellant's claim was that he was unaware of the proposed Tribunal hearing on 2 December 2004 because his agent did not tell him about it. He noted that the appellant described the agent's conduct as "wrongful" and that the written submissions filed by counsel for the appellant sought to separate the issue of wrongful conduct into fraudulent and non-fraudulent conduct. The Magistrate said that while some authorities suggested that such a dichotomy might have been a useful one in proceedings, recent decisions binding on him led to a different conclusion. The Magistrate referred to various sections in the Migration Act and decisions of this Court, including the decision of the Full Court of this Court in Minister for Immigration and Multicultural Affairs v SZFDE [2006] FCAFC 142 ; (2006) 154 FCR 365 (" SZFDE "). The Magistrate took the view that an agent's wrongful conduct, whether fraudulent or not, in failing to inform an applicant of a hearing of the Tribunal of which notification had been given did not give rise to jurisdictional error. The Federal Magistrate did not make an express finding to the effect that the appellant's agent did not advise him of the proposed hearing before the Tribunal because he said that even if that were so it did not affect the result. He said that the outcome of the application for constitutional writs in relation to the decision of the Tribunal did not turn on whether or not the agent's conduct in not informing the appellant of the proposed Tribunal hearing was fraudulent. 26 On the authorities as they stood at the time of the Federal Magistrate's decision, his decision was correct: SZFDE ; SZGQL v Minister for Immigration and Multicultural Affairs [2006] FCA 1420. 27 The respondent in SZFDE sought and obtained from the High Court of Australia special leave to appeal against the decision of the Full Court of this Court. The appeal was heard on 24 May 2007 and, on 2 August 2007, the High Court handed down its decision. The Court reversed the decision of the Full Court of this Court: SZFDE v Minister for Immigration and Citizenship (2007) 81 ALJR 1401. 29 For his part, the Minister sought an extension of the time within which to file and serve a notice of contention. On 6 June 2007 I granted that extension of time. Federal Magistrate Cameron should have rejected the applicant's contention that his adviser had fraudulently failed to inform the applicant of the hearing before the Tribunal. 31 In SZFDE the High Court held that fraud by an applicant's agent causing the applicant not to attend a hearing of the Tribunal could constitute jurisdictional error. But the concomitant was the stultification of the operation of the critically important natural justice provisions made in Div 4 Pt 7 of the Act . In short, while the Tribunal undoubtedly acted on an assumption of regularity, in truth, by reason of the fraud of Mr Hussain, it was disabled from the due discharge of its imperative statutory functions with respect to the conduct of the review. That state of affairs merits the description of the practice of fraud "on" the Tribunal. The consequence is that the decision made by the Tribunal is properly regarded, in law, as no decision at all. This is because, in the sense of the authorities, the jurisdiction remains constructively unexercised. The authorities were collected in Bhardwaj . 33 Although it is not entirely clear, I think it is correct to say that it is not enough that the agent acts negligently or incorrectly; he or she must act fraudulently. The appeal has turned upon the particular importance of the provisions of Div 4 of Pt 7 of the Act for the conduct by the tribunal of reviews and the place therein of the ss 425 and 426A . In the Full Court, French J correctly emphasised that there are sound reasons of policy why a person whose conduct before an administrative tribunal has been affected, to the detriment of that person, by bad or negligent advice or some other mishap should not be heard to complain that the detriment vitiates the decision made. The outcome in the present appeal stands apart from and above such considerations. 34 Furthermore, the fraud must affect the process prescribed by the Act , in particular, whether the applicant has had the opportunity to appear before the Tribunal to give evidence and present arguments relating to the issues arising in relation to the decision under review. 35 The Minister submitted that there was simply no evidence of fraud before the Federal Magistrate and that in those circumstances it was appropriate to dismiss the appeal. 36 The Federal Magistrate did not make any findings as to whether Mr Lue had been fraudulent in his dealings with the appellant and whether that had affected the process prescribed in the Act . That was understandable on the authorities as they stood at the time of his decision. However, the effect of the decision of the High Court in SZFDE is that the question of fraud and its effect on the process must be considered. 37 In my opinion, the question of whether there was even an arguable case of fraud raised before the Federal Magistrate is finely balanced. Counsel for the Minister referred to the transcript of the hearing before the Federal Magistrate and reminded me of the fact that strong evidence is usually required to establish fraud. He referred to Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336. There is considerable force in the Minister's submissions. The appellant appears to have changed his story on whether his signature appears on one of the documents. More importantly perhaps is that, on the face of it, it is difficult to discern a motive for any fraudulent dealing on the part of Mr Lue. Despite these considerations, I do not think I should go so far as to conclude that on no possible view of the evidence before the Federal Magistrate could fraud be established. If the appellant's signature was falsely placed on a relevant document and part of a statement "made up", then that may go some way towards establishing fraud, although it will still be necessary for the appellant to show that the fraud (if there be fraud) has affected the process prescribed by the Act . I am not to be taken as saying that it is likely that fraud will be made out, but simply that I cannot be certain that it cannot be made out. It seems to me that the application for constitutional writs must be remitted to the Federal Magistrates Court for rehearing in accordance with these reasons. I am satisfied that the circumstances are such that a rehearing of the application is necessary. The application is remitted to the Federal Magistrates Court of Australia for rehearing in accordance with these reasons. I will hear the parties on the question of costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | appeal from decision of federal magistrate where delegate of first respondent refused application for protection visa where second respondent invited appellant to hearing where appellant failed to attend hearing where second respondent under s 426a migration act 1958 (cth) affirmed decision of first respondent where appellant on application for constitutional writs in federal magistrates court alleged fraud by agent where federal magistrate made no factual findings as to fraud because third party fraud immaterial to judicial review where subsequent high court decision that fraudulent conduct of migration agent relevant to judicial review of tribunal decision whether fraud unarguable on evidence before federal magistrate. migration |
In this respect the respondent relies upon the power of the Court in s 31A(2) of the Federal Court of Australia Act 1976 (Cth) to give judgment for one party against another in relation to the whole of a proceeding if (b) 'the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding ...'. This is to be read with s 31A(3) that provides that for the purposes of the section a proceeding need not be hopeless or bound to fail for it to have 'no reasonable prospect of success'. 2 The respondent relies on an affidavit of Mr Hill, a solicitor of the Australian Government Solicitor and written submissions. The applicant relies on an outline of submissions. 3 The applicant's notice of appeal seeks to appeal from a decision of Deputy President Hotop in the Administrative Appeals Tribunal (the Tribunal), Perth given on 6 September 2006. All he does is basically ask a series of questions which really don't take this matter any further'. The request was made on 25 November 2005 for documents held by the respondent dated between 1 January 2003 and 27 November 2005. A decision was made by the respondent on 3 February 2006 and provided to the applicant releasing a large proportion of the documents sought by the applicant's request. 6 On 13 February 2006 the applicant sought internal review. An internal review decision was made on 22 March 2006 as a result of which some additional material was released to the applicant. 7 On 29 March 2006 the applicant made the application to the Tribunal for review of the respondent's internal review decision. 8 The respondent's decision resulted in certain of the documents, the subject of the request by the applicant, being listed as exempt. Documents I, J, L and Q were said to be exempt in whole or in part under subs 36(1) of the FOI Act. Document T was said to be exempt pursuant to s 41. Documents L, M, O and P were said to be exempt pursuant to s 42. 9 The respondent submits that on this application the applicant has not particularised any foundation to support his application and that what he relies on is unrelated to matters before the Tribunal. It is submitted that his submissions are embarrassing and nonsensical. Further, that there is nothing to persuade the Court that had the Tribunal considered his application for review, it would not have gone against him anyway. 10 In his outline of submissions the applicant refers to s 64 of the Constitution . He asserts that the respondent is defending crimes against the Commonwealth. He also asserts that what he wants to do is to appeal the decision of 3 February 2006. That, of course, is the decision of which internal review has already taken place. Attached to the submissions are a variety of materials including extracts from The King v Barger [1908] HCA 43 ; (1908) 6 CLR 41, correspondence to him from the respondent, from the Treasury and from various members of Parliament, correspondence from him to the Governor-General and to him from the Director of Public Prosecutions. I accept the submission for the respondent that these matters do not particularise any basis of his appeal. 11 In oral submissions the applicant referred to the need for justice, fairness and rightness. He asserted that there was a falsification of evidence that no-one was investigating and which was being covered up. He stated that he needed a solicitor. He expressed unfairness at not receiving an answer from the Prime Minister to correspondence addressed to him. None of these matters assist in particularising the basis of his appeal. Further, steps were taken by the Court to obtain a solicitor for him pursuant to O 80 of the Federal Court Rules but none was forthcoming. 12 The position is therefore that both the written and oral submissions of the applicant are not helpful to him. 13 It is apparent from the transcript of the Tribunal on 6 September 2006 to which reference has been made above, that there was likewise no case made to the Deputy President to support the reinstatement of the applicant's application. As was there said, there was also no evidence that would have helped to explain in any way why the decision of 17 July 2006 to dismiss the application was not properly made. 14 The position is therefore that there is nothing before the Court which would support in any way a conclusion that there were prospects of success in the applicant's appeal from the decision of the Deputy President made on 6 September 2006. 15 I therefore find that the applicant has no reasonable prospect of successfully prosecuting that appeal. Accordingly the respondent's notice of motion should be allowed. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | summary judgment no reasonable prospect of 'appeal' being successfully prosecuted appeal from decision refusing to reinstate application for review previous dismissal of application non-attendance by applicant on each occasion no evidence of prospects of success on appeal procedure freedom of information |
The claims arise from my judgment in this matter, given on 8 September 2006, in relation to a claim for unjustified threats, with cross claims as to infringement, invalidity and misleading conduct. 2 In my reasons for judgment I decided that the NSI parties had failed to make out a case of unjustified threats to take infringement action which had been brought under s 128 of the Patents Act 1990 (Cth). I also found that the Complex patent claims in suit were valid and that relief for infringement should be granted against the University parties. In reaching the conclusion that the claims were valid, I found that the patent did not lack novelty; that there had not been anticipation or public disclosure of the patent so as to invalidate it; and that the patent claims were not invalid because they did not involve an inventive step. I also rejected submissions that the patent was obtained by fraud for false suggestion or misrepresentation and that there was no fair basis for the claims or that there was a lack of clarity in the claims in suit. 3 In relation to the cross claim brought by the University parties against the NSI parties that they had engaged in misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) ("the TPA Act "), I found in favour of the NSI parties. In the case of one of the claims for misleading conduct, however, the NSI parties accepted that there had been misleading conduct. 4 I made orders on 17 November 2006 restraining the NSI parties and Probiotec parties from infringing the Complex patent, requiring delivery up of documents and materials and directing the removal of information from certain web sites. I also made a declaration that the NSI parties and Probiotec parties had infringed specified claims of the Complex patent and directed further discovery on the question of further relief. I did not then make any order as to costs. 5 On this application the University parties seek costs against the NSI parties and the Probiotec parties in respect of the claims and cross claims in the proceedings and in particular the claim for unjustified threats, the cross claim for patent infringement and patent invalidity and the cross claim for the breach of the TPA Act . They seek these costs on the basis that the First to Eighth Cross Respondents are jointly and severally liable for the costs incurred by the University parties. 6 On Monday 19 March 2007 I made unopposed orders against two of the NSI parties (the Second Cross Respondent, Topocal Pty Ltd, and the Fourth Cross Respondent, Pacific Biolink Pty Ltd) in relation the cross claims for infringement, revocation and unjustified threats. Those costs are not the subject of this judgment. 7 Although I received written submissions from the NSI parties, I am informed that they no longer have legal representation and, although aware of the hearing on 20 March 2007, they did not appear. I have nevertheless had regard to their written submissions, which only consider costs on the misleading conduct claims. The remaining questions in relation to costs concerning the NSI parties relate to the costs of the remaining misleading conduct claims. 8 In relation to the Probiotic parties, all questions of costs as sought against them remain in issue. Notwithstanding that relief has been granted against the Probiotec parties, they submit that they should not be liable for any costs. The essence of this submission derives from the contention of the Probiotec parties that they have taken no active part in any of the issues raised. 9 The Probiotec parties point out that the Applicant commenced proceedings against the University parties in July 2004, alleging that the University parties made wrongful threats of infringement of several claims in patents, including the Complex patent, and sought declarations and injunctive relief to restrain the making of further threats, and compensation or account of damages. In addition, the NSI parties made allegations of misleading and deceptive conduct in breach of the TPA Act and a similar claim under the Fair Trading Act 1987 (NSW) in respect of those threats. The Probiotec parties were not included in those claims. 10 In response to the NSI parties' claim, the University parties filed a cross claim alleging infringement of patents. The Probiotec parties and the NSI parties became the respondents to that cross claim. 11 The NSI parties retaliated by cross claim against the University parties, alleging that the patent claims were invalid. The Probiotec parties were not claimants in this cross claim, and now submit that they have at no stage been active protagonists in pursuit of any issues before the Court and have not added to the costs. The fact is, they say, they were passive in the proceeding in that they allowed the other parties to contest the issues. They also say that they have made all reasonable admissions and given all reasonable undertakings. They became involved in the proceeding by no choice of their own, and were drawn in as a consequence of the cross claim by the University parties. 12 The Probiotec parties were joined to the proceedings by the amended cross claim filed on 11 July 2005 and they informed the Court that they would give undertakings as agreed between the parties and, consequent upon that, they would not seek to take any further part in the proceedings. They informed the Court that the parties had already given inter partes undertakings which they proposed in due course to give to the Court. They say that as a result of these undertakings there is no good reason for the University parties to proceed with their claim against the Probiotec parties. When the hearing began on 28 November 2005, counsel informed the Court that the Probiotec parties appeared only for a purpose of giving an undertaking but reserving the position as to costs. Thereafter they did not take any active part in the proceeding. 13 Their case, therefore, is that they played only a peripheral role in the proceedings. Their joinder to the case was not necessary to resolve the real issues which had been resolved as far as they were concerned by their undertakings. The dispute, they say, was between the University parties and the NSI parties. N1033 of 2004 by the manufacture, supply, offer for sale or sale of the current products , each of Probiotec Pharmaceuticals Pty Ltd, Probiotec Pty Ltd, Probiotec Nutritionals Pty Ltd, Probiotec (NSW) Pty Limited, Probiotec (Australia) Pty Ltd and Probiotec (Qld) Pty Ltd undertake , while one or more of the Patents remain in force, not to manufacture, supply, offer for sale or sell the current products . ' (Emphasis added. The above submissions were supplemented by counsel for the Probiotec parties when the matter came on for hearing on the question of costs. Counsel noted that the Probiotec parties were never joined in the NSI parties' invalidity cross claim and did not provide independent particulars of invalidity in relation to the Complex patent. Counsel notes that the particulars only involved certain claims so that the thrust of the undertaking given was that the Probiotec parties would take no part in the revocation proceeding other than to file defences to the infringement cross claim, a discovery and to be heard on costs. The Probiotec parties thereafter repeated their reliance on the undertakings. They say the question of the Probiotec parties' infringement of the Complex patent was only formally denied when regard was had to their conduct. They say the claim brought against them was the manufacture of Phoscal products. This was traversed in their Defence, in which the Probiotic parties relied on the undertakings offered in its letter of 17 September 2004. They say that the manufacture was effectively admitted by them in paragraph 11 of their Defence. They contend that they only appeared at the trial to make admissions and that the question of infringement not asserted by them depended on resolution of the issue of validity as between the NSI parties and the University parties. They say that infringement turned only on the validity of the patent, having regard to their admissions, and that they played no part in making submissions on that point. They say they simply stood behind the NSI parties who were the only active participants. 16 Furthermore, the Probiotec parties argue that since they did not participate at the hearing and have proffered their undertaking they did not respond to the University's closing submissions. While they acknowledge that they filed separate Defences, the Probiotec parties emphasised that they did not provide any active contest and effectively had no representation in the course of the proceedings. They denied the infringement and resisted restraint by order of the Court. 17 The Probiotec parties point out that the University parties did not get a direction seeking to have Probiotec bound under O 5 r 12(2)(f) of the Federal Court Rules , which relates to the binding effect of a determination. Consequently, due to the fact that the Probiotec parties did not seek to participate in the validity proceedings, it would not be proper to regard them as parties. In my view, this argument has no force, having regard to the pleadings of the Probiotec parties on the issues of denial and non-infringement. The fact that they are prepared to conduct themselves in a certain way without admission is not sufficient. 18 The Probiotec parties say their "formal" defences to the infringement cross claim had no practical effect to the resolution of proceedings. They say that on its true construction the undertaking given was that they would not exploit the products until such time, if at all, there is a final judicial determination that they had not been infringed. Accordingly, this means that the effect of the undertaking is not just interlocutory, but rather final and perpetual. 19 Finally, the Probiotec parties say that the invalidity issue was not raised by them, but rather in the cross claim by the NSI parties. They contend that there is no evidentiary foundation for a conclusion that the NSI parties would have resolved their cross claim if the Probiotec parties had admitted the validity of the Complex patent, and that it cannot be said that the Probiotec parties kept the invalidity issue alive. They submit that their undertakings remained in force until a final judgment was handed down determining the claims had not been infringed. If the University parties had abandoned the proceedings, it would have been entitled to the benefit of the undertaking. This is said to illustrate that it was the controversy between the University parties and the NSI parties that kept the invalidity issue as a contested matter in the proceeding, and since the Probiotec parties were not "protagonists" in the determination of the invalidity claim no adverse cost order should be made. I am also satisfied that the way in which the proceedings were conducted, and having regard to the Defence they filed, demonstrates that the Probiotec parties put the University parties to proof on their claims of infringement and denied the validity of the Complex patent. Furthermore, I do not accept that the undertakings provided by the Probiotec parties were adequate. As a result, the general principle applies, namely that costs will follow the event. 21 Although the discretion of the Court to award costs is a broad one, it must be exercised judicially and unless special circumstances are shown a successful litigant will receive costs: see Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 per Toohey J. In the present case the question is whether there are special circumstances in relation to the Probiotec parties which displace that general rule. 22 The Probiotec parties refer in support of their case on costs to the decision in Knight v F.P. Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178 at 192-193, where Mason CJ and Deane J considered the principles on which costs may be awarded against a non-party to the litigation. Their Honours referred to the position where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting, has an interest in the subject of the litigation. The Probiotec parties say in the present case that they were not party to the cross claim alleging invalidity of the patent claim, that they were drawn into the litigation in which they played no active role, and that they should not be the subject of adverse costs order. 23 I do not accept this submission. Clearly the Probiotec parties were a party to the litigation. The expression "litigation" in this case should be read as a reference to both the infringement and validity aspects of the proceeding. It should not be confined simply to the cross claim alleging invalidity brought by the NSI parties. They denied not only infringement but also invalidity. They gave an undertaking inter partes not to carry out relevant conduct, but this was a conditional undertaking in that it was made without admissions and was only to continue until the outcome of the proceedings, and even then only in the event that they were unsuccessful in their defence. In my view, the principles in Knight are not relevant to the present circumstances. When looked at in the context of the overall litigation, the Probiotec parties intended to and did take advantage of the invalidity claim and non-infringement submissions advanced on behalf of the NSI parties. Looking at the substance of the position taken by the Probiotec parties, the non-infringement defence in relation to the patent involves by its nature, substance and effect a consideration of the patent's validity in a real sense: see Baygol Pty Ltd v Huntsman Chemical Co Australia Pty Limited t/a RMAH [2004] FCA 1248 at [27] - [28] ; and Farmitalia Carlo Erba SrL v Delta West Pty Ltd (1994) 28 IPR 336 at 339 and 341. The end result of this consideration is that, although they took no active part in argument or in the conduct of the proceeding, the Probiotec parties, in denying infringement and asserting invalidity in the event that infringement was found to have been made out, were content to allow the NSI parties to put the case and to rely on the same submissions thus advanced. When regard is had to the limited and conditional nature of the position taken by them in the undertaking and in not withdrawing the pleading as to invalidity, the approach of the Probiotec parties to the litigation was not one simply of a submitting party. The University parties therefore are entitled to their costs against the Probiotec parties, including costs on the question of invalidity and infringement. 24 It is settled law that liability for payment of a costs order is ordinarily joint and several. In the present case it cannot be said that the Probiotec parties have raised a separate and distinct defence which has incurred costs that cannot be attributed to the joint conduct of the Cross Respondents in the course of this action. 26 The final orders made in the case by way of restraint are against all Cross Respondents in relation to the relevant claims challenged. In order to make good its case on the pleadings, it was necessary for the University parties to prove the involvement of the Probiotec parties, and I note no director of any of the Probiotec parties gave evidence about the relationship between those parties and the NSI parties until after the 20 March 2007 hearing on costs. In it, Mr Stringer gives a detailed history and states that he was the person responsible for the Probiotec parties' instructions to solicitors in respect of the current proceedings. He states that he has never given instructions to Messrs Spruson & Ferguson that the Probiotec parties wished to dispute the validity of the University's patents or to assist the First to Fifth Cross Respondents in their contest of the validity of the University parties' patents. His instructions are reflected in the Letter of Undertaking from Spruson & Ferguson to Freehills dated 17 September 2004. In view of the conclusion which I have reached above and the reasons for that conclusion, the contents of Mr Stringer's affidavit do not persuade me that the Probiotec parties should not be jointly and severally liable for costs in this matter. Consequently, although the University parties have not, since the hearing of 20 March 2007, made written submissions in reply to either the content of Mr Stringer's affidavit or the written submissions handed up by the Probiotec parties in court on that date, in any event, in view of my conclusion, any further submissions on behalf of the University parties would not affect the outcome of my decision on costs in this matter, as the orders which I have made are in favour of the University parties. In those circumstances, there is no necessity for any further submissions on behalf of the University parties in relation to the costs question. 28 Having considered the evidence and submissions of the parties before me, and in particular having regard to the pleadings and the nature and form in which the undertaking relied on was given, I conclude that the Probiotec parties should liable jointly and severally with the NSI parties for costs in this matter. 29 Accordingly, I order that the Cross Respondents be jointly and severally liable for the costs incurred by the First and Second Cross Claimants in respect of the claim for unjustified threats, the cross claim for patent infringement and the cross claim for patent invalidity. 31 This issue relates to costs sought for breaches of the TPA Act alleged in the Second Further Amended Cross Claim. In relation to the first of these, namely what might be described as the "efficacy claim" concerning the effectiveness or the product's Topacal and Dentacal and Tooth Mousse, the University parties failed. 32 In view of this, on accepted principles the appropriate order is that the NSI parties should have the costs of and related to this aspect of the claim under the TPA Act . I do not accept that this issue should not be segregated out. In my view the issue concerning efficacy was a distinct issue although the evidence to some extent overlapped with evidence in relation to other matters. 33 The second aspect of the trade practices claim relates to what might be described as the "misrepresentation claim" to the effect that the Applicant had misrepresented that Topacal Pty Ltd had sponsorship or approval from the University of Melbourne and Professor Reynolds which it did not have. On this issue undertakings were given by the NSI parties and admissions and undertakings were made on 30 November 2005. The NSI parties seek an order that in respect of the misrepresentation claim, having regard to the history of a matter outlined in their written submissions, each party should bear its own costs. I have considered the history of the matter and in my view the undertakings previously proffered by the NSI parties were unsatisfactory and should not affect the position of costs. Consequently, the NSI parties should be ordered to pay the costs of the University parties concerning the misrepresentation claim, which is referred to in the submissions of the University parties on costs as the "association claim". 34 Accordingly, I order that the First and Second Cross Claimants pay the costs incurred by the First to Fifth Cross Respondents in respect of the "efficacy claim", and that the First to Fifth Cross Respondents pay the costs incurred by the First and Second Cross Claimants in respect of the "misrepresentation claim". I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | costs active participation in proceedings without admission undertaking not to produce products potentially infringing on patent filing of defence by purportedly non-active party reliance on submissions of active party costs follow the event joint and several costs. practice and procedure |
The applicant also sought an order that the respondents arrange the return of the applicant to Australia, a declaration of wrongful imprisonment and damages. Since then, a number of events have occurred which have altered the issues that need to be determined. First, the applicant has been returned to Australia by the Commonwealth. Secondly, the High Court has given judgment allowing an appeal against a judgment of a Full Court of this Court. The Full Court's judgment underpinned part of the case originally advanced by the applicant. The parties agreed that judgment in this matter could be reserved until the High Court gave its judgment. The High Court gave judgment, Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 , on 8 November 2006. The judgment of the High Court had the effect of removing two of the grounds relied on by the applicant. The High Court's judgment is discussed shortly. The applicant was born in Paris, France on 4 December 1966 to parents who were then both citizens of Yugoslavia. In 1968, when the applicant was two years of age, his parents migrated to Australia with him and his siblings. The applicant and his family members were granted permanent entry permits on their arrival into Australia. In 1983, the applicant's parents became Australian citizens. The applicant was not included in his parents' application for citizenship. From 19 September 1984 to 4 November 1984, the applicant travelled with his father to that part of Yugoslavia which, up until very recently, was known as Serbia and Montenegro, and then returned to Australia as the holder of an old visa of a kind known as a "Return Endorsement". 3 On 1 September 1994, the applicant became the holder of a transitional (permanent) visa by operation of reg 9 the Migration Reform (Transitional Provisions) Regulations 1994 (Cth). Between 1979 and 2001, the applicant was convicted of a number of criminal offences. On 15 October 2002, the then Minister for Immigration and Multicultural and Indigenous Affairs made a decision pursuant to s 501(2) of the Act to cancel the applicant's transitional (permanent) visa. The applicant was removed from Australia on 18 June 2004. One of the statutory criteria for that visa was that the applicant had not, on or after 2 April 1984, left Australia. The Minister contended this criterion had not been satisfied by the applicant having regard to his travel to Yugoslavia in late 1984. Submissions were directed to the meaning of "left Australia". 5 Another argument advanced by the applicant was that s 200, and not s 501, was the applicable source of the power on which the Minister might have acted and that there was a direct repugnance between s 501 and ss 200 and 201, with the result that the first respondent's decision was vitiated by jurisdictional error. 6 It is not necessary to consider those arguments in light of the High Court's decision which held that where a person held two visas (the same visas the applicant contends he held in this matter), each of which conferred the same substantive rights, in cancelling one the Minister was not bound to take into account the "nature" of the other because there was no consideration relevant to the applicant's absorbed person visa which was not relevant to and considered when the Minister cancelled his transitional (permanent) visa (at [129] per Heydon and Crennan JJ). Gummow and Hayne JJ held that nothing in the text of s 501 or s 501F provided any support for reading into s 501(2) a requirement to consider the possible effect of s 501F on the visa holder (at [41]). Even if the applicant held an absorbed person visa in addition to his transitional (permanent) visa, s 501F(3) operates to cancel the absorbed person visa. 7 The other issues which Nystrom resolved concerned whether there was repugnancy between ss 200 and 201, and s 501 of the Act. The issue was whether s 501 of the Act, as a general provision, yielded to the more specific provisions in s 200 and s 201 governing the deportation of non-citizens who have committed criminal offences with the result that the Minister had no power to cancel a visa under s 501 in circumstances governed by s 200 and s 201. The scheme of the Principal Act does not treat as having the one identity deportation and cancellation of a visa. This is so notwithstanding that, by reason of other provisions of the Principal Act, the exercise of both powers may well result in the same practical outcome. Those differences cannot be ignored by an ellipsis which regards s 200 and s 501 as directed to the same practical outcome. Where a deportation order is made, the individual has the status of a lawful non-citizen who is subject to deportation. If an order under s 501(2) be made, the status of the individual changes to that of unlawful non-citizen. The Principal Act attaches significance to each status. In the circumstances of this case, the inapplicability of s 200 (by reason of non-satisfaction of s 201(b)(i)) cannot deny the application of s 501(2) by reference to s 501(6)(a). Direction 21 was made under s 499 of the Act which provides that the Minister may give directions to a person or body about the performance of functions under the Act or as to the exercise of powers under the Act, but such a direction must not be inconsistent with the Act or the Migration Regulations 1994 (Cth). A person or body receiving the direction must comply with the direction. Direction 21 concerns "visa refusal and cancellation under section 501 of the Migration Act 1958 ". 11 Specifically, the applicant submitted that the ICCPR created a legitimate expectation that in considering whether to cancel the visa, the Minister would consider certain matters regarding the applicant's country of origin and nationality and whether returning the applicant to the then current Federal Republic of Yugoslavia would constitute inhuman or degrading treatment or punishment or would otherwise endanger his life. The applicant submitted that the ICCPR contained an implicit non-refoulement obligation where as a necessary or foreseeable consequence of their removal or deportation from Australia, the person would face a real risk of violation of their rights under Art 6 (right to life) or Art 7 (freedom from torture and cruel, inhuman or degrading treatment or punishment). Reference was made in oral submissions to Arts 9, 10 and 23 as well. 12 The applicant submitted that his claims and the material before the Court were such as to require assessment in relation to international obligations under the ICCPR. The applicant submitted that, because the Minister had been advised through the issues paper that the applicant had "not made any claims that require[d] assessment in relation to international obligations", he had been invited to make a decision without regard to the implicit non-refoulement obligation of the ICCPR. Because the Minister proceeded on this error, his approach was not obviously open on the known material and the applicant could not reasonably have been expected to be aware of it. 13 The applicant submitted that the intention to proceed on the basis that no claims had been made out which might be affected by the implicit non-refoulement obligation was inconsistent with the legitimate expectation that the Minister would act in conformity with the ICCPR. There was an expectation that if the Minister proposed to act in a manner which was not consistent with Australia's obligations under the ICCPR, that he would be afforded procedural fairness in relation to this intention and given the opportunity to argue against that course. Reference was made to Minogue v Human Rights & Equal Opportunity Commission [1999] FCA 85 ; (1999) 84 FCR 438 at [37] . 14 The Minister submitted that the applicant had not in fact made claims that required assessment in relation to international obligations. The Minister submitted that the applicant's claims did not show or reasonably show that he would suffer subjection to torture or cruel, inhuman or degrading treatment or punishment by someone in Serbia. In particular, no one shall be subjected without his free consent to medical or scientific experimentation. The Minister noted that the applicant was expressly invited to give comments based on Direction 21 which refers to existing international obligations. He submitted that he had previously been a citizen of the Socialist Federal Republic of Yugoslavia but that this country had ceased to exist in 1992. 18 The applicant submitted that the Minister was required to consider Australia's international obligations under Art 31(1) of the Convention relating to the Status of Stateless Persons (CSSP) and that if he proposed to depart from that, the applicant was entitled to notice and that he had a legitimate expectation that he would be given an opportunity to argue against that course being taken: Minogue . 20 The Minister submitted that, at no point did the applicant say that he was not a Serbian citizen or that he could not be removed to Serbia. His failure to do so was critical to any alleged failure to have regard to a relevant consideration and any alleged denial of procedural fairness. In response to the applicant's submission that he should have been given notice of the Minister's intention to make a decision inconsistent with the applicant's legitimate expectation that the CSSP would be adhered to, the Minister submitted that there was no evidence that the applicant was stateless. The Department's records showed he left and returned to Australia on a Yugoslavian passport. The Minister submitted that the inference that the applicant was Yugoslavian was available and compelling and that absent a claim that he could not be removed to Yugoslavia because he was not a citizen, the question of statelessness did not arise. 21 The Minister submitted there was no inconsistency between a decision under s 501 of the Act and the obligation under Art 31 of the CSSP as each was concerned with different subject matter, "cancellation of a person's visa" on the one hand and "expulsion" from a territory on the other. The Minister contended that if there were any obligations flowing from the CSSP they would attach to a removal decision, rather than a cancellation decision. The Minister submitted that his decision to cancel the applicant's visa did not conflict with the CSSP and there was no matter concerning the CSSP about which the applicant could have relevantly been heard. 22 The Minister submitted that, following the decision in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1, the applicant must do more than simply identify an expectation that a particular treaty would be applied. The applicant must identify some respect in which he suffered a practical injustice because of the procedure that was followed. The Minister submitted that even if the Court were to find that the applicant was stateless the applicant could not have had a legitimate expectation that the Minister would consider obligations arising under the CSSP because the CSSP was not one of the international instruments expressly referred to in Direction 21. The applicant submitted that failure to do so resulted in a breach of procedural fairness which can result in the decision being set aside: see Johnson v Williams [2000] FCA 3 , R v Kylsant (1932) 1 KB 442 and Dagli v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 298 ; (2003) 133 FCR 541. The material errors of fact and law pleaded in the second further amended statement of claim included those relating to the statements that the applicant's citizenship was the "Federal Republic of Yugoslavia" and that he "would be entitled to apply for a new Yugoslav passport". 24 Secondly, the issues paper incorrectly stated that he had not made any claims that required assessment in relation to international obligations in circumstances where he had made the following claims. The applicant had claimed that in the event that his visa was cancelled and he was deported to the then current Federal Republic of Yugoslavia that he had no family ties or friends in that country, limited knowledge of the language and vocabulary and no financial support. He had also claimed that the deportation was likely to have a devastating effect on his then successful rehabilitation from drug addiction, perhaps causing his relationship with his de facto to end or causing him to commit suicide. He claimed that he would have extreme difficulties in finding employment and that he did not hold a current travel document to enter the then current Federal Republic of Yugoslavia. 25 The applicant submitted that these claims required assessment in relation to international obligations including those under the ICCPR and the CSSP and that to have proceeded based on the errors in the issues paper was not a course obviously open on the known material and the applicant could not reasonably have been expected to have been aware of it. 26 The Minister submitted that none of the alleged errors in the issues paper indicated extreme irrationality or an illogical fact finding process. It was acknowledged that validity of a decision may be challenged on the basis that the submission on which it was grounded, contained fraudulent or knowing misrepresentations or half-truths. However, short of that, an error of fact would not vitiate the decision itself: see Oates v Attorney-General for the Commonwealth of Australia [2001] FCA 84 ; (2001) 181 ALR 559. The Minister submitted that though it was possible that an error of fact contained in an issues paper relied upon by the decision-maker could vitiate a decision, the error must relate to a matter that the decision-maker was bound to take into account and there was only a limited range of such matters. With respect to citizenship status and statelessness the Minister relied on the judgment of a single judge in VKAC which, as noted, has since been reversed by a Full Court. The applicant was notified on 19 October 2001 of the intention to consider cancelling his visa under s 501. A written submission was made on his behalf by a solicitor from Victoria Legal Aid on 19 March 2002. The applicant was interviewed by a Departmental officer on 22 August 2002. Letters were written by his sister and fiance, who was also interviewed, in support of his case against cancellation of his visa. At no point was it suggested that he was stateless (if that be the fact) or that circumstances existed which pointed to a real possibility that he might be. Similarly, while his heroin addiction and mental health problems were adverted to, it was not suggested that he might be at risk of being exposed to cruel, inhuman or degrading treatment or punishment or otherwise placed in a situation where rights protected by the ICCPR might be violated. 28 As the Full Court noted in Minogue , the authority relied on by counsel for the applicant, the notion that departure from a course that a person has an expectation will be followed, is an aspect of procedural fairness. Even making a range of assumptions in the applicant's favour about the contents of the two international instruments and that an expectation of the type asserted had been raised in a general sense, the applicant singularly failed to provide the Minister with any information which might reasonably have caused the Minister not to decide to cancel the applicant's visa because of the instruments. In substance, the factual case now called in aid to establish that there would have been an expectation that the Minister would act in a particular way, was a case never raised with the Minister before he made the impugned decision. There was no unfairness: see Lam at [24]-[25]. At best, it would be a case based on facts now known and advanced by the applicant in these proceedings. 29 The last issue is whether the issues paper was misleading and enlivened the obligation to invite comment as discussed in Dagli . It was said to be misleading in two respects. Firstly that the applicant was a citizen of the Federal Republic of Yugoslavia and would appear to be entitled to apply for a new Yugoslavian passport. Secondly that the applicant had not made any claims that required assessment in relation to international obligations. For the reasons discussed in the preceding paragraph, the issues paper was not misleading in this second respect. That leads to a consideration of whether it was misleading in the first respect and, if so, should the applicant have been invited to comment. 30 The judgment of the Full Court in Dagli reinforced, in the context of decision-making under s 501 , the principle that a person is entitled to an opportunity to comment on adverse material provided to the decision-maker by others, and the failure to provide an opportunity constitutes a denial of procedural fairness. As illustrated by the recent Full Court judgment in VKAC , that adverse material can include assertions in an issues paper about the citizenship of the person whose visa is at risk of cancellation. However, as Mansfield and North JJ noted in VKAC (at [19]) the comment in the issues paper in the matter, that the appellant was a Burmese citizen, was adverse because it removed from consideration the position advanced by the appellant (a contention of substance based on probative material) that she was stateless and could not be returned to Burma. 31 The present case is different. At no point did the applicant contend that he was stateless or, additionally, that he could not be removed to Serbia or any contemporary manifestation of Yugoslavia. Thus the statement that he was a "Yugoslav citizen" and, later in the issues paper, that he would be "entitled to apply for a new Yugoslav passport" did not constitute adverse material as it did not impeach or have the potential to impeach the case he had advanced in opposition to the cancellation of his visa. 32 The application should be dismissed with costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | cancellation of visa on character grounds s 501(2) of the migration act 1958 (cth) where direction made under s 499 of migration act 1958 (cth) referred to international instruments whether applicant had made claims requiring assessment in relation to international obligations under the international covenant on civil and political rights or the convention relating to the status of stateless persons migration |
2 I set out, in brief, the relevant circumstances. In late December 2004, the University commenced an application in this Court against Dr Gray and the second respondent (Sirtex), a public company. The University claimed that Dr Gray held 15,379,303 shares in Sirtex on trust for the University. This was because, so it was alleged, the shares represented the product of inventions which were made by Dr Gray during the time he was an employee of the University, with the consequence that the intellectual property in the inventions belonged to the University. 3 On 17 April 2008, after a trial lasting some 50 days, French J dismissed the University's claim. (See University of Western Australia v Gray (No 20) (2008) 246 ALR 603. ) The University has appealed against the decision of French J. The appeal is to be heard over eight days in the November 2008 sittings of the Full Court. 4 This interlocutory application, however, arises from the fact that it has recently come to the attention of the solicitors for the University that on 27 August 2008 Dr Gray transferred 16,462,283 Sirtex shares to ACN without first informing the University that he proposed to do so. Dr Gray had a relevant interest in a total of 17,522,283 shares in Sirtex at the time that this transfer was effected. The consequence is that Dr Gray now has a relevant interest in around one million shares in Sirtex. 5 The main ground relied upon by the University today in support of its application for an interlocutory injunction pending the appeal, is that unless an injunction is granted restraining disposal by Dr Gray of his interest in ACN and the disposal by ACN of the Sirtex shares, the subject-matter of the appeal would be lost and the appeal rendered nugatory. The University proposes to bring the originating claim, supporting this injunction, against Dr Gray and ACN by joining ACN as a party to the original proceeding by amending the substituted application. I have reserved judgment on whether this is the appropriate means to proceed. 6 This application for interlocutory relief is brought in the original jurisdiction of the Court. The weight of authority in this Court does not require the applicant for a stay to demonstrate special or exceptional circumstances before the order will be made - Westaflex (Aust) Pty Ltd v Wood [1990] AIPC 36 ,227 at 36,228, Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd [1991] FCA 329 ; (1991) 30 FCR 548 at 551, Henderson v Amadio Pty Ltd (No 3) (1996) 65 FCR 66 at 69, Powerflex Services Pty Ltd v Data Access Corporation (1996) 137 ALR 498 at 499. The Court generally has adopted the approach of the New South Wales Court of Appeal in Alexander & Ors v Cambridge Credit Corp Ltd (Receiver Appointed) (1985) 2 NSWLR 685 at 691. It has differed from the Supreme Court of Victoria in this respect --- Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653 and Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150. The same approach was adopted by Kirby J in Bryant v Commonwealth Bank of Australia [1996] HCA 3 ; (1995) 134 ALR 460. While, as his Honour said, a stay is not granted simply for the asking, special or exceptional circumstances are not generally required to justify a stay of execution of orders the subject of an appeal which lies as of right. It may be that, as Heerey J observed in Amadio at 69, the difference is "more apparent than real since on any approach the party seeking a stay needs to show a reason why the stay should be granted". But broadly speaking, as was said in Powerflex Services at 499, the language of O 52 suggests "no limitations upon a broad discretion inhering in this court". 7 I will consider a number of circumstances in determining whether to grant the injunction sought by the University pending the appeal. 8 The first consideration, as Mr Bennett has rightly pointed out, is that Dr Gray does have the benefit of a judgment in his favour and due weight should be given to this factor. 9 The next consideration to which regard is to be had is the merits of the appeal. The judgment appealed from occupies just short of 400 pages of Pt 4 of vol 246 of the Australian Law Reports. In this circumstance, the Court does not have to consider the merits of the appeal in detail and determine whether they have reasonable prospects of success. What the Court must do is have regard to whether the appeal is at least arguable and is not an appeal which has been brought frivolously or in bad faith. 10 In this regard, the University has referred to the discussion in the judgment as to whether there was an implied term of Dr Gray's employment contract with the University, that he would hold the benefit of any inventions that he made for the University. French J said in the course of his judgment that there was not a great deal of authority on this question, namely, to the distinction between a duty to research and a duty to invent. In my view, that is a matter which will give rise to serious argument before the Full Court on appeal. 11 The University also contended that there was a finding by French J that one of the inventions, called DOX-Spheres, was developed within the general time frame which was relied upon by the University, namely, at a time when Dr Gray was an employee of the University. At [1507] of his judgment, French J said words to that effect. Mr Bennett sought to argue that that finding was open to further elucidation, but that is a matter to be debated before the Full Court. As I have mentioned, all that I am required to find, in these circumstances, is that the appeal is at least arguable, and that the appeal is not brought frivolously or in bad faith. I am satisfied in that respect. 12 I next turn to the question of the balance of convenience. On that point, the University contends that the balance of convenience strongly favours it, because the claim it makes is a proprietary claim, and the subject-matter of the appeal is at risk of being lost, because the Sirtex shares in which they claim an interest, are no longer held by Dr Gray, but are held by ACN. 13 That obviously is a powerful consideration. 14 I also have to consider the position from Dr Gray's perspective. Dr Gray has not put on an affidavit which seeks to depose to the inconvenience that he or ACN might suffer if I was to grant the interlocutory injunctions that are sought against ACN and himself. 15 There is an allusion in the affidavit of Ms Donald to the existence of current proceedings in the Supreme Court of Western Australia between Sirtex and Dr Gray relating to the enforcement of a restraint of trade clause between Sirtex and Dr Gray. Mr Bennett said that the period of restraint upon Dr Gray commences upon his ceasing to be a shareholder of Sirtex. But it goes no further than that. 16 There is also an allusion in the affidavit of Ms Donald, to the fact that some of the shares were issued to Dr Gray by Sirtex in lieu of salary, but the evidence did not refer to the amount of salary or the number of shares issued in lieu. Accordingly, I place no weight on that evidence. I note that Mr Zilko said, without objection from the Bar table, that during the trial, Dr Gray gave evidence that he was given 152,000 shares in lieu of salary. Plainly, that would not account for the transfer of 16,462,283 shares. 17 So in the circumstances, apart from the fact to which I have already referred, that Dr Gray is the beneficiary of the judgment, there is little more to weigh in the balance in Dr Gray's favour. 18 Dr Gray also contended that I should decline relief on discretionary grounds because of delay. It was said that the University delayed fatally in failing to make this application immediately after its solicitors were informed by Dr Gray's solicitors that Dr Gray's previous undertaking had expired. I do not accept that submission. The University was not faced with the situation where there was any manifest threat by Dr Gray to dispose of the shares. Once Dr Gray took steps to dispose of the shares, the University acted with due expedition. I do not regard delay as a sufficient basis to exercise my discretion against making the orders. 19 In conclusion, I, therefore, find that the balance of convenience strongly favours the University. On that basis I am prepared to make orders which would give effect to the thrust of the proposed orders in the amended application for interlocutory relief. During argument, Mr Zilko indicated that there would be amendments made to the proposed orders. I will ask counsel to bring in a minute of orders which gives effect to these reasons, and which implement the amendments foreshadowed by Mr Zilko. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | the respondent to a pending appeal sold shares to a third party the appeal is against the dismissal of the applicant's claim to a proprietary interest in the shares interlocutory injunction pending appeal original jurisdiction practice and procedure |
He seeks a declaration in separate proceedings ('the Hillig proceedings') that no native title exists over land at Port Stephens ('the Land'). The Land Council owns the fee simple in the Land, subject to any native title rights or interests (s 36(9) of the Aboriginal Land Rights Act 1983 (NSW)) and wishes to sell the Land. On 22 August 2006, I struck out a claimant application by Mr Dates, who prefers to be known as Worimi, for a determination that native title exists over the Land ('the first application'): Hillig as Administrator of Worimi Local Aboriginal Land Council v Minister for Lands for the State of New South Wales (No 2) [2006] FCA 1115. Worimi has now filed a further claimant application ('the second application'). These proceedings concern the second application. Mr Hillig moves the Court for orders that the second application be struck out. 2 In order to deal with Mr Hillig's motion, it is necessary to reiterate some matters considered in Hillig (No 2). The first application was a claimant application by Worimi on behalf of women who asserted a native title interest in the Land as a sacred site for women. Worimi had sought, by a draft proposed application ('the proposed application'), to amend the first application to assert a native title interest held by himself and his family. The claim group of the second application is the same as the claim group identified in the proposed application considered in Hillig (No 2). I concluded that, subject to an exception that is not relevant in this case, where a small family group or sub-group is only part of the group who claim to hold native title, the sub-group does not hold the common or group rights or interests within s 61. 4 I determined that the first application should be struck out (at [72]). I did not permit Worimi to amend that application for reasons that I gave. I did, however, give him the opportunity to file a further claimant application. A relevant consideration was the delayed hearing of the Hillig proceedings for a declaration of no native title over the Land ( Hillig (No 2) at [79]). I directed at [83] that any further application filed by Worimi include, in accordance with the requirements of the Act, the proper identification of and authorisation by the claim group; the connection between the claim group and the relevant traditional laws and customs observed; and the basis for the claim by that claim group from the time of sovereignty. 5 Worimi filed the second application on 19 September 2006 and in so doing initiated these proceedings. Without objection from Worimi, I made an order that Mr Hillig be joined. Mr Hillig now seeks to strike out the proceedings pursuant to s 84C of the Act or to dismiss them summarily pursuant to O 20 r 2 of the Federal Court Rules . He does not rely on s 31A of the Federal Court of Australia Act 1976 (Cth). He submits that the test in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129 is satisfied: the second application is so obviously untenable that it cannot possibly succeed. He points out that, as expressed in General Steel , the test is met where the case disclosed is one which the Court is satisfied cannot succeed and where it is manifest that to allow the pleading to stand would involve useless expense (see also Lindon v Commonwealth of Australia (No 2) [1996] HCA 14 ; (1996) 136 ALR 251 at 255---6). 7 If the evidence were to establish unequivocally that Worimi has not been authorised by the native title claim group, the application may be summarily dismissed for failure to comply with s 61 of the [2004] FCAFC 226 ; Act ( Bodney v Bropho (2004) 140 FCR 77 at [52] per Stone J). However, the application should only be dismissed where the claim as expressed is untenable and on the basis of the evidence most favourable to Worimi ( Landers v State of South Australia (2003) 128 FCR 49 at [7]). He claims to be authorised in accordance with a process of traditional decision making whereby ' the eldest male of the family makes all the decisions on behalf of the immediate family and about the family's traditional country and deals with matters arising in relation to those decisions ' (my emphasis). He asserts in the second application that all the persons in the native title claim group ' agreed to and adopted the traditional decision making process that the eldest male of the family would make the application and deal with the matters arising in relation to it '. 9 The other members of the claim group are Worimi's wife, Cynthia Dates and daughters Priscilla Dates, Rachael Dates, Beryl Dates and Sheena Dates. Worimi claims native title rights in accordance with and subject to the traditional laws and customs of the claim group, subject to adaptation and change. He acknowledges that ' these rights may co-exist with other statutory or common law rights in relation to ' the Land. He speaks of his association and physical connection with the Garuahgal area, which includes the Land. He says that he has camped all over the area. He has taken wood and other natural materials from the Land for his art works. He describes the Garuahgal area as being a 'state' of Worimi country in a similar sense to which New South Wales is a State of the Commonwealth of Australia. 11 Worimi says that he was taught by his father's mother that there were sites sacred to Worimi women on and adjacent to the Land. As a Worimi man, he is not allowed to know most of the law and custom regarding those sites. He says that Worimi women travelled to the Land and the area adjoining the Land to have their babies. After having the babies, the women would take them to a place near the Land on an area of Kingsley Beach, known as the Poona . There the women bathed the babies in the sea water and gave them their tribal totem. The women would then take the babies to an area adjacent to the Land, to a billabong and wash the sea water off the babies. They would then choose a special spot ' on the Land or the adjoining areas ' to bury the afterbirth. From Worimi's affidavit, the site or sites sacred to women are described as ' on and near to the Land ' and also as not on the Land but adjacent to it. Worimi says that, under Worimi law, men are not allowed to go to the women's site at the Poona . There is no restriction on going to the billabong or the Land. 12 Worimi says that he is the custodian of the Land. His father had been the eldest initiated male in his family, which meant that he was responsible for making decisions about his country and his family and had responsibility for protecting culturally significant places, including the Land and the coastal areas nearby. On his father's death, the position of custodian passed to Worimi, his eldest son. 13 Worimi now believes that he and his children are the only persons who currently have native title rights and interests in the Land. He explains the fact that a number of Worimi women have sworn affidavits in the Hillig proceedings saying that there were no sacred women's sites on the Land ([20] to [22] below) by concluding that they have not been taught about the sites. Worimi says that it appears that he may be the only Worimi person who was given the native title rights and interests in the Land under traditional laws and customs. He is passing those laws and customs on to his children so that they also hold native title rights. 14 He claims authorisation under the traditional decision making process whereby the eldest male of the family makes all the decisions and that the others in the claim group agreed and adopted that traditional decision making process. Affidavits of Worimi's wife and daughters have been filed asserting that Worimi has the right to bring the application as the oldest male member of the family. Ms Jowett did not object to the Court having regard to those affidavits; indeed, she relied upon them to establish the existence of an arguable case that Worimi, his wife and his children possess individual or group native title rights in the Land. 16 In his original affidavit of 19 August 2005, filed in the Hillig proceedings, Worimi asserted that he held native title in the Land as did the Garuahgal people. He said that part of the Land was a sacred and secret place for women. 17 In a more extensive affidavit of 20 January 2006, filed in support of the first application, he said that his authority to make the first application was as '[c] ustodian and [p] rotector of the Garuahgal women ' who wished ' to reclaim their secret, sacred place ': a ' secret birthing place of tribal women '. He said there that he had been given the Land by his father who told him that he must protect it. His grandmother was the custodian and protector of Boat Harbour. The Land between Birubi Beach and Boat Harbour was a special sacred place for women. The area described as the women's site encompassed the Land. The women gave birth there. He said that the babies were washed and baptised in the fresh water spring. His father pointed out a special rock which was the boundary of the secret women's place. He and his father camped and fished at Boat Harbour and Worimi has continued his association with the Land. 18 Worimi filed a further affidavit in the Hillig proceedings sworn 28 March 2006. He reiterated in that affidavit that his father had given him all the land between Boat Harbour and Birubi Beach for care and safe keeping. He restated that his grandmother told him stories of how the Boat Harbour land was a secret, sacred place for women and that the tribal women came to the Land to give birth. He stated that his grandmother told him how they washed the newborn infants in the fresh water stream that runs along the Land. His father also told him stories of the secret women's place and pointed out the special rock which was the boundary where men could not pass. That rock was in the Land, adjoining the land at Boat Harbour. He also described his own association with the Land as a place where he lived and camped and fished. The babies were born in the area and the birthing ceremonies took place in the area. The subject land has a fresh water stream running through it. This land was most definitely the place where the babies were washed and baptised after their birth. As part of the traditional ceremony, the after-birth would have been buried. Each of the deponents identified themselves as Aboriginal members of the Worimi Nation or tribe and denied the existence of any site sacred to women on or adjacent to the Land. 21 Ms Jowett objects to the relevance of these affidavits to the strike out motion. She submits that ' the information contained in the [a] ffidavits has no more probative value than evidence from a stranger who was stopped in the street and asked their opinion about the content of native title in the Land '. 22 Worimi refers to the deponents in his affidavit filed in support of the second application and states, with reference to their evidence, that he now believes that others have not been taught about the traditional laws and customs associated with the Land. He further states that he believes that he and his children are the only persons who currently have native title rights and interests in the Land. To the extent that Worimi himself cites the evidence given by the deponents to explain the composition and identity of the native title claim group, the fact that the deponents gave that evidence is relevant. The deponent's evidence as to the existence of native title rights is not relevant to the determination of the strike out application. • The formulation of the claim group is wholly inconsistent with the claim group of the first application, identified and advanced by Worimi on oath. • It cannot be the case that, according to traditional law and custom, the claim group can change from the women of the Worimi nation to the Garuahgal clan to Worimi and his family. • It is not possible that, in applying traditional law and custom, the claim group of Worimi and his family is only lately identified. • Worimi either knows the traditional laws and customs associated with the Land, or he does not. If he does, there is no reason why the claim group in the first application and identified in his affidavits in relation to that application has changed. • A surviving normative system of traditional law and custom cannot admit of a belated revelation, as here, where Worimi has only now discovered beliefs that his family constitutes the claim group and not the women as he previously claimed. • It cannot be the case that legal advice has relevance in determining a native title claim group which exists according to traditional law and custom, or at least not where there is such profound inconsistency in the content of the claim group. The previous claim made by Worimi on behalf of the women is inconsistent with the exclusivity of the present claim group of Worimi and his wife and daughters. • The previous claim made by Worimi was that the Land was a site sacred to women and subject to an avoidance obligation on men. Now it is asserted by him that the women's sacred site for washing babies was adjacent to the Land. To the extent that it is still claimed that the afterbirth would be buried on the Land, there is now, apparently, no avoidance obligation on the men. • Neither Worimi's brother or sister nor their children are included in the claim group although, on the basis advanced by Worimi they would be so entitled. Worimi's sister was included in the claim group as originally formulated. • Worimi's mother, Beryl Dates senior, is not a member of the claim group despite the fact that Worimi asserts in his affidavit in support of the second application that marriage into the claim group gives a connection to the land under traditional law and custom. Worimi's wife Cynthia Dates is in the claim group. There is no evidence that Beryl Dates senior has authorised the claim as required by s 61(1) of the Act. • Despite the pro forma affidavits filed by each member of the claim group purportedly authorising the bringing of the claim by Worimi, s 251B(a) of the Act is not satisfied. There is no evidence of the process of traditional decision making, only of the consequence of a process. There is, accordingly, no authorisation for the purposes of the Act. The identity of the claim group is dependent upon and shaped by the traditional laws and customs of the group. It is in this context, he submits, that the inconsistencies in the membership of the claim group are relevant. The inconsistencies are not, in his submission, merely reflective of the fact that Worimi did not earlier have legal advice. 25 Other matters raised by Mr Wright go to the sufficiency of and inconsistencies in the evidence. One example is that there is no explanation of how, if Worimi's father was the eldest male in his family and therefore had responsibility for the Land, Worimi's father's mother had an overlapping role of custodian and protector of women's business. If Worimi's father's mother had that role, there is no explanation of how the role of custodian fell to Worimi's father and to Worimi. Mr Wright also points to other inconsistencies between the affidavits filed by Worimi in support of the first application and the proposed application and the affidavit in support of the second application. 26 Those other matters, being merely evidentiary, are not relevant to these proceedings to strike out the second application. I will consider that application on a view of the evidence most favourable to Worimi. Ms Jowett appeared for Worimi in respect of the proposed application in the circumstances described in Hillig (No 2) . She emphasises that Worimi prepared and filed the first application and the proposed application without the benefit of legal advice or assistance. She concedes that the first application and the proposed application are relevant to the consideration of these proceedings. She contends, however, that the lack of legal assistance in the preparation of the first application is sufficient to explain any inconsistencies between the first and the second applications. The proposed application was prepared in a very short time and was only a draft. Accordingly, Ms Jowett submits, inconsistencies between that document and the second application should be disregarded. 28 Ms Jowett also emphasises that the factual issues, many of which are complex in nature, should not be determined in interlocutory proceedings. The merits of the claim should be determined at trial ( Bodney at [11]). She points out, correctly, that there was no cross-examination of Worimi; nor has Mr Hillig adduced evidence from his mother Beryl Dates senior or from his sister Debbie Dates. Her explanation for the identification by Worimi of the different claim group in the first application is an assumption on his part that other Worimi people were recipients of the same knowledge as he held. The second application and the identification of the claim group was, according to Ms Jowett, prepared in the knowledge from the first application that some Worimi women and Mr Kelvin Dates, Worimi's brother, denied holding any native title rights over the Land. 29 Mr Jowett submits that, if individuals cease to acknowledge and observe relevant laws and customs, they will cease to possess native title. That provides an explanation why Worimi and his wife and children who continue to observe those laws and customs represent the totality of the claim group. That knowledge was passed to Worimi by his father, his father's brothers and his father's mother. She stresses that the determination of the recipients of the native title rights requires findings of fact to be made which ought not be the subject of inquiry for the purposes of a strike-out application. 30 Having made those submissions, Ms Jowett acknowledges that, if the second application does not comply with ss 61 and 62 of the Act, it is liable to be struck out. IS THE SECOND APPLICATION LIABLE TO BE STRUCK OUT? He has also been consistent in his description of his own association with the Land. 32 Worimi's evidence is not consistent as to the description of the location of the secret women's site. In the first application it encompassed the whole of the Land. In the second application it is either adjacent to the Land or ' on and near to the Land '. In his most recent affidavit, in support of the second application, he has changed the location of that site by associating it with the washing of babies in sea water whereas in all previous affidavits he had stated that a fresh water stream was part of the site. Inconsistency in his evidence as to the location and nature of the site sacred to women is not relevant for the purposes of a strike out application. 34 The expression "native title claim group" is given meaning by s 61(1) (s 253). The native title claim group is " all the persons who, according to their traditional laws and customs, hold the common or group rights and interests comprising the particular native title claimed" (my emphasis). A person or persons authorised by the claim group may make an application for a determination that native title exists pursuant to s 61(1), provided that person is also a member of the claim group. 35 Worimi says that, under traditional laws, the position of custodian of the Land was passed to him by his father who was an initiated Worimi man and a Worimi Elder. He does not assert that traditional law and custom recognises his individual right to claim native title over the Land. He says that the fact that his father was a custodian and keeper of customary law did not mean that he had sole responsibility for protecting the country; other Worimi men were given equally important responsibility for other families and other areas in Worimi country. In relation to the Land and the surrounding area, Worimi says that his father's mother had an overlapping role as custodian and protector of women's business at that place. Worimi does not claim that under traditional law and custom his father held and he holds the native title rights to the secret women's site. 36 Worimi now excludes from the claim group many of the women on whose behalf he brought the first application and the women who, he said, held native title rights in respect of the women's secret site. His wife, he says, obtained her rights by marriage to him. By passing the laws and customs to his children, he is passing to them the native title rights and interests in the Land. 37 Worimi's claim that he and his family are the totality of the claim group is based on his belief that he may be the only Worimi person who was given the native title rights and interests in the Land under traditional laws and customs. This conclusion is based on the fact that other Worimi people, including his brother and sister and the women whom he thought would have been taught about the sites were not so taught. 38 If that were the case, then Worimi's mother, Beryl Dates senior, should be part of the claim group. She obtained her rights by marriage to Worimi's father, the previous custodian and protector of the Land. Worimi's evidence is that '[m] arriage gives a connection to land under Worimi law ' and that '[w] hen a woman marries into another clan or tribe, she takes the law and custom of her husband's country '. It follows that Worimi's mother is a person who, according to the traditional laws and customs, holds the common or group rights as described by Worimi as comprising the particular native title claimed. She is not included, nor has she authorised Worimi to bring the application. 39 In the first application, it was stated that Worimi's sister Debbie Dates, who was part of the claim group, had visited the Land on numerous occasions, continues to visit the Land and has told her children stories according to traditional laws and customs. Neither she nor her children are in the claim group of the second application. 40 On Worimi's own evidence on the first application, tendered by Mr Hillig in these proceedings, there are others who have entitlement to membership of the claim group. Whether they are the persons identified in the previous application or not identified as such in these proceedings, they have not been included nor given the opportunity to authorise the claim. Previously Worimi asserted that he was part of a larger claim group and that native title interests were held by a larger group, not restricted to his immediate family, of which he was a part. It was put, variously, as membership of the Worimi nation, the Garuahgal clan, or the descendents of Mary Mahr (see Hillig (No 2) at [21] to [22]). Other than those who have stated that there is no native title over the Land, there is no evidence as to whether or not those other members of the Worimi nation or the Garuaghal clan observe traditional laws and customs. There is no evidence establishing their exclusion from the claim group as acknowledged by Worimi. 41 Worimi asserts that he has the traditional knowledge. Worimi explains inconsistencies in his evidence, such as the earlier statement that the rights were held by the women and that he was only bringing the application on their behalf, by the absence of legal advice at that time. He does not say in his evidence that he needs legal or other expert advice to speak of traditional law and custom and I do not see how the lack of such advice explains inconsistencies in the evidence as to that law and custom. 42 The reasoning can be said to be as follows. The native title rights are held by the Worimi people. The custodian and protector is the eldest son in a family, although this is not an exclusive right because, for example, women are custodians of the women's site; it is not suggested that Worimi's father's mother was the sole female custodian. There is no evidence of a basis in traditional law and custom as to the restricted class of persons who hold native title rights or individual rights or of the restriction to Worimi and his family. It is Worimi's own deduction that others whom he acknowledges would have such native title rights cannot have them because they fail to acknowledge that such rights exist over the Land. A claim group, however, may exist for the purposes of s 223(1) of the Act where only a part of the community have acknowledged and observed traditional laws and customs ( De Rose v South Australia (No 2) [2005] FCAFC 110 ; (2005) 145 FCR 290 at [58] ). 43 Worimi's case seems to be that, if the persons otherwise possessing native title interests have abandoned them, they are no longer identifiable as members of a community living under the relevant laws and customs. Worimi does not claim that, according to traditional laws and customs, individual rights or family rights (in the sense of Worimi, his wife and daughters) are recognised by traditional law and custom. This is not a case where Worimi claims that his immediate family hold native title rights by virtue of the membership of their family alone (cf Colbung v Western Australia [2003] FCA 774). He acknowledges that the Land is Worimi land. That is, according to traditional law and custom, the rights are held by Worimi people or the particular clan or group, such as the Garuahgal people. Whatever the precise identity of the people who possess such rights over the Land (see Hillig (No 2) at [20]-[22]), it is a group larger than Worimi and his family. If that is the case the family, by calling itself a native title claim group, does not establish that it is a "native title claim group" for the purposes of Worimi's entitlement to make the second application pursuant to s 61(1) of the Act ( Risk v National Native Title Tribunal [2000] FCA 1589 at [60] ). 44 In De Rose (No 2) at [57] the Full Court said that a claimant group whose members have never acknowledged or observed traditional laws and customs cannot succeed in a claim for native title rights and interests merely because other Aboriginal peoples have acknowledged and observed the relevant traditional laws and customs, even if by those laws and customs observed by others, the claimant group "possessed" native title rights. The Court observed that the position would be similar where a native title claim is made by one or more individuals who do not assert a communal or group claim. Here, on the basis of Worimi's evidence, traditional law and custom identifies Worimi people other than Worimi and his family as "possessing" rights and interests in the Land, not least Worimi women. Worimi's evidence is that at least some of those persons have not been taught about the Land; they do not acknowledge and observe the relevant laws and customs. They do not, by the laws and customs described by Worimi, have a connection with the Land. That would preclude them from succeeding in a claim (s 223(1)(b); De Rose (No 2) at [56]). 45 Worimi concludes that those persons who denied native title did not know of the traditional laws and customs that established it. Worimi's assertion is that he and his family hold native title rights within the meaning of s 223(1)(a) and (b) of the Act. He does not suggest that, by traditional law and custom, native title rights were only "possessed" by his family (s 223(1)(a)) or that they "hold" exclusive to them the common or group rights and interests comprising the particular native title claimed (s 61(1)). 46 De Rose (No 2) discussed the fact that a group that does not fulfil the requirements of s 223(1)(a) and (b) cannot succeed in a native title claim. This included a group that possessed the rights and interests under traditional laws and customs but did not, by those laws and customs, have a connection with the land. The native title claimant group must establish rights and interests possessed under the traditional laws acknowledged and the traditional customs observed by that community or group (at [58], original emphasis). Here, Worimi's evidence is that his claim group, himself, his wife and the daughters to whom he has passed the laws and custom, is not the totality of the group which possesses the rights and interests under traditional laws and customs. That group is the Worimi people, or Garuahgal people; the descendents of Mary Mahr. At the least it includes Worimi's mother Beryl Dates senior; his sister Debbie Dates and those of Debbie Dates' children to whom she has imparted knowledge of traditional laws and customs as specified in the first application. 47 Whichever of the groups identified by Worimi in the first application is the relevant group, it is a group of which Worimi and those persons specified in the claim group of the second application form only a part. 49 Worimi has, unlike Mr Bodney, changed the composition of the claim group from the first to the second applications (cf Bodney at [5]) and has, in these proceedings, sought to explain his reasons for doing so. My consideration of the claim group and authorisation is based only on Worimi's evidence, as relied upon by him in these proceedings. That evidence includes his affidavit in these proceedings which refers to the first application and his affidavits in support of that application. Those affidavits were relied upon by Worimi in his written submissions. That evidence is untested by cross-examination. I have accepted that evidence. However, that does not preclude an analysis of that evidence to present a coherent understanding of the asserted claim group and the extent of authorisation. 50 Worimi's evidence is that there are other persons outside his immediate family who, as part of the Garuahgal people or the Worimi nation, would have been entitled to assert native title over the Land (cf Bodney at [28]). His qualification is that he now understands that they do not observe traditional laws and customs and that, accordingly, the persons specified in the claim group are the whole of the group alleged by him to hold the claimed native title rights and interests. In other words, as discussed in Bodney by Branson J at [31], Worimi relies upon the theoretical possibility that individuals who are Garuahgal or Worimi by descent do not share in all of the native title rights and interests because they have ceased to acknowledge the traditional laws and observe the traditional customs of the community. That is not a question that needs to be determined on this strike-out application. I am prepared to accept that possibility, for the purposes of this application. 51 The characteristics of those persons are members of the Garuahgal or Worimi people who presently observe traditional law and custom as described by Worimi or who may claim entitlement through marriage to the eldest son of the family. Worimi is the eldest son, as was his father. As Worimi's wife is included by her marriage to Worimi although there is no suggestion that she observes traditional law and custom, so also is his mother. As his daughters are part of the claim group as members of his family, to whom he has passed laws and customs, so too is his sister Debbie and possibly her children. The claim group of the second application is not comprised of all the persons who, according to traditional law and custom, hold the common or group rights and interests comprising the native title claimed. It follows that it is liable to be struck out for failure to comply with s 61(1) of the Act. 53 Native title, by s 223, refers relevantly to rights and interests possessed under the traditional laws acknowledged and the traditional customs observed by the Aboriginal peoples. Worimi does not claim to be authorised according to traditional law and custom by the community or group who possess the native title rights within s 223. He claims to be authorised by the members of his family on the basis that they are the only ones who know that they possess the rights. That is not sufficient for the purposes of s 251B and s 61 of the Act. If native title rights are held by a group larger than the persons specified as constituting the claim group, there is no suggestion that there has been authorisation of Worimi's application. 54 It is not clear from the evidence whether Worimi could be said, under traditional law and custom, to be entitled to claim authorisation by his mother and sister Debbie Dates who, on his evidence, would be included in the claim group. He says that he is authorised to make decisions for the immediate family; in context, that equates to his wife and daughters. There is no evidence of traditional law and custom whereby Worimi could be said to be authorised by his mother and sister or of a mechanism of authorisation. There has not been authorisation under s 251B(a). Worimi's own evidence establishes that he is not entitled under s 61 to bring the second application. The application is not brought by a person who is authorised by all the persons who, according to their traditional laws and customs, hold the common or group rights and interests comprising the particular native title claimed. The application is also liable to be struck out under s 84C of the Act on this basis. The claim group is not restricted to Worimi's immediate family. The only evidence of traditional law and custom authorises Worimi to bring the application on behalf of his immediate family. The claim group is not comprised of all the persons who, according to traditional law and custom, hold the common or group rights and interests comprising the native title claimed (s 61(1)). Further, Worimi's evidence establishes that he is not authorised to bring the second application for the purposes of s 61(1) of the Act. 56 The application should be struck out under s 84C for failure to comply with s 61. To allow the application to proceed would involve useless expense. The proceedings should also be summarily dismissed pursuant to O 20 r 2 of the Federal Court Rules . I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | application to strike out claimant application relevance of evidence given in earlier proceedings claim group consisting of the applicant and his immediate family whether claim group comprises the whole of the persons with native title rights assertion that others had not been taught traditional laws and customs and do not hold native title rights no findings as to persons who observe traditional laws and customs on a strike out application evidence to be read on the view most favourable to applicant evidence of traditional law and custom is that additional persons should be included in claim group applicant not authorised by those persons applicant not entitled to make application pursuant to s 61(1) of the native title act 1993 (cth) native title |
These reasons should be read in conjunction with the reasons given today in action number NSD 584 of 2008 in which the defendants to these proceedings are the plaintiffs and the plaintiffs in these proceedings are the defendants: Hardel Investments Pty Ltd (ACN 083 276 000) v Consolidated Byrnes Holdings Limited (ACN 111 052 585) [2009] FCA 400. This is an application by the defendants for the costs of these proceedings. It is necessary to trace the history of the proceedings before identifying against whom the defendants seek orders for costs and the particular orders sought. In both proceedings the plaintiffs claimed to be creditors of the defendants and relied upon the defendant's failure to comply with two statutory demands. They claimed that debts had been assigned to them. The relationship of the parties to each other will be explained later, but it should be noted in passing that Mrs Catherine Byrnes is the sole director of the first plaintiff, Consolidated Byrnes Holdings Limited (CBH) and Dr Low and Mrs Low are the directors of the second plaintiff, Alpha Asset Group Pty Ltd (Alpha). The plaintiffs asserted in these proceedings that they have been assigned two debts from companies controlled by Dr and Mrs Low, Contor Developmennts Pty Ltd (Contor) and Cobra Property Services Pty Ltd (Cobra). Mr James Byrnes is the husband of Mrs Catherine Byrnes and claims to be a consultant of the plaintiffs. The originating processes which commenced these two proceedings attached a copy of an unsigned creditors' statutory demand which was dated 18 December 2007 and which was a copy of the document which was said to have been served upon the defendants together with an affidavit of Mr James Byrnes who deposed that in his belief there was no genuine bona fide dispute to the amount claimed by the plaintiffs. The plaintiffs also filed an affidavit in support of the originating process, again sworn by Mr James Byrnes who deposed that the statutory demands were posted to the defendants at 5.45pm on 18 December 2007. He asserted that at that time and date, and at the date of his affidavit, the amounts claimed in the statutory demand, in the case of the defendant, Hardel Investments Pty Limited (Hardel) ($1,791,032.50) and in the case of Avpri Pty Limited (Avpri) ($2,100,000), were still unpaid and due and owing. On 26 April 2008 the defendants filed their notices of appearance to which was annexed their Grounds of Opposition to Winding Up (grounds of opposition): rule 2.9 of the Federal Court (Corporations) Rules 2000 (Cth); s 465C of the Corporations Act . The defendants raised a number of grounds of opposition to the applications for winding up, the principal ground being that the statutory demands had never been served upon the defendants and, in those circumstances, did not comply with s 459E of the Corporations Act . Moreover, the defendants claimed that the statutory demands were defective for the purpose of s 459E in that Mr Byrnes was not authorised to make the demands and that the affidavits which purportedly accompanied the demands did not comply with the requirements of s 459E(3) in that they did not properly verify the debts or give proper notice to the defendants of the basis of the alleged indebtedness. A further ground in opposition was that at the time that the statutory demands were purportedly served on the defendants there was no valid assignment of the alleged debts to the plaintiffs. It was claimed, in opposition to the winding up, that neither of the plaintiffs were creditors of the defendants. Lastly, it was claimed that the defendants were solvent. The defendants asserted in their grounds of opposition that if the plaintiffs claimed that the statutory demands had been served by reason of them having been attached to the originating process which was issued on 28 March 2008 and which had been served on the defendants on 7 April 2008, then the period within which the defendants had to comply with the statutory demands had not expired at the time the originating process was issued, and there was a genuine dispute as to the existence and amount of the alleged debts to which the statutory demands related. On the same day that the defendants filed their notices of appearance and grounds of opposition to the applications for winding up they commenced a proceeding against the plaintiffs in NSD 584 of 2008 to set aside the statutory demands pursuant to s 459G of the Corporations Act . The grounds upon which the orders for the setting aside of the statutory demands were based were stated to be: That the Statutory Demands purported to be served by the Respondents on each of the Applicants on 7 April 2008 be set aside pursuant to s 459H of the Corporations Act . In the alternative to paragraph 1 herein, that the statutory demand purported to be served on the Applicants by the Respondents on 7 April 2008 be set aside pursuant to s 459J of the Corporations Act . That the Respondents pay the Applicant's costs of this application. That this application be made specifically returnable before the Court at 9.15am on 2 May 2008. The significance of the last date was to have that proceeding returned before the same judge at the same time as these proceedings for winding up. It can be seen that the defendants commenced their proceeding against the plaintiff in NSD 584 of 2008 in case it be found that the service of the originating processes in the winding up proceedings was held to be service of the statutory demands which were attached to those originating processes. On 4 June 2008 Gyles J ordered that the proceedings be transferred to the South Australian Registry. All three proceedings came before me for directions on 27 June 2008. The plaintiffs who were represented by counsel appeared by video conference. The defendants were represented by senior and junior counsel. I made various directions as to the filing of evidence and written submissions, and listed the proceedings for hearing on 25 August 2008. Mr Byrnes was in the habit of emailing his and the plaintiffs' solicitors and copying in the defendants' solicitor. His correspondence is particularly aggressive. Settlements start this week. The first advises there are only 42 sold. By next week the borrower will have an unfunded GST liability approaching 1 million as well. I can buy the second if I want it at a discount. I can get money the easy way or the hard way ... the hard way means I ensure he gets a liquidator to pursue him for insolvent trading, bankrupt him and start examining everyone he has given money to in his family in the past 5 years. Wife, Kids, Who ever ... look at any donations to the church in the past year as they are on notice of the insolvency ... this guy is a candidate for a fully tax paid vacation in a government facility for 2 to 3 years. They wrote to my Chambers on the same day attaching a copy of the letter to the plaintiffs' solicitors advising they would be seeking an adjournment of the hearing on Monday, 25 August 2008. On the same day the defendants' solicitors wrote to the plaintiffs' solicitors advising that the defendants would not consent to any adjournment of the matter. However, they offered to settle the matter on the basis that the plaintiffs discontinue the winding up proceedings; the plaintiffs acknowledge that there had been no effective service of the statutory demands; the plaintiffs pay the defendants' costs fixed at $50,000; and the plaintiffs undertake not to issue or attempt to issue any other winding up proceedings in respect of the alleged debts. The defendants wrote that if the plaintiffs did not accept the offer they should be prepared to proceed and Mr Byrnes and Mrs Low should be present and available for cross-examination. The defendants also filed an outline of argument addressing the grounds of opposition in the notice of appearance. The grounds identified were: (a) non-service of demands; (b) no fair notice of the demands; (c) defective demands; and (d) no valid assignment of the debts. Dr Low said in an affidavit subsequently relied upon by his counsel that neither he nor his wife were made aware of that offer. The plaintiffs' solicitors' request gave rise to an exchange of correspondence between the plaintiffs' solicitors and the defendants' solicitors in relation to whether there had been compliance with the directions which I had made on 27 June 2008. On the same day as they made their request (22 August 2008), the plaintiffs' solicitors were advised that I would not allow the plaintiffs' counsel to appear by video conference on 25 August 2008. On 25 August 2008 the plaintiffs' solicitors wrote to my chambers claiming that the defendants were in default in relation to various directions I had given on 27 June 2008. Unfortunately I was interstate on business last Friday and therefore did not have a direct hand in the various communications that took place. It is our clients' view that an appointment of a liquidator to the Respondent companies will have a seriously deleterious effect on the standing of the unsecured creditors. That affidavit was required by 8 th August as well. Last night, on returning to my office and seeing the emails, I put a further request to Johnson Winter and Slattery advising them that we were unable to respond to their material in the limited time left to us and that as a consequence we were embarrassed. I was advised that counsel was only retained to make the application for the adjournment and not in the proceedings. The plaintiffs' solicitors' letter of 22 August 2008 spoke of an adjournment of eight weeks. Their letter of 25 August 2008 spoke of a reasonable adjournment. Counsel asked for a short adjournment. The defendants opposed the application. I was not satisfied that the reasons put for the adjournment were bona fide. First, because the defendants' obligations were to file affidavits and their written submissions in response to any affidavits and written submissions filed by the plaintiffs. The plaintiffs failed to comply with the directions which bound them in relation to the time within which they were to file their affidavits and submissions. In those circumstances, the plaintiffs were not entitled to rely upon the defendants' failure to comply with the time limits which applied to them. Secondly, I had been advised, as already indicated, that on 22 August 2008 the plaintiffs indicated that the reason why they sought an adjournment was not because of the fault on the part of the defendants but because they were aware that the defendants were settling approximately $9 million in property sales over the next two weeks. In considering the application, I asked counsel to inquire as to whether his instructors and counsel who were retained in the proceedings were available to attend the next day. He obtained instructions in relation to that request, and advised me that whilst the solicitors and counsel would be available, Mr Byrnes, who was required for cross-examination, could not attend until Wednesday. Further inquiries were made and counsel then sought an adjournment of the matter until Wednesday so that Mr Byrnes could attend for cross-examination and the matters could proceed. I refused the application for an adjournment for other than a very short period and adjourned the matter to Wednesday, 27 August 2008 to allow the plaintiffs to consider the defendants' evidence and submissions, and to arrange for Mr Byrnes to be present in Adelaide for cross-examination as requested by the defendants. As already indicated, the defendants also wished to cross-examine Mrs Low. I indicated at that stage that I would allow the defendants to have their costs thrown away by reason of the adjournment on an indemnity basis but left open the party who would be responsible for those costs. On Tuesday, 26 August 2008 the plaintiffs purported to discontinue both proceedings by filing a notice of discontinuance. However, the notice was incompetent because O 22 r 2(3) of the Federal Court Rules provides that an application for winding up order under s 459P may not be discontinued without leave of the Court and no leave had been sought or given. The plaintiffs' solicitors were advised that the proceedings would be heard on Wednesday, 27 August 2008. Dr Low said he was not told of the implication of this action. On the morning of 27 August 2008 the plaintiffs' solicitors wrote to the defendants' solicitors advising that they were "agreeable to dismissal of the proceedings and costs as agreed or assessed". In correspondence to my Chambers, the plaintiffs' solicitors advised that the costs of Monday and Tuesday ought to be on an indemnity basis and the remainder of the costs on a party and party basis. They said in their letter that the costs should be paid by the applicants (the plaintiffs). I have just been informed by Mr Burnett that he is not available today. It was pointed out to the plaintiffs' solicitors that it was not acceptable for them to make submissions to the Court via email. They were advised that if the plaintiffs were to be unrepresented the plaintiffs may need to reach an agreement with their opponents as to costs. The plaintiffs did not appear at the hearing on 27 August 2008 and, as a consequence, I dismissed the proceedings: Consolidated Byrnes Holdings Ltd v Hardel Investments Pty Ltd [2008] FCA 1337. Mr Whitington QC, senior counsel for the defendants, sought an order for the costs of the proceedings and for the costs awarded on Monday to be reserved so that the defendants could give notice to non-parties to the proceedings that an order for costs would be sought against them. He contended that orders for costs ought to be made against non-parties because the plaintiffs in the proceedings were bare trustees and any order for costs against them might not be able to be enforced. I reserved the question of costs and adjourned further consideration of that question until 26 September 2008. I directed each defendant in the two proceedings to give notice to any non-parties against whom they sought an order for costs advising (1) the orders sought; and (2) the basis upon which the orders were sought by identifying the material facts upon which the defendants would rely for those orders. The proceeding NSD 584 of 2008 in which the defendants are plaintiffs was not listed for hearing on either 25 August 2008 or 27 August 2008. In those circumstances, I indicated that I would list that proceeding for hearing on the return of any application for costs in these proceedings. I will not set out the whole of their letter which is in similar terms to each of the non-parties. The letter indicated the nature of the proceedings commenced by the plaintiffs and the proceeding commenced by the defendant. A history of the proceedings was included. The parties were advised that on 27 August I had reserved the question of costs and made directions that the defendants give notice to any non-parties against whom they sought any order for costs. The letter set out the costs orders and the reason for the orders. The letter claimed that the plaintiffs would be unlikely to be able to satisfy any costs orders made against them; that the non-parties had played a significant role in the conduct and control of the winding up proceedings; and that the non-parties had an interest in the subject matter of the proceedings. Copies of the exhibits and the statement of facts which had been taken from the affidavits and in the letter were given with the letter. The defendants' solicitors offered to provide the whole of the affidavit material for inspection at their Sydney offices. Ms Thomson, a solicitor in the employ of the defendants' solicitors, has exhibited to her affidavit Mr Byrnes' reply to the notice given on 15 September 2008. On that date I made the following orders: The defendants in NSD424 of 2008 and NSD425 of 2008 and the plaintiffs in NSD584 of 2008 issue any notice of motion seeking joinder of any parties to these proceedings by 29 September 2008. The defendants in NSD424 of 2008 and NSD425 of 2008 and the plaintiffs in NSD584 of 2008 file and serve any affidavits upon which they intend to rely in support of the notice of motion by 29 September 2008. Any party who is sought to be joined in the notice of motion file and serve any affidavits in opposition to the notice of motion upon which they intend to rely by 7 October 2008. The notice of motion if issued be listed at 9.30am on Thursday, 9 October 2008 for hearing. On 29 September 2008 the defendants, by notice of motion, sought the following orders: Pursuant to Order 6, rule 8 of the Federal Court Rules and/or rule 2.13 of the Federal Court (Corporations) Rules 2000 , that James Warren Byrnes, Catherine Gina Byrnes, Justin Peter Low, Elizabeth Laura Low, Ian David Lazar and Victoria Lazar be joined as defendants to this action. That the plaintiffs, James Warren Byrnes, Catherine Gina Byrnes, Justin Peter Low, Elizabeth Laura Low, Ian David Lazar and Victoria Lazar, pay the defendant's costs of this action, including the costs of this Notice of Motion, jointly and severally on an indemnity basis. Pursuant to order 62, rule 9(2)(d) of the Federal Court Rules , that the plaintiffs' solicitors, Simmons & McCartney, pay the defendant's costs thrown away of 25, 26 and 27 August 2008 on an indemnity basis. The matter came on before me on 9 October for the purpose of making directions and on that occasion I made the following directions: The plaintiffs and any non-party the subject of the notice of motion filed by the defendant on 29 September 2008 file and serve any affidavits in opposition to the notice of motion to join the non-parties as parties to the proceeding and for the order for costs sought by the defendant by Friday, 17 October 2008. The defendant file and serve any further written submissions in support of the application for joinder in the notice of motion filed on 29 September 2008 and any further written submissions as to the application for costs by 21 October 2008. The plaintiffs and any non-parties the subject of the notice of motion filed by the defendant on 29 September 2008 file and serve any written submissions in opposition to the application for joinder in the notice of motion and the application for costs by 24 October 2008. The proceeding be adjourned until Friday, 31 October 2008 at 10.30am for hearing. The defendants' application that the plaintiffs and non-parties pay its costs was heard on 31 October 2008. At the hearing the first plaintiff, Mr and Mrs Byrnes and the plaintiff's solicitors, Messrs Simmons and McCartney, were represented by Mr Dart. The second plaintiff and Dr and Mrs Low were represented by Mr Lazarevich. Mr and Mrs Lazar were represented by Mr Quinn. The defendants continued to be represented by Mr Whitington QC and Mr Doyle. The parties relied upon a number of affidavits. The defendants relied upon an affidavit of Peter William Harris, the sole director of each of the defendants sworn on 28 April 2008; an affidavit of Mr Kenneth Pridmore, who provides business consulting and litigation management services to the defendants sworn on 22 August 2008; an affidavit of Mr Matthew Holden, an accountant employed by the defendants' accountants, Brentnalls SA Chartered Accountants sworn on 24 April 2008; and two affidavits of the defendants' solicitor, Ms Eve Thomson sworn on 23 and 29 September 2008. The first plaintiff, Mr and Mrs Byrnes and Messrs Simmons and McCartney relied upon affidavits of Mr Byrnes sworn on 29 May 2008 and Mrs Byrnes sworn on 17 October 2008. The second plaintiff and Dr and Mrs Low relied upon the affidavits of Dr Justin Low sworn on 8 and 23 October 2008; the affidavits of Mrs Low sworn on 13 August 2008 and 8 October 2008; and the affidavit of Dr and Mrs Low's solicitor, Mr Christian Dennis Moore sworn on 30 October 2008. They also relied upon exhibit KJP1 to the affidavit of Kenneth Pridmore. Finally, Mr and Mrs Lazar relied upon the affidavit of Mr Lazar sworn on 17 October 2008. They also relied upon the affidavit of Mrs Byrnes sworn on 17 October 2008. There can be no doubt, because these winding up proceedings were dismissed, that the defendants are entitled to the costs of the proceedings as against the plaintiffs at least on a party and party basis: Ritter v Godfrey [1920] 2 KB 47 ; Re British Electric Street Tramways [1903] 1 Ch 725. No submission was made by any party to the contrary. However, the defendants claim that they are entitled to costs on an indemnity or a solicitor and client basis against the plaintiffs and the non-parties for separate reasons; first, because proceedings had been initiated and maintained for an ulterior and abusive purpose being to pressure the defendants into paying the claimed debts with a threat of the proceedings; secondly, the proceedings were in any event hopeless and lacking in merit and known to the plaintiffs as such at the time of issuing proceedings; thirdly, the defendants had not received fair notice of the purported statutory demands; and fourthly, at all times there was a genuine dispute as to the existence of the underlying debts. Section 459E provides a statutory regime which allows a creditor to serve a statutory demand on a company which if not satisfied within the time prescribed in the Act raises a presumption that the company is insolvent. The winding up procedure is not to be used for the purpose of compelling a solvent company to pay a disputed debt: Radiancy (Sales) Pty Ltd v Bimat Pty Ltd [2007] NSWSC 962 ; (2007) 25 ACLC 1216. Nor is it to be used for the purpose of coercing a company into paying a debt without allowing the company a reasonable opportunity to ascertain that the debt is payable: L & D Audio Acoustics Pty Ltd v Pioneer Electronics Australia Pty Ltd (1982) 7 ACLR 180 at 183. A winding up proceeding which is brought for a purpose other than the purpose identified may amount to an abuse of process: Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 at 518-522. A winding up proceeding brought for a collateral purpose will be an abuse of process and will attract the Court's implied power to prevent abuse of its own processes: David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43 ; (1995) 184 CLR 265 at 279. It will be an abuse of process if a creditor brings a winding up proceeding under Pt 5.4 against a solvent company as a means of putting pressure on the company to pay its debt: Baillieu Knight Frank v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 ; Re A Company (No 0012209 of 1991) [1992] 2 All ER 797. It may be an abuse of process if the creditor who has served a statutory demand has knowledge that the company is unaware of the statutory demand but persists with the winding up proceedings: Chief Commissioner of Stamp Duties v Paliflex Pty Ltd [1999] NSWSC 15 ; (1999) 149 FLR 179. The question to be determined when it is asserted that the proceedings constitute an abuse of process is the purpose for which the proceedings have been brought. If the proceedings have been brought for an ulterior or collateral purpose, then the proceedings are an abuse of the Court's processes. The party who has initiated the proceedings may then be liable to pay the costs of the party against whom the proceedings were brought on an indemnity basis. In a sense, that is undesirable because the proceedings have already been dismissed in circumstances where the plaintiffs have abandoned their claims. However, because of the defendants' claims against the plaintiffs and non-parties, an examination of the facts cannot be avoided. This is not to try a hypothetical action between the parties. The Court should not be called upon to decide whether the plaintiffs' proceedings if pursued would or would not have succeeded. The parties should not be burdened with the conduct of proceedings already dismissed. Moreover, the only evidence before the Court is in affidavit form. The Court has not had the advantage of seeing and hearing the witnesses on matters where the facts are in dispute. In those circumstances, the inquiry must be limited to whether commencing the proceedings was reasonable and whether the conduct in the proceedings, including the conduct leading up to my dismissing the proceedings, was reasonable: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin [1997] HCA 6 ; (1997) 186 CLR 622 per McHugh J at 624. The following matters are taken from the affidavits to which I have referred. The defendant, Hardel is the trustee for the Hardel Investments Unit Trust. It entered into a loan agreement with Contor as trustee for the Contor Developments Unit Trust on or about 16 December 2005 (the loan agreement). The defendant, Avpri entered into a services agreement with Mr Harris, a company director of the defendants and Cobra on or about 14 July 2005 (the services agreement). At the relevant time, Dr Justin Low was the sole director of Contor and Cobra, and the two agreements to which I have referred were entered into in the context of a property development at Coomera in Queensland. The plaintiff, CBH, has as its sole director, Catherine Byrnes, the wife of Mr James Byrnes. At the relevant time, Mr Byrnes was disqualified from managing a corporation. The plaintiff, Alpha, has as its directors, Dr Low and his wife, Mrs Low. It would appear from the evidence that CBH is a company associated with Mr James Byrnes and Alpha is a company associated with Dr Low and Mrs Low. Mrs Low has sworn an affidavit in which she says that she had no involvement in the events except in a formal sense. She was not involved in the negotiations leading up to the loan agreement and services agreement. She was not a director of Contor or Cobra. She had little or no involvement or knowledge of the events that followed. Sometime prior to 2004 Mr Harris and Dr Low met each other as members of the Paradise Community Church and became friends. In early 2004 Avpri obtained an option to purchase land in Coomera, Queensland for the purpose of development. Contor owned adjoining land and, after Avpri obtained its option, approached Avpri offering to sell its land for $8.5 million. On 9 July 2004 Contor and Avpri entered into agreement for the sale and purchase of the Contor land. It is Mr Harris' case that, prior to entering into that agreement, various representations had been made by Dr Low relating to development approval which representations were relied upon by Mr Harris in causing Avpri to enter into the contract for sale and purchase. Settlement was to take place on 9 November 2004 but did not occur because Avpri could not obtain a valuation of the property at the $8.5 million purchase price, nor had development approval been obtained at that date. In July 2005 the purchase price was adjusted to $6.5 million (the second contract of sale). At the same time, Dr Low proposed that a services agreement should be entered into so that Cobra could provide services and skills in relation to property development through Dr Low. The services agreement provided that Avpri would pay Cobra in the order of $2.5 million in instalments. Mr Harris says that agreement was also entered into in reliance on representations made by Dr Low. The second contract of sale was to settle on 15 August 2005. For reasons which are unimportant, Hardel was incorporated to become the vehicle to purchase the land on the same terms and conditions as Avpri had agreed, and the contract for sale between Contor and Avpri was rescinded on 16 December 2005. A deed of rescission was entered into under which Hardel agreed to pay the fees which Avpri had previously agreed to pay. Contor acknowledged in that Deed that it had received $815,000 from Avpri on account of deposit monies and extension fees. A third contract for sale and purchase of the land was entered into by Hardel and Contor. That contract provided for settlement on 16 December 2005 which was the same date upon which the contract was executed. There was a shortfall of funds as a result of which Hardel entered into the loan agreement with Contor. The contract of sale between Contor and Hardel settled on 16 December 2005. Some monies were paid by Hardel in satisfaction of the loan agreement but no monies were paid by Avpri in relation to the services agreement. I believe that there are further claims available against Contor and Cobra for costs incurred by my companies as a consequence of those representations not being fulfilled or capable of being fulfilled. Throughout mid to late 2007 I had various without prejudice meetings and discussions with Dr Low about settlement of our disputes regarding the Loan Agreement, the Services Agreement, and the sale of the Reserve Road land, including a without prejudice meeting with Church elders held on or about 23 October 2007. Mr Harris says that on 10 October 2007 Mr Ian Lazar advised a financier of Hardel that he had bought "the vendor finance debt" from Dr Low. Mr Lazar is the sole director and secretary of Business Acquisitions Australia Pty Ltd (BAA). Dr Low had first met Mr Lazar in February 2007. Dr Low said in his affidavit that he bumped into Mr Lazar again in April 2007. In August 2007 he told Mr Lazar there was a large amount of money owed to his companies. Mr Lazar said he would help. Mr Lazar suggested Dr Low assign the debt to him and he would recover the debt. In September 2007 Mr Lazar introduced Dr Low's accountant (Michael Armstrong) to Mr James Byrnes, who was then a director of Australian Litigation Funders Pty Ltd (ALF). Dr Low has deposed that he did not wish to engage Mr Byrnes "but he started acting any way and claimed Armstrong agreed to engage him on my behalf. In any case Mr Byrnes assisted Lazar in sending emails to the Harris (sic) and his consultant Ken Pridmore demanding the payment of the debt". Mr Harris responded seeking a stamped copy of the assignment of debt from Dr Low referred to in Mr Lazar's email. His email address is given as [email protected]. There is no explanation in the evidence why such aggressive emails were written. Mr Lazar has sworn an affidavit but has not explained the circumstances in which he (or BAA) received an assignment of the debt (if in fact he did) and why it was that he wrote what he did. Mr Harris said that on 17 October 2007 he made a without prejudice offer to Dr Low to resolve the dispute and he requested a copy of the assignment of debt to Mr Lazar. Than any offer or settlement will need to be approved by BAA and on terms acceptable to BAA. I prepared a detailed document pertaining to the history and causes of action which are available to the parties. I confirm that from the documents and actions by the parties that Harris and His companies are substantially in breach of the agreements. Clearly even by there offers it is clear they are hopelessly insolvent. I have prepared a document setting out the agreement, the default and the defaulting parties action ... or lack of it. This document will be sent to ASIC to the head of investigations. this area issues section 30 notices and investigates insolvent companies. I know the area and have had dealing with them before on behalf of clients ... it is very simple ... my documents are complete and ASIC will act as I provide information which shows insolvent trading. The term insolvent means cant pay your debts as and when they fall due. To simply turn these insolvent companies to solvent companies you need to schedule debt that is presently due and pay able to be paid in part now and the balance secured in a manner which is acceptable to BAA. I understand Dr Low is in discussion. I am instructed BAA do not authorize any settlement discussions and or any settlement. We will however actively and commercially agree to take part in any fruitful discussions within the next 2 days. After Wednesday if we are not completely satisfied then we shall file such notices and reports as we deem fit. This ranges from filing defaults on the director and the companies with Veda/Baycorp. Filing the appropriate complaint with ASIC fraud and insolvent investigations with a view of seeing ALL companies placed into the hands of a liquidator. Finally if for one second I though there was any truth that, a respectable church and its elders would use un fair and unreasonable tactics to pressure Low. i would be horrified. The man and his company were correctly owed money (the subject of the assignment. ) the debt is 3.7 mil and growing. If you are having difficulty ... we are willing to be commercial, don't be thinking 2,350 as we are not interested ... Neither I or Mr Lazar are easy intimated and would suggest you stop all the un godly threats and get real! Email me and fast as my patience is running out fast. Friday I was polite and willing to be as accommodating and reasonable as ever ... Mr Pridmore's rudeness and stupid and unprofessional statements have only inflamed matters and have made me more determined than before and far less accommodating when it comes to commercial give and take ... i am happy however to put things back on track and will deal with any person who is authorized by the two companies to bind the companies to a deal. So its back to you Mr Harris! In this email Mr Byrnes purports to be acting for BAA and claims, as Mr Lazar had, that Mr Lazar had taken an assignment of the debts. Mr Byrnes swore affidavits in the proceedings before the proceedings were listed for trial on 27 June 2008. He has not sought to rely on any further affidavits and has proffered no evidence to explain his actions in the period leading up to the commencement of the proceedings and since. As a result, his conduct remains unexplained. The threats which can be seen in the email, and which will be shown in further communications, remain unexplained. On 23 October 2007 a meeting took place between Dr Low, Mr Harris and elders of the church of which they were both members. Mr Harris said an in-principle agreement was reached to resolve the dispute but the matter did not resolve. We had the opportunity to meet with Mr Low from 11-45 am to 12-15 today. At his request we agreed to withhold lodging caveats, Mr Low also undertook certain positive covenants to meet certain obligations to BAA and ALF. We wish to be informed of a time and place for the first tranche of funds to be paid. As you can imagine if the undertakings are not given we will look to our rights. Further based on agreements reached both BAA and ALF stood to benefit substantially out of recovery of funds from the Harris companies and him personally, so we are to say the least very unhappy with being asked to stand down. Further to accommodate the offer made (which we consider to be at the very low end of the scale at which we believed recoverable) and accepted subject to satisfactory security Mr Low both BAA and ALF agreed to give up certain bonus percentage payments. It does not take 2 weeks to draft terms of settlement and provide positive covenants re loan documents. this is in reality should be effected next week. The schedule of payments to be secured and subsequently paid at a latter date are as important to ME JIM BYRNES as is our payment out next week and that if the Harris group default in any way now or in the future we have agreed to immediately assist Mr Low in taking the Harris group to task. Mr Byrnes again claims in that email to be representing BAA which is surprising in view of the fact that on the same day Mr Lazar of BAA wrote to Dr Low acknowledging that the assignments of debts from Contor and Cobra to BAA "are now rescinded" and BAA has now relinquished its rights under the assignment. A deed was entered into on the same day to that effect. A redacted form of the Deed of Release is exhibited to Mr Harris' affidavit. The parties to the Deed are BAA, ALF, Mr James Byrnes and Cobra, Contor and Dr Low. Paragraph C of the Deed of Release records that a "verbal agreement" had been entered into between Cobra and Contor and BAA "to assign the debt to BAA with the option for Justin to withdraw the assignment should he negotiate a satisfactory settlement directly with the Harris parties". It is further recorded that BAA subsequently introduced ALF to act on BAA's behalf. Paragraph D of the recital to the Deed of Release records that "Justin's Group" had negotiated a settlement with "the Harris parties". It is a term of the Deed of Release that "ALF and Jim further agreeing not to contact "Justin's Group" or the Harris parties or take any action whatsoever which will adversely affect the Harris parties or jeopardise the payment to be made by the Harris parties at any time unless requested to do so by Justin Low". It would appear that no assignment had occurred as at the date of the release but merely an agreement to assign. You also refused to provide a copy of the assignment document and repeatedly stated to Mr Harris, the CEO of our client, that he should "get it himself". Our client has not been able to obtain any confirmation from Contor that there has been any assignment of any debt by it to you. Our client is and remains ready, willing and able to meet all proper claims on it. Our client will pay any debts properly and legitimately due and owing. At this stage there is nothing whatsoever that might suggest that any moneys are due to you. Our client has had no dealings whatsoever with you, no contract with you and no notification of any assignment of any debt to you. Please be very clear that unless you take the necessary steps to allow our client to verify and quantify the claims you are making, our client intends to disregard the claims by you and you may lose any entitlement you may have to require our client to deal with you. On 30 October 2007 Dr Low's accountant, Mr Armstrong, was provided with a facsimile of the letter written by Mr Lazar on 24 October 2007 of BAA to Dr Low acknowledging that the assignment had been relinquished and enclosing a copy of the redacted Deed of Release. Apparently in November, Mr Harris and Dr Low exchanged further correspondence in an attempt to resolve the ongoing disputes. No settlement was achieved. Dr Low said in his affidavit that in late November 2007 he had a number of discussions with Mr Byrnes regarding the debts owed to Cobra and Contor. Mr Byrnes offered to purchase the debts for $200,000. Dr Low said in his affidavit that it was agreed that any funds recovered would cover costs and the balance would be distributed according to the Heads of Agreement dated 29 November 2007. He said, "We agreed to establish an entity named the Coomera Trust for the purpose of conducting the matter. " The Heads of Agreement of 29 November 2007 is a handwritten agreement, the parties to which are Cobra, Contor, Dr Low and BAA and ALF. BAA was to hold the assignments "non-beneficially" --- "to the benefit of BAA/ALF unit trust which will issue units equally to ALF and BAA". The total consideration was expressed to be $1 each to Cobra and Contor on signing; a further two instalments of $25,000 on two separate but unidentified Fridays in November; and two further instalments of $75,000 each to Cobra and Contor on 31 January 2008. The Heads of Agreement then provided for the disbursement of funds owed. $200,000 was payable to the unit holders. The document exhibited to Dr Low's affidavit is unsigned. If you or Harris want to play games re the agreement, expect that we will need to discuss this with Bankwest as it is a default under your loan to have proceedings on foot for such an amount as is owed to Low entities. time to put up or shut up as they say. In any event, Mr Byrnes claimed that his firm and Mr Lazar's firm had a vested interest in ensuring that Mr Harris pays Dr Low a portion of what is legally owed. Mr Byrnes threatened that a number of actions would be taken to embarrass Mr Harris with his bankers and bring Mr Harris to the attention of reporting agencies. The writer also threatened to have Mr Harris examined by ASIC. The email is written in similar terms to previous correspondence. The email suggests that the agreement to assign the debts did not proceed. It may be inferred that the Heads of Agreement of 29 November 2007 did not proceed. As I have said, Dr Low was sent a copy of the email, as was Mr Lazar. Both would have been aware of the threats that Mr Byrnes made in that email. i will give him a few alternatives. Assignments now being finalized. I have spoken with Bankwest and am talking to the Hardel relationship manager tomorrow and have already got the ear to someone much more senior. Have not decided what I want to tell them yet ... but the truth is that companies and Harris are in default of contractual obligations and the security holder is within there rights to list the companies and directors as defaulters today. The security Holder can seek the appointment of a controller over the sites ... note I am saying sites. the Group is insolvent and unable to pay its debts as and when they fall due. they have no C.R.M, they have no corporate governance, they are associated with a group that has an un approved funds or funds. the funds are insolvent and they are still trying to raise money. remember insolvent means unable to pay it debts as and when they fall due. it is a great Pity that ken Pridmore and or the companies management did not have either the manners or good sense to properly deal with these issues before it became to late. the transcript has been sent to the DPP with a senior counsels advise. Mr Byrnes threatened to inform the defendants' bankers of their default; Mr Harris will be bankrupted and listed as defaulter with credit reference queries; ASIC has been informed; ASIC will be asked to review the defendants and appoint a provisional liquidator; ASIC will be encouraged to undertake a s 30 examination; and the Church will be informed. Mr Byrnes boasts that he is a bigger bully and boasts about how he ruined a road contractor. The email sent at 12.29 am contains naked threats. They go further than a creditor pressing for repayment of a debt. The email contains threats that no reasonable person would make. They are outrageous and constitute harassment. There can be no doubt that the series of emails to which I have referred constituted serious threats which I find were made for the purpose of frightening Mr Harris into paying to Dr Low the amount which Dr Low was seeking from Mr Harris at or about this time. The emails were written after Dr Low had withdrawn the offer to assign the debt to BAA which was recorded in the Deed of Release of 24 October 2007. During that interval Dr Low and Mr Harris were attempting to resolve their dispute. It must be inferred that at some time shortly before 10 December 2007 Dr Low or someone associated with Dr Low spoke to Mr Byrnes and instructed or retained him for the purpose of attempting to persuade Mr Harris to pay the debts. Mr Byrnes sent another email on 12 December 2008, this time to Mr Harris' Adelaide solicitors advising that he had a notice of assignment to forward on the Low/Harris matter and enquiring whether it should be sent to them or some other party. I will at all times be sensible and act in a polite and dignified manner ... until treated inappropriately, at which time I will take a much more hard line approach. On 12 December 2007 ALF wrote a long letter to the defendants' Sydney solicitors in response to complaints made by those lawyers concerning Mrs Byrnes' conduct in more measured tones than previously employed. In that letter, Mr Byrnes said that no action would be taken for recovery or for notifying credit reference departments until such time as Mr Harris' solicitors had been provided with a notice of assignment. Both the email and the letter of 12 December suggested an assignment was in place of the debts from Cobra and Contor to some other party which is represented by Mr Byrnes. However, as the facts will show, no such assignment had been executed at that time. It is clear enough that insofar as it was claimed at that time there was an assignment, the claim was false. On 14 December 2007 Alpha was appointed joint trustee with CBH of the Coomera Trust. An undated Deed of Settlement constituting the Coomera Trust was exhibited to an affidavit of Mrs Low. The settlor of the trust was Michael Armstrong. The trustees are CBH and Alpha. The Coomera Trust is a discretionary trust. The beneficiaries of the Coomera Trust include ALF, CBH as trustee for the Byrnes Motor Trust, CBH as trustee for Byrnes Family Trust, BAA, Elizabeth Low for the Coomera Discretionary Trust, Ian Lazar and Mrs Victoria Lazar. It is tolerably clear when regard is had to the deeds of assignment which were said to be executed on 17 December 2007 that the parties intended the Coomera Trust to be the vehicle by which any debts which were recovered would be distributed. The joint trustees of the Coomera Trust were controlled by Dr Low and Mr Byrnes respectively. Dr Low's accountant was the appointor. Dr Low has exhibited to his second affidavit, sworn on 23 October 2008, two separate deeds of assignment made by Cobra and Contor in which it is said each of those companies assigned to Alpha and CBH as joint trustees the two debts said to be owing by the defendants to the assignors. The two deeds are similar in form. Contor is the assignor in one deed and Cobra in the other. The assignees in both deeds are Alpha and CBH. Jim Byrnes and ALF and Ian Lazar and BAA are also parties to the deeds. In the respective deeds the "Seller" is defined to mean Contor and Cobra. In both deeds the "Buyer" is said to be Alpha. In both deeds the "Buyer's Guarantor and Indemnifier" is defined to mean "Ian David Lazar and Business Acquisitions Australia Pty Ltd (ACN 114 268 361) of Suite 2, 11 Rangers Road, Neutral Bay in the State of New South Wales and Jim Byrnes and Australian Litigation Funders Pty Ltd (ACN 117 508 586) and Consolidated Byrnes Holdings Ltd (ACN 111 052 585)". The debt in the Contor deed is the debt said to be owned by Hardel Investments Pty Ltd and in the Cobra deed the debt is said to be owned by Avpri Pty Ltd. In both deeds the recitals state that the Seller has agreed to assign the respective debts to the Buyer. The Buyer it is said is the assignee in the recitals but Buyer is defined in the deed to be Alpha, not Alpha and CBH. In both cases, the Buyer, as I have said, is Alpha which is said in the recitals to both deeds to be the trustee of the Coomera Trust and is buying the debt for the benefit of the beneficiaries of that trust. The deeds seem to assume that Contor and Cobra will assign the debts to the Buyer but the Buyer will buy the debts rather than take them by way of assignment. Clause 3 provides for the Seller's covenants which include a covenant that "the Seller has full power to assign the Debt to the Buyer". In both deeds the Seller appoints the Buyer as the attorney of the Seller to demand the debt; conduct any legal proceeding in relation to the debt; and appoint any substitute delegate or sub-attorney. Clause 10 provides that the deed is the whole agreement between the parties and supersedes all oral and written communications by or on behalf of any of the parties. Clause 16 provides for a guarantee and indemnity. It would seem from that clause that Mr Lazar and Mr Byrnes and the companies associated with them are guaranteeing to Contor and Cobra respectively that Alpha will comply with its obligations under this deed. That follows because Alpha is the Buyer and clause 2 talks of the Buyer paying the sum of $100,000 for the Seller to assign to the Buyer all of the rights in the debt. It is not clear why Mr Lazar and Mr Byrnes and their companies would guarantee Alpha's performance in purchasing a debt from Cobra and Contor. All three parties, Cobra, Contor and Alpha, are controlled by Dr Low and Mrs Low. The Buyer and the Seller are controlled by the same parties. There does not seem to be any need for any form of guarantee at all. Moreover, if these were the deeds which operated between the respective parties to the deed, then CBH was not the assignee or buyer of the debts. Even though CBH is said to be an assignee to the deed, the assignment is not to the assignee but is a sale by the Seller to the Buyer and CBH is not one of the Buyers. In the end there may be no assignment to Alpha and CBH. CBH's entitlement to any part of the debt might arise because the debt purchased by Alpha became an asset of the Coomera Trust of which it was a joint trustee with Alpha. The deeds perhaps raise more questions than provide answers. In the end result, the deeds do, however, disclose that Dr Low purported to sell the debts to a company associated with himself for the benefit of the beneficiaries of the Coomera Trust and, for reasons which are unexplained, Mr Lazar, Mr Byrnes and the companies associated with them guaranteed the performance of that transaction. The deeds do not disclose the advantages which might flow to CBH or Mr Lazar and the companies associated with him. It is Mrs Low's evidence in her affidavit that the deeds were executed on 17 December 2007 at the offices of Guardian Lawyers. She said at the same time she executed notices of assignment which are in the form of the notices of assignment annexed to the affidavit of James Warren Byrnes sworn on 29 May 2008. Dr Low said that it was agreed at that time that CBH and Alpha would appoint Mr Byrnes as the agent of the Coomera Trust and that Mr Byrnes would provide a consultancy service in relation to the recovery of the debt. I relied upon representations made by Mr Byrnes and Mr Lazar that they were experts in debt recovery and knew what they were doing. Furthermore, Mr Byrnes worked for an entity named Australian Litigation Funders Pty Ltd who I assumed was its business to engage in this type of activity. Of course, they were not that. The trustees of the Coomera Trust were CBH and Alpha. However, she said they met as trustees and minutes of that meeting were signed by herself and Mrs Byrnes. On 18 December 2007 CBH sent to the defendants' Adelaide solicitors, Magarey Farlam Lawyers, with copies to their Sydney solicitors, a letter and notices of assignment assigning the interest of Cobra and Contor to the joint trustees, Alpha and CBH. CBH and Alpha are the trustees of the Coomera Trust. The notices might purport to reflect the authority that Mrs Low said was given on the previous day. There is, however, no suggestion in that letter of 18 December 2007 that any statutory demands have been made or served or attempted to be served on any of the defendants. The demand in the letter cannot be thought to be a statutory demand for the purpose of Part 5.4 of the Act. On the same day at about 4.10 pm Mr Pridmore received an email from Mr Byrnes which had attached to it copies of the notices of assignment which were in the same form as the notices of assignment sent to the defendants' Adelaide solicitors on that day. I shall refer to the notices of assignment sent to the Adelaide and Sydney solicitors, and Mr Pridmore on 18 December 2007 as the "first notices of assignment". Those notices of assignment are in different form to the first notices of assignment. The second notices of assignment are signed by both Mr Byrnes and Mrs Low as the "duly authorised representitive[s] (sic)" of the assignees. The notices of assignment have not been signed by the assignors. Mr Byrnes said that on 18 December 2007 he sent notices of assignment by email to Mr Harris and Mr Ken Pridmore. He exhibited to his affidavit the notices of assignment which he said he sent to the respondents care of their registered offices. They are not the notices of assignment which the defendants' Adelaide solicitors received on that date. They are in the same form as the form of notices of assignment which were exhibited to an affidavit of Mr Byrnes sworn on 19 March 2008 which was filed in the respective proceedings on 28 March 2008. 079-999-992 (the 'assignor') has assigned to Alpha Asset Group Pty Ltd & Consolidated Byrnes Holdings Limited absolutely [the debt of $2,100,000-00 due and owing by you to the assignor. You are irrevocably directed to pay $2,100,000 to. 104 784 367 (the 'assignor') has assigned to Alpha Asset Group Pty Ltd & Consolidated Byrnes Holdings Limited absolutely [the debt of $1,791,032-50 due and owing by you to the assignor. You are irrevocably directed to pay $1,791,032-50 to. The third notices of assignment are the only versions which have been signed by the assignors. It is clear that there are three different versions of the notices of assignment and the defendants made much of the facts of those differing versions. The defendants contended that the notices of assignment were not signed on 17 December 2007 as each of them purport. Mr Byrnes has not given evidence in relation to that matter. Mrs Low said that she executed a deed of assignment and a notice of assignment "on or about 17 December 2007". She said that the deed and notices which she signed are annexed to the affidavit of James Warren Byrnes sworn on 29 May 2008. She says that she also executed further notices of assignment, copies of which are annexed to the affidavit of James Warren Byrnes. She does not indicate which affidavit but her evidence cannot be correct. The only notices of assignment annexed to Mr Byrnes' affidavit are the third notices of assignment. The second notices of assignment, which she executed, were not exhibited to any affidavit of Mr Byrnes. She does not explain when they were executed. Neither Dr Low nor Mrs Low explain how Dr Low came to execute the third notices of assignment. The applicants and the non-parties have not attempted to explain the discrepancies in the notices and Mrs Low was not cross-examined in relation to her evidence. In my opinion, it is likely that the only notices of assignment which were executed on 17 December 2008 were the first notices of assignment sent to the Sydney and Adelaide solicitors, and Mr Pridmore on 18 December 2008. The second notices of assignment must have been executed prior to 20 December 2008 because CBH sent a copy of those documents to the Sydney solicitors on that date. It is unclear when the third notices of assignment were executed but it is unlikely that they would have been executed prior to 20 December 2008 because otherwise, if they were, they would have been supplied either on 18 December 2008 when the first notices of assignment were sent or on 20 December 2008 when the second notices of assignment were sent. The applicants had the opportunity of explaining the differences and the evolution of the notices of assignment but neglected to do so. I accept the defendants' criticism of Mrs Low's evidence when she speaks of the document having been executed on or about 17 December. The third notices of assignment were relied upon by the plaintiffs and Mr Byrnes, and Mrs Low as the notices given to the defendants. Mr Byrnes sent those notices of assignment to Mr Pridmore on 1 February 2008 but there is no evidence that the notices of assignment were ever served on the defendants or their solicitors. I find that the third notices of assignment which she said were executed on 17 December 2008 were not executed on that date, were not executed before 20 December 2008, but were executed some time after 20 December 2008. Mr Byrnes has sworn an affidavit on 29 May 2008 which was relied upon by the first plaintiff and Mr and Mrs Byrnes on this application. He said that he received advice from Dr Low's accountants of the registered office of both Avpri and Hardel which was at Brentnalls SA, 225 Port Road, Hindmarsh. He said that he completed the creditors' statutory demands which he placed into the one envelope, affixed a stamp, addressed the envelope to the defendants' registered offices and posted the statutory demands in the mail box at the post office at New South Head Road, Double Bay. The envelope, he said, bore a return address care of Thomas and Co Solicitors, Level 3, 50 Margaret Street, Sydney, New South Wales which was an office which he shared with those solicitors. He does not in that affidavit exhibit the statutory demands which he said he sent. At no time has an executed copy of the statutory demands been adduced by the plaintiffs or any of the non-parties. Mr Matthew Holden is an accountant employed by Brentnalls SA Chartered Accountants for Hardel and Avpri. He has the responsibility for the day to day management of those companies' files under the supervision of a partner. The registered office of Avpri was at the offices of Brentnalls at 255 Port Road, Hindmarsh from 28 July 2004 to 26 December 2007. The registered office of Hardel was at the same office from 18 February 2005 to 26 December 2007. Mr Holden has deposed that no statutory demand was received by Brentnalls for Hardel or Avpri in December 2007 or January 2008 from CBH or Alpha or at all. He has deposed to the procedures which exist in Brentnalls which is a small accounting firm of four partners and four associates. Mail addressed to the firm at 255 Port Road, Hindmarsh is delivered each week day. Mail addressed to a post office box is collected by a member of the administrative staff each week day morning from the post office which is across the road from Brentnalls' offices. The receptionist sorts all of the mail and allocates the mail to the accountant responsible for the particular client. Some time in December 2007 Mr Holden was told by either Mr Harris or Mr Pridmore to "look out for any demands or court proceedings directed to Hardel or Avpri and to notify them immediately if anything was received". Mr Holden's evidence is that the original of the statutory demands, which are attached to Mr Byrnes' affidavit which is exhibited to the originating process, were never received at the registered office of the defendants. Mr Harris has requested that we communicate with you in relation to claimed rights of action by Justin Low, Contor Developments Pty Limited and Cobra Property Services Pty Limited against various of the Harris Entities and alleged assignments to Alpha Asset Group Pty Limited and Consolidated Byrnes Holdings Pty Limited as proposed in correspondence dated 18 December 2007 from Consolidated Byrnes Holdings. He said: At or about 12 noon on Wednesday 19 December 2007 I received a telephone call from Dr Justin Low in which he indicated that he wished to discuss the ongoing settlement discussions. Amongst other things, in the course of that discussion Dr Low said words to the effect that he had until 3:00 pm that afternoon to decide whether to proceed with the assignment or not. At the conclusion of the conversation, Dr Low indicated that he would need to go and talk to his wife Elizabeth about the matter, and would call me back shortly. Dr Low has not denied that telephone conversation. Indeed, he has not addressed the topic. He has deposed that the Deeds of Assignment were executed on 17 December 2007. There is, in the absence of any evidence to the contrary, no reason to reject Mr Pridmore's evidence as to the events on 19 December 2007 and accept that he had a telephone conversation with Dr Low and Dr Low said words to the effect that he had until 3.30 that afternoon to decide whether to proceed with the assignment or not. Moreover, having accepted that Dr Low said that, there is no reason to think that Dr Low was intending to mislead Mr Pridmore at that time. It is in my opinion likely that Dr Low was truthful when he said that he had until that afternoon to decide whether to proceed with the assignment or not. That is not inconsistent with Mr Byrnes sending the first notices of assignment to the defendants' Adelaide and Sydney lawyers because those notices were not executed by Dr Low and Mrs Low. As I have already said, the second notices of assignment must have been executed before 20 December for them to have been sent to the defendants' Sydney solicitors on 20 December. For reasons already given, it is likely that the third notices of assignment were executed after 20 December. On 22 December 2007 Mr Pridmore wrote to Dr Low and Mr Byrnes enclosing a copy of the email to the defendants' Adelaide solicitors advising that he had been requested by Mr Harris to communicate in relation to claimed rights of action by Dr Low, Contor and Cobra against various of the Harris entities "and alleged assignments to Alpha Asset Group Pty Ltd and Consolidated Byrnes Holdings Pty Ltd". I would expect the appropriate action would be for the companies to provide detailed points of claim to determine what they said is in dispute. Mr Pridmore was no doubt referring there to a letter which had been written by the defendants' Sydney solicitors, J Biady & Associates which had given rise to the more measured reply from CBH to which I have already referred. In relation to this matter, our clients do not recognise you, the people or entities you purport to represent or your so-called claims. If there is any misunderstanding as to the nature of those disputes we suggest that you refer to Dr Justin Low. On 4 January 2008 Mr Byrnes emailed Mr Pridmore with a copy to the defendants' Adelaide solicitors and Mr Lazar arguing that neither Cobra nor Contor or the assignees were obliged to provide any further evidence apart from the notice of assignment. I have without prejudice to the creditors rights extended an olive branch. I have been polite in every approach to you. I have acted in a courteous and pleasant manner. I again remind you of an old saying "never mistake kindness for weakness" the position is if not resolved by the time I go overseas on Thursday instruction which will result in the debtors being wound up. I plan to instruct a large firm who can deal with the formalities and filing of applications. The appointment of a liquidator will be the end I fear of the groups ability to operate. I have said and so we can be very clear, my phone is on 24/7 ... the number 0425 266600. I am despite what you believe a reasonable person to deal with ... until I reach a certain point. Then I will take all such legal actions as may be required to not only recover the funds but to ensure those who may have broken the law a prosecuted to the fullest extent of the law. I again confirm. Demands require the debtors attention. perhaps it is normal to leave things to the last moment. Now again and for the record. Debts owed to Dr lows 2 companies have been assigned. You have had and your lawyer acknowledges receipt of the assignment. You constantly imply without any particularization that the assignment is not recognized. The demands were sent to the registered office prior to the companies changing there registered office. On Friday lawyers will be instructed to make an application to the court which we believe will ultimately lead to the appointment of Mr Wily as liquidator. I offered to review any genuine and dispute or any genuine cross claim. I simply requested that the details of your claim be particularized. I have offered to sit a discuss in a rational and sensible manner any reasonable proposal that would see the debt owed compounded to the creditors satisfaction. But we get silly threats from the Harris camp. Any attempt to do will need to factor in our total debts. Next to prove solvency you need to demonstrate you can pay the bills as and when they fall due. Well gentlemen then both due, well and truly. Mr Byrnes deposed that on 7 January 2008 he had a telephone conversation with a partner in Johnson Winter & Slattery who some time in early January became the defendants' solicitors who told him that they had not received the statutory demands. Can you send me copies? " I replied with words to the effect: "Look, I don't have access to my office. I share some space in a law firm and they closed on 22 nd December re opening on the 14 th of January. I have some IT issues and I can't log onto my server. I can receive and send emails but I can't access saved documents. I advised Biady of this in my letter to him of 20 December. " (See annexure B page 2 para 2). "Miss Vozzi you are the third lawyer in the space of a month involved in this. This is not my first trip to the rodeo. Your clients owe the money. They might have some rubbish excuse over a small part of the debt. They might claim the interest calculation is incorrect but look, they are hopelessly insolvent. They offered to settle before the assignments to make a payment of $1,200,000 plus secure another $800,000 so I guess Miss Vozzi you can say the debt is $2,000,000 but they defaulted on that agreement and that settlement is out the window. I hope you get some funds on account. Look, send me an email particularising your dispute. I will even agree not to proceed even if it is out of time if you can particularise a genuine and bona fide dispute. Please do not waste my time by sending me self serving statements that you believe there is a dispute, that will just infuriate me and lead to an eventual winding up of your clients. Also Miss Vozzi if you can put to me a sensible resolution, if you can compound to my satisfaction on behalf of my clients funds which would constitute part payment of an offer to settle this I will consider that to be satisfaction of the demand by compounding payment. Get some instructions, I'm not going to immediately move after theca expiry date as I am about to leave with my family to travel to Los Angeles. I am happy to give you some time to try and settle it but you have to do one of three things. Appoint a controller, provide me details of a genuine and bona fide dispute for the full amount claimed or compound to my satisfaction an amount to be agreed upon. " She then said: "I will get some instructions". On 8 January 2008 Mr Pridmore wrote to Mr Byrnes by email, a copy of which was sent to Mr Lazar and Dr Low claiming to be entitled to the assignment documents together with copies of all collateral documents and evidence of the debt which was the debts which were asserted to exist. If, indeed, you can provide supporting evidence for your claims, then please provide it. Don't offer to meet and "show" us. Provide us with full and unadulterated copies of all documents upon which you rely, including those listed above, and allow our client's legal advisors to review them and provide appropriate advice. Moreover, he has made it clear that the defendants will and are able to meet the proper claims of its creditors. I shall deal with your request one by one. The documents which give rise to the claim you and or your client already have. These are the loan agreement between Contour developments pty ltd and Hardel investments pty ltd, dated 16 dec 2005. the amount as per item 7 of the schedule at the time of the advance was $1,237,542.47. interest is at 15% and the default rate is at 20%. the next debt the subject of an agreement is Agreement between Avpri pty ltd and cobra property Services Pty Ltd., the agreement sets out in the recitals the parties obligations. the fee was largely the result of the introduction to the land, in addition point three deals with the engagement and again notes that the appointment is non cancelable. point 6 is a release to Cobra which should deal with any claims that the landowner may have. the initial Debt was 2.5 million. interest is not specified but interest can be levied by a court judgment on amounts not paid on the due dates. the final payment was to be paid by 31 December 2007 The debts are arrived at as per the agreements executed as mentioned above, there is no obligation to provide a tax invoice for repayment of a mortgage as it is a financial transaction and thus not liable for GST as defined under the GST tax act. The repayment of funds as per the consulting agreement are however the subject of a need to produce a Tax invoice. the act states that a creditor must provide a tax invoice upon payment being tendered and or the debtor can write to the creditor and demand a tax invoice to be issued within 28 days. non compliance is an offense and can be reported and dealt with by the ATO, however both the agreement and the deed of variation do not make payment conditional upon the production of a tax invoice, the document sets out dates for payment and the debtor should have tendered payment on the due dates. I can confirm that the assignor will produce a tax invoice at the time payment is tendered. Again with respect none of anyone's business and I suggest somebody gets advice on a creditor 's obligation when a debt has been assigned the only obligation is for the production of a notice of assignment. They are parties who are seriously in default of there obligations and they are moving perilously close to having there companies would up. So essentially they have till late Wednesday to meet and negotiate a settlement. When I come back I expect to be informed of a return date for an application which will be filed on Friday. The first debt had a repayment date of not later that 30 June 2006 your clients are 18 months late and have confirmed they did not have the funds and were attempting to refinance. As far as open letter to the court, try getting an affidavit of solvency together as that is what you need or tender the amounts claimed in the demands. Nor in fact has he ever provided the information. Any request of Mr Byrnes induced a quarrelsome response. On 8 January 2008 Mr Harris instructed his present solicitors, Johnson Winter and Slattery to write to Mr Byrnes advising him that their enquiries revealed that no formal demand or notice had been served on the registered office of the defendants. He instructed his solicitors to ask what formal demands it was asserted had been sent. Your email suggests that "formal demands" have been sent to the registered office of Hardel Investments and Avpri, and you foreshadow making application to the Court to wind up the companies on Friday (11 January 2008). Our clients have been informed that no formal demand or notice has been served on the registered offices. We also request that we be given reasonable notice of any application or Court proceedings commenced against our clients. Dr Low and Mr Lazar must have been aware of the defendants' position. On 11 January 2008, after Johnson Winter and Slattery had obtained confirmation from the defendants' accountants and former solicitors that they had not received any statutory demand, they wrote to Mr Byrnes advising that in those circumstances he could not apply to wind up the defendants. The letter was sent by email, a copy of which was sent to Mr Lazar. We enclose a copy of letters from the current and former registered offices of our client companies confirming this. First, they sought advice from Mr Byrnes as to what capacity he purported to act in relation to the matter. Secondly, they confirmed that the defendants had not been served with any statutory demands or other formal proceedings in relation to the matter. Thirdly, they advised that the defendants disputed the validity and effectiveness of the assignments of the "Alleged Debts". They advised that the defendants asserted that the Alleged Debts were incapable of assignment; because the services agreement was a contract for personal services and not capable of assignment; and because Cobra and Contor had fixed and floating charges over their assets and undertakings to National Australia Bank Ltd and Equititrust Ltd. Fourthly, they disputed that any money was owing under the Alleged Debts. In respect of the services agreement they disputed that any amount was owing. In respect of the loan agreement they asserted that there were significant defences and counterclaims arising from the underlying property transactions concerning the sale of the Coomera land to Hardel. Lastly, they complained about Mr Byrnes and Mr Lazar having approached various of the defendants' financiers, including BankWest and making defamatory or misleading remarks about the defendants. Our clients believe such approaches may have included the making of defamatory or misleading remarks regarding our clients. Our clients maintain that neither you, Mr Lazar, Mrs Low nor those you purport to represent have any proper basis to approach our clients' financiers or anyone associated with our clients' business interests (other than, of course, ourselves). All communications relating to this matter must be in writing directed to this office. Our clients reserve all of their rights in relation to all such unauthorised communications, including the right to seek damages for any loss suffered. Mr Byrnes responded to the letter on 21 January 2008. He continued to maintain that there was no obligation on either the assignor or assignee to provide copies of the assignments to either the defendants' solicitors or the defendants, but only to provide a notice of assignment which had been done. He said he had authority to deal with the matter. He said that demands were sent unanswered and an act of insolvency had occurred. He addressed the other matters referred to in the defendants' solicitors' letters and said that, under the circumstances, "we will now file an application for winding up of the 2 debtor companies and seek the appointment of a liquidator". On 22 January 2008 Mr Byrnes sent an email to Mr Harris, with copies to Dr Low, Mr Pridmore and Mr Lazar, Johnson Winter & Slattery, and Mr Grant McCartney who, by this stage, had apparently become the plaintiffs' solicitor. He wrote that no genuine bona fide dispute had ever been articulated. The debts had been properly assigned and "[n]otices of assignment had been forwarded to the companies and there (sic) lawyers" at the time. He again said that the debtor had no right to see the assignment agreements. He said demands had been issued and "the correspondence above supports the argument that the Harris Group and its respective companies have been on notice since dec 07 (sic)". the (sic) correspondence suggests that you new (sic) as you were advised about the demands but never rejected the fact that demands had issued (Jones and Dunkel). the (sic) appointment of any controller to a Harris group company will be an act of default on all loans as well. That seems to be clear from his statement that he would proceed in the way that he mentioned so that a settlement could be finalised. The thrust of that particular statement is clear evidence, it seems to me, that at least as at 22 January 2008 Mr Byrnes saw the winding up procedure as an opportunity to collect the debts which he claimed had been assigned to the plaintiffs. On 23 January 2008 Johnson Winter & Slattery emailed Mr Byrnes with a copy to Mr Lazar and Guardian Lawyers requesting that Mr Byrnes desist from approaching the defendants' financiers as Mr Byrnes had threatened to do earlier that day. This drew a further response from Mr Byrnes, a copy of which was sent to Dr Low, Mr Lazar, Guardian Lawyers and a number of other persons. I will not stop. in fact I just got back from a lovely 10 days in the USA and am just starting. this is the beginning. The email contains a plethora of threats. Mr Byrnes indicates in that email he will leave no stone unturned in bringing the defendants to their corporate knees. The tone of that email again indicates the plaintiffs' and Mr Byrnes' purpose at that time, which was known to the persons to whom I have mentioned the email was sent, was to exact a settlement out of the defendants by the commercial threats contained in that email. On 25 January 2008 Mr Byrnes emailed Mr Pridmore advising that "Winding up applications were finalized and attempted to be filed today, however one signature was missed". He also advised that the lawyer handling the winding up application was Grant McCartney of Simmons and McCartney, Lawyers and Attorneys. Dr Low has deposed that he was told by Mr Byrnes that Mr Byrnes had appointed Mr McCartney to assist him with the matter. He said that he and his wife felt comfortable with Mr McCartney's involvement "and our expectation was that as such, the debt would be pursued in a professional and legitimate manner. We relied upon Mr Byrnes to keep us updated on progress in relation to the matters and to ensure that proper legal advice in relation to the process was obtained at all times. " He also says that he and his wife have been kept abreast of developments but that most of the time they had not been fully aware of what Mr Byrnes and Mr McCartney have been doing. Dr Low said that he was aware that Mr Byrnes and Mr McCartney were intending to pursue the matter by commencing winding up applications based upon the statutory demands but did not understand the significance of that action. He said that at no time did he have any understanding that anything done by Mr Byrnes or Mr McCartney was irregular. Dr Low was, in fact, copied into a number of the emails sent by Mr Byrnes. He was not only aware of what Mr Byrnes was doing but he must have been aware of the manner in which Mr Byrnes was carrying out the exercise. Dr Low does not suggest in his evidence that he did not receive copies of the communications which were said to have been sent to him. Mr Byrnes has not to date provided us with satisfactory, or indeed any, evidence of his authority to act on behalf of an entity other than himself. You should also be aware of our recent correspondence with Mr Byrnes concerning the underlying dispute. We especially refer to our letter to Mr Byrnes of 21 January 2008 (copy attached). Mr McCartney was put on notice, if he had not been earlier, as was his firm, that the defendants asserted that they had never been served with any statutory demands at any time. He was also aware because he received Johnson Winter & Slattery's letter of 21 January 2008 of the various matters which they had raised in that letter with Mr Byrnes. Mr McCartney later suggests that he did not receive that letter when it was sent. That may be so but, as will be shown, there is no question that he later received the letter. On the same day, 1 February 2008, Mr Byrnes emailed the defendants' solicitors with copies to Mr Pridmore, Mr Harris, Mr McCartney and Dr Low enclosing copies of the third notices of assignment. The third notices of assignment were those subsequently exhibited to Mr Byrnes' affidavit. He also advised that he had instructed Mr McCartney to file a winding up application on Monday morning. An earlier notice that complied with legal requirements was sent on the day of the assignment. I have instructed Grant McCartney to file the winding up application on Monday morning. I have spent much time recently with Justin Low preparing the basis of an affidavit for him to swear outlining the history, chronology, earlier default when Avpri failed to settle on the first contract for sale. details of the other buyer, the valuation at the time of exchange and at settlement. And its far to late now. We will next week also seek an order that the companies execute loan documents over QLD and provide details of the repudiation including the removal of the security which formed part of the variation which has now been repudiated. The repudiation of the variation allows for the original security to be demanded. This is made clear, in my opinion, by an email sent the next day to the defendants' solicitors, Johnson Winter & Slattery, their former Adelaide solicitors, Dr Low and Mr Armstrong and other parties. I have offered to try and resolve this. The final two paragraphs of the email establish that. On 7 February 2008 the defendants' solicitors wrote again to Mr McCartney enclosing the email which they had received from Mr Byrnes that day which suggested that an application had been made under s 459P of the Act. More importantly however we reiterate that our clients have not been served with any statutory demand. None of these documents could possibly constitute a valid statutory demand under the Corporations Act which could be relied upon in an application under Section 459P of the Corporations Act . Mr McCartney's reply to the three letters written by Johnson, Winter & Slattery on 21 January 2008, 1 February 2008 and 7 February 2008 was somewhat laconic. I am not particularly sure that the responses that you seek have any particular relevance to the matters at hand. I will however give those matters some consideration. But his email adds nothing to the statements already made except he reiterates the threat of winding up proceedings. No explanation has been given as to why the plaintiffs, Mr Byrnes and the plaintiffs' solicitors were not prepared to accede to the reasonable requests made by the defendants' solicitors. They could easily have sent copies of any statutory demands which had been served at that time. There does not, it seems, to be any reason not to. Mr McCartney's reply which is referred to above suggests, as his behaviour generally in the proceedings confirms, that he was not in control of the proceedings. The proceedings were being run by Mr Byrnes. However, that is no consolation for Mr McCartney or his firm. He and they had a responsibility like his client not to use the winding up procedure except for the purpose for which it was designed. The separate proceedings were commenced on 28 March 2008 in the New South Wales Registry of this Court in which CBH and Alpha sought the winding up of the defendants under s 459P of the Corporations Act . CBH and Alpha relied upon the failure by the defendants to comply with statutory demands. In each proceeding a copy of the statutory demand was said to be attached to the originating process. Annexed to each of the originating processes was a creditor's statutory demand for payment of a non-judgment debt which was in each case said to be dated 18 December 2007 and said to be under the hand of James Warren Byrnes but was unsigned. Also annexed to the originating process was an affidavit of Mr Byrnes under s 459E of the Corporations Law but which was also not signed or witnessed. I am a consultant authorised by the Creditor to swear this Affidavit. I confirm that the amount is currently due and payable. I have provided the debtor with notices of assignment. On 1 April 2008 Mr Pridmore conducted electronic searches at the Federal Court and discovered that the originating applications in these proceedings had been filed. On 4 April 2008 the defendants' solicitors wrote to Messrs Simmons and McCartney advising them that they had become aware that winding up applications had been filed but had not been served, but that in any event the winding up applications were themselves based upon statutory demands that also had not been served. The registered offices of Hardel and Avpri have not received any statutory demands since 7 February 2008, or at all. Despite this, neither you nor your client has forwarded us or our clients the statutory demands which are now attached to the Applications. Furthermore, Mr Byrnes deposes that there is no genuine bona fide dispute as to the amount claimed, contrary to our earlier correspondence. It follows therefore that there are serious issues regarding the underlying basis of the Applications. Please provide us with a sealed copy of the Notice of Discontinuance of both proceedings within seven days. If you dispute service your options are clear. The other which needs to be resolved is how your clients propose to repay the monies owed to our clients. You appear to be silent on this point. Our view is that your clients are insolvent and to date all conduct supports that conclusion. However, Mr Byrnes wrote: Mr McCartney sent on Mr Byrnes' email. You should however review the vast correspondence that was issued from my office that referred to demands. They have never articulated the proper basis for a genuine and bonified dispute. In doing so I draw your attention to the agreements entered into by Harris and co ... please do not waste your and my time with fairy tales about non existent damages. The only defense is one of solvency, a test your client cannot meet. I have even advised your client after receiving instructions that the creditors would consider buying stage 2 to clear the debt (at current market value) (englobo, undeveloped) if this assists. the only way that will happen is with a short minutes of order setting out payment and or payment terms, I suggest your client arranges a substantial amount of money before he travels to Sydney is he is inclined not to want to sell the land. However, he had been put on notice prior to the issue of these proceedings, and was put on notice again immediately after the issue of the proceedings, that the defendants maintained that they had not been served with the statutory demands. Notwithstanding he was so advised, he caused the proceedings to be issued. Mr Byrnes also was well aware of the defendants' position and he was prepared to allow the matter to be dealt with as an issue in the proceedings. Like Mr McCartney, he was prepared to leave the question of whether there was a genuine dispute for determination in the proceedings. He was not prepared to address either issue at that early stage of the proceedings. Even after these proceedings were issued, Mr Byrnes made it clear that the plaintiffs' motivation for the bringing of the proceedings was to obtain an offer of settlement from the defendants in relation to the dispute. The plaintiffs were prepared to settle by way of receiving money or buying into the development itself. That is clear by what is said in the penultimate paragraph of the email mentioned above. She deposes that Australian Corporate Restructuring Services Pty Ltd (ACRS), also a wholly owned subsidiary of CBH commenced trading on 1 July 2007 providing aid to companies in financial distress and has returned a significant profit in the previous financial year. No financial statements are exhibited in regard to ACRS. No consolidated accounts are exhibited. The purpose of her evidence is to establish that the first plaintiff is in a position to meet any order for costs and, in those circumstances, no order for costs should be made against the non-parties. Mrs Byrnes has deposed that CBH is a parent company of a number of subsidiaries and also acts as a trustee company. It is involved in property development. When entering into a property development it usually causes a special purpose vehicle to be incorporated which is wholly owned by CBH in its own right or as trustee for one of the trusts it acts as trustee for. Mrs Byrnes has deposed that CBH has the financial capacity to meet any costs orders that may be made in the subject proceedings. CBH's balance sheet shows that it has a deficiency of assets. Notwithstanding the asset deficiency, the accounts have been prepared on the going concern basis because "the company has received a guarantee of continuing financial support from the director to allow the company to meet its liabilities and it is the director (sic) belief that such financial support will continue to be made available". Its current assets amount to just over $4.365 million. Almost the whole of the company's current assets is a secured loan (mortgage) described in the accounts as "held-to-maturity investments". The accounts do not disclose the mortgagor. No current liabilities are disclosed but there is a non-current liability of almost $5.6 million, being a debt owed to Mrs Byrnes. The terms of the debt to Mrs Byrnes are not disclosed in the accounts. However, CBH's Profit and Loss Statement shows interest paid of $363,730 which was presumably paid on this debt. Presumably because the mortgage loan given by the company is included as a current asset, recourse can be had to it for the purpose of the company meeting its debts as and when they fall due but there is a dearth of information in that regard. CBH made a trading loss in 2007 of $5,510 on an income of $1.075 million but paid directors' fees of $300,000 and bonuses of $260,000. On the face of it, CBH has sufficient current assets to meet an order for costs. However, if Mrs Byrnes were to demand the amount owing to her then the company's liabilities would exceed its assets and it would not be able to meet an order for costs. The balance sheet of ALF also shows that it has a deficiency of assets just under $60,000. It has total current assets of $687,000 and no non-current assets. Its current assets comprise trade debtors. It has a current liability to CBH of $650,000. The liability to CBH is not shown as an asset in CBH's accounts unless it be part of the "hold-to-maturity investments". Nevertheless, on a consolidated basis, CBH's assets would be reduced and its deficiency of assets would increase by that amount. It does not appear that ALF would necessarily be able to meet any order for costs. In any event, ALF is not a party and no order for costs is sought against it. The same might be said of ACRS. It is not a party and no order for costs is sought against it. Because ALF and ACRS are wholly owned subsidiaries of CBH, the only way that the defendants could have recourse to their assets is if the defendants caused CBH to be wound up. In my opinion, the financial statements do not disclose that the first plaintiff could meet any order for costs. Dr and Mrs Low have not adduced any evidence of Alpha's financial circumstance and therefore there is no evidence that the second plaintiff could meet any order for costs. The defendants contended that Mr Byrnes has never produced copies of the actual statutory demands which he alleges were served. On 19 March 2008 Mr Byrnes swore an affidavit pursuant to s 459E of the Act stating that he believed there was no genuine and bona fide dispute as to the amount claimed by CBH and Alpha. Exhibited to that affidavit was, as required, what was said to be the statutory demands which had been served. It has always been the defendants' position that there was a genuine dispute as to the debts which are the subject of these proceedings and that Mr Byrnes was well aware of that prior to the issue of the winding up applications. The defendants contend that Mr Byrnes, and thereby the plaintiffs, have engaged in a crude and heavy-handed attempt to apply as much pressure to the defendants as possible by whatever means with a view to extracting a payment from the defendants, despite there being a genuine dispute as to the existence and quantum of the alleged debts. It was contended that the first notices of assignment sent by email on 18 December 2007 and by facsimile on the same date was signed by Mr Byrnes alone and not by the purported assignor. They were the only copies of the notices of assignment the defendants received prior to the purported date of the statutory demands. However, on 20 December 2007 the defendants were sent the second notices of assignment purported to have been signed by each of Mr Byrnes, Catherine Byrnes and Elizabeth Low. The third notices of assignment were sent to the defendants' solicitor on 1 February 2008. It was contended that Mr Byrnes was well aware that prior to the winding up proceeding being commenced the defendants had not been served with the statutory demands; that they disputed the existence of the debts; that they disputed the assignment of the debts and Mr Byrnes and the plaintiffs' capacity to deal with those debts. Notwithstanding those matters of dispute, the winding up proceedings were commenced. The defendants contend that the plaintiffs and Mr Byrnes continued to prosecute the winding up proceedings in an endeavour to pressure the defendants into paying the alleged debts right up until the time of their capitulation at the trial. Further, the winding up proceedings were issued and maintained despite Byrnes (and CBH and Alpha) being informed that the defendants had not received the statutory demands (and with you refusing to provide them a copy prior to issuing the winding up proceedings), and hence with the purpose of using a threat of winding up to secure payment of a contested debts without giving the defendants a fair or proper opportunity to contest, or seek to set aside, the statutory demand. He said that he is the sole director and secretary of BAA. He is separated from his wife and he is not sure that she has been served with any of the documents in the proceedings. He said that he has no involvement in the proceedings and has not received any benefit as a result of these proceedings. He said that his involvement in the proceedings came to an end prior to the commencement of the proceedings. As has been shown, Mr Byrnes included Mr Lazar in a number of the communications he had with the defendants. He and BAA are also parties to the deeds of assignment but it is not clear from the deeds what the true position in in regard to the parties' relationship with each other. The deeds do not disclose whether Mr Lazar and BAA will gain by the recovery of the debts. Indeed, for reasons already given, BAA's position is somewhat ambiguous. I suspect that there are other commercial arrangements in existence between the non-parties and the plaintiffs of which I am not aware. Whilst Mr Lazar says that his and BAA's involvement ceased before the issue of proceedings, they were involved as at 17 December 2007 when the deeds of assignment were apparently executed. He also received copies of an email from Mr Byrnes on 7 January 2008. The defendants' solicitors wrote to him on 21 January 2008 accusing him of approaching their financiers and requiring him to desist from doing so. Mr Byrnes sent Mr Lazar further emails of 22 January 2008, 23 January 2008 and 2 February 2008. However, there is no evidence that he was involved after 2 February 2008 which was about six weeks before these proceedings were commenced. However, he and his wife are beneficiaries of the Coomera Trust. He says also neither he nor his wife have contributed financially to the conduct of these proceedings. He said that he and his wife do not stand to obtain a direct benefit in the event that the debt is ultimately recovered from the respondent. All funds, he says, are to be directed back to the beneficiaries of the Coomera Trust. Dr Low does not say who has the responsibility for the plaintiffs' legal costs. Alpha is a plaintiff. Alpha and CBH appointed Mr Byrnes and ALF to make the demands and "to liaise with lawyers on behalf of the trustees". It is hard to imagine, unless there was some side agreement, that Alpha was not responsible for the joint trustees' legal costs. Mrs Low is a beneficiary of the Coomera Trust as trustee for the Coomera Discretionary Trust. Dr Low and Mrs Low are directors of the joint trustee, Alpha. Dr Low's accountant is the appointor of the Trust. It is somewhat disingenuous to claim that he and his wife do not stand to obtain a direct benefit in any recovered debts. Indeed, Dr Low engaged Mr Byrnes and CBH and ALF to recover those debts. He went to the trouble of causing Contor and Cobra to sell the debts to Alpha on behalf of the Coomera Trust of which his wife is a beneficiary on behalf of a discretionary trust. Dr Low has said in his affidavit that he is "surprised and disappointed by the way in which the Proceedings have been conducted in recent times that Simmons and McCartney lawyers and Mr Byrnes have had for the procedure and orders for the Court (sic)". He says he is "shocked by the dramatic turn of events which now disclose some serious difficulties in terms of the conduct of the matter and raise the prospect of very substantial cost orders against my wife and I". He concludes his affidavit by saying that he believes that the sum of $1.8 million is owing by Hardel to the Coomera Unit Trust and $2.3 million is owing by Avpri to the Coomera Unit Trust. However, Dr Low was kept abreast of the circumstances as they unfolded. Mr Byrnes sent him the communications to which I have referred and others. Dr Low must have known of the manner in which Mr Byrnes and CBH were going about recovering these debts. He was also aware that the defendants disputed that the debts were owing; that proper notices of assignment had been given; and that statutory demands had never been served. Mrs Low has sworn an affidavit in relation to the application for costs itself on 8 October 2008. She discloses in that affidavit that she is a beneficiary of the Coomera Discretionary Trust which, itself, is a beneficiary of the Coomera Trust. She does not say, nor does Dr Low in his affidavits, whether Dr Low is also a beneficiary. She says she generally speaking does not take any active role in her husband's business dealings but leaves him to make decisions of what he might think is best for the family. She says that she executed the deed of assignment, the notices of assignment and the minutes of meeting of the Coomera Trust after discussions with her husband and acting upon his advice. I had no ongoing involvement. My husband and I expected that the proceedings would be conducted in a proper and legitimate matter particularly in light of the appointment of Simmons and McCartney Lawyers and Mr Byrnes (sic) representations to my husband from Mr Byrnes that he had significant experience in debt collection matters. Mrs Low's evidence is also somewhat disingenuous. It has to be remembered that Mr Byrnes' involvement was brought about by Mr Lazar introducing Dr Low's accountant to Mr Byrnes and whilst Dr Low has deposed that he did not wish to engage Mr Byrnes, a fact which I find hard to believe, Mr Byrnes started acting anyway. The events which unfolded are the result of Dr and Mrs Low wishing to recover what they said was the amount owing by the defendants to their companies. Whilst it may be right to say that the deeds of assignment of 17 December mean that any monies recovered become an asset of the Coomera Trust, Mrs Low is a beneficiary of that trust as trustee of the Coomera Trust and beneficiary of the Coomera Discretionary Trust. As I have already said, the second applicant and Dr and Mrs Low relied upon an affidavit of Mr Christian Moore, their solicitor who has exhibited to his affidavit a number of self-serving letters written by him to the solicitors for the plaintiffs and one of the non-parties, Simmons and McCartney Lawyers. In a letter dated 21 October 2008 he described their conduct as "tardy and unprofessional" which has "brought our clients into disrepute". In that letter, he seeks indemnity from CBH and Mr Byrnes in relation to any adverse costs orders that might be made. Mr Byrnes was not overwhelmed by the claim for indemnity from Mr Moore. He replied in lieu of Mr McCartney, who seemed not to reply to any correspondence but to leave it to his client to do so. Mr Byrnes described the letters from Mr Moore as a "self-serving load of rubbish". Mr Byrnes did not tender any affidavit sworn by him subsequent to the dismissal of these proceedings but, of course, the first applicant did rely upon his earlier affidavit of 29 May 2008. Reliance was also placed by the first applicant upon the financial statements which were exhibited to Mrs Byrnes' affidavit. The words in parentheses in s 43(1) may be ignored. The exception in s 43(2) is also not relevant. Section 43(1) is in like terms to s 32 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act ). That decision was given about three weeks before the High Court's decision in Knight v F.P. Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178. In that case, the High Court was concerned with s 58 of the Supreme Court Act 1857 which provided, "The Supreme Court shall have power to award costs in all cases lawfully brought before it and not provided for otherwise than by this section. " Order 91 rule 1 of the Rules of Court of the Supreme Court of Queensland provided that costs should be in the discretion of the Court. The High Court held that the discretion to award costs was not confined to the parties to the proceeding but that the Rules conferred jurisdiction to make orders for costs against non-parties and, in that case, the receiver. The decision in Knight v F.P. Special Assets Ltd [1992] HCA 28 ; 174 CLR 178 and its application to s 43 of the Federal Court Act was considered by the Full Court of the Federal Court in Caboolture Park Shopping Centre Pty Ltd (in liquidation) v White Industries (Qld) Pty Ltd [1993] FCA 471 ; (1993) 45 FCR 224. Clearly the section is no narrower than the provisions of O 91, r 1 of the Rules of the Supreme Court of Queensland considered by the High Court in Knight v FP Special Assets . CAN AN AWARD OF COSTS BE MADE AGAINST NON-PARTIES AFTER THE DISMISSAL OF THE PROCEEDINGS? In Caboolture Park v White Industries [1993] FCA 471 ; 45 FCR 224 , it was argued that the Court's jurisdiction under s 43 to award costs ceased at the time that judgment was entered. It was submitted in that case that "once the original action or proceedings had been completed by entry of judgment there was no longer a 'proceeding' before the Court in respect of which a cost order could be made" (at 230). In other words, there is no jurisdiction to order costs at large. There has to be or have been, within the Court's jurisdiction, instituted a proceeding. It is irrelevant, subject to the application of common law principles discussed later, that judgment has been given and entered. Pty Ltd (In liquidation) v Ultra Tune Australia Pty Ltd [1998] VSC 13 ; (1999) 1 VR 204. His Honour held that orders for costs are truly supplemental and do not affect the legal impact of the earlier judgment. 's costs incurred in relation to its proceeding against U.T.S.A. and Titan. DOES S 1335(2) PREVENT AN AWARD OF COSTS AGAINST A NON-PARTY? "[C]ourt" is defined in s 58AA of the Corporations Act . A winding up application is a "proceeding" under the Corporations Act and "Court" includes the Federal Court of Australia which has jurisdiction by reason of s 58AA of the Corporations Act . The non-parties contended that s 43 of the Federal Court Act does not apply in circumstances where "any other Act provides that costs shall not be awarded". The Corporations Act , it was contended, was an Act to which s 43 applied and s 1335(2) limited the power to award costs to a party to the proceeding. The Act which is referred to in s 43(1) is any Commonwealth Act: s 38 of the Acts Interpretation Act 1958 (Vic). The Corporations Act is an Act of the Commonwealth and so, to that end, it could be an Act referred to in s 43(1) of the Federal Court Act. However, the exceptive words in s 43(1) (ignoring the exceptive words in the introduction to the subsection which are irrelevant) do not and are not intended to apply to any Act which has been passed subsequent to the enactment of s 43(1) of the Federal Court Act: Rose v Hvric [1963] HCA 13 ; (1963) 108 CLR 353 at 357. In that case the High Court was concerned with s 74(1) of the Justices Act 1958 (Vic) (the Justices Act) which allowed a court to impose a penalty other than an imprisonment if the court thought the justice of the case would be thereby better met. Section 74(1) commenced: "Except by the right expressly enacted ...". The Justices Act came into force on the same day as the Licensing Act 1958 (Vic) (the Licensing Act) so by force of the Acts Interpretation Act 1958 (Vic) it can be construed as coming into operation simultaneously. Section 154 of the Licensing Act provided for a penalty of imprisonment for a term not less than six months or more than 12 months for a second offence of selling liquor without a licence. The question for the Court was whether the exceptive words in s 74(1) meant that the Court could not exercise the power in s 74(1) to reduce a penalty to something less than imprisonment if the justice of the case would be better met. In regard to later enactments they "go no farther than the general law": Garnett v Bradley (1878) 3 App. Cas. 944 , at p. 965 and "are not really necessary because if the later Act shows a contrary intention the earlier enactment cannot control it. But they remind us of the general rule". So Isaacs J. observed in Bennett v. Minister for Public Works (N.S.W. ) [1908] HCA 50 ; (1908) 7 C.L.R. 372 , at p. 384, speaking of the exceptive expression "unless the contrary intention appears". Whatever the verbal formula employed, it cannot have in regard to later legislation any greater force or value than that expression. As Keating J. remarked in Chorlton v. Lings (1868) L.R. 4 C.P. 374, "to do more would be exceeding the competency of parliament with reference to future legislation" (1868) L.R. 4 C.P., at p. 395. The exceptive words in the body of s 43 do not by themselves limit the operation of s 43 by any later Act. Section 43 of the Federal Court Act was enacted before s 1335(2) of the Corporations Act . It cannot control that subsection. A later Act could limit the operation of s 43 but that would raise the question of the construction of the later Act. Therefore, the question which is to be determined is whether s 1335(2) as a later enactment has the effect of limiting the operation of s 43(1) to a party or a party to a proceeding brought under the Corporations Act . The non-parties' argument was accepted by Jenkinson J in Re Wridgemont Display Homes Pty Ltd [1992] FCA 604 ; (1992) 39 FCR 193. In that case, Jenkinson J held that s 43(2) had to be read subject to s 1335(2) which limits persons whom the Court may direct to bear the costs of the proceeding to those who are parties to the proceeding. He thought, however, an application could be made to join a person as a party to obtain an order for costs. That decision was approved by Lindgren J in Australian Forest Managers Ltd (in liq) v Bramley (1996) 136 ALR 431. The court's discretion relates only to how the costs are to be so borne. Such terms are inconsistent with an exercise of the power given by s 43 of the FCA Act to order a non-party to pay costs. The excepting words in s 43(2) of the FCA Act are apt to refer to, inter alia, a provision of such a nature. Both those decisions were given prior to the enactment of the Corporations Act but s 1335(2) has been re-enacted in the Corporations Act . There is nothing in the Corporations Act itself which would allow those decisions to be distinguished. I should as a matter of comity and unless I think the decisions to be plainly wrong follow them. However, there are decisions of the Supreme Court of Victoria and the Supreme Court of New South Wales which need to be considered. In U.T.S.A. Pty Ltd (In liquidation) v Ultra Tune Australia Pty Ltd 1 VR 204, Chernov J was concerned with an application by the defendant to a proceeding for an order that two non-parties pay the costs of the proceeding. His Honour assumed, but later decided otherwise, that the proceeding with which he was concerned was a proceeding under the Act. The two non-parties sought to set aside the notice of motion seeking costs on two grounds. First, because judgment had been entered and therefore there was no jurisdiction for the Court to exercise its discretion under s 24(1) of the Supreme Court Act 1986 (Vic) (SC Act (Vic)) to order that costs be paid by the respondents; and secondly, because s 24(1) of the SC Act (Vic) which gave the Court jurisdiction to award costs was to be read subject to s 1335(2) of the Corporations Law. As I have already observed, the first argument was rejected by the Court following the decision of this Court in Caboolture Park v White Industries [1993] FCA 471 ; 45 FCR 224. His Honour then turned to consider the effect of s 1335(2). He found that the exceptive words of s 24(1) had no legal effect beyond "saving earlier enactments which otherwise would be inconsistent with the provision introduced": Rose v Hvric [1963] HCA 13 ; 108 CLR 353 at 357. He addressed the question whether s 24(1) of the SC Act (Vic) was limited by s 1335(2) of the Corporations Act . The real question was whether s 1335(2) , being a later enactment, evinced an intention to limit the operation of s 24(1) of the SC Act (Vic). His Honour traced the legislative history of s 1335(2). He noted that the English Judicature Acts of 1873-1875 did not address all of the anomalies which then existed in relation to the Court's powers in relation to costs. Costs in the common law courts were entirely creatures of statute: Garnett v Bradley (1878) 3 App Cas 944 at 962. On the other hand, the Court of Chancery claimed to have power to deal with costs at its discretion although there was some uncertainty as to the extent of that power. The authorities suggested that the position in equity continued after those Acts. He noted that s 5 of the Judicature Act 1890 (UK) which gave the Court expanded jurisdiction to award costs resolved the uncertainty. Section 32(1) gave the Court jurisdiction to deal with all questions of costs, including proceedings under the Companies Act. Before the Uniform Companies laws of 1961, there was no equivalent of s 1335(2) in the Victorian legislation. There was on his Honour's reasons no need for s 1335(2) because s 32(1) gave the Court power to award costs in all proceedings and therefore s 1335(2) was not picked up by the Victorian Companies Act of 1938 or its consolidation in 1958. He turned his attention to the New South Wales jurisdiction. He noted that New South Wales did not adopt the Judicature Acts until 1970 when the Court was given the statutory provision equivalent to s 5 of the Judicature Act 1890 (UK). In the meantime, the predecessor of s 1335(2) was introduced into the Companies Act 1936 (NSW) (the Companies Act) by s 365(2). Section 365(2) eventually became s 1335(2). Bearing in mind that s. 24(1), or its equivalent, was in force in Victoria and England, there was no need to introduce in those jurisdictions a provision such as s. 365(2) of the Companies Act of New South Wales. On the other hand, there was reason to pass such legislation in New South Wales in 1936 if its Supreme Court was to have a wide discretion to award costs in a proceeding under the companies legislation. The enactment of s 365(2) was to put beyond doubt the Courts' power to award costs for proceedings under that Act. It was not enacted to limit the circumstances in which costs might be awarded. Thus it was that his Honour held that s 365(2) at the time of its introduction was an enabling provision, not a limiting provision. His Honour also noted that the equivalent of s 365(2) was not introduced into Victorian law until 1961 at the time of the Uniform Companies legislation in the form of s 363(2). His Honour pointed out that there was no need to introduce such legislation into the Victorian Uniform Companies legislation because the position was covered by s 24(1) of the SC Act (Vic). Moreover, his Honour observed was that there was no need to continue with s 365(2) in the New South Wales legislation after the New South Wales Parliament adopted the Judicature Act in 1970 but the provision has remained and has become s 1335(2). For those reasons, his Honour found that s 1335(2) was intended to be an enabling provision, not a limiting provision. In those circumstances, it did not limit the provisions of s 24(1) of the SC Act (Vic). The decision in U.T.S.A. v Ultra Tune 1 VR 204 was followed by Brereton J in Re Struthers (liq of Project Management, Architecture and Construction Interiors Pty Ltd) (No 3) [2005] NSWSC 1113 ; (2005) 56 ACSR 238. But were it not for the judgment of Chernov J in UTSA , despite these initial impressions about s 1335 , I would unquestionably have followed Wridgemont and Australian Forest Managers , particularly given Lindgren J's strong endorsement of Wridgemont , and also given that those cases had been followed in this court by Bergin J. However, in circumstances where there has been, since Australian Forest Managers , what impresses me as a compelling analysis of the history and purpose of the section by Chernov J --- the benefit of which does not appear to have been afforded to Bergin J when her Honour came to consider the point --- and where Ryan J, albeit without reference to the authorities, had adopted an opposite approach, I consider that I am at liberty to give effect to my own views. Its history shows that it was intended to confer a jurisdiction or a power to make costs orders when there was doubt as to the existence that power, at least in the equitable jurisdiction of this court in this state. If there were no s 1335(2) , the court would not be without power to make costs orders in proceedings under the Act; it would have all its powers under the Supreme Court Act and the Civil Procedure Act. Section 1335 was not intended to limit such other powers to make costs orders as the court already enjoyed, but to supplement them. In my opinion, the current provisions ought not be taken as intended to exclude the power of courts under, for example, Civil Procedure Act, s 98, and UCPR, r 42.27, to make costs orders which are designed to protect the processes of the courts and the integrity of those processes and the procedural rights of parties who litigate in those courts. In that s 1335(2) simply replicates the former s 533(2) of the Companies Code, enacted prior to the courts' recognition of a jurisdiction to order costs against non-parties, it could not have been intended to deny that jurisdiction. Certainly this has not been the approach of other judges when ordering costs against directors, receivers or liquidators of companies as litigants. Moreover, s 43(2) deals with the court's discretion , not its jurisdiction, which is the province of s 43(1), and which is not expressed '[e]xcept as provided by any other Act'. Even so, it does not necessarily follow that s 1335(2) should be seen as ousting the operation of s 43(1) or 43(2), which provisions can arguably operate consistently with s 1335(2). To remove any degree of uncertainty, however, it would be useful if the legislature either reworded s 1335(2) to extend to non-parties, or defined the term 'party' more extensively. This is more pressing following the replacement of the Corporations Law with the Corporations Act 2001 (Cth), which comes within the phrase 'any other Act' in s 43(2). According to his Honour, this power could circumvent the lack of jurisdiction just mentioned, allowing it to be exercised in a case where the court considers that such a person ought to bear the costs of the proceeding. However, in my opinion, Chernov J's reasoning is compelling and I think should be adopted. For the reasons given by Chernov J in relation to the legislative history of s 1335(2), s 1335(2) does not limit the operation or reach of s 43(1) of the Federal Court Act. It would be surprising if Parliament intended in enacting the Corporations Act to limit the circumstances where this Court might make an order for costs to parties or parties to the particular proceeding and to exclude from the scope of an order for costs non-parties who would, if it were not for the proceeding being brought under the Corporations Law, be liable to pay the costs of a party to the proceeding. In my opinion s 1335(2) does not have the effect of preventing this Court from making an order for costs against non-parties in proceedings brought under the Corporations Act . CAN THE NON-PARTIES BE JOINED AS PARTIES? Pty Ltd (In liquidation) v Ultra Tune Australia Pty Ltd 1 VR 204 and Re Struthers (liq of Project Management, Architecture and Construction Interiors Pty Ltd) (No 3) [2005] NSWSC 1113 ; 56 ACSR 238 then I should make an order joining the non-parties as parties for the purpose of avoiding the consequences of s 1335(2). The defendants contended that I could make an order under O 6 r 8 of the Federal Court Rules and/or rule 2.13 of the Federal Court (Corporations) Rules 2000 (the Corporations Rules). It was accepted that I would not make an order for joinder unless I was first satisfied that it was appropriate to make an order for costs against those non-parties. The defendants relied upon the dicta in Re Wridgemont Display Homes Pty Ltd [1992] FCA 604 ; 39 FCR 193 in support of this contention. In that case, Jenkinson J said that the obstacle which was presented by s 1335(2) on his construction of that subsection "may, and in an appropriate case should, be obviated by the exercise of the power conferred by Order 71, rule 10(4)" to join a non-party whom the Court considers ought to bear the costs of the proceedings. The equivalent of O 71 r 10(4) is now rule 2.13 of the Corporations Rules. Rule 1.3 of the Corporations Rules provides that those rules apply to a proceeding in this Court under the Corporations Act : Rule 1.3(1)(a). The rules also provide that the other rules of the Court apply to the extent they are relevant and not inconsistent with the Corporations Rules: Rule 1.3(2). It follows that an examination of the Corporations Rules must be made to determine whether a source of power exists for the joinder of non-parties to a proceeding under the Corporations Act . Rule 2.13 deals with creditors, contributories and officers of a corporation and empowers the Court to give leave to allow such persons to be heard in a proceeding without becoming a party to the proceeding. Whether they are creditors of the plaintiffs does not appear to be relevant. Rule 2.13(3) could be used to join shareholders, directors and other officers of a corporation to a proceeding where it appears that their conduct has been such that it would be appropriate to make orders for costs against them. I agree with Jenkinson J's observations. However, I also think O 6 r 8 is a source of power. That rule is relevant and not inconsistent with Rule 2.13(3): Rule 1.3(2). Where an application for costs is made against a non-party in a proceeding and because that application is incidental to the proceeding, the Court can order that a non-party be joined to ensure that all matters in dispute may be effectually and completely determined and adjudicated upon. The present Federal Court Rules were promulgated before it was fashionable in legislation of this kind to identify the objects and purposes of the Rules. Rules of Court are made to establish procedures for arriving at a just resolution of a civil dispute. In that regard, all unnecessary cost and delay is to be avoided and, instead, efficiency at an affordable cost provided it is consistent with justice is to be promoted. The Federal Court Act and Rules recognise that the Court may make orders for costs against non-parties in accordance with the general rules relating to costs: Knight v F.P. Special Assets Ltd [1992] HCA 28 ; 174 CLR 178. That jurisdiction must carry with it the power to enforce any order that justice demands be made. If it be necessary to make an order that the non-party be made a party so that an order can be made that the non-party pay that party's costs then it must be assumed that the Court has jurisdiction to make the non-party a party to the proceeding. Order 6 rule 8 gives that power to the Court. Where it appears that a non-party ought to be held liable to pay a party's costs the Court can, in my opinion, utilise O 6 r 8(1)(b) to join that non-party to the proceeding. It follows therefore that if I am of the opinion that any of the non-parties should be ordered to pay the defendants' costs and contrary to my opinion s 1335(2) prevents any such order being made, I can make an order joining those non-parties as parties to the proceedings. If such an order is made, and so as to avoid any doubt I intend to make those orders, s 1335(2) on the construction given to it by Jenkinson J and Lindgren J would not stand in the way of an order for costs against the non-parties after they become parties. The defendants contended, however, that there was no need to make an order joining Simmons and McCartney, the plaintiffs' solicitors, given that there is an express power under O 62 r 9(1) of the Federal Court Rules . It was contended because of that express power in the Rules there was no need to make an order joining the solicitors as a party to the proceedings. Simmons and McCartney did not take issue with the proposition that the Federal Court Rules empowered the Court to make an order against them. They simply argued that such an order should not be made. The matter to which I now advert therefore was not the subject of argument but I am not sure that the defendants' contention is correct. The question raised is, if s 1335(2) of the Corporations Act prevents an order being made against a non-party, does O 69 r 9(1)(d) of the Federal Court Rules notwithstanding empower the Court to make such an order? The defendants relied upon a decision of Master Coulehan of the Supreme Court of the Northern Territory in Construction Enterprises Pty Ltd v Lafarge Plasterboard Pty Ltd [2002] NTSC 21 for the proposition that an order for costs could be made against solicitors without making the solicitors parties and notwithstanding s 1335(2) of the Corporations Act . That case concerned an application to set aside a statutory demand pursuant to s 459G of the Corporations Act . Shortly after the proceeding was commenced, the plaintiff was wound up by order of the Supreme Court of New South Wales. The defendant sought costs against the plaintiff's solicitor who had pursued the application on the part of the plaintiff, notwithstanding that the plaintiff had been wound up before the hearing of the application and notwithstanding that the liquidator was unaware of the application. The Master thought he was constrained by the decisions in Re Wridgemont Display Homes Pty Ltd [1992] FCA 604 ; 39 FCR 193 and in Australian Forest Managers Ltd (in liq) v Bramley 136 ALR 431 from ordering costs against persons who were not parties. However, he was of the opinion that O 63.21 of the Supreme Court Rules of the Northern Territory, which provides for the costs liability of a legal practitioner where the legal practitioner has caused costs to be incurred improperly or without reasonable cause or be wasted by undue delay or negligence or by some other misconduct or default, was not in conflict with either the Corporations Regulations or s 1335(2). As already adverted to, if the Supreme Court Rules of a jurisdiction are relevant and not inconsistent with the Corporations Rules, the Court can have regard to those Rules in a proceeding under the Corporations Act . However, that is not, it seems to me, the question that needs to be addressed. The question in issue is whether the Rule is inconsistent with s 1335(2) of the Corporations Act . The Master relied upon two decisions for the second proposition that the rule was not inconsistent with s 1355(2): Myers v Elman [1940] AC 282 and Caboolture Park v White Industries [1993] FCA 471 ; 45 FCR 224. I am not sure how those cases support the proposition that there is no conflict between the Rules of Court of the Supreme Court of the Northern Territory and s 1335(2) of the Corporations Act . The first case stands for the proposition that the High Court in England has power to order a solicitor to indemnify a party who has been injured by the solicitor's default. The power rests upon the Court's jurisdiction over its own officers. That proposition can no longer be doubted. The second case, a decision to which I have already referred, is authority for the proposition that the Federal Court has the power to award costs against a non-party and, in that case, the solicitors for a party. The power to award costs against a non-party, and in particular against a solicitor, are not the questions in issue. The question, further refined, is whether the Court can award costs against a legal practitioner who is a non-party. The Master, it seems to me, with respect, did not address that issue. If the jurisdiction to award costs against a solicitor emanates from the Rules of Court, then the first consideration is whether those Rules are inconsistent with an Act of the Parliament. The power to make Rules of Court is given by s 59 of the Federal Court Act which is to make Rules not inconsistent with the Federal Court Act for and in relation to the practice and procedure to be followed in the Court. In particular, the Court may make Rules in relation to the costs of the proceedings in the Court: s 59(2)(o). However, the Court cannot make Rules relating to costs inconsistent with s 43 of the Act. That section allows the Court to make orders for costs other than in proceedings in respect of which any other Act provides that costs shall not be awarded. If, contrary to my opinion, the Corporations Act prevents the Court from making any order for costs against a non-party, the Federal Court Rules could not overrule that statutory injunction and empower the Court to make such an order. Subordinate legislation such as the Federal Court Rules cannot, in the absence of express statutory power, repeal or amend an Act of the Parliament. If the Rules are inconsistent with the Corporations Act , then they could not empower the Court to make an order that the Corporations Act forbids: Wardley Australia Ltd v State of Western Australia [1992] HCA 55 ; (1992) 109 ALR 247 per Toohey J at 281; Mahfoud v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 313 ; (1993) 43 FCR 217. If the jurisdiction to make an order for costs against a legal practitioner is independent of the Rules of Court and arises out of the Court's power over its own officers, that power must be understood to be and will always be subject to any Act which limits the power. Thus, if the power to award costs against a legal practitioner who is a non-party is inconsistent with an Act of the Parliament, the statute must prevail. It seems to me therefore that the solicitors, Simmons and McCartney, are in the same position as the other non-parties. If the Corporations Act does not allow the Court to make orders against non-parties, the solicitors must, if such an order is to be made, be joined as parties. Because these matters were not argued, I will not dwell upon them. It seems to me that it would be appropriate to treat Messrs Simmons and McCartney the same as the other non-parties and if I were of the opinion that an order ought to be made against the solicitors, Messrs Simmons and McCartney, that an order should be made joining them as parties to the proceedings in order that the order can be made. That raises the next question as to what orders should be made. On 27 August 2008, after dismissing the proceedings brought by the plaintiffs, I reserved the question of costs including the costs thrown away, the subject of the order made on 25 August 2008. As I have already said at [53], there can be no doubt that the defendants must be entitled to their costs as against the plaintiffs on a party and party basis. The plaintiffs, for reasons unexplained, failed to prosecute the proceedings and the proceedings were dismissed. However, the defendants seek orders on an indemnity basis against the plaintiffs. I have been asked to infer that the plaintiffs did not proceed with their winding up applications because neither Mr Byrnes nor Mrs Low were prepared to give evidence and subject themselves to cross-examination. It was put that their cross-examination would have exposed irregularities in the assignments of the debts, the notices of assignment and the failure by the plaintiffs to serve a statutory demand. I am not in a position to make the findings which would need to have been made if the proceedings had proceeded to trial and judgment. It is not possible to determine whether the statutory demands were in fact ever served on the defendants in accordance with the Act. Mr Byrnes contends they were and the defendants contend they were not received. That was an issue to be determined at the trial but the proceedings were dismissed for the reasons given. I do not think, in the absence of hearing the witnesses whose evidence is relevant to this issue and particularly Mr Byrnes, the issue can be resolved. Moreover, the resolution of that issue would be undesirable after the proceedings were dismissed at the behest of the defendants: Australian Securities Commission v Australian Home Investments Ltd (1993) 116 ALR 523 at 530. In that case, the Court was required to consider the question of costs where the applicant had sought and obtained the appointment of a receiver to the respondents' property. The appointment was subsequently revoked but without an inquiry into the merits. The respondents sought an order for costs. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. To do otherwise would require some prediction of the outcome of the case. It seems to me that the third proposition stated by Hill J was intended to cover the situation where the Court was in fact able to form a clear view about the merits of a case without a trial. So, if a claim is patently hopeless that would be a good reason to make an order for costs against the claimant. Likewise if a defence was bound to fail that would be good reason for awarding costs in favour of the claimant. But I venture to suggest that there will be very few cases where the issues will be sufficiently clear, in the absence of a hearing, for an order for costs to be made in favour of a party. The fact that a party has not conducted himself reasonably may disentitle him to costs. But, beyond that, the reasonableness of the conduct of the parties is not likely to assist in determining whether the applicant should recover his costs. The real question is whether the applicant had reasonable prospects of success. It seems preferable, therefore, to express proposition (3) in different terms. There are three questions to be determined. The first question for decision is whether the plaintiffs (and the non-parties) acted reasonably in bringing winding up proceedings. The second question to be determined is whether the plaintiffs (and the non-parties) acted reasonably in the prosecution of the proceedings having been put on notice that the defendants claimed never to have been served with the statutory demands and the defendants' requests for the deeds of assignment. The third question to be determined is whether the plaintiffs (and the non-parties) acted reasonably between 22 August and 27 August 2008 when these proceedings were dismissed. The three questions I have posed mean that I disagree with respect with Debelle J's decision in Boscaini v Corporation of Kensington and Norwood [1999] SASC 327. A party may behave so unreasonably in the bringing or conducting of proceedings so that an order for costs against that party is required in the interests of justice without ever deciding whether the party had a good cause of action. Finkelstein J cast some doubt on the third principle referred to by Hill J. I do not need to decide whether I agree with the proviso mentioned by Finkelstein J because, in my opinion, at the very least this is one case where the issues are sufficiently clear, in the absence of a hearing, for orders for costs to be made. The plaintiffs' behaviour, which was demonstrated by Mr Byrnes' emails and correspondence generally prior to the commencement of proceedings, was quite unreasonable. Mr Byrnes behaved like a bully as he claimed to be. He threatened the defendants and Mr Harris with all sorts of commercial harm. His communications were calculated to induce fear into the defendants. His threats, if carried out, would have ruined the defendants in circumstances where he knew the defendants took issue with the debts. His actions were taken for the benefit of the plaintiffs and for the assignors, Cobra and Contor. The threats which were made prior to the proceedings commencing indicate that the proceedings were to be used for a collateral purpose; namely, the recovery of a debt, rather than for the purpose for which the proceedings were designed; namely, the winding up of an insolvent corporation. The proceedings were an abuse of the Court's processes. That finding is enough, it seems to me, to make the order sought by the defendants that the plaintiffs pay the defendants' costs on an indemnity basis: In the matter of Bond Corporation Holdings Ltd (1990) 1 WAR 465 ; Packer v Meagher (1984) 3 NSWLR 486. An award of costs on an indemnity basis may be made only in a special case, where the circumstances justify departure from the ordinary principle. The circumstances must be such as to justify an award indemnifying the successful party in respect of all of the costs incurred, save only as to those costs which are unreasonable in amount. Thus, indemnity costs may be awarded where unsuccessful proceedings have been brought and prosecuted, not for the bona fide purpose of protecting and enforcing a legal right, but to achieve an ulterior or extraneous purpose. The plaintiffs' and Mr Byrnes' behaviour, after the commencement of the proceedings, has also been unreasonable. The defendants have always maintained that they did not receive the statutory demands. They requested on a number of occasions a copy of the statutory demands but none was provided. The plaintiffs have refused to cooperate with the defendants and have refused to provide evidence of the service of the statutory demands said to have been served upon the defendants. The plaintiffs have provided the defendants with three different notices of assignment. No explanation was given for the discrepancies. They have done nothing to cooperate in these proceedings. In my opinion, the plaintiffs, by reason of the conduct of Mr Byrnes, involved themselves in a vindictive campaign which consisted of bullying and threatening in an endeavour to frighten the defendants and Mr Harris into paying what the plaintiffs claim to be owing to them by reason of the deed of assignment. The plaintiffs' conduct from 22 to 27 August 2008 was also unreasonable. It is to be remembered that the plaintiffs' application was for the winding up of the defendants. Their letter of 22 August 2008 was quite inconsistent with the basis upon which the applications were made. Whether the defendants were intending to sell land of the value mentioned in the letter of 22 August is, in my opinion, not to the point. The plaintiffs' application was for winding up an insolvent company, not for the purpose of debt collecting. Their conduct of 22 August was further evidence of the collateral purpose which motivated the plaintiffs to bring these proceedings. The plaintiffs had no right, after receiving the defendants' communications indicating that the application for an adjournment would be opposed and receiving advice from my chambers that the matter would proceed on 25 August 2008, to absent themselves from the proceedings for the purpose of having counsel make an application for an adjournment. The matter was adjourned because the plaintiffs indicated their solicitors and counsel and witnesses would be available on Wednesday, 27 August 2008. On 26 August 2008 the plaintiffs tried to discontinue these proceedings. That failed and the proceedings were dismissed on 27 August 2008. The plaintiffs' conduct after the commencement of these proceedings and up until the time of the dismissal of the proceedings has been entirely unreasonable. For those further reasons, there will be an order that the plaintiffs pay the defendants' costs on an indemnity basis. I have made no order for costs in that proceeding for the reasons given. However, the affidavit sworn by Peter William Harris on 28 April 2008 which was filed in that other proceeding was used extensively in these proceedings and for the purpose of these reasons. Indeed, the defendants filed an affidavit in each of these proceedings sworn by Mr Harris on the same day in which he referred to and relied upon his affidavit sworn in the other proceeding. In that way the affidavit was used in these proceedings. It would be appropriate to allow the defendants the costs of that affidavit even though it was filed in the other proceeding because it contained the relevant information relied upon by the defendants for the defence of these proceedings. The costs which the defendants are entitled to recover on the orders in these proceedings shall include the costs of the preparation, swearing and filing of Mr Harris' affidavit sworn on 28 April 2008 and filed in action number NSD 584 of 2008. Mason CJ and Deane J (with whom Gaudron J agreed) said in Knight v F.P. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made. The discretion to award costs against a non-party is unfettered except that it must be exercised judicially. Having said that, the cases identify the principles upon which the exercise of the discretion might be exercised. If the order for costs which is sought against non-parties in lieu of, in substitution for or complementary to an order for costs against a party, the circumstances for making such an order will not arise unless there is some connection or association between the party to the litigation and the non-party against whom the order for costs is sought. The connection must be of a kind that makes it just to make an order for costs in that the connection must be material to the question of costs: see Bischof v Adams (1992) 2 VR 198 at 205. The categories of costs in which a court may order a non-party to pay costs are not closed: Applicant NAGM of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 396 ; (2002) 125 FCR 488. One such category is where the non-party is considered to be the "real party" to the litigation: Knight v Special Assets at 188 per Mason CJ and Dean J. Another is where the non-party is a legal representative of a party to the proceedings. A costs order may be made, for example, against a solicitor in consequence of his or her conduct in the litigation: Caboolture Park at 231. While s 43 of the Federal Court Act empowers the Court to make a costs order against a legal representative of a party, a second source of jurisdiction is the "implied", "accrued" or "inherent" jurisdiction of the Court over its own officers: Caboolture Park at 231. In Naomi Marble and Granite Pty Ltd v FAI General Insurance Company Ltd (No 2) [1998] QSC 18 ; (1999) 1 Qd R 518 , Shepherdson J identified categories of cases where it might be appropriate to make an order for costs against a non-party. He said at 545: Where a person has some management of the action e.g. a director of an insolvent company who causes the company improperly to prosecute or defend a proceeding (191). Where a person has maintained or financed the action (citing Singh v. Observer Ltd [1989] 2 All E.R. 751). was a member of the Court of Appeal in each of Bahai v. Rashidian and Symphony Group and in Symphony Group went on to say that he accepted that the categories which he had set out were neither rigid nor closed. 128 (Einfeld J. ); Re Land and Property Trust Co. Plc. [1991] 1 W.L.R. 601 at 604-605 and H. Leverton Ltd v. Crawford Offshore (Exploration) Services Ltd --- unreported decision on costs of Garland J. in Queens Bench Division dated 11 October 1996). Special Assets Limited at 193 in a passage I set out earlier in these reasons). Special Assets Limited at 202 (per Dawson J.). 494 at 503; (Einfeld J. ) H. Leverton Ltd v. Crawford Offshore (Exploration) Services Ltd) . As I have already said, CBH's financial position is that Mrs Byrnes would be in a position to cause CBH not to be able to pay costs if she called upon the amount owing to her. Dr Low has not descended into advising the Court of the financial position of Alpha. In my opinion, the plaintiffs may well be incapable of satisfying the orders for costs which are to be made against them. In those circumstances, the defendants are entitled to ask the Court to make orders against any of the non-parties who have joined in or maintained these proceedings for the same ulterior and collateral purposes as the plaintiffs. There can be no doubt in my mind that an order for costs should be made against Mr Byrnes who has been the conductor of the vindictive campaign which has been maintained against the defendants. His conduct has been reprehensible and he should be made a party to the order for costs. So also should Mrs Byrnes. She caused CBH to commence these proceedings for the ulterior and collateral purposes which I have identified. She has allowed CBH to be used as a debt collector and has caused CBH to improperly bring these proceedings. She has done nothing to restrain Mr Byrnes in his conduct. Of course, she was a party to his appointment on 17 December 2007. There will be an order for costs against Mrs Byrnes. In my opinion, Dr Low and Mrs Low also should be ordered to pay the defendants' costs on an indemnity basis. Although they protest that they had little or nothing to do with the conduct of these proceedings and would claim to be affronted by the conduct of which they have been made aware, those claims and those denials cannot be reconciled with the information which Mr Byrnes supplied Dr Low from time to time. Dr Low and Mrs Low assigned Contor and Cobra's debts to CBH and Alpha so that they could bring these proceedings. They also have used the proceedings for the same improper and collateral purposes as the plaintiffs. They have done nothing to restrain Mr Byrnes in his conduct throughout the proceedings. The solicitors, Simmons and McCartney, have not sought to explain their conduct in any way. They have, in my opinion, failed as officers of the Court to conduct themselves appropriately. The plaintiffs' solicitors would have been aware prior to the commencement of these proceedings that the proceedings were to be instituted for an ulterior or collateral purpose. They were aware of Mr Byrnes' communications with the defendants and the defendants' agents. They could not have failed to be aware that these proceedings were to be commenced for an ulterior or collateral purpose. Moreover, they should have responded to the defendants' request in relation to the statutory demands and the notices of assignment. It was inappropriate to merely ignore those matters and to assert that they would be matters for issue at trial. The letter they wrote on 22 August 2008 and the request for an adjournment and for the hearing on 25 August 2008 to be by way of video were all inappropriate having regard to the fact that the proceedings had been set for hearing on 25 August 2008. The fact that the defendants were to sell $9 million worth of property was irrelevant. The solicitors failed to advise the defendants' solicitors that neither they nor Mr Byrnes would be attending Court on 25 August 2008 until the morning of 25 August 2008. The failure to have counsel available on the hearing of the proceedings indicated a lack of respect for the Court. On 22 August 2008 the solicitors were aware that the defendants would oppose the application for an adjournment and the Court would not permit the plaintiffs to appear by videolink. Notwithstanding that awareness, they took no steps to have counsel or their witnesses available for the hearing on 25 August 2008. Moreover, they did not advise the defendants that they would not be appearing. On 26 August 2008 they inappropriately attempted to discontinue those actions. When that step failed on 27 August 2008 they simply did not appear indicating very shortly before the hearing that the plaintiffs would consent to dismissal of the action with costs assessed or agreed. Notwithstanding that the matter was listed for trial on 27 August 2008, they failed to appear. In my opinion, in all those circumstances, the solicitors have failed to prosecute these proceedings for the appropriate purpose and after the commencement of the proceedings have failed to prosecute the proceedings diligently and appropriately. They should also be subject to an order that they pay the defendants' costs on an indemnity basis. That leaves Mr and Mrs Lazar. It must be said immediately that there is no evidence that Mrs Lazar had any awareness of any of the circumstances relating to these proceedings either before or after they were commenced and there should be no order for costs made against her. The evidence discloses that Mr Lazar was aware of Mr Byrnes' various demands made prior to the commencement of the proceedings. He was also a director of BAA which purported to take an assignment of the Contor and Cobra debts in October 2007, and he made demands upon the defendants in relation to those debts. He was also copied in to correspondence between Mr Byrnes and the defendants' solicitors in January 2008, and was aware that the defendants had disputed that the statutory demands had been served and disputed the debts and their assignment. Lastly, he is a beneficiary of the Coomera Trust. However, I am not satisfied that Mr Lazar played any active part in the commencement of these proceedings or the maintenance of these proceedings after their commencement. It is true, as I have said, that he was aware of the commencement of the proceedings and of the defendants' assertions. There is, however, no evidence that he did anything active in maintaining the proceedings. There will be no order for costs against Mr Lazar. I certify that the preceding four hundred and one (401) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | costs application for indemnity costs brought by defendants against plaintiffs and non-parties originating action an application for winding up under corporations act 2001 (cth) application previously dismissed circumstances necessary to award costs in absence of hearing whether plaintiffs and non-parties acted reasonably in bringing proceedings whether plaintiffs and non-parties acted reasonably in prosecution of the proceedings whether plaintiffs and non-parties acted reasonably in events leading up to proceedings being dismissed application brought for improper and collateral purposes application was an abuse of process plaintiffs' and non-parties' conduct entirely unreasonable application for indemnity costs granted costs application for costs against non-parties where plaintiffs may not be capable of satisfying orders for costs court can make an order for costs against non-parties even though proceedings have been dismissed whether operation of s 43 of federal court of australia act 1976 (cth) was affected by s 1335(2) of corporations act 2001 (cth) s 1335(2) only operates to save earlier enactments which otherwise would be inconsistent with the provision introduced intended to be an enabling provision does not prevent court from making an order for costs against non-parties in proceedings brought under the corporations act 2001 (cth) court can utilise o 6 r 8(1)(b) to join a non-party even where s 1335(2) would prevent an order for costs against non-parties application granted costs application for costs against non-parties where non-parties were legal practitioners where proceedings had been dismissed whether o 69 r 9(1)(d) empowers the court to make an order for costs against legal practitioners if s 1335(2) operates to prevent an order being made against a non-party statute must prevail where power under federal court rules to award costs against legal practitioner is inconsistent with statute legal practitioners joined as parties to proceedings so costs orders could be made application granted practice and procedure practice and procedure practice and procedure |
The appellants did not appear at the hearing today. In the circumstances, I considered it appropriate to proceed with the hearing pursuant to O 52 r 38A(1)(d) of the Federal Court Rules . I noted that this is the second time that this matter has been listed for hearing in this Court. Shortly before the matter was to come on for hearing on Monday, 16 November 2009, the Court was informed that the appellants were unable to attend the hearing that day because the first appellant (who is the principal claimant) was ill. On Saturday, 14 November 2009, the first appellant had faxed a letter to this effect, accompanied by a medical certificate stating that he was "unfit for his/her normal work" from 15 November 2009 to 18 November 2009". At the appellants' request an adjournment was granted and today set as the new hearing date. In the meantime, the Court sent to the appellants a notice of the new listing of the hearing of the appeal, specifying the date, time and place. The Court has received no further communication from the appellants. There is nothing to indicate that the appellants are unaware of today's hearing. At the hearing, counsel for the first respondent relied on her written submissions. I indicated that having read these submissions and the appellants' contentions, I would dismiss the appeal and that I would provide reasons later today. These are my reasons for dismissing the appeal. Before detailing these reasons, however, I note by way of background that the Tribunal found that the appellants are a married couple and citizens of Sri Lanka. They arrived in Australia on 15 August 2008, each holding a visitor visa. On 11 September 2008, they lodged an application with the first respondent's Department for protection (class XA) visas. Only the first appellant made substantive protection claims. The second appellant's application depended on the outcome of the first appellant's application. On 9 December 2008, a delegate of the first respondent refused the application. On 7 January 2009, the appellants applied to the Tribunal for a review of the delegate's decision. The Tribunal subsequently affirmed the delegate's decision. The appellants filed an application for judicial review in the Federal Magistrates Court, which was heard and dismissed on 7 September 2009. The Tribunal's decision record described the first appellant's claims, as stated in a document attached to the protection visa applications and before the Tribunal. In summary the first appellant claimed: Further, the first appellant claimed before the Tribunal that: In affirming the decision under review, the Tribunal drew the following conclusions and made the following findings. (b) The Tribunal accepted that the first appellant engaged in various election activities including the provision of vehicles, but did not accept that he suffered the harm claimed as a consequence, nor that he would be targeted for associating with Mr Salley. (c) The Tribunal found that the first appellant's claimed involvement in the UNP in 2003 was not consistent with the fact that he was unaware that no general election had been held in 2003. As a consequence, the Tribunal did not accept that the first appellant campaigned for the UNP and Mr Salley at that point; that his house was damaged; and that he faced threats and harassment because of his high profile support for the UNP. Nor did the Tribunal accept that the first appellant made complaints to the police as he claimed. (d) The Tribunal found the claims that the first appellant would be imputed with a pro-LTTE stance and be regarded as a traitor for that reason were far-fetched and did not accept them. (e) The Tribunal found that the extortion suffered by the first appellant was not related to his political opinion but to the fact that he was in business. (f) The Tribunal found that the first appellant's claim to have been beaten with an iron rod around the time of the 2001 elections was an embellishment of claims and did not accept it. (g) The Tribunal found, based on a lack of evidence, that the claimed forging of a power of attorney was not related to the first appellant's support of the UNP or his real or imputed political work. (h) The Tribunal did not accept that the awarding and revoking of the lease of land was related to the first appellant's claim for refugee status as it considered the awarding of the lease and revoking of it to be a legitimate administrative decision taken on the legality of the grant and did not accept that the first appellant had arranged for the lease to be in his father's name. (i) The Tribunal, while accepting that the first appellant was a supporter of the UNP and had participated in minor ways in a number of election campaigns, found that this involvement did not lead to a finding that the chance that he would be persecuted for his political opinion, now or in the reasonably foreseeable future, was real. (j) In relation to the claims of extortion in particular, the Tribunal found that, even if it were to accept that the first appellant would be again subjected to extortion, the evidence led the Tribunal to conclude that one or more of the Convention reasons would not constitute the essential and significant reason for such harm. (b) Whether the Tribunal failed to discuss how the degree of State protection available in Sri Lanka could make fear of persecution at the hands of PA members/supporters an unfounded fear and whether the Tribunal failed to discuss Sri Lankan politics. (c) Whether the Tribunal took into account and placed too much weight on an irrelevant consideration, namely, the first appellant's lack of knowledge about the 2003 election and whether the Tribunal failed to take into account relevant considerations, namely the fact that elections were held in 2000, 2001 and 2004. The Notice of Appeal filed in this Court restated these three grounds, and the written contentions filed by the appellants in this Court were in the same terms as those filed in the Federal Magistrates Court. Thus, in substance, the appellants contended that the learned Federal Magistrate had erred in not finding jurisdictional error. This jurisdictional error was said to arise in the three ways referred to in [6] above. These three contentions, referred to below as 'grounds', are discussed below. The Federal Magistrate held that no question of state protection arose. I agree. The Tribunal did not accept that the first appellant faced a real change of persecution for a Convention reason. The first respondent submitted that no error attended her Honour's approach to this issue. In the absence of a finding that an applicant for a protection visa has a well-founded fear of being persecuted for a Convention reason, there is no need to proceed to the question whether the applicant is unable or unwilling to avail himself of the protection of his country of nationality (or, if without nationality, the country of his former habitual residence. ) Accordingly, this ground fails. No relevant error is disclosed. The appellants submitted that this disclosed error, because "it is well documented that politics in Sri Lanka is continuously marred by violence, particularly during election time". The Federal Magistrate noted that the Tribunal did not rely on the degree of state protection in coming to its conclusion that the first appellant did not face a real chance of persecution. This is correct. The Tribunal's findings are substantially to the effect that the first appellant did not have a significant involvement in politics in Sri Lanka, and for this reason did not face a real chance of persecution. Further, it is plain enough from the Tribunal's reasons that it did in fact have regard to country information that described the political situation in Sri Lanka, but that the first appellant failed because of the Tribunal's assessment of the evidence and the first appellant's credibility. In the circumstances, it was unnecessary for the Tribunal to enter into a discussion of state protection and Sri Lankan politics during election times as urged by the appellants. This ground also fails. No error of the kind alleged is disclosed. The appellants also stated that the fact the first appellant had mistakenly said 2003 instead of 2004 should not be fatal to his case. The Federal Magistrate found that this submission went to the merits of the protection visa application and that it was for the Tribunal to assess the facts before it, and to weigh the various items of evidence before it. I agree with her Honour in this regard. It was clearly open to the Tribunal to conclude that the first appellant's involvement in politics was minor and not relevantly significant, having regard, amongst other things, to his mistake about there being a general election in 2003. This ground also fails. No jurisdictional error is therefore disclosed in the Tribunal's decision and no error is revealed in the Federal Magistrate's judgment. For these reasons, I dismissed the appeal. The appellants should pay the first respondent's costs of the appeal. I indicated at the hearing that I would fix these costs, but, upon reflection, I consider that the preferable course is to order that the appellants pay the first respondent's costs of the appeal, leaving the quantum to be agreed or fixed by a taxing officer. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | appeal against federal magistrates court appeal dismissed migration |
2 His Honour dismissed an application for review of a decision of the Migration Review Tribunal (the Tribunal) signed on 28 November 2006, and handed down on 22 December 2006 affirming a decision of a delegate of the Minister not to grant to the applicant an Extended Eligibility (Temporary) (Class TK) visa or a General (Residence) (Class AS) visa. 3 An extension of time is required because a Notice of Appeal was not filed and served within the time limit by O 52 r 15. The application for extension of time was filed on 5 September 2007, nearly four months after the decision in the Federal Magistrates Court. 4 An explanation for the delay appears from the fact that on 7 June 2007, a Mr Toufic Laba Sarkis, who was advising Mr Reddy, wrote to the Mr Kevin Andrews MP, the Minister, and, on 24 July 2007, wrote a further letter to the Minister. His previous Federal Court application ws remitted to the Tribunal and due to illness and unforeseen fear the applicant and his wife did not attend the last interview by the Tribunal. They sought the advice of a reputable solicitor, Christopher Livingstone & Associates, and they did not have the amount of $11,500 to meet his costs therefore a decision was made by his daughter-in-law, Susan Reddy, to appear before His honour and His Honour could not see an error of law. At the time of lodging a spouse visa the applicant had the opportunity to lodge an application under family category but as his relationship with his wife was and continues to be genuine he decided to go ahead with the spouse visa. He has no one to go back to in Fiji. And I feel that using your discretion in this matter would lead his wife, his children and grandchildren to be happy as they cannot imagine being separated from him. The applicant's application was previously returned to MRT as the Government Solicitor agreed that an error of law was established. He is the only person of the Reddy family who is not allowed to stay in Australia. Mr Reddy has the love and support of his Australian wife, his Australian children and grandchildren and he has absolutely no immediate family outside Australia. And his age would not lead him to tolerate a separation for an unknown period of time in Fiji, a country which he left many years ago. I am replying to you directly as Mr Sarkis is not a registered migration agent. However, the additional information provided, in combination with the information known previously, does not bring the case within the ambit of the Minister's guidelines for consideration and accordingly it has not been referred to the Minister. You should now contact the nearest regional office of this Department to discuss your status in Australia. No doubt Mr Sarkis was well meaning, but in some respects, the advice has been simply wrong. Mr Reddy has been placed in a very difficult position. 10 I am satisfied that an explanation has been offered for the delay in filing a Notice of Appeal. No prejudice to the Minister by the delay has been suggested. In my judgment, an extension of time should be granted, unless the foreshadowed appeal has no prospect of success. 11 The consideration of that aspect of the matter requires some reference to the history of Mr Reddy's application. The delegate decided to refuse to grant the visa on 23 July 2002. The Tribunal (differently constituted) affirmed the Department's decision to refuse the visa on 14 April 2004. On 22 March 2006, the Federal Magistrates Court made orders by consent in the nature of certiorari to quash the decision of the Tribunal dated 14 April 2004. The Matter was remitted to the Tribunal for reconsideration. The applicant was invited to provide any documents or written arguments he wished the Tribunal to consider which he had not already provided. The applicant did not provide any further material. The hearing was scheduled for 1 August 2006. The Tribunal rescheduled the hearing to 2 August 2006 and the applicant was duly notified of the rescheduled date. Mr Laba Sarkis acknowledged receiving the letter inviting the applicant to attend the hearing on 2 August 2006. Mr Laba Sarkis requested that the Tribunal consider the material before it and advise of any adverse information in writing. Mr Laba Sarkis stated that "at this stage they are not comfortable to come again to the hearing on 1 August 2006". The Tribunal advised her that it would require a medical certificate to confirm that the applicant was unable to attend the hearing. A medical certificate was faxed to the Tribunal later the same day stating that the applicant was suffering from a medical condition and that will be unfit for work up to and including 2 August 2006. The applicant failed to respond to the hearing invitation notice. The Tribunal telephoned the applicant's authorised recipient on 30 August 2006 and inquired whether the applicant would be attending the hearing scheduled for 5 September 2006. Mr Laba Sarkis informed the Tribunal that the applicant did not wish to attend that hearing as "he is old" . (Emphasis added). On 31 August 2006, the Tribunal received a letter from the applicant's daughter in law. She informed the Tribunal that the applicant and the sponsor were not willing to attend the hearing scheduled for 5 September 2006. Ms Reddy stated that the applicant and his wife were not happy or comfortable attending the hearing and that they requested that the Tribunal consider their matter and forward any requests that the Tribunal may have in writing. (Emphasis added). The applicant failed to attend the hearing scheduled for 5 September 2006. In particular, the Tribunal requested specific information that went to the question of whether the applicant is in a spousal relationship with the sponsor at the time of decision. They commenced living together in October 1998 and were married in Australia on 20 March 1999. I called Mr Sarkis and was advised by him that the applicant did not wish to attend the hearing as he is old. I advised him that the member is unable to make a favourable decision and has requested their presence at a hearing to discuss the issues relating to the case. He then said that a lot of Members ask too many silly questions that have no bearing on the case, such as who likes tea or coffee. I advised him that i wasn't going to get into a discussion about this and that if he had any concerns he should put them in writing and i would bring the matter to the members attention. (Emphasis added). Had the Tribunal proceeded to make a decision on the basis of the material then before it, and in the circumstance that Mr Reddy had not appeared "to discuss the issues relating to the case," there would be no basis for Mr Reddy to allege jurisdictional error in that decision. 16 However, that did not happen. As earlier indicated, the Tribunal wrote to Mr Reddy on 15 September 2006 inviting him to provide further information. The Tribunal also does not say that if further information is received, will make a decision on that material without any further communication with or hearing with Mr Reddy. 21 On 24 October 2006, the Tribunal, in response was provided with the material earlier set out. 22 Without any further communication to Mr Reddy, and, in particular, without any discussion with him about the further extensive material that he had provided, the Tribunal proceeded to make its decision. 23 The Tribunal concluded that it was not satisfied on the basis of the material before it that the applicant was, at the time of the decision, the spouse of the sponsor in the meaning of regulation 1.15A of the Regulations. There is no evidence before the Tribunal to raise any issue as to the validity of the marriage for the purposes of the Marriage Act. The Tribunal finds that at the time of application for the visa, and at the time of his decision, the visa applicant and sponsor were and remain married to each other under a marriage that is recognised as valid for the purposes of the Act. They therefore satisfy the requirements of r.1.15A(1A)(a) for a married relationship. Accordingly, they do not satisfy the requirements of r.1.15A(1A)(b)(iii) for a married relationship. The finding of fact seems improbable and unjust. However, the making of a wrong finding of fact does not constitute jurisdictional error. 27 I am satisfied that it is arguable there has been jurisdictional error in the Tribunal proceeding to a conclusion without any later communication with, or any invitation to a hearing with, Mr Reddy in the light of the invitation to provide further material and the contents of the letter of 15 September 2006. 28 The failure of Mr Reddy to attend the scheduled hearing on 5 September 2006, with the consequence that the information provided prior to that date remains unexplained by him, arguably does not continue to have application when the Tribunal has sought further information, and the applicant in good faith has supplied that further information. 29 I am not satisfied that an appeal against the decision of the Tribunal for jurisdictional error would be doomed to fail. I propose to grant an extension of time in which to appeal until 21 December 2007, so as to permit Mr Reddy to obtain proper advice concerning his appeal. 30 I propose to direct that any Notice of Appeal on which Mr Reddy wishes to rely should be filed and served by 21 December 2007. 31 Notwithstanding the extension of time was opposed by the Minister, Mr Reddy required the indulgence of the Court for an extension of time. 32 It is appropriate in those circumstances that there be no order as to costs of the application for an extension of time to file a Notice of Appeal from the judgment of Scarlett FM given on 10 May 2007. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Acting Chief Justice Spender. | application for leave to file and serve notice of appeal whether special reasons for granting leave consideration of further invitation to provide information to refugee review tribunal where appeal not without merit and leave granted practice and procedure |
In that judgment, I dismissed the application by the applicant. Pursuant to the Court's broad discretion as to costs, and following the general principle that costs follow the event, I ordered that the applicant pay the costs of the respondents. 2 Subsequent to delivery of that judgment, the first respondent made an application seeking costs from the applicant on an indemnity basis. The second respondent did not seek such an order. I granted the applicant and first respondent some time to file and serve submissions as to whether the applicant should pay indemnity costs to the first respondent. 3 The applicant submits that it should not have to pay the costs of the first respondent on an indemnity basis. The applicant goes further and, without leave to file submissions on this point and despite the Court's order on 21 August 2008, argues that it should not have to pay any costs. 4 To support its position, the applicant makes several arguments. Most of these arguments relate to the conduct of the case and, in my view, to a large extent simply seek to canvass for a second time the merits of the dispute. By way of example, the applicant submits: that the respondents did not "come to the Court with clean hands"; that there was inadequate disclosure of certain information, and in particular information relating to Australian Business Numbers; that it has suffered and will continue to suffer considerable loss; that the second respondent has breached s 153 of the Corporations Act 2001 (Cth); that the respondents' pleadings were inadequate; and that there was late filing of relevant documents and/or non-compliance with orders of the Court. 5 I have considered the arguments advanced on behalf of the applicant. They are not sufficient to warrant variation of the order made on 21 August 2008. It is also my view that the applicant's arguments do not have sufficient force to displace the general principle which led me to the conclusion on the last occasion that discretion should be exercised to require the applicant to pay the costs of the respondents. 6 In relation to the first respondent's application for indemnity costs, I note that the first respondent made an offer of compromise, which it filed and served on 28 April 2008. The content of that offer was that judgment would be entered for the first respondent and the first respondent would not seek its costs in the proceeding. In the present case, I am satisfied that such an offer was reasonable. As is evident from my earlier judgment, the case advanced by the applicant was ultimately unsuccessful, the arguments which they advanced as to agency and liability were clearly untenable, and the order of the Court was less favourable to the applicant than those offered to it by the first respondent on 28 April 2008. In the present circumstances --- having regard to s 43 of the Federal Court of Australia Act 1976 (Cth), O 23 r 11 of the Federal Court Rules , and the relevant authorities on this point (see Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 ; Dukemaster Pty Ltd v Bluehive Pty Limited [2003] FCAFC 1 ; Brother Industries, Ltd v Dynamic Supplies Pty Ltd [2008] FCA 126) --- I am of the view that making the orders sought by the first respondent is appropriate. 7 Accordingly, I order that: (i) the applicant pay the costs of the first respondent on a solicitor/client basis as taxed or agreed from and including the date of 29 April 2008; (ii) the applicant pay the costs of the first respondent on a party/party basis as taxed or agreed up to and including the date of 28 April 2008; (iii) the applicant pay the costs of the second respondent on a party/party basis as taxed or agreed; and (iv) the applicant pay the costs of the respondents of this costs application on a party/party basis as taxed or agreed. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | indemnity costs sought by first respondent offer of compromise rejected whether offer reasonable and more favourable than final orders. costs |
So far his case has received attention by a delegate of the Minister, by the Refugee Review Tribunal ('the RRT') (three times) and by the Federal Magistrates Court of Australia ('the FMCA'). Apparently there were procedural errors made in connection with the first two decisions of the RRT because each was set aside by consent and remitted for further hearing. On each occasion the RRT affirmed the decision of the delegate but it is only the last decision that is now relevant. 2 In order to secure yet another consideration of his case by the RRT the appellant must show that the RRT made a jurisdictional error which provides grounds to set its decision aside. He failed to persuade the FMCA that a jurisdictional error had been made. 3 One of the appellant's claims for a protection visa is that if he is returned to Yemen he will be persecuted by the sheik of a particular tribe and his family because the appellant's uncle had a sexual relationship with the sheik's daughter and later the uncle, when the subject of a revenge attack, killed one of the sheik's sons and another man. The appellant claims that his father was later arrested by another son of the sheik (head of the police department) and was killed in custody. The appellant says that he also was apprehended when he returned to Yemen after hearing of the death of his father but escaped and fled again to Australia where he had for some months resided as the holder of a student visa. 4 Apart from fearing that his life would be taken in revenge for the death of the sheik's son the appellant also claimed to fear persecution due to the inferior ('haik' or servant) status of his family. 5 Originally, the appellant's claims rested on his stated fear of retribution for the conduct of his uncle. As a result of an altercation the applicant's uncle killed the Sheik's son and this led to a blood feud between the two families. I do not accept that there has been any information put forward to support a finding that the reason for the altercation was related to the political or religious beliefs of the participants nor related to their ethnicity or nationality. I consider that there is no Convention category that can be regarded as the essential and significant reasons for any future mistreatment of the applicant or his family members. Rather, I consider the essential and significant reason to be that the Al Khabani tribe was seeking the applicant's uncle because of his relationship with the Sheik's daughter. Both the applicant's claims and country information regarding blood feuds makes it clear that the reason the applicant's uncle was being pursued, and in turn the family of the applicant's uncle, is because of the perceived offence, not the applicant's uncle's political religious views, his ethnicity nor nationality. For the purposes of establishing whether the applicant has a well founded fear of persecution in Yemen, pursuant to S91S and given my findings above, I must disregard the harm feared or suffered by the applicant and his family members in relation to the alleged blood feud. I make this finding because it is my opinion that this blood feud, which the applicant fears may result in harm to himself, is motivated for a non-Convention reason, that being the perceived offences committed by the applicant's uncle. He stated at interview that his mother and sisters are not at risk of harm because they are female and his brother is only four years old. The applicant claims he returned to Yemen in May 2001 and was arrested on 2 July 2001 but managed to escape from prison on 22 August 2001 and fled Yemen. I have some concerns about aspects of the applicant's story regarding the blood feud and serious concerns about his claimed arrest and method of escape from prison in Yemen as well as the authenticity of the documentation provided. In any case, pursuant to S91R and S91S I find that the applicant does not have a real chance of Convention related persecution in Yemen. His claim contained additional aspects. In that sense the applicant's uncle was himself the subject of persecution for a Convention reason: membership of a particular social group. Had the applicant been from an equal or higher caste, the Al Khabanis would have tried to arrange a marriage. When it comes to blood feuds and questions of honour, there is no rule that adultery is always punishable by death. If the man who has a relationship with an unmarried girl is considered a good match, there would be no reason to kill him and destroy the girl's life. The fact that the relationship began prior to the couple being married would be forgotten. There would have been no need for revenge to be exacted on the whole family. Even after the murders of the members of the Al Khabani family, if the applicant's family was rich or influential he would not have been at risk of persecution because the Al Khabanis would have been scared to do anything or the Al Azzanis could have bought their way out. While the loss of honour is a significant issue, whether the person is a tribesman or not, we submit that the sheikh would not have attempted to kill the applicant's uncle if he were not an al haik. Were the offender (the applicant's uncle) a tribesman the sheikh and his daughter's lost honour could have been recovered through marriage or through material compensation (money, cattle, etc). Because the uncle and the applicant are considered inferior --- racially and socially --- the sheikh could not accept either marriage or compensation. As such, the punishment given to his family would not have amounted to persecution. Therefore, the essential and significant reasons for the persecution are Convention related. His Honour erred in not finding that the Refugee Review Tribunal ("the Tribunal") misunderstood or misconstrued a criterion under s36 of the Migration Act 1958 about which it had to be satisfied for the purposes of s65 or failed to consider the case as put or an issue going directly to the question whether that criterion was satisfied or a central element of the applicant's claim. His Honour erred in not finding that the Tribunal failed to consider and failed to make findings expressly, impliedly or at all upon the seminal issue and claim of the uncle's illicit affair with the sheikh's daughter and the claim of the uncle's persecution for reasons of membership of a particular social group (ie lower caste or tribe) and thus the risk of harm to the applicant by reason of his being a family member of his uncle's family. Counsel for the appellant argued that this demonstrated that the RRT overlooked the significance of the issue. The argument proceeds, in the written submissions, from that foundation to suggest that the RRT might, if it had dealt with the issue, have taken a 'more flexible and liberal view of what it perceived as fatal flaws in the Appellant's story'. In a similar vein counsel submitted orally that the RRT, if it had addressed the question of the illicit affair directly 'could have looked at what happened later in a different light'. 11 There can be no doubt that the RRT was aware of the claimed foundation for the appellant's fear of persecution. The Applicant replied that he feared two main threats. First, he feared being killed for revenge, for the shame that his uncle had brought upon his tribe. Second, as a haik , he would be subject to insults and degrading behaviour. His uncle had an illicit affair with the daughter of the local sheikh, and killed the sheikh's son and another person in an ensuing gunfight. The sheikh's eldest son imprisoned and killed the Applicant's father. On his return to Yemen, the Applicant too was imprisoned, but managed to escape. He fears prospective harm because of his membership of his uncle's family. He states that the harm he fears also arises because of his membership of a particular social group (eg. The Haik, a servant class):- the dispute would be amenable to a monetary or other negotiated settlement if it were not for the fact of the Applicant's inferior social standing as a member of this group. He also contends that, even if the Tribunal were not satisfied that such harm is Convention-related, the fact that the local authorities consist of the rival tribe means that they would deny him protection from such harm as might befall him, because of his inferior social standing. It may be that some evidence is irrelevant to the criteria and some contentions misconceived. Moreover, there is a distinction between the Tribunal failing to advert to evidence which, if accepted, might have led it to make a different finding of fact (cf Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at [87] - [97] ) and a failure by the Tribunal to address a contention which, if accepted, might establish that the applicant had a well-founded fear of persecution for a Convention reason. The Tribunal is not a court. It is an administrative body operating in an environment which requires the expeditious determination of a high volume of applications. Each of the applications it decides is, of course, of great importance. Some of its decisions may literally be life and death decisions for the applicant. Nevertheless, it is an administrative body and not a court and its reasons are not to be scrutinised "with an eye keenly attuned to error". Nor is it necessarily required to provide reasons of the kind that might be expected of a court of law. But that is an inference not too readily to be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point. It may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality or because there is a factual premise upon which a contention rests which has been rejected. Where however there is an issue raised by the evidence advanced on behalf of an applicant and contentions made by the applicant and that issue, if resolved one way, would be dispositive of the Tribunal's review of the delegate's decision, a failure to deal with it in the published reasons may raise a strong inference that it has been overlooked. The RRT did not believe the appellant in important respects. It did not accept either the account of his father's death or that the appellant himself had been arrested, detained or suffered any harm on his return to Yemen. The Tribunal also does not accept that the Applicant was subject to any harm --- beatings, attempted sexual assault or anything else --- whilst in custody or in any other circumstances. This finding made it unnecessary to decide whether, if such harm had occurred, it would establish persecution within the meaning of the Convention. for the essential and significant reason of his membership of a particular social group (whether his uncle's family, or a group such as Haiks), his political opinion (being imputed opposition to the sheikh's local domination or the tribal values on which it was said to rest) or any other Convention ground. The illicit affair had no independent significance at this point in light of the RRT's rejection of the allegations of harm. Any question about whether the illicit affair had actually occurred was subsumed in more general findings. It was unnecessary to make any findings about it at this point at least. 17 The RRT then went on to give consideration to the claim of fear of future persecution. In his protection visa application, the Applicant referred only to the particular incidents involving his uncle and father, asserting that the sheikh's eldest son had sworn to take revenge on all members of the Applicant's family. At the first Tribunal hearing, he alluded to his tribe not being on the "same level" as that of the sheikh. It was his current adviser's contention that in this comment lay the germ of a more sustained claim, namely that the Applicant was being targeted not merely for his membership of his family (which would be affected by the operation of s.91S of the Act), but that he was a member of particular social group and that he faced both past and prospective harm for reason of his membership of that group. As most recently advanced the appellant's contentions did not rest entirely on fear of revenge for his uncle's behaviour but included the proposition that the appellant would be persecuted nevertheless because he was a member of a distinct social group. This claim was rejected. Whatever might be said about that issue it could not assist the appellant. When the RRT rejected the additional factual element of the alleged inferior status of the appellant's family it became impossible to sustain a claim for a protection visa on the suggestion of a 'blood feud' for the reasons given by the delegate. It is not satisfied that the Applicant has suffered past harm, let alone persecutory harm, in Yemen for reasons of his race, (putative) particular social group, political opinion or any reason at all. On the totality of the material before it, the Tribunal does not accept that there are any other factors --- including membership of any particular social group --- to indicate that he faces a real chance of prospective persecution. The Tribunal is therefore not satisfied that he has a well-founded fear of persecution for a Convention reason, now or in the reasonably foreseeable future, if he returns to Yemen. He is not a refugee. There is no basis to conclude that any relevant factor was overlooked by the RRT. 22 The conclusions I have reached accord with those reached by the FMCA. As no error in the decision of the FMCA has been established and I see no jurisdictional error in the decision of the RRT, the appeal must be dismissed. It is appropriate to dismiss it with costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | whether the refugee review tribunal need deal expressly with every issue findings about a particular matter may be unnecessary because that matter may have been subsumed in findings of a greater generality or because a factual premise on which the contention rests has been rejected migration |
Costs. The subject matter of those patents will hereinafter be referred to collectively as the "invention". Each patent is derived from patent application No 85236/91 filed on 30 August 1991. The patents were sealed on 27 October 2005 and issued in the names of George Stack ("Stack") and Alan Grieves ("Grieves") who are said to have been the inventors. It is pleaded that upon grant, Stack and Grieves held each patent on trust for GST. In any event the patents have subsequently been assigned to GST, such assignments being registered on 29 November 2005. I infer that the patents date from the date of filing of the complete specification (s 65 of the Act) and that such date was 30 August 1991. It is alleged that between 1994 and 2006 the Council installed, or caused to be installed a large number of water meter assemblies and that such conduct amounted to exploitation of the invention for the services of the State of Queensland (the "State") within the meaning of subs 163(1) of the Act. The (Council) says that (GST) is thereby estopped per rem judicatam from re-litigating the same cause of action. I will refer to those proceedings as the "previous proceedings". There were other associated proceedings, primarily action No QG 21 of 1996. Exhibit 12 to the affidavit of Joanne Francis Whiting filed on 1 November 2006 is a copy of the further amended and consolidated statement of claim as against the Council and the State in the previous proceedings. The Council submits that those proceedings were for relief similar to that presently sought and relating to the same invention, and that they were resolved in its favour. It claims that GST seeks, in these proceedings, to re-litigate 'one of the causes of action in respect of which judgment was given by Cooper J in favour of the (Council) on 30 March 2004 and against which there has been no appeal. ' This is said to give rise to a defence of the kind commonly described as 'res judicata'. On that basis the Council seeks dismissal of the proceedings pursuant to s 31A of the Federal Court Act and/or O 20 r 2 of the Rules. 8 Resolution of the issues raised on the motion requires a detailed examination of the statement of claim in the previous proceedings, the disposition of those proceedings by Cooper J, the present statement of claim and the structure of the Patents Act , particularly as it concerns Crown exploitation of inventions. The expression "nominated person" as used in the Act means 'the person identified in a patent request as the person to whom the patent is to be granted. ' As I understand it, Stack claimed to be the sole inventor of the relevant inventions. GST claimed as assignee from Stack although it may also have been suggested that GST was entitled to the original grant. The applicants pleaded that the Council was a person authorized to exploit inventions pursuant to s 163 of the Patents Act and that it had authorized various persons to exploit the inventions contained in petty patents 645740 and 662284 and in 'the Applications for Patents concerning water meter assemblies PK 2036; PK 5286 (filed 26 March 1991); 85236/91 (filed 30 August 1991) (PCTAU 91/00404); and number 44897/93, giving rise to divisional patents 645740 and 662284' . 10 As far as I can see, the Council defended the proceedings upon the basis of its further amended defence and cross-claim filed on 4 August 1997 (ex JFW 10 to Ms Whiting's affidavit), notwithstanding the fact that such pleading was delivered prior to the further amended and consolidated statement of claim filed on 6 October 1997. Although, in that document, the applicants relied upon two patents, the Council's defence related only to patent 645740 (the "previous patent"). It seems that the previous proceedings originally concerned the previous patent, whilst action No QG 21 of 1996 involved a similar claim based on petty patent 662284. See Stack v Brisbane City Council [2004] FCA 354 at [13] - [15] . Both petty patents were based upon patent application 85236/91 which, in turn, was based upon two provisional applications, PK 2036 and PK 5286. Consolidation was granted. However the trial which followed was, as Cooper J held, only concerned with the previous patent. It seems that for present purposes only the previous patent and application 85236/91 are relevant. 12 The Council denied the validity of the previous patent and denied that it had exploited, or would exploit the alleged invention. This latter allegation appears to have involved a denial that the relevant water meter assemblies were within any claim in the previous patent. By its cross-claim the Council sought revocation of the previous patent. Its grounds were said to appear in particulars of objection which do not appear in Ms Whiting's affidavit. However the grounds ventilated at the trial appear from the reasons for judgment ( Stack v Brisbane City Council [1999] FCA 1279) and from the reasons of the Full Court ( Stack v Davies Shephard Pty Ltd & Ors [2001] FCA 501). One ground of invalidity was that neither Stack nor GST was entitled to the patent because Stack was not the sole inventor. 13 Following the trial, on 15 September 1999, his Honour declared that Stack was not, at any material time, entitled to the grant of a patent based upon provisional specification PK 2036 or upon application 85236/91. His Honour further declared that Stack was not entitled to the grant to him of petty patent 645740, and that GST (who claimed through Stack) was also not so entitled. Such declarations were based upon his Honour's finding that Stack and Grieves were joint inventors of the relevant invention, and that it was not competent for one of two co-inventors to apply for and obtain a patent. His Honour also concluded that both Stack and Grieves had, at the relevant time, been employed by a company, Russell Plastics Pty Ltd, and that they had performed the invention in the course of such employment, so that neither Stack nor Grieves individually, nor Stack and Grieves jointly, was or were entitled to apply for, or receive, the previous patent. As GST's claim depended upon Stack's claim, it also failed. On appeal the Full Court took a different view as to the effect of Stack and Grieves' employment by Russell Plastics but upheld the finding that Stack, alone, and therefore GST, was not entitled to the previous patent. 14 The matter again came before Cooper J on 10 May 2000. On that occasion his Honour ordered that the previous patent be revoked and that the remaining proceedings be adjourned to a date to be fixed. On 30 March 2004 Cooper J ordered that the previous proceedings be dismissed, save for outstanding claims for breach of copyright, breach of contract and breach of confidence. Other proceedings, including action No QG 21 of 1996 were also dismissed. The applicants in that action sought to continue those proceedings in connection with petty patent 662284. His Honour concluded that his decision in the previous proceedings raised an issue estoppel which would prevent the applicants in action No QG 21 of 1996 from succeeding in their claims. The relevant issue was the entitlement of Stack, alone, to a patent based on provisional specifications PK 2036 and PK 5286 and on applications 85236/91 and 44897/93. His Honour dismissed the proceedings but declined to revoke petty patent 662284 on the ground that nobody had sought such relief. They are patents 708782, 781173 and 781174, all of which appear to be based upon application 85236/91 filed on 30 August 1991. The previous patent was also derived from that application. I was told that following the proceedings before Cooper J, application 85236/91 was amended to identify Grieves and Stack as joint inventors. The current patents were subsequently issued in their joint names. Those patents have now been transferred to GST. There is no doubt that the invention is the same as that which was the subject of the previous proceedings. GST alleges that the Council has installed, or caused to be installed, numerous water meter assemblies 'in circumstances which amount to the exploitation of the invention for the services of the State of Queensland within the meaning of section 163(1) of the (Act) . ' It then alleges that the Council failed to notify it 'or the nominated person' pursuant to s 164. The expression "nominated person" is not otherwise used in the current statement of claim. It may be that the reference was inadvertently carried over from the previous proceedings, or it may be that it was intended to reflect the fact that some of the alleged exploitation occurred prior to the grant of the current patents. However the identity of the nominated person is not pleaded. It operates in the context of an Act which authorizes and regulates the grant of statutory monopolies to inventors. I infer that the three presently relevant patents are dated 30 August 1991, the date of filing of application 85236/91. Thus, subject to specific statutory exceptions, any exploitation since that date would infringe GST's patents. The patentee would be entitled to relief pursuant to s 122 of the Act. 18 The Act binds the Crown (s 11), but ss 162 and 163 provide that use by the Commonwealth or a State, a person authorized by, or any authority of, the Commonwealth or a State is not an infringement of either 'the nominated person's rights in the invention' (when a patent application is pending) or, if the patent has been granted, of the patent. Section 164 requires that any such exploitation be reported to the applicant and nominated person or patentee. Section 165 provides for agreement between the exploiting party and the nominated person or patentee as to the terms of such exploitation, including remuneration for such exploitation. In the absence of any agreement the terms are to be as determined by a prescribed court 'on the application of either party' . Although the section expressly confers power to fix such terms, it does not expressly confer power to determine any other matter arising between the parties such as whether there has been exploitation of an invention and whether a patent is valid. On the other hand s 169 authorizes a patentee to apply to a court for a declaration that a patent has been exploited pursuant to s163. In such proceedings the exploiting authority may counter-claim for revocation, raising the question of validity. The invention in those proceedings was that disclosed in the previous patent, based on application 85236/91. The exploitation is said to have occurred from 30 August 1991. ' It is true that the application seeks remuneration 'which ... has accrued since 30 August 1991' . However, in the statement of claim, it is alleged that the Council has exploited the invention since 1994. GST also relies upon the fact that Grieves was not a party to the previous proceedings. Issue estoppel is not raised. His Honour expressed the rule as to res judicata by saying: "where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based on the principles expressed in the maxims 'interest reipublicae ut sit finis litium' and 'nemo debet bis vexari pro eadem causa. ' " His Honour went on to discuss issue estoppel, citing the comment of Dixon J. in Blair v. Curran ...: "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or other privies. The fact that there are some other causes of action yet to be litigated in that action does not change the status of the judgment; a fortiori given the Court's separation of issues, by order, in the earlier proceedings. The relevant cause of action was pursued against the present Respondent. Other causes of action were pursued against other respondents. The Council's submission is that the question of GST's entitlement to remuneration for such exploitation was determined against it in the previous proceedings. This submission seems to depend upon the proposition that a patentee's rights pursuant to Ch 17 are derived from the "invention" rather than from the relevant patent. The chapter certainly contemplates exploitation of an invention prior to grant of a patent and the fixing of the terms for such exploitation, including remuneration. In the course of argument the parties identified numerous difficulties in understanding the operation of the chapter. In the end, they may not matter for present purposes, but I will set out my understanding of the chapter and say a little about comparable legislation in the United Kingdom. See the decision of the High Court in N V Philips Gloeilampenfabrieken & Anor v Mirabella International Pty Ltd [1995] HCA 15 ; (1995) 183 CLR 655. Other requirements of the Act must also be satisfied. The inclusion in the definition of an 'alleged' invention is also relevant. It is arguable that s 165 contemplates remuneration for exploitation of an invention which is not patentable. However such an interpretation seems unlikely. The notion of remuneration for exploitation implies some recognizable "right" in the invention which is protected or recognized by the Act. An applicant may, prior to grant, have a right to such grant and a right to assign, but it is difficult to see how Crown use could, absent s 161, "infringe" such rights. The primary rights conferred by the Act are those conferred by s 13 and supporting sections such as those contained in Ch 11. Those rights are conferred upon patentees. If an applicant has, prior to grant, any rights in connection with exploitation of the invention, they are inchoate. Infringement before grant may be actionable after grant because the patent will probably have retrospective effect pursuant to ss 47 and 39. As the Act confers no rights in connection with the exploitation of a non-patentable invention, it seems unlikely that s 165 does so. Of course the parties may agree terms of exploitation upon a mistaken belief as to the patentability of an invention, but this case concerns legal rights and obligations, not freedom of contract. 29 As I have pointed out, the section does not expressly confer power to determine whether a patent is valid or whether an application is likely to result in a valid grant. Nor does it expressly authorize an enquiry as to whether there has been exploitation of an invention. This suggests that it assumes acceptance by the parties of the validity of any patent or anticipated patent and that the relevant authority's conduct or proposed conduct amounts, or will amount to exploitation. On the other hand s 169 empowers a patentee (but not an applicant) to apply for a declaration as to exploitation and an exploiting authority to counter-claim for revocation. 30 Whilst it would be impossible for anybody to commence proceedings concerning the validity of a patent in advance of grant, it would be possible to seek to determine entitlement to a grant. However proceedings of that kind would compromise the Commissioner's power and duty to grant patents and might lead to embarrassing results. Proceedings as to infringement in advance of grant might also pose problems. It is presumably for this reason that in a slightly different context, a declaration under Part 2 of Ch 11 may not be made prior to grant (s 126(1)). 31 The United Kingdom legislation concerning Crown use has never been in precisely the same form as Ch 17, but the two schemes have historical similarities. The history of the relevant aspects of the United Kingdom legislation appears from various editions of Terrell on the Law of Patents . Prior to the Patents, Designs and Trademarks Act 1883-1888 (Imp) the Crown could exploit an invention without consent and without remuneration, although an ex gratia payment was often made. In the 4 th edition of Terrell at 15, the author observes that s 27 of the 1883 Act provided for Crown use of an invention 'for the services of the Crown on such terms as may, either before or after the use thereof, be agreed on, with the approval of the treasury. ' Such use could occur at any time after application. 32 As appears from the 6 th edition of Terrell , by 1919, s 29 of the Patents and Designs Acts 1907 (Imp) provided that disputes '... as to the making, use or exercise of an invention under this section, or the terms therefor, or as to the existence or scope of any record or trial as aforesaid ... shall be referred to the court for decision ...' It was further provided that the court might 'with the consent of the parties, take into consideration the validity of the patent for the purposes only of the reference and for the determination of the issues between the applicant and such Government department. It does not give the patentee the right to insist on the question of validity being determined by the Court ... if the Crown does not admit validity, and the Crown may still maintain the attitude adopted by the Treasury in the past that nothing is payable by the Crown for the user of an invention, the validity or infringement of which is not admitted. In 1919 there were still difficulties in taking proceedings against the Crown. The author observes that Sargant J suggested that a patentee might proceed by petition of right for a declaration as to validity. It seems that this practice was adopted. Thus, by 1921 (the date of publication of the 6 th edition of Terrell ), the United Kingdom system provided for exploitation by the Crown after application and before grant. Any dispute as to exploitation or terms could be referred to the court. The court might consider validity if the parties agreed. If not, a patentee might apply for declaratory relief. In such proceedings disputes as to exploitation might also be considered. There is no suggestion that an applicant could seek to establish the validity of a claim to a patent in advance of grant. 35 The historical provisions in the legislation of the United Kingdom concerning the fixing of compensation prior to grant appear to have created problems which have been progressively remedied. They are discussed in successive editions of Terrell . The present UK Patents Act (the 1977 Act) demonstrates steps which have been taken to deal with such problems. It is likely that some of the problems dealt with in these sections are avoided under the Australian system by excluding the fixing of terms for exploitation where the parties have not agreed as to validity or as to the fact of exploitation. 38 I conclude that s 165 authorizes the court to fix terms of exploitation but not to determine whether there has been exploitation of an invention or the validity of the patent. Section 169 authorizes the court to determine, on the application of a patentee, questions as to exploitation and, on a counter-claim, questions of validity. In the present case, the Council has consistently disputed validity and that it has exploited the invention. Terms of exploitation might only be fixed after recourse to s 169 (and therefore after grant), with the probability that the Council would counter-claim for revocation. IS RES JUDICATA AN AVAILABLE DEFENCE? Perhaps it was thought necessary to claim as nominated person because some exploitation occurred prior to grant. However, as far as I can see, all exploitation occurred after the date of the previous patent, assuming that such date was the date of filing of application 85236/91. Thus, assuming validity and exploitation, the patentee at the time of any such exploitation was entitled to remuneration in that capacity. 40 In the previous proceedings Cooper J determined that Stack was not entitled to a patent 'in consequence of the filing of application 85236/91' and therefore was not entitled to the grant of the previous patent. GST was also not entitled to a grant of that patent and took no valid patent as a result of the assignment by Stack of his invalid patent. Those determinations led to the conclusion that neither Stack nor GST had established a claim to remuneration for exploitation of the invention by the Council. Cooper J did not determine that neither of them was entitled, on any basis, to such remuneration. The grant of the current patents created new rights which are capable of enforcement. It is no answer to the assertion of those rights that the previous patent was invalid. To decline to enforce rights conferred by the current patents would be to ignore the statutory mandate for their grant. 41 To put the matter in a slightly different way, it might be said that in the previous proceedings it was determined that Stack was not individually entitled to a grant pursuant to application 85236/91, and that GST had not derived a valid patent from him. That says nothing concerning the entitlement of Stack and Grieves jointly, or GST claiming through them. Some support for this proposition is to be found in the decision of the Privy Council in Singh v Singh (1897) LR 24 Ind App 50. In that case, it was held that dismissal of a claim for want of a necessary plaintiff (a joint claimant) did not justify a plea of res judicata in subsequent proceedings by all necessary plaintiffs. That decision concerned procedural matters, namely the joinder of necessary parties. The decision in the previous proceedings was not based on procedural considerations but on the absence of substantive rights. Nonetheless any different result in the present case would mean that if Grieves were to claim, he could not join Stack as an applicant. Presumably, he might join him as a respondent and, in any event, would presumably hold the benefit of any judgment on trust for the two of them. Such an unlikely result suggests that the better view is that Stack would not be prevented from claiming with Grieves as joint applicants, and that GST may claim through them jointly. 42 There is another approach to the question which leads to the same result. It is necessary to refer to only three of them. In Mills v Cooper [1967] 2 QB 459 at 470, a divisional court considered a prosecution in which it was alleged that a particular person was a gypsy, that term being taken to mean, not a person of the Romany race, but a person leading a nomadic life with no fixed employment and with no fixed abode. The justices accordingly would not have been right in holding that the prosecution were not entitled to, or were estopped from asserting that the defendant was a gipsy [sic] on March 13, 1966, and from proving it if they can. In earlier proceedings in West Germany it had been held that the council was not authorized to represent the corporation. As to this, it has become common to distinguish between cause of action estoppel and issue estoppel. There is certainly no cause of action estoppel here. The question before the German court was whether the Council of Gera were the legal representatives of the Stiftung at one date. The question here is whether at a different date the solicitors had the authority of the Stiftung to raise this action. An answer, yes or no, to the first question does not necessarily imply a similar answer to the second. That judgment did create an estoppel as to one proposition --- but that estoppel cannot operate to establish by estoppel another proposition which follows from the former proposition only when that proposition is combined with others the establishment of which depends upon evidence or assumption. In the present case the finding that GST was not entitled to remuneration for exploitation at the time of the previous proceedings did not preclude the possibility that it might, at some later stage, derive such a right. This it did by obtaining the current patents. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. | estoppel by judgment res judicata issue estoppel cause of action estoppel exploitation crown exploitation crown use estoppel intellectual property |
4 The Mt Newman rail line comprises a single track standard gauge heavy haulage rail line from the Mt Whaleback mine in the Newman mining area to Nelson Point in Port Hedland, a distance of approximately 426 kilometres ('Mt Newman Railway Line'). The Goldsworthy rail line is comprised of a single track standard gauge heavy haulage rail line from the Yarrie rail head in the East Pilbara to Finucane Island at Port Hedland, a distance of approximately 210 kilometres ('Goldsworthy Railway Line'). The two rail lines intersect approximately 15 kilometres from Port Hedland. 5 The Mt Newman Railway Line is constructed on Crown land, known as the Mt Newman Rail Corridor. It is leased from the State of Western Australia by the participants in the unincorporated Mount Newman Joint Venture ('Mt Newman JV'), comprising BHP Billiton Minerals Pty Ltd ('BHPBM') 85%, Mitsui-Itochu Iron Pty Limited ('Mitsui') 10% and Itochu Minerals and Energy of Australia Pty Ltd ('Itochu') 5%. The Goldsworthy Railway Line is similarly constructed on Crown land, known as the Goldsworthy Rail Corridor, and is leased from the State of Western Australia by the participants in the unincorporated Mt Goldsworthy Mining Associates Joint Venture ('Goldsworthy JV'). The Goldsworthy JV comprises BHPBM 85%, Mitsui 7% and Itochu 8%. 6 BHPBIO operates both the Mt Newman Railway Line and the Goldsworthy Railway Line in its capacity as manager of the respective joint ventures. 7 BHPBIO also operates the two port facilities on opposite sides of Port Hedland harbour, Nelson Point and Finucane Island. The two facilities are connected by a 1.4 kilometre under-harbour tunnel conveyor belt. 8 Fortescue Metals Group Limited ('Fortescue') proposes to carry on the business of the mining, refining and sale of iron ore in the Pilbara region of Western Australia. Fortescue is an equal share participant with Consolidated Minerals Limited in the Pilbara Iron Ore Joint Venture ('PIO JV'). The PIO JV holds tenements at Mindy Mindy. 12 The Mt Newman Service does not include the use of any of the branch and spur lines of the Mt Newman Railway Line such as the Area C spur line, the Yandi spur line or any of the branch lines which run to the loadout facilities at any of the mines BHPBIO manages in the Pilbara. The Goldsworthy Service is limited to the length of the track running from the junction of the two lines to the port facilities at Finucane Island. It does not include the use of any part of the Goldsworthy Railway Line which runs to loadout facilities at any of the mines BHPBIO manages in the Pilbara. Fortescue indicated that it was willing to accept flexible arrangements and times for the running of its trains on both the Mt Newman and Goldsworthy Services and to work with BHPBIO to ensure that such access does not unduly interfere with or prejudice BHPBIO's existing operations. 15 In September 2004, the Council issued a preliminary issues paper, inviting submissions on two issues: first, whether to deal with the application as two separate applications in respect of the Mt Newman Service and the Goldsworthy Service; and second, whether the service to which Fortescue seeks access is a 'service' for the purposes of Part IIIA of the Act. 16 In November 2004, the Council published its statement of reasons in relation to the preliminary issues. The Council's decision in relation to the first preliminary issue, that the Access Application should be dealt with as two separate applications, is not in dispute for the purposes of these proceedings. In relation to the second preliminary issue, the Council considered that the service of the specified part of the Mt Newman Railway Line was a service to which Part IIIA of the Act applies and that the Council therefore had jurisdiction to further consider Fortescue's application with respect to the Mt Newman Service. The Council considered that the service of the specified part of the Goldsworthy Railway Line was not a service to which Part IIIA applies, that the 'production process' exception in s 44B did apply, and therefore that the Council had no jurisdiction to further consider Fortescue's application with respect to the Goldsworthy Service. 17 The Council then proceeded to consider the application under s 44G of the Act with respect to the Mt Newman Service only. Pursuant to s 44F(2)(b)(i) of the Act, the Council recommended to the designated Minister (relevantly, the Commonwealth Treasurer) on 22 March 2006 that the Mt Newman Service be declared. 18 Having received the Council's recommendation, the Treasurer had 60 days to decide whether to declare or not declare the service under s 44H of the Act. That 60 day decision period expired on 22 May 2006 without the Treasurer having either published the declaration or his decision not to declare the Mt Newman Service. As a result, the Treasurer was deemed to have decided not to declare the Mt Newman Service: s 44H(9). A declaration that the bulk iron ore rail track transportation services provided by the Mount Newman rail facility ( the Mt Newman rail track service ) as defined in Part 5.1 of the application ( the Access Application ) filed by the Second Respondent under s 44F(1) of Part IIIA of the Trade Practices Act 1974 (Cth) ( the Act ) and dated 11 June 2004 is not a service within the meaning of s 44B of the Act. Such further or other relief as this Honourable Court may deem appropriate. Such further or other relief as the Honourable Court deems appropriate. The Council has not recommended to the delegated Minister that the Goldsworthy Service be declared. No party suggested that this change in position of the Council impacted upon the relief sought by Fortescue, and the parties were content that I should proceed to determine the Western Australian Proceeding. Any person can apply to the Council asking that a particular service be declared: s 44F(1). On receipt of an application, the Council must tell the provider of the service that the Council has received the application, and must, after having regard to the objects of Part IIIA, make a recommendation to the designated Minister that the service be declared or not be declared: s 44F(2). Without limiting the grounds on which the Council may decide to recommend that the service be declared or not be declared, s 44F(4) specifically requires the Council to consider whether it would be economical for anyone to develop another facility that could provide part of the service. In making his or her decision, the Minister must also have regard to the objects of Part IIIA: s 44H(1A). Section 44H(2) specifically requires the Minister to take into account, in deciding whether to declare the service or not, whether it would be economical for anyone to develop another facility that could provide part of the service. Failure to do this is deemed to be a decision of the Minister not to declare the service: s 44H(9). Failing that, Part IIIA provides that access terms and conditions can be the subject of arbitration by the Australian Competition and Consumer Commission ('the Commission'). 30 If a third party is unable to agree with the provider on one or more aspects of access to a declared service, either the provider or the third party may notify the Commission that an access dispute exists: s 44S. The dispute then goes before the Commission for arbitration, the parties to which are the provider, the third party and any person who applies (subject to the Commission accepting they have sufficient interest). 31 Unless the Commission terminates the arbitration, it must make a written final determination on access by the third party to the service: s 44V(1). No issue in these proceedings arises as to the identity of the provider or any third party. This does not mean that each and every word or expression found in Part IIIA of the Act is to be interpreted as an economic word or expression, just that the economic context of Part IIIA of the Act provides the setting within which to interpret words and expressions. The Full Court recently set out the background and context to Part IIIA in its decision in Sydney Airport Corporation Ltd v Australian Competition Tribunal [2006] FCAFC 146 (' Sydney Airport') , to which I will briefly return. 39 Part IIIA of the Act was introduced by the Competition Policy Reform Act 1995 (Cth) and had its genesis in the recommendations of the report entitled 'National Competition Policy Report by the Independent Committee of Inquiry, August 1993' by F Hilmer, M Rayner & G Taperell. The report is more commonly known as the 'Hilmer Report'. Of course, one must recall that not all the recommendations of the Hilmer Report were adopted by Parliament. Nevertheless, it provides an insight into the purpose of the access regime in Part IIIA of the Act. 40 The Hilmer Report made a number of recommendations as to how concerns over access to 'essential facilities' could be dealt with under a national competition policy. The Hilmer Report recognised that in some markets the introduction of effective competition requires competitors to have access to facilities which exhibit natural monopoly characteristics and therefore cannot be duplicated economically. 41 Chapter 11 of the Hilmer Report deals with access to essential facilities. In addition, where the owner of the facility is also competing in markets that are dependent on access to the facility, the owner can restrict access to the facility to eliminate or reduce competition in the dependent markets. While it is difficult to define precisely the term "natural monopoly", electricity transmission grids, telecommunication networks, rail tracks, major pipelines, ports and airports are often given as examples. Some facilities that exhibit these characteristics occupy strategic positions in an industry, and are thus "essential facilities" in the sense that access to the facility is required if a business is to be able to compete effectively in upstream or downstream markets. For example, competition in electricity generation and in the provision of rail services requires access to transmission grids and rail tracks respectively. For example, a business that owned an electricity transmission grid and was also participating in the electricity generation market could restrict access to the grid to prevent or limit competition in the generation market. Even the prospect of such behaviour may be sufficient to deter entry to, or limit vigorous competition in, markets that are dependent on access to an essential facility. For instance, the provision of gas services to consumers might involve the extraction of gas from a gas field, the transportation of the gas (via a pipeline) from the gas field to a major population centre, the distribution of the gas to consumers via a reticulation system in the major population centre, and then the retailing of the gas to consumers. While some of these stages may exhibit the characteristics that give rise to a natural monopoly, others may not. For instance, in the gas example, while it may be uneconomic to duplicate the gas pipeline and reticulation systems at the transport and distribution stages of the supply chain, this does not mean it would be uneconomic to have more than one retailer of gas in a major population centre. Similarly, it may not necessarily be uneconomic for there to be more than one organisation that can exist to operate gas fields served by the relevant pipeline. However, if one organisation has control over that element in the supply chain that is naturally monopolistic in nature (i.e. the pipeline), it may be able to leverage the market power it acquires from this control into other stages of the supply chain that could otherwise be competitive. 43 One of the principal outcomes of an access regime, therefore, is that it can lead to the introduction of competition into those stages of the supply chain where it could exist by providing access to the natural monopoly infrastructure elements at other stages of the supply chain that could otherwise, in the absence of access, prevent such competition from occurring. Rather, the essential notion to be derived from the Hilmer Report, the outline of legislation issued by COAG, the Explanatory Memorandum and the Competition Principles Agreement is that it is necessary for the fact of access (in its ordinary meaning) to be relevant to effective competition in another market (upstream or downstream). Vertical integration in itself cannot be a basis to exclude the operation of Part IIIA. The notion of shared access within the context of a vertically integrated operation is part of the scenario the Hilmer Report was seeking to address. That is, it is the very prevention of a vertically integrated organisation using its control over access to an essential facility to limit effective competition in dependent markets that is a key activity that the access regime seeks to deal. Hence, it was envisaged --- certainly by the Hilmer Report --- that the access regime would be applied to require vertically integrated organisations to provide access to services provided over some of their infrastructure. 46 This is not to say, however, that the Hilmer Report envisaged the automatic and indifferent application of the access regime to vertically integrated operations. The efficient operation of a market economy relies on the general freedom of an owner of property and/or supplier of services to choose when and with whom to conduct business dealings and on what terms and conditions. This is an important and fundamental principle based on notions of private property and freedom to contract, and one not to be disturbed lightly. Failure to provide appropriate protection to the owners of such facilities has the potential to undermine incentives for investment. While it is difficult to define precisely the nature of the facilities and industries likely to meet these requirements, a frequent feature is the traditional involvement of government in these industries, either as owner or extensive regulator. The general rules proposed are intended to cover essential facilities, irrespective of ownership, where certain public interest and other criteria are met. That is, while it was intended the regime be used so that third parties could gain access to essential infrastructure that exhibited natural monopolistic characteristics, it was not intended that the regime be used to enable third party access to all infrastructures. For instance, it is not intended that third parties could enter factories all around the country and demand access to machinery that may be in operation in these factories. Rather, the regime was intended to apply only to infrastructure such as that outlined in paras (a) to (c) of the 'service' definition s 44B of the Act. Undoubtedly the exclusions in paras (d) to (f) are to ensure that the access regime is not too broad in its application. 51 Hence, it is clear that the aim of the exclusion to the definition of 'service' in para (f) in s 44B is to place limits on the extent to which a third party is able to gain access to a provider's infrastructure. An important purpose of the exclusion in para (f) is to ensure that production or manufacturing plants are not brought within the access regime, and that access does not artificially interrupt or disturb a production chain. Further, there was clearly seen to be a need to protect the viability of certain investments. Failure to provide appropriate protection to the owners of such facilities has the potential to undermine incentives for investment. In that context, the Hilmer Report referred to a decision of a United States court in Berkey Photo v Eastman Kodak Co 603 F 2d 263 (1979) in which a small photographic company sought (unsuccessfully) to obtain access to the products of Kodak's research and development. 53 However, it is to be recalled that even if there be an opportunity for access to a particular service should the exclusion in para (f) not apply, Part IIIA provides for a two-stage process as described by the Full Court in Sydney Airport (see [25]-[34]). Even a declaration of the service under the first part of the process does not necessarily ensure access to the service, but rather confers a right on the access-seeker to negotiate with the provider. Whether access occurs and on what terms will involve questions of 'an economic, commercial and social character' (see Sydney Airport at [35]). It seems to me this is an important consideration in determining the interpretation to be given to the exclusion in para (f). Protection of the viability of certain investments is not just found in the interpretation to be given to the exclusion in para (f), but is also found in the two-stage process that is to be undertaken even if the exclusion is inapplicable. The CSMS is part of the production and grade control system that is involved in BHPBIO's operations from mine to ship loading at the port. It assists in the development of the daily blend for each mining area, and determines the required sequence of trains necessary for BHPBIO's operation and requirements for finished iron ore products. Essentially the CSMS was intended to be a more efficient and effective form of the 'batch system' which was employed prior to the introduction of the CSMS. Each of the joint ventures has appointed BHPBIO as the manager of the joint venture, with power to manage, supervise and conduct the business operations of the joint ventures. BHPBIO undertakes this task using the services of employees and contractors. The ownership of the ore mined from the mining areas is described below. 59 In relation to Jimblebar, until recently, ore from the Jimblebar mine was owned by BHP Iron Ore (Jimblebar) Pty Ltd (a wholly-owned subsidiary of BHPBM). On 1 October 2005, ownership was transferred to the participants of the unincorporated joint venture Wheelara Joint Venture ('Wheelara JV'), comprising BHP Iron Ore (Jimblebar) Pty Ltd 51%, Mitsui 4.2%, Itochu 4.8% and Australian subsidiaries of 4 Chinese steel mills. 62 Ore from W4 is owned by the participants in the unincorporated JW4 Joint Venture ('JW4 JV'), comprising the Yandi JV and an Australian wholly-owned subsidiary of a Japanese steel mill. The ore from these mines is owned by the participants in the Goldsworthy JV. I proceed on the basis that the actual process and operations are as contended for by BHPBIO. 67 BHPBIO currently produces for sale six finished iron ore products from its Pilbara operations. From September 2006 BHPBIO suspended the production of GMGL and GMGF. However BHPBIO is continuing to mine within the Goldsworthy mining area at a reduced rate of approximately 2 million tonnes per annum (down from approximately 8 million tonnes per annum) with the majority of the mined ore being stockpiled at the relevant mine site. At least until July 2007, BHPBIO will rail approximately 240,000 tonnes of ore per annum from the Goldsworthy mining area to port where that ore will be included in the blend of ores used to produce NHGL and NHGF products. 69 NHGL and NHGF are blends of ore from the mines in the Newman mining area (and now also the Goldsworthy mining area). Ore from each of these mines undergoes primary and secondary crushing at the mine. It is then stockpiled at each mine, and railed to port in a form known as 'run of mine' ('ROM') ore. The ore then undergoes tertiary crushing, if necessary, and screening and is stockpiled, blended and, in the case of lump, re-screened as finished products at the port. 70 Yandi Lump and Fines are blends of ore from the mines or pits located within the Yandi mining area. The Yandi 1 and Yandi 2 fines are blended at the port to produce the Yandi Fines finished product. The lump ore from Yandi 2 must be blended into stockpiles at the port prior to loading and shipment. During the ship-loading process it is re-screened, with the screened fines being blended with the other Yandi fines. 71 MAC Lump and Fines are produced from ore sourced from Area C mining area. The ore undergoes primary, secondary and tertiary crushing at the mine, and is screened and stacked onto one of three lump stockpiles and one of three fines stockpiles at the mine. At the port, the lump and fines from Area C are distributed onto stockpiles. Lump from Area C undergoes further screening prior to shipment, with the screened fines being further blended with the port fines on stockpiles. 72 While most of the ore railed from the mines in the Newman mining area undergoes further processing at Port Hedland including crushing and blending prior to being loaded onto a ship, some of the ore from the Area C and Yandi mining areas proceeds directly to ship from the port car dumpers. This is known as direct to ship ore ('DSO'). DSO is only used with respect to two of BHPBIO's products: Yandi Fines and MAC Fines. DSO is only ever a portion of the ore in any given cargo. It is mixed with other ore from the port stockpiles in the cargo hold, which is referred to as 'in ship' blending. The proportion of DSO in any particular cargo is dependent on the rest of the cargo but in any event is around 20% of Yandi Fines and 25% of MAC Fines. 73 All of the iron ore produced by BHPBIO, other than the small proportion of Yandi Fines and MAC Fines that constitute DSO, is blended at the port facilities. The blending at port occurs through the process of creating blending stockpiles at the port, and through the process of reclaiming the ore from the stockpiles. Lump products must be re-screened at the port because lump products suffer physical degradation from the handling process between the mines and the port stockpile. The fines that are removed from the lump are blended with the relevant fines product, which may improve the grade of the fines. All train movements are managed from the control centre at Port Hedland. The tolling amount is calculated by BHPBIO. The Goldsworthy JV participants pay fees to the Yandi JV participants and the Mt Newman JV participants with respect to railing and, in the case of the Mt Newman JV participants, use of the Nelson Point port and Mt Newman rail infrastructure and railing of ore. However, there are no written terms and conditions concerning the railing arrangements, and the fees are calculated by reference to a rate of return on a notional value of the assets employed. Whether they do or do not meet customers' expectations is not a matter of evidence before me, only that this is the objective sought by BHPBIO. 78 To consistently meet these expectations, BHPBIO uses an integrated approach to its mining, rail and port operations and marketing. When I refer to an integrated approach, I mean by adding together each of the various operations, BHPBIO operates its production of iron ore as a whole from mine to port for the purpose of the overall objective of BHPBIO. 79 BHPBIO's use of the rail line is an operation that contributes to the creation of its finished product, and can even be seen as essential (as the BHPBIO's existing operations attest) to the creation of the final export product. Without the rail line, there would be no connection between mine and port. The CSMS has been developed to ensure the carrying or conveying of iron ore over the rail line meets BHPBIO's overall objective. Of course, in itself the rail line does not create or make anything --- it conveys the iron ore as part of the overall operation designed by BHPBIO to meet customers' expectations. More specifically, the critical issue is the proper construction to be given to the expression 'use of a production process' in para (f) of the definition of 'service' as interpreted in the context of Part IIIA and the Act as a whole. The former was said by Fortescue to constitute the use of the rail line and associated infrastructure, and the latter constituting the carriage of goods on the rail line. 82 The definition of 'service' in s 44B of Part IIIA of the Act specifically includes the use of an infrastructure facility such as a road or railway line. In its terms, the definition distinguishes between the use of such an infrastructure facility and the handling or transporting of things, such as goods. 83 In its Access Application, Fortescue identifies the services the subject of its application as a 'below rail service', being the use of the infrastructure facility (and associated infrastructure) consisting of the relevant parts of the Mt Newman Railway Line and the Goldsworthy Railway Line. 84 The Full Court confirmed the distinction between 'above rail' (transportation) and 'below rail' (infrastructure) services in its decision in Rail Access Corporation v New South Wales Minerals Council Ltd (1998) 87 FCR 517 (' Rail Access Case '). The Rail Access Case concerned the question of whether the NSW Rail Access Corporation provided a 'government coal-carrying service' within the meaning of Part IIIA of the Competition Policy Reform Act 1995 (Cth) which could therefore not be a 'service' within the meaning of Part IIIA of the Act. Rail Access Corporation did not carry coal itself or offer the service of carrying coal, but it owned the railway line which Freight Rail Corporation used to carry coal and provided a below rail service to third parties seeking to run trains to transport coal on its tracks and related infrastructure. It may, however, consist merely of the use of a facility. The definition of "service" distinguishes between the use of an infrastructure facility, such as a road or railway line, and the handling or transporting of things, such as goods or people, by the use of a road or railway line. The fact that one service provider, such as Freight Rail Corporation, is using the railway line infrastructure facility made available to it by Rail Access Corporation for the purposes of carrying coal by rail does not mean Rail Access Corporation is carrying on, or is the provider of, a service of carrying coal by rail. There is a clear distinction, enshrined in the Transport Administration Act and confirmed by the NSW Rail Access Regime, between the service provided by Rail Access Corporation and the service provided by Freight Rail Corporation. Freight Rail Corporation provides the service of transporting coal. Rail Access Corporation provides to Freight Rail Corporation the different service of making available the infrastructure facility which is necessary to enable Freight Rail Corporation to provide the transportation service. The respondent is seeking access to the service provided by Rail Access Corporation, not the service provided by Freight Rail Corporation. 87 Transportation of iron ore by rail from one location to another will necessarily though involve the use of above and below rail services, in the sense they are complementary to each other. Access, if granted as sought by Fortescue, will involve the use of the rail lines and many systems employed by BHPBIO in the operation of the Mt Newman and Goldsworthy Railway Lines. This, however, does not mean that Fortescue is to be treated as seeking anything other than the service the subject of the Access Application. For the purposes of these proceedings, once the relevant service is identified and described by reference to the Access Application, it does not advance the matter further to characterise it either as a 'below rail service' or an 'above rail service'. That is, the court must give the words a meaning which is consistent with the language and purpose of Part IIIA and the Act as a whole. It is important to remember that whilst for the purpose of these proceedings one focuses upon the definition of 'service', it is just that, a definition. One must consider the operative provision that incorporates that definition, and determine the purpose and ambit of the operative provisions. 89 It is tempting to say that in any particular case a court may well be able to recognise a 'service' just as it can recognise an elephant when it sees one, but may not find it necessary to define it (see, e.g. R v Bradbourn [1985] Crim LR 682). The difficulty with this approach is that it provides little, if any, guidance on the considerations that need to be considered in arriving at a reasoned decision. 90 In Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14 ; (2004) 218 CLR 273 the High Court restated a number of the key principles of statutory interpretation. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd , if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonable open and more closely conforms to the legislative intent. This is so even if the meaning of the words, interpreted in the context of the rest of the Act, is clear. When the purpose or object is brought into account, an alternative interpretation of the words may become apparent. However, I accept that if the words of a legislative provision are capable of only one construction, taking into account the purpose and context of the provision, then a court cannot ignore them and substitute a different construction because the court considers it somehow furthers the object of the legislation. Section 35 [of the Interpretation of Legislation Act 1984 (Vic)] requires a court to construe an Act, not rewrite it, in the light of its purposes. When the express words of a legislative provision are reasonably capable of only one construction and neither the purpose of the provision nor any other provision in the legislation throws doubt on that construction, a court cannot ignore it and substitute a different construction because it furthers the objects of the legislation. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning. 96 I should also mention two other matters which are relevant to my deliberation. First, one should be mindful of the well-recognised limit to the use to be made of dictionary definitions of words. 98 I accept that I should not depart from the ratio decidendi of the Hamersley decision unless I am satisfied it is 'clearly wrong' or 'plainly wrong': see Nezovic v Minister for Immigration & Multicultural & Indigenous Affairs (No 2) [2003] FCA 1263 ; (2003) 133 FCR 190 (' Nezovic ') at 206, [52]; Marr v Australian Telecommunications Corp (1991) 34 FCR 82; Upperedge v Bailey (1994) 13 ACSR 541 at 543; Bank of Western Australia Ltd v Commissioner of Taxation (1994) 55 FCR 233 at 255. It would not be sufficient for a judge to merely reach one view, which he or she may prefer over that of an earlier decision, and upon that basis not follow the strong persuasive authority that has already pronounced on the same legislative provision. Before a judge refuses to follow an earlier decision regarding the construction of the same legislative provision he or she must come to the view the earlier decision is 'clearly wrong' or 'plainly wrong'. 99 Justice French in Nezovic noted that the rule that one judge of the same or co-ordinate jurisdiction should follow another has greater significance in the area of statutory construction. Unless I was satisfied that his Honour was plainly wrong, I would not be justified in departing from the ratio of his decision on that point. In that respect I refer to what I said in Hicks v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 757. Judicial comity does not merely advance mutual politeness between judges of the same or co-ordinate jurisdictions. It supports the authority of the courts and confidence in the law by the value it places upon consistency in judicial decision-making and mutual respect between judges. Where questions of law and in particular statutory construction are concerned, the view that a judge who has taken one view of the law or a statute is "clearly wrong" is not lightly to be adopted having regard to the choices that so often confront the courts particularly in the area of statutory construction. 102 It is important that the courts look at the relevant statutory provisions (in their context), and not give priority to judicial exposition of legislation over the meaning to be derived from the actual legislation itself (see Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49 ; (2001) 207 CLR 72 at 89, [46] per Kirby J). The Court has an obligation and duty to give effect to relevant provisions of any legislative provision upon determining the correct interpretation to be placed upon them. It is contended by the Council that the Hamersley decision is clearly wrong. Fortescue supported the decision of 'production process' adopted in Hamersley , but contended that the trial Judge made errors of principle in her reasoning so as to lead her to the wrong conclusion. In addition, Fortescue contended that Hamersley was plainly distinguishable. In view of these submissions the question of the correctness or otherwise of the Hamersley decision falls for my consideration, as does the question of whether the decision can be distinguished. 104 The decision in Hamersley arose after an application was made by one of the respondents in the proceeding (which I will refer to as 'Robe') to the Council under s 44F(1) of the Act to recommend to the designated Minister declaration of a service. The service to which Robe sought access was identified in its application as 'the bulk iron ore rail track transportation service provided by the Hamersley Rail Infrastructure Facility'. Robe specifically distinguished this service from any rail haulage service which may be available in relation to the facility. In essence, Robe sought access to what it termed the rail track service provided by Hamersley Iron Pty Ltd ('Hamersley') by means of a facility owned by Hamersley, including associated infrastructure, but not including locomotives, rolling stock, hi-rails or operational personnel. 105 One of the main issues in the proceeding was whether the service to which access was sought by Robe was a 'service' within the meaning of Part IIIA of the Act. In particular, the issue was whether the rail track service involved the use of a production process. 106 In determining what was meant by the expression 'production process' the learned trial Judge used dictionary definitions of the word 'production' and the word 'process' as the starting point for her analysis. 109 Having determined the meaning of the term 'production process', the learned trial Judge then considered the purpose of the expression as an exclusionary criterion within the definition of 'service' in s 44B of the Act. In doing so, she noted that Part IIIA was introduced into the Act as a result of the Competition Principles Agreement and the recommendations of the Hilmer Report. Most commonly, a user makes use of a production process to create the product or products which the process of production is designed to create. That is not, however, the only sense in which a user can be said to engage in 'the use of a production process'. Someone may use a production process by incorporating it into another process or operation. To use a production process may not only involve incorporating it into a larger operation; it is also possible to 'use a production process' by using (employing, applying, exploiting) part of that process. That is, the use of a production process extends, in my view, not merely to the use of the whole process but also to the use of any operation (or step or procedure) that is integral (and perhaps essential or non-subsidiary) to that process as a whole. In this case the use of the railway is integral and essential to the highly integrated series of operations that constitute Hamersley's production process. 113 In reaching her ultimate conclusion the learned trial Judge made a number of important observations and factual findings. The respondents submitted that Hamersley's own use of its railway line is irrelevant, because that use forms no part of the service sought by them. That submission is, it seems to me, accurate to a limited extent only. Thus, I accept that the ultimate issue is the correct characterisation of the service (or use of the railway line) sought by Robe. I do not accept, however, that the operational ends that Hamersley meets by its use of the railway line are immaterial. Those ends, or the uses to which Hamersley puts its use of the line, are relevant, in my view, to the question whether the service Robe seeks is or involves the use of a production process. In summary, the central facts are the following. (The respondents did not submit that ore from Yandicoogina was subject to a relevantly different production process. (Nothing turns in this analysis on the fact that Robe seeks access to a part of the length of the railway line and not to the whole of the length of the line. ) By the use of its railway line (and associated infrastructure) it does not merely convey ore by rail from mine to port, it makes up the recipe that it has formulated for the creation of a particular batch of its product. The making-up of a recipe for a batch of product depends on the line being made available (by Hamersley) for Hamersley's use. That is the effect of the undisputed evidence. It follows from this that Hamersley's use of its railway line is an integral (indeed, essential) operation in Hamersley's production process. That is, by virtue of the operations carried on by Hamersley in the Pilbara, Hamersley's use of the railway line is an operation upon which other operations necessarily depend for the creation of its export product. (In this connection, I emphasise that I am not concerned with the application of the exemption from the exclusion; rather, I am concerned with the operation of paragraph (f) of the exclusion. First, the learned trial Judge carefully considered the question before her, and analysed in detail the various terms used in Part IIIA. There was a detailed consideration of the purpose of Part IIIA and of the exclusion in question. The different conclusion I have reached, and where I find Hamersley to be 'clearly wrong' or 'plainly wrong', is in the approach taken to defining 'the use of a production process'. 117 Secondly, I can see no objection to interpreting a composite phrase by reference to the dictionary definitions of one or more of the words within that composite phrase. Everything will depend upon the context and subject matter of the composite phrase. Of course, the context is the master not the dictionary definitions of single words, particularly where one has a phrase involving a number of individual elements combining to introduce into legislation a single concept. However, approaching the expression 'production process' as merely the combination of the dictionary definitions of the individual words 'production' and 'process' has its dangers, and in itself may not yield the correct interpretation of the expression in Part IIIA of the Act. 118 I do not disagree with her Honour's use of the definitions of 'production' and 'process' as a starting point to the sympathetic understanding of the operation of the relevant provisions. However, as a composite phrase, in my view the emphasis is on a process of production, being a production process which in itself makes or creates one thing into another, not being so much a series of operations covering relevantly in Hamersley , mine to port operations. If one focuses, as her Honour does, on the 'series of operations' concept, then one readily moves to the conclusion in Hamersley that the 'production process' includes the entire operation from mine to port. 119 I do not think this is warranted as a matter of the most ordinary and natural meaning of the term, particularly when dealing with the composite term 'production process'. By looking at the overall series of operations one diverts attention away from the very thing to which access is sought in the Access Application (the railway line and associated infrastructure), and the function it has to perform. The railway line in itself is not designed to make or create anything. Further, with or without the 'batch system', iron ore could be carried over the rail line, and whether or not the 'batch system' was employed does not affect the character of the railway line itself. The 'batch system' was merely a management tool in the efficient carriage of iron ore over the railway line, albeit from Hamersley's point of view, an important one. 120 Thirdly, the concept of marketable commodity (of which I will discuss later) is not found in the dictionary references made in Hamersley . This concept arises out of the tax cases her Honour refers to such as Federal Commissioner of Taxation v Hamersley Iron Pty Ltd (1981) 12 ATR 429 at 440 per Lush J (with whom Kaye J agreed); at 444 per Brooking J. 121 In my view, I see no warrant to introduce such a concept into the definition of 'service' or the phrase 'use of production process' in the context of Part IIIA. Whilst the learned trial Judge in Hamersley was acutely aware of the limited assistance to be afforded by those cases she relied upon, in my view the purposes of the statutory regimes are so dissimilar that there is no warrant to introduce the concept of 'marketable commodity' into the meaning to be given to a 'production process'. In addition, by introducing the concept of 'marketable commodity', as these proceedings attest, introduces an even greater uncertainty into the operation of Part IIIA. It also detracts, in my view, from the main enquiry, which is to define what is a production process. In looking at the most natural and ordinary meaning of the words found in the exclusion in para (f), one is not directed to an enquiry as to what is a 'marketable commodity', which has taken prominence in these proceedings. 122 Fourthly, her Honour recognised that the concept of 'use of' a production process most commonly imparts the notion of a user making use of a production process to create the product or products which the process of production is designed to create. In my view, this is the very concept that ought be incorporated into the phrase 'use of a production process'. It fits well within the most natural and ordinary meaning to be given to the term 'a production process', and by employing that concept one does not necessarily exclude the whole rail line from the possibility of consideration for declaration under Part IIIA. In view of the specific inclusion of a railway line as a service, the interpretation of 'use of a product in process' given in Hamersley is not appropriate. It has the potential to exclude infrastructure that would normally be expected to be considered under Part IIIA for access, and does not assist in promoting the purposes of Part IIIA. 123 Fifthly, in my view the learned trial Judge focused not upon the phrase 'use of a production process' but the concept of 'involving the use of a production process'. The critical question was whether the 'service' in respect of which Robe sought access was or constituted the use of a production process. The exclusion does not extend to something which merely 'involves' the use of a production process. The learned trial Judge's approach in any given circumstance may not lead to any different conclusion, but when considering the 'highly integrated operation' from mine to port as in Hamersley , approaching the matter as 'involving' the use of a production process, did lead, in my view to an erroneous conclusion. It diverted attention away from the service the subject of the Access Application and from a proper characterisation of the railway line itself. 124 Finally, I agree with the principle in the Hamersley decision that in determining whether the 'production process' exclusion is applicable, the court must consider 'the actual operation of the activities in question, considered as a whole. The question of characterisation is, in this sense, one of fact and degree' (at 213, [48]). As I have indicated, however, the use of the railway line as part of its operations, even if essential to Hamersley's operations, does not mean that the railway line has the character of being 'a production process'. The use of the railway line itself was to convey iron ore by rail from mine to port by whatever management tool was appropriate to employ, and did not of itself constitute the use of a production process. 125 In light of the above, with respect to the learned trial Judge, I have come to the conclusion that the decision in Hamersley is 'clearly wrong' or 'plainly wrong', and I should not follow it in these proceedings. Is Hamersley to be distinguished in any event? First, it was submitted that the above rail/below rail distinction found to be irrelevant in Hamersley was relevant on the facts in these proceedings because the Mt Newman JV and the Goldsworthy JV own the facilities which provide the two below rail services to which Fortescue seeks access, whilst BHPBIO provides to Mt Newman JV, Goldsworthy JV and the Yandi JV above rail services to which Fortescue does not seek access. 127 Secondly, it was submitted that the production process as relied upon by BHPBIO in these proceedings is relevantly different from that found by the learned trial Judge in Hamersley , and was not the 'highly integrated operation' therein described. 130 In relation to the first feature, there is nothing in her Honour's reasoning that would lead to the conclusion that she would have reached a different conclusion if joint venture parties (as providers) owned the facilities which would have provided the below rail services to which Robe sought access. The essential question the learned trial Judge determined was whether access was being sought to the use of a production process. On her Honour's reasoning, as detailed above, the exception in para (f) would apply irrespective of the ownership of the facilities, and irrespective of the distinction sought to be made by Fortescue here of the above rail/below rail services. 131 As to the second feature, upon the facts as I have found them in relation to the operations of BHPBIO, I can see no material difference in the operations of Hamersley found by her Honour. In particular, BHPBIO's operations in these proceedings effectively consist of carrying iron ore over the railway line in a planned sequence as part of making up 'the recipe' for the iron ore eventually blended and stockpiled, to adapt the words of her Honour. In essence, the findings I have made in relation to BHPBIO operations indicate no material difference to the elements relied upon by her Honour in Hamersley at [40]. 132 I now turn to the question of when the 'marketable commodity' is produced. It is necessary for me to consider in some detail the context in which 'marketable commodity' was used by her Honour. There is some dispute between the parties as to the meaning of the expression 'marketable commodity' used by the learned trial Judge in Hamersley . Expert evidence was led by Fortescue in support of its position, but in light of the following analysis, nothing turns on such evidence. 133 BHPBIO submitted that the marketable commodity to which the learned trial Judge referred was Hamersley's finished product, or 'export product'. The inquiry, it was submitted, was focused on the products that were produced by Hamersley for sale to end-user customers, and the series of operations undertaken by Hamersley to produce those products. BHPBIO submitted that the interpretation did not involve or invite a hypothetical inquiry into whether a commodity capable of being sold was 'produced' at an earlier point in time: the case involved an inquiry into the actual operations undertaken, and the actual products created, or manufactured, for sale to end users by Hamersley. 134 Fortescue, on the other hand, contended that the term 'marketable commodity' in Hamersley referred to a product that is capable of being sold rather than one which is actually sold. In its submission, whether a product is capable of being sold depends upon whether there are actual or potential transactions for that product. The potential for transactions will exist if the transaction costs associated with the separate provision of goods or services at the two layers cannot be such that vertical integration is inevitable. 135 In my mind, it is difficult to accept Fortescue's submissions on this point. In the learned trial Judge's discussion of the meaning of 'process', she referred to the Macquarie Dictionary, which defined 'process' as 'a systematic series of actions directed to some end' (at 213, [32]). Her Honour also referred to the definition of 'process' in the Oxford Dictionary, which referred to a series of actions carried on 'in a definite manner, and leading to the accomplishment of some result'. There was no evidence to show that Hamersley produces a marketable commodity at an earlier stage. However, this does not detract from the learned trial Judge's focus on the product that Hamersley 'sells'. Her focus is on the end product that Hamersley's production process is directed to producing, and indeed does produce. Accordingly, the main focus for me in this case must be the commodities that are sought to be produced by BHPBIO. 138 Even if I am wrong on this point, and accept the submission that the term 'marketable commodity' refers to no more than a product for which there is a potential or actual market, it is still necessary for me to assess whether the production process used by BHPBIO produces the actual marketable commodities at the port. Whilst it may be, as Fortescue submited, that a marketable commodity is produced by BHPBIO at a stage before railing the ore to the port and therefore before the use of either the Mt Newman or Goldsworthy Railway Lines, BHPBIO also produces marketable commodities, not only capable of being sold but that are in fact sold, at the port. Accordingly, where a marketable commodity is produced by BHPBIO at the port, all of the integrated series of operations by which that marketable commodity is produced will constitute the production process under the Hamersley Construction. 139 It is instructive to analyse the application of the Hamersley Construction to the evidence in this case to determine whether the third distinguishing feature relied upon would have produced a different result in the Hamersley case. The issue requires an analysis of whether the railway facilities to which Fortescue seeks access are an integral part of the series of operations by which any (or all) of BHPBIO's marketable commodities are created or manufactured. 140 The output of BHPBIO's production process is currently six bulk iron ore products that are offered for sale to steel makers, primarily on the export market. The iron ore products are sold as the ore is loaded onto ships at Port Hedland. The iron ore products have consistent and specific chemical and physical properties. Those properties are determined by BHPBIO, having regard to BHPBIO's perception of what is acceptable to its customers, and having regard to BHPBIO's perception of the optimal manner of using its available mineral resources. The process by which BHPBIO produces the six finished iron ore products for export at Port Hedland involves an integrated series of operations as has been described above. 141 However, the process by which BHPBIO produces each of its six bulk iron ore products differ to some extent. Despite this, BHPBIO submitted that it has only one overall production process for the purposes of producing all of its iron ore products. In the alternative, BHPBIO submitted that it conducts more than one production process to the extent that the operations by which the different products are produced differ. For the purposes of applying Hamersley , I do not accept BHPBIO's first submission that it has only one overall production process for all its products. However, I do accept its alternative submission. Hamersley requires an analysis of the process by which a marketable commodity is produced and each of BHPBIO's exported iron ore products clearly constitutes a marketable commodity whether on the definition contended by Fortescue or BHPBIO. To the extent that the process by which each marketable commodity is produced differs, the use of the Mt Newman and Goldsworthy Services in that process will also differ. Therefore, applying Hamersley , there would be more than one production process, but still from mine to port and involving the use of the railway line. 142 Fortescue further submitted that BHPBIO produces iron ore which is a marketable commodity prior to its transportation on either the Mt Newman or the Goldsworthy Railway Lines by reason of a number of joint venture transactions. The facts establish that iron ore is sold between different joint ventures at the various mine sites. In particular, the evidence shows the transfer of ownership of ores mined from Jimblebar, W4 and Mining Area C. These joint venture transactions at the mine sites are legitimate commercial transactions and evidence a market for ROM ore at the Newman mining area. Therefore the ROM ore is a marketable commodity (applying the definition contended for by Fortescue) produced without the use of the rail lines. Fortescue submitted that, therefore, the use of the Mt Newman and Goldsworthy Rail Lines are used after the end of a production process. 143 Whilst I accept that a marketable commodity (within the meaning contended for by Fortescue) is produced in these instances at the mines, the evidence establishes that after ownership of these ores is transferred at the mine, the relevant ores continue to undergo further processing. The further processing is directed to the production of finished bulk iron ore products by BHPBIO to be loaded onto ships at Port Hedland for export. Fortescue did not dispute that through its operations at the port BHPBIO seeks to make, in relation to some ore, a more refined and valuable product. However, Fortescue submitted that these port operations, under which ore from some of the mines is further crushed, screened and blended and ore from other mines is blended and screened are separate production processes to those undertaken at each of the mines. 144 Applying Hamersley , I do not accept this submission. The extent to which the ROM ore undergoes further development in order to produce some other marketable commodity of different physical or chemical constitution, in this case NHGL and NHGF, necessarily means that the production process for NHGL and NHGF, which commences at the mine, does not finish until the finished product is produced at the port. 145 Fortescue also submitted that, in respect of at least two of the iron ore products produced by BHPBIO (Yandi Fines and MAC Fines), finished products are produced at the mine without the use of the rail line as a proportion of these products are loaded as DSO without undergoing further processing at the port after railing. I do not accept the contention that a particular service must solely be used as part of a production process according to the principles adopted in Hamersley . Accordingly, accepting that a proportion of Yandi Fines and MAC Fines products are finished at the mines, and accepting Fortescue's submission that the production process in relation to that proportion of Yandi Fines and MAC Fines ends at the mine, it does not necessarily follow that the Mt Newman and Goldsworthy Railway Lines are not a part of BHPBIO's production process used to create BHPBIO's other finished products. 146 The evidence clearly shows that all six of BHPBIO's final export products, apart from the small proportion of Yandi Fines and MAC Fines loaded as DSO, are produced at the port, after transportation on the relevant rail facilities. Accordingly, in relation to all of BHPBIO's products (or 'marketable commodities') on the Hamersley Construction the production process extends from the commencement of mining operations at the mines and ends at the port, when that final product is created. 147 Therefore, in light of the above, there is no basis to distinguish the ratio decidendi in Hamersley to the facts pertaining to these proceedings. Other than giving guidance as to the aims and potential parameters of the access regime, the Hilmer Report (and for that matter other extrinsic material referred to in the Sydney Airport case) provides little guidance as to the ambit of the exclusion found in para (f) of the definition of 'service'. In view of the general application of the access regime this is not surprising. Part IIIA is not referable to any particular industry. This is to be contrasted with similar regimes in other jurisdictions, such as New Zealand, where access regimes are introduced in the context of a particular industry, such as the telecommunications, gas or electricity industries. Similarly, Part XIC of the Act specifically deals with a telecommunications access regime. However, Part IIIA applies generally to a wide range of potential industries and circumstances. Therefore, the court must apply Part IIIA to a range of services and this will be done on a case by case basis. 149 It can be accepted that the use of rail infrastructure generally is the type of essential facility infrastructure which was intended to be included within the scope of Part IIIA. The services provided by a railway line would be obvious candidates for declaration given that they would often be prohibitively expensive to duplicate. The width of exception in para (f) must balance the desire to preserve the viability of investment in production facilities whilst at the same time preserving the aims of the access regime. Whether or not access to a particular railway line should be declared would need to be determined following the two-stage process set out in Part IIIA and referred to in the Sydney Airport case. So much is clear from the legislative scheme and by reference to the Hilmer Report to the extent adopted by Parliament. 150 Putting aside the Hamersley decision, in my view the question before the Court can be resolved by the following analysis. 151 BHPBIO uses the rail line in its operations, and schedules trains which run on the track as part of BHPBIO's overall production of iron ore. One can conclude that, by virtue of the operations carried on by BHPBIO, its use of the railway line is an activity upon which other operations necessarily depend for the creation of its export product. Fortescue, by gaining access, may well interfere with BHPBIO's operations and scheduling of trains, but this will be a matter to be assessed at a later part of the statutory investigation under Part IIIA. The fact that access to the relevant service sought by Fortescue may impact upon, or be a part of, BHPBIO's operations does not mean that access to the rail lines and associated infrastructure and systems is access to the 'use of a production process'. 152 A production process is the creation or making of a product or the transforming of one thing into another. To use a production process is to employ, apply or exploit a process for this purpose. This most natural and ordinary meaning can be seen from the use of the definitions of 'production', 'process' and 'use' in the Oxford English Dictionary and the Macquarie Dictionary, which may be used as a first point of reference. However, as I have discussed previously, the relevant expression is a composite term and must be read in the context of the definition, Part IIIA and the Act as a whole. 153 The focus of the enquiry is upon the essential nature of each railway line and associated infrastructure to which access is sought, and the particular 'production process' to which access and protection from access is respectively sought. The issue of whether or not the infrastructure facility sought to be accessed is the use of a production process can be answered by reference to whether the process is actually creating or making a product or transforming one thing into another. The rail service involves the use of infrastructure or a facility that enables the transportation of one product from one location to another, but the infrastructure facility (the railway line and associated infrastructure) does not transform that product into something different. Even if the railway line is an integral and essential part of an overall process used by BHPBIO to produce an exportable iron ore product, this does not make the use of the railway line the use of a production process itself. The railway service represent the provision of a transport service, just as the use of a gas pipeline is a conveyance or transport service used to move gas from one place to another, or an airport runway is a landing strip used to ensure airplanes can take off and touch down. In none of these cases does the infrastructure facility itself involve a process of transformation; each constitutes an important or essential part of the overall operation of the supply of gas or the provision of air services, but does not in itself constitute a production process. It could not have been intended in Part IIIA for the use of an infrastructure facility to be treated as part of an overall process of production and then to qualify as being the 'use of a production process'. Every process of infrastructure, in some way or the other, could be part of at least one production process. Such an approach would not be consistent with the underlying purpose of the access regime, and would either eliminate or limit unreasonably the services that could be considered at least eligible for declaration under Part IIIA of the Act. 154 Apart from the decision in Hamersley , BHPBIO relied upon the case of Hematite Petroleum Pty Ltd v Victoria [1983] HCA 23 ; (1982) 151 CLR 599 (' Pipeline Tax Case') in the consideration of the question of what is encompassed by the concept of production process. The question in that case was whether the Pipelines (Fees) Act 1981 (Vic) purported to impose a duty of excise, contrary to s 90 of the Constitution , and accordingly was invalid. By majority (Mason, Murphy, Brennan and Deane JJ, Gibbs CJ and Wilson dissenting), the High Court so held. 155 The case was dealt with by way of demurrer. The facts stated were that the plaintiff joint venturers carried on the business of exploring for, and exploiting, petroleum resources from wells in Bass Strait. Hydrocarbons were carried from offshore production platforms to a plant at Longford in Gippsland where they were processed and separated into crude oil, liquefied petroleum gas and natural gas. The crude oil was conveyed by a pipeline to a fractionation plant at Long Island Point on Westernport Bay. The liquefied petroleum gas was conveyed by another pipeline to the plant at Long Island Point. The natural gas was conveyed by a third pipeline to Melbourne. At Long Island Point fractionating, processing and purification took place. The resulting liquefied petroleum gas, ethane and stabilised crude oil were all marketed and sold from Long Island Point. The natural gas produced at Longford was sold and delivered by the plaintiffs to the Gas & Fuel Corporation of Victoria at Longford and subsequently conveyed to Melbourne by the Gas & Fuel Corporation pipeline, which was owned by the Gas & Fuel Corporation. The tax on that pipeline was not relevant to the issues before the court. There is no practical possibility these pipelines can be used other than for the transportation of hydrocarbons. Transportation by pipeline is thus an integral step in the production process. It does not appear that the same is true of the conveyance of the natural gas to Melbourne. Ltd. v. Victoria , at pp 558-559 that the term 'excise' had come to be used in the United Kingdom as a convenient label for a mass of heterogenous taxes collected by the excise administration. In this country the meaning of the term for the purposes of s. 90 of the Constitution has been expounded in the judgments of this Court. The line of authority stretches back to Peterswald v. Bartle and it has not been uniform. Nevertheless, since Bolton v. Madsen , 'conflicting opinions have been expressed as to whether the criterion of liability under the statute imposing the tax, or the practical effect of the legislation, is determinative of the question whether the tax is a duty of excise' (per Gibbs J. in Logan Downs Pty. Ltd. v. Queensland , at p 64 . That conflict leaves untouched the notion that a tax upon the taking of a step in the process described by Kitto J. is of the essence of a duty of excise (per Barwick C.J. in Anderson's Pty. Ltd. v. Victoria ). The movement of gas liquids and crude oil through their respective pipelines is an integral part of the process of converting the petroleum brought ashore from the Bass Strait field into the products sold from the Long Island Point plant, and lies, so to speak, somewhere in the middle of the process of production. Putting aside the fact that the question before the High Court was one to be determined in a different statutory context, and readily accepting the importance of the pipeline to the overall operation in the movement of gas liquids and crude oil, this would not answer the question whether the use of a particular infrastructure is the use of a production process for the purposes of Part IIIA. Transportation by pipeline may well be an integral and essential part of the 'process of production', but as I have attempted to explain, this does not mean, for the purposes of Part IIIA , the use of the pipeline itself would be 'the use of a production process'. The pipeline is the means or method of conveyance of liquid hydrocarbons, it is involved in or forms part of the 'process of production' as described by the High Court, but it should not be considered to be the use of a production process in the context of Part IIIA. In the same way, the railway line is the means of transporting iron ore from mine to port and necessarily forms part of the process of production or operations of BHPBIO, but is not 'a production process' in the context of Part IIIA. Three economic experts gave written and oral evidence. The economists were Professor P G P Rey called by the Council, Mr G J Houston called by Fortescue and Mr H I Ergas called by BHPBIO. Whilst the whole of this body of evidence was adduced, BHPBIO objected to the admissibility of the economic evidence of Fortescue and the Council on the grounds of relevance. BHPBIO accepted that if the economic evidence of the Council and Fortescue were ruled inadmissible, BHPBIO's economic evidence was similarly inadmissible. The Court received the evidence subject to this objection and it is necessary now to deal with the issue of admissibility. 162 The evidence of Mr Ergas and Professor Rey was primarily concerned with the meaning 'from an economic perspective' to be given to the term 'production process' as used in s 44B of the Act. Having formulated a proposed economic test, they both provided an opinion of the facts and matters that would be relevant in determining whether the Mt Newman and Goldsworthy Services constitute a 'production process' within the meaning of those words as favoured by them. The evidence of Mr Houston was primarily directed to the meaning 'from an economic perspective' of the words 'marketable commodity' as used by the learned trial Judge in Hamersley and he similarly arrived at a proposed test. He then provided his opinion of the facts and matters that would be relevant in determining whether the various stages of BHPBIO's iron ore operations are economically separable in accordance with his test. 163 BHPBIO submitted that as the words used in s 44B of the TPA, in particular the term 'production process', are words of ordinary meaning, expert evidence was not required for their understanding. Therefore, BHPBIO submitted, the economic evidence cannot affect the construction of ordinary words in a statute. 164 It was further submitted that the economic evidence had to be relevant to some issue in the proceeding. It was stressed that whilst there may be some debate in relation to how the definition of 'service' applies to the facts in the case, it was certainly not a matter for the economists. It was merely a matter of argument, one in which it is clearly inappropriate for the economists to engage. 165 The Council, however, submitted that the economic evidence was admissible in order to provide context to the task of interpreting Part IIIA of the Act. It submitted that since Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1989) 67 CLR 77, the courts have approached the Act as an economic statute designed to address economic activity. It was submitted that, critically, the courts have understood that the character of the Act as an economic statute must be taken into account in construing the words of the Act and, in this regard, economic theory and writings may be considered: see Boral Besser Masonry Ltd v Australian Competition and Consumer Commission [2003] HCA 5 ; (2003) 215 CLR 374 (' Boral Besser ') at 454, [247] per McHugh J. Like the High Court, the Tribunal recognised the importance of economic concepts in the consideration and understanding of the purpose of Part IIIA: see Re Australian Union of Students (1997) 147 ALR 458 at 462-463. 166 The Council submitted that Professor Rey's evidence is an attempt to put before the Court some economic theory and writings so that the statutory construction task is approached from a position of economic literacy. It's primary submission was that, given the economic nature of the Act and particularly Part IIIA, the Court should receive economic evidence not only as to the context of the Act but also as to how, given that context, an economist would interpret the phrase in the context of the economic statute in which it appears. In the alternative, the Council submitted that the task of the Court is to look to the range of meanings which the term 'production process' has in ordinary usage and then, informed by the economic evidence, choose the alternative meaning which best suits the context in which the phrase is used and best achieves the objectives of Part IIIA of the Act. 167 In principle, Fortescue's position was similar to the Council's. It submitted that economic expert evidence is relevant to the extent that it gives context to the task of statutory construction of Part IIIA of the Act. However, Fortescue submitted that the limit of the relevance of the economic evidence before the Court was in informing the Court of the economic distinction between above and below rail services. 168 The general rule of statutory interpretation is that words used in a statute are given their most natural and ordinary meaning which is appropriate in the circumstances. Consistent with a purposive approach to the interpretation of the expression 'use of a production process', the court would be entitled to receive expert economic evidence to assist in the interpretation of that phrase if it had a technical or specialised meaning: see, e.g. Agfa at 401; Pepsi Seven-Up Bottlers Perth Pty Limited v Commissioner of Taxation (1995) 62 FCR 289 at 297-8; Re Michael ; Ex parte Epic Energy (WA) Nominees Pty Ltd (2002) 25 WAR 511 (' Re Michael ') at 543-544, [107]. Whether the words of a statute are to be given their ordinary meaning or a technical or specialised meaning is a question of law for the court: see Agfa at 396-398. 169 No party asserted that the term 'production process' has a technical or specialised meaning in economics. On that basis, it is not possible for the Court to construe those words other than in accordance with their most ordinary and natural meaning. It is therefore not permissible to receive the views of witnesses, expert or lay, as to their preferred interpretation or to explain how the words of a statute would be expected to be applied to the circumstances of the case: Royal Insurance Australia Ltd v Government Insurance Office (NSW) [1994] 1 VR 123 at 133-4. Such evidence is nothing more than submission and argument and indeed an attempt to usurp the judicial function. 170 Accordingly, each of the tests proposed by the experts, and the application of the facts of this case, is irrelevant. I therefore accept BHPBIO's submission and reject the expert evidence to the extent that it is directed to the meaning to be given by the Court to the term 'production process'. 171 However, BHPBIO also submitted that the economic evidence is not relevant to any other issue in the proceeding. BHPBIO submitted that the evidence cannot assist the court in understanding the purposes of the legislation or the 'production process' exclusion. It was contended that to the extent that Professor Rey gave evidence about the purpose of Part IIIA generally, his observations are derived from extrinsic materials available to the Court, which do not require expert explanation. 172 In the process of my reasoning, reliance has been placed upon relevant legitimate extrinsic material (referred to by the parties), including the Hilmer Report. However, I have found helpful the discussion of the economic experts as to the nature and the context in which Part IIIA is to operate, although in this regard this has been no more than an elaboration of the relevant legitimate extrinsic material referred to me by the parties. I see nothing inappropriate in the court having regard to and admitting into evidence expert evidence to inform itself as to the nature of and the context in which Part IIIA is to operate, just as it would be appropriate for the court to consider any economic writings on the subject: see Boral Besser at 454, [247] per McHugh J. By admitting the expert evidence for this purpose, the material is presented in evidentiary form and all the parties know precisely the extent of the material that is before the court and that which is to be considered by the court. 173 In Re Michael, Parker J (with whom Malcolm CJ and Anderson J agreed) discussed the relevance of economic expert evidence in informing the court of the specialised usage of particular words or phrases. In addition, the potential relevance of some concepts and provisions in the Act and Code can be more readily understood. 176 Accordingly, I rule that the economic evidence is admissible. I have not found it necessary to rehearse in these reasons this evidence or attack because of the approach I have taken to the construction of the phrase 'use of a production process'. To the extent I have found as a fact and detailed within these reasons the operations of BHPBIO, such have been determined objectively by reference to the operations actually employed by BHPBIO and not by reference to BHPBIO's own subjective views or characterisations, nor by reference to the subjective views or characterisations of any witness called on behalf of BHPBIO. None of the matters raised by Fortescue would otherwise detract from the essential elements of the production process as relied upon by BHPBIO nor would lead to distinguishing the ratio decidendi in Hamersley. It may well be that the submissions made and evidence relied upon by Fortescue will be relevant at a later stage in the processes to be undertaken under Part IIIA, but these considerations do not impact upon the Court's function in these proceedings. In the Western Australian Proceeding, I will declare that the bulk iron ore rail track transportation services provided by the Goldsworthy rail facility, as defined in Part 5.1 of the Fortescue's Access Application filed under s 44F(1) of the Act and dated 11 June 2004, is a service within the meaning of s 44B of the Act. The matter of the question of costs will be adjourned to a date to be fixed. I certify that the preceding one hundred and seventy eight (178) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice MIDDLETON. | access to services application for declaration recommendation of a service whether rail track service is a 'service' within the meaning of s 44b of the trade practices act 1974 (cth) whether the use of the rail track service would be the use of a production process meaning of the expression 'use of a production process' legislative purpose of the production process exclusion to the definition of service principles of statutory interpretation importance of the context of the provision role of dictionary meanings in task of statutory interpretation application of previous judicial pronouncements whether previous decision 'clearly wrong' or 'plainly wrong' admissibility expert evidence economic evidence relevance to task of statutory interpretation of part iiia of the trade practices act 1974 (cth) whether purporting to interpret statute 'production process' trade practices statutory interpretation evidence words and phrases |
The litigation has been complex and hard fought at every level. It suffices to say that, for present purposes, following the unsuccessful attempt by the debtor to have a guarantee given by him held not to be enforceable before Sackville J, the Full Court dismissed an appeal and the High Court refused special leave. 2 The case had the remarkable feature that on the third day of the hearing when in the witness box and confronted by the guarantee on which he was sued and which he had previously acknowledged he had signed, the debtor said that the signature appearing against his name on the guarantee did not look like his own. That caused an application to be made on his behalf to withdraw the admission that he had signed the guarantee, which Sackville J refused to permit. The exercise of his Honour's discretion was not found to be in error in the Full Court and accordingly it stood. The unusual circumstance that then followed was that the debtor began separate proceedings in the Supreme Court of New South Wales seeking to sue the bank officer for, inter alia, fraud in having asserted that he witnessed the debtor's signature when affixed to the guarantee, a claim which the debtor said was false to the knowledge of the bank officer. 3 The Court of Appeal of the Supreme Court of New South Wales has held by majority that the decision of Acting Justice Matthews was correct, namely, that the issue as to whether or not the bank officer had falsified the guarantee was a triable issue. The trial has been fixed to commence in the Supreme Court of New South Wales on 29 May 2006. The bankruptcy petition, the subject of these proceedings, having been extended by order of Hely J last year will expire on 9 July 2006. Hely J determined in July last year that the debtor would not be permitted to go behind the judgment of Sackville J and challenge the basis upon which his liability had been established before his Honour and upheld on appeal. 4 At the time his Honour did so, the decision of the Court of Appeal was not known and, indeed, it had not been argued before that court then. The debtor has relied on the fact that he has expert forensic evidence in the Supreme Court proceedings which suggests that there is a real case to be fought on the issue as to whether his signature in truth appears on the guarantee. That issue, if it is to be decided, would it need to be determined before the Supreme Court. Mr Bell took me to passages in Sackville J's judgment which culminated in a finding in the final judgment that the debtor's assertion that it was not his signature was not accepted by his Honour on the basis of an assessment of credibility, his Honour having previously ruled that the actual admission itself would not be able to be withdrawn. Therefore, he determined the issue of substance which had already been decided against the debtor. 6 As was pointed out during the argument today, forensically, the refusal of his Honour to allow the withdrawal of the admission meant that the debtor's case could not have been conducted in the same way, including by cross-examination by his counsel, so as to challenge the fact of the genuineness of the signature. 7 During the hearing today, Mr Ralston, the bank officer with the principal carriage of these proceedings, gave evidence. He acknowledged that the bank's solicitors were also acting for the bank officer, Mr Cleary, in the proceedings in the Supreme Court of New South Wales and that the bank had agreed to indemnify Mr Cleary in respect of his costs in those proceedings. But, as at 13 February this year, the bank had decided not to indemnify Mr Cleary in respect of any judgment which the debtor may obtain against him. 8 When Mr Ralston was being cross-examined I asked a question to clarify his evidence concerning what might happen if it transpired, hypothetically, that the debtor was successful in the Supreme Court proceedings and it was proved that the bank officer, Mr Cleary, had falsified the guarantee. I just wanted to clarify it for myself. 10 It can be seen from the brief recitation of the factual context which I have given that the proceedings between the debtor, the bank and Mr Cleary in different courts have levels of complexity and interrelationship which raise a real question in my mind as to where the interests of justice lie in deciding whether to make a sequestration order today. 11 The prejudice to the bank of not my making a sequestration order today is that it may be affected by a dissipation of assets by the debtor after today including a dissipation in the pursuit of the litigation against Mr Cleary. I have been referred to the decision of the Full Court of this court in Ling v Enrobook Pty Limited (1997) 74 FCR 19 and in particular the court's statement of the test to be applied for the purposes of determining whether, pursuant to s 52(2) of the Bankruptcy Act 1966 (Cth), I could be satisfied by the debtor that 'for other sufficient cause a sequestration order ought not to be made' and that therefore I might in my discretion dismiss the petition. But the authorities do not suggest that it is in the public interest to allow insolvent debtors to prosecute litigation generally. Mr Bell points out that if the petition remains undetermined prior to its expiry on 9 July 2006 the bank will lose the benefit of any relation back period based on the occurrence of the act of bankruptcy which founds the petition. If I were to grant an adjournment there would be a very tight time frame within which, ultimately, a Supreme Court judge would have to give a reasoned final judgment, if that were to happen prior to the expiry date of the petition. 13 On the other hand if I were to refuse to grant an adjournment of the petition, a case which clearly has a triable issue as found by the Court of Appeal, and which has a number of very difficult factual and legal issues may never be able to be determined since the overwhelming quantum of the debtor's creditors consist of the bank by reason of the size of the judgment debt. 14 The only evidence of the debtor's financial position currently before the court is to be found in his affidavit of 2 February 2005. That position reveals that as at that time based on the then value of the judgment debt of $5.3 million, there was a surplus of approximately $1.3 million. However, the judgment debt has now increased to about $6.1 million, that is an increase of approximately $800,000. 15 Mr Ireland has offered that the debtor would provide an updated verified statement of assets and liabilities if an adjournment were to be granted and a condition made that he do so and would also give an undertaking not to dispose of his assets otherwise than in the ordinary course of business and in a way that ensured that there would be no dissipation other than, I infer, for ordinary living expenses and the payment of such legal fees and disbursements which might be due to finance the Supreme Court litigation and, to the extent necessary, this litigation. 16 Balancing the interests of justice and of the parties as best I can I am of opinion that the appropriate course which I should pursue is to grant a very short adjournment at this time to enable the debtor to provide a verified statement of assets and liabilities and for the bank to formulate, and I may be prepared to deal with this immediately, the terms of an order or undertaking which would sufficiently protect the debtor's assets from being dissipated. 17 Provided that a satisfactory position is revealed in the affidavit and appropriately crafted undertakings and orders can be formulated, I am of opinion that it is in the interests of justice that the determination of whether or not the debtor has shown sufficient cause to warrant the proceedings to be dismissed should at least await the anticipated time of the conclusion of the Supreme Court trial listed to commence on 29 May 2006. 18 Subject to hearing from the parties, what I would propose would be that I order the debtor to file and serve an affidavit setting out his current assets and liabilities and his dealings of any material kind between the date of his affidavit of 2 February 2005 and the date of the swearing of the affidavit. I propose to direct that the affidavit be filed and served by 4 pm tomorrow and that the matter be returnable at 9.30 am on 12 April. I certify that the preceding seventeen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | creditor's petition where petition based on judgement debt opposition to creditor's petition application for adjournment where concurrent proceedings prejudice to parties bankruptcy |
2 Further evidence tendered by the respondents on 6 August 2007, following the re-opening of the respective cases of the applicant and the respondents, after the hearing had concluded on 19 June 2007, revealed that there is a material inconsistency between what the public record shows the issued capital of Kjun International Pty Limited to be and what Kjun International Pty Limited's own Register of Members reveals. 3 It may be that share transfers have been made but not registered and that further shares have been allotted, without the relevant allotments being recorded, but there is no evidence to allow any conclusions to be drawn in this regard. 4 The minute book recording minutes of meetings of directors of Kjun International Pty Limited (Exhibit 5 as tendered on 6 August 2007) only records resolutions passed at meetings which took place on 5 May 2000. The unsigned minutes of one such meeting recorded the deemed allotment to the applicant of one share on 5 May 2000 and the deemed allotment to Seon Ho Jang of one share on the same date. The same minutes recorded the appointment of the applicant and Seon Ho Jang as directors of Kjun International Pty Limited. 5 There are no minutes recording the registration of any transfer, by Seon Ho Jang, of his share in Kjun International Pty Limited to the applicant and no minutes recording the allotment of a further 998 shares in Kjun International Pty Limited to the applicant. 6 Kjun International Pty Limited's register of members (Exhibit 6 as tendered on 6 August 2007) shows that only two shares have been allotted by it, one held by the applicant and the other held by Seon Ho Jang. 7 A register of directors (Exhibit 9 as tendered on 6 August 2007) showed that the directors of Kjun International Pty Limited were the applicant and Seon Ho Jang. The minutes of meetings of members of Kjun International Pty Limited record no changes in this regard. 9 Clauses 73 --- 78 inclusive of Kjun International Pty Limited's constitution made provision in respect of the appointment, removal and remuneration of directors of Kjun International Pty Limited. ... a director appointed under any of Clauses 73, 74 or 75 shall hold office until he dies, or until his office becomes vacant by virtue of the Law [a reference to the Corporations Law] , the SIS Act [a reference to the Superannuation Industry (Supervision) Act 1993 (Cth)] or this Constitution . The notice must be in the prescribed form. 12 Notwithstanding what is revealed in Kjun International Pty Limited's register of members, information obtained by the Australian Securities and Investments Commission ('ASIC') from the national database suggests that the issued capital of Kjun International Pty Limited consisted of 1,000 shares. A 'Historical Extract' of 27 October 2006 (part of Exhibit A) indicated that the applicant was the holder of 1,000 shares and that Seon Ho Jang was a former member of Kjun International Pty Limited as at that date. In other words, the writing is proof of such a matter in the absence of evidence to the contrary. I will later return to address the relevance of a finding that, on the basis of the register of members, only two shares in Kjun International Pty Limited had ever been allotted, one of which was held by the applicant, and the other by Seon Ho Jang. 15 In relation to the status of Seon Ho Jang as a director of Kjun International Pty Limited, the 'Historical Extract' of 27 October 2006 suggests that he ceased to be a director on 5 May 2001. Having regard to s 1274B(2) of the Corporations Act , it is clear, on the evidence, that the applicant became the sole director of Kjun International Pty Limited from that date. 16 The applicant contends that the shares are held by Ji Song in trust for the applicant. 17 Alternatively, the applicant contends that the fifth respondent engaged in unconscionable conduct within the meaning of s 51AA of the Trade Practices Act 1974 (Cth) ('the Trade Practices Act ') and also that the first, second, third and fifth respondents engaged in misleading or deceptive conduct within the meaning of s 52 of the Trade Practices Act and/or s 42 of the Fair Trading Act 1987 (NSW ) ('the Fair Trading Act ') and/or s 1041H of the Corporations Act which resulted in the transfer of the shares by the applicant to the third respondent. In the circumstances the applicant seeks orders restoring to him ownership of the shares. 18 Lying at the heart of the proceedings is the trade mark 'Su-shi World' said to have been registered as No. 785516 on and from 12 February 1999. That trade mark was apparently registered by the fifth respondent, Su-shi World Australia Pty Ltd ACN 076 098 701, a Song family company, of which the first respondent was a director between 23 October 1996 and 29 May 2006 and of which the second respondent has been the sole director since 29 May 2006. 19 The applicant contends that by a deed made 1 May 2002 Su-shi World Australia Pty Limited assigned certain intellectual property including the trade mark 'Su-shi World' to Kjun International Pty Limited. The consideration for the assignment was said to be $50,000 which was allegedly paid to Su-shi World Australia Pty Limited by a bank cheque on 25 October 2002. The first, second, third and fifth respondents (collectively referred to as 'the respondents') do not accept the validity of the alleged assignment of the trade mark. 20 As it transpires Su-shi World Australia Pty Limited allegedly transferred the registered trade mark to LSU Pty Limited ACN 119 854 152 as trustee of the Nirvana Investment Trust by a Deed of Assignment dated 24 May 2006. LSU Pty Limited was a Song family company of which the first and second respondents have been directors since 24 May 2006. The applicant does not accept the validity of that assignment. 21 In the foregoing circumstances, Kjun International Pty Limited, then said to be wholly owned by the applicant, and an associated company, Sushi Nara Australia Pty Ltd ACN 099 988 333, instituted proceedings NSD 1661 of 2006 against LSU Pty Limited as trustee of the Nirvana Investment Trust, Su-shi World Australia Pty Limited, Dong Soon Song ('Sue Song') and Suk Joon Song ('Luke Song') ('the trade mark proceedings') on 30 August 2006. By an Amended Application filed 1 September 2006 SNK Trading Pty Limited ACN 105 594 296, a Ku company, was recorded as being a third applicant and JHJ Brothers Holdings Pty Limited ACN 119 204 125, another Song family company of which Luke Song and Sue Song have been directors, was recorded as being a fifth respondent. Neither of these companies would appear to have become parties to the trade mark proceedings by an order of the Court under Order 6 rule 8 of the Federal Court Rules , nor would they appear to have become parties in accordance with Order 13 rule 2(4) or 2(5). 22 Sushi Nara Australia Pty Limited claims to be a franchisor of 'Su-shi World' deriving rights to franchise others to use that name from Kjun International Pty Limited as the equitable owner of the registered trade mark 'Su-shi World'. The name "SUSHI WORLD", the Marks, and the brand names, logos and slogans associated with the Licensor's goods or services and the System are part of and features of the Image'. 23 In the trade mark proceedings the applicants therein seek relief in respect of the trade mark 'Su-shi World' and certain consequential relief. An order that the Register of Trade Marks be amended by recording the first applicant [Kjun International Pty Limited] as registered owner of Trade Mark No. 785516. Alternatively, an order that the first respondent [LSU Pty Limited as trustee of the Nirvana Investment Trust] , by its directors, the third and fourth respondents [Sue Song and Luke Song] , sign an application and all other documents prescribed pursuant to s.107(2) of the Trade Marks Act 1995 for an assignment of Trade Mark No. 785516 from the first respondent to the first applicant within 7 days of the date of this order. Alternatively, an order that the Register of Trade Marks be rectified by cancelling the registration of Trade Mark No. 785516 on the grounds set out in ss.88(2)(c) and (e) of the Trade Marks Act 1995 . Declaration that the first respondent had and has no grounds for making the threats of legal proceedings for infringement of registered Trade Mark No. 785516. These proceedings were instituted on 21 December 2006 after what was, arguably, a settlement of the trade mark proceedings on or about 25 October 2006, at least as between the parties named in the original Application in those proceedings. The only conclusion that the Court can reach is that, despite the inappropriate registration by the Applicant, Ji Song is not the owner of any shares in Kjun International Pty Limited. The Applicant has, since the outset, conducted this proceeding on the basis that an effective transfer of shares had occurred in circumstances where a cursory glance at the constitution would have disclosed that this was not the case. However, as will be apparent later, Mr Ku's evidence, which I accept, is that he didn't ever execute a traditional form of transfer of the shares to Ji Song. This is now common ground. 27 It so happens that on 9 November 2006 a Cross-claim was filed in the trade mark proceedings notwithstanding the alleged 'settlement' of those proceedings that occurred on or about 25 October 2006. The cross-claimants were each of the five parties named in the Amended Application in the trade mark proceedings as being respondents, including JHJ Brothers Holdings Pty Limited. The cross-respondents were each of the three parties named in the Amended Application as being applicants (Kjun International Pty Limited being wrongly described as ACN 105 593 879), including SNK Trading Pty Limited, together with Kjun Australia Pty Limited ACN 092 708 999 (sic), Theme Land Group Pty Limited ACN 118 575 992, Jun Bom Ku, the applicant in the current proceedings, Keith Kang Ho Rhee, Young Ha Kim, Young Kim Legal Pty Limited ACN 101 573 460, ENC International Pty Limited ACN 105 593 824, SSW Management Pty Limited ACN 115 922 864 and Sushi World Pty Limited ACN 100 334 058. 28 For present purposes it is unnecessary to determine the strengths and weaknesses of the cases of the respective parties in the trade mark proceedings in relation to the Amended Application and the Cross-claim. However, it is important to note that the Cross-claim, which bears a certificate of the cross-claimants' solicitor dated 20 October 2006, was not served until 13 November 2006, i.e. after the transfer of the shares from the applicant in the current proceeding to Ji Song was said to have been made on 9 November 2006. Having said that, it may be noted that paragraph 5 of the Defence filed 19 October 2006 in the trade mark proceedings did refer to 'the reasons pleaded in the cross-claim'. The substantive parts of the two forms of agreement were expressed in the Korean language. It is common ground that the translations proffered by the applicant may be relied upon, although there is an apparent error in the alphabetical identification of the paragraphs in the translation of the longer form of agreement. The longer form of agreement contained seven clauses and the shorter form contained five clauses. Both parties are to accept it as a legally binding agreement and execute it. Both agree to keep the content of the agreement confidential not disclosing it to any third party apart from 'A' and 'B'. 'A' admits and agrees that 'B' continues the franchise system. And 'B' agrees that there will be no more lawsuits against 'A' regarding this matter. Both parties are to accept it as a legally binding agreement and execute it. Both agree to keep the content of the agreement confidential not disclosing it to any third party apart from 'A' and 'B'. And 'B' agrees that there will be no more lawsuits against 'A' regarding this matter. The longer form of agreement was translated on 18 December 2006 and the shorter form on 1 May 2007. 30 Both forms of agreement had been prepared by Mr Ku on 24 October 2006. They were presented by him to Luke Song at the meeting on 25 October whereupon, following discussion, both forms of agreement were executed in duplicate by each of Mr Ku and Luke Song. The circumstances pertaining to the execution of the seemingly inconsistent documents will be addressed hereafter. That agreement includes in its heading, in manuscript form, a reference to SNK Trading Pty Limited as a third applicant in those proceedings and also a reference to JHJ Brothers Holdings Pty Limited as a fifth respondent. Each party will be entitled to continue to operate the Sushi World shops currently managed by them or by companies associated with them without interference from any other party in the proceeding. Each party without any interference from any other party will be entitled to open new Sushi World shops and to enter into leases in respect of those new shops provided that in so doing there is no assignment of the goodwill and intellectual property the subject of this proceeding. In relation to shops currently intended to be opened by a party in respect of which another party has informed the landlord or intending landlord that there is a dispute as to the ownership of the goodwill and intellectual property the subject of this proceeding, that other party will on the request of the firstmentioned party inform the landlord or intending landlord in writing that, whilst the parties remain in dispute, the landlord or intending landlord is free to enter into leasing arrangements with the firstmentioned party if the landlord or intending landlord so chooses. In the case of the applicants, the respondents will so inform QIC (if requested) in respect of the shop to be opened at Centre Tower and at Canberra City. In the case of the respondents, the applicants will so inform (if requested) QIC in respect of the shop and kiosks to be opened in the Canberra Centre. His computer files also suggest that the longer form of agreement was the subject of amendment later in point of time than the last amendment of the shorter form of agreement. Having noted that, I must say that I find it curious that the shorter form of agreement contains paragraphs identified as A, B, D, F and G. One might have thought that those paragraphs would have been simply A, B, C, D and E if the shorter form of agreement came first. However, it is possible that in its original form the shorter form of agreement contained paragraphs A, B, C, D, E, F and G, and that it was later amended to excise paragraphs C and E without there being any re-identification in alphabetical order of the remaining paragraphs, followed by the creation of a second version founded upon the shorter form of agreement but with new paragraphs B and C inserted into it and the old B reidentified as D. This may explain how it came about that there were two paragraphs D in the longer form of agreement. 34 Mr Ku's evidence is that on 24 October 2006 he prepared not only the shorter form of agreement and the longer form of agreement but also a form of transfer whereby Ji Song could transfer back to him shares in Kjun International Pty Limited, be they all of the shares or some of them. The 'Transfer of Shares' form did not provide a space for the insertion of a number to indicate how many shares were being transferred back to Mr Ku. Furthermore, it did contemplate the payment by Mr Ku of a monetary consideration for any transfer back that may have been in contemplation. 35 Mr Ku says that when he had finalised the preparation of the longer form of agreement on the evening of 24 October 2006, he printed off two copies of each document, inadvertently including the shorter form of agreement, which he did not then intend to utilise. 36 As it transpires Mr Ku attended his meeting with Luke Song on 25 October 2006 armed with two copies of the longer form of agreement, two copies of the shorter form of agreement and two copies of the form of share transfer which he had prepared to allow Ji Song to retransfer shares in Kjun International Pty Limited to him, all within a single plastic sleeve. In about 1999 he was assisting a supplier to the Songs. Following his initial contact with the Songs through that supplier, he spent some time teaching them how to use a computer. Between about mid-2003 and mid-2005 Sushi Nara Australia Pty Limited secured more than ten franchisees for Sushi World outlets. The reason for this is that the parties do not intend that their agreement should give rise to legal relations. This intention may be implied from the subject matter of the agreement, but it may also be expressed by the parties. In social and family relations such an intention is readily implied, while in business matters the opposite result would ordinarily follow. However, even in business matters, there can be no reason why the parties should not intend to simply rely on each other's good faith and honour. If they clearly express such an intention, there can be no reason in public policy why effect should not be given to it (per Scrutton LJ in Rose and Frank Company v J. R. Crompton and Brothers, Limited ('Rose and Frank') [1923] 2 KB 261 at 288). 39 In Rose and Frank the English Court of Appeal was considering a signed memorandum purporting to set out the understanding between two English firms supplying carbon paper of various kinds and the American firm which was importing such carbon paper. It was held that the document did not constitute a binding agreement. 40 An executed document becomes an agreement when and in the manner the parties intend that it should do so (see per Lord Greene, MR in Eccles v Bryant (1947) 2 All ER 865 at 869.3). So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties"; per Sugarman J. (sic) in the Full Court of the Supreme Court of New South Wales, quoted on appeal with approval by Menzies J. in Thorby v. Goldberg [1964] HCA 41 ; (1964) 112 C.L.R. 597, at p.607. See also May and Butcher Ltd v. R. (H.L. ) [1934] 2 K.B. 17, at p.20, per Lord Buckmaster and, at p.22, per Lord Warrington. This general principle of the law of contract was stated by Viscount Dunedin in May and Butcher Ltd. v. R. , at p.21 in the following passage: "To be a good contract there must be a concluded bargain, and a concluded contract is one which settles everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties. Of course it may leave something which still has to be determined, but then that determination must be a determination which does not depend upon the agreement between the parties. In the system of law in which I was brought up, that was expressed by one of those brocards of which perhaps we have been too fond, but which often express very neatly what is wanted: 'Certum est quod certum reddi potest. ' Therefore, you may very well agree that a certain part of the contract of sale, such as price, may be settled by someone else. As a matter of the general law of contract all the essentials have to be settled. What are the essentials may vary according to the particular contract under consideration. We are here dealing with sale, and undoubtedly price is one of the essentials of sale, and if it is left still to be agreed between the parties, then there is no contract. 268-9 stated: "There are many cases in the books of what are called illusory contracts, that is, where the parties may have thought they were making a contract but failed to arrive at a definite bargain. It is a necessary requirement that an agreement in order to be binding must be sufficiently definite to enable a court to give it a practical meaning. Its terms must be so definite, or capable of being made definite without further agreement of the parties, that the promises and performances to be rendered by each party are reasonably certain. The situation is distinguished from a contract made by parties leaving an essential term to be agreed upon by them, and if they fail to agree the disputed term is to be determined by a third party or by arbitration. No doubt these categories may and frequently do overlap and many cases fall within more than one of them. The parties may have only agreed to agree. They may have left terms to be fixed by subsequent negotiation between them, their intention being that the provisions already agreed and those yet to be agreed shall operate together as one contract. Thorby v. Goldberg . The parties may have made their agreement subject not only to the preparation but also to the execution of a formal document. In such a case, then, even though everything has in fact been agreed, either party may withdraw before the execution of such a document; e.g. Coope v. Ridout . Their intention must be taken to be that until such execution each of them has a locus poenitentiae . Many cases falling under this head also fall under the first. The agreement may have left to the option of one party not only the mode of performance but whether there shall be any performance at all; e.g. Taylor v. Brewer . There remains a residual class of case outside the first three categories where the agreement reached is so vague and uncertain that the court cannot give it any definite meaning at all. Cf. per Lord Wright in Scammell (G.) & Nephew Ltd. v. Ouston (H. C. & J. G.). A consideration is illusory if its payment or fulfilment depends upon an unfettered discretion vested in the promisor. There are of course limitations. I have already referred to the case where the promisor has a discretion, not only as to what he shall do, but also as to whether he shall do anything. Such a promise is illusory. Furthermore it appears that the promise will not be enforceable if the manner of performance, including the amount of money to be paid or, if relevant, the number of shares to be offered, is a matter entirely in the discretion of the promisor and no criteria by which the performance required of the promisor can be measured, or the minimum of that performance can be measured, is expressed or can be found to be implied. 45 Cases may arise where a vague, uncertain, or meaningless clause in a contract can simply be ignored. Other like clauses may be waived by a party if inserted solely for the benefit of that party. However, a clause which is definitive of the ultimate rights which it is contemplated that a party will get under his contract is incapable of being so treated. 46 However, not all ambiguous contracts are to be found void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlin's words in this connexion in Hillas & Co. Ltd. v. Arcos Ltd. ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright's words in Scammell (G.) & Nephew Ltd. v. Ouston is not "so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention", the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved. It was further held that since the uncertain term was a material and inseverable part of the contract, there was no concluded agreement between the parties. Nor do we think that the further expression "as to the interpretation or operation" of this clause covers a dispute as to either of those matters. We, therefore, are of opinion that the clause is uncertain in that it neither specifies nor provides a means for the determination as between the parties of the period for which the contemplated lease shall be granted or the rent which shall be payable thereunder. If the contract be divisible, the part which is void may be separated from the rest and does not affect its validity. The Court held that the condition was void for uncertainty because, upon construing it, one was unable to determine the term of the relevant sub-lease, the type of crop, or what 'one-third share of crops' meant. The condition did not specify the nature of the crop or crops which the respondent might plant although, no doubt, it was contemplated that they would be peanuts. But the condition does not restrict him in his choice of crops and it may well be that it was for this reason that the condition provided, in effect, that the lease should subsist "until the end of peanut crop in 1968 or end of harvesting period or as otherwise agreed upon". The duration of the lease, therefore, it seems to us, was to depend upon what sort of crops had been sown for harvesting in 1968 and any agreement to grant a lease with the term so defined, or undefined, is void. I agree entirely with what has been said about this condition being void for uncertainty. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ in Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] ). 50 Actual beliefs and intentions are, generally speaking, irrelevant in the determination of the legal rights and obligations flowing from a written agreement (see per Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ in Equuscorp Pty Ltd v HGT Investments Pty Ltd [2004] HCA 55 ; (2005) 218 CLR 471 at 483 [34] ). 51 The primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate', to use the words from earlier authority cited in Locke v. Dunlop ((1888) 39 Ch D 387 at 393), which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case ((1880) 16 Ch D 681 at 686). Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas and Co. Limited. v Arcos Limited. ((1932) 147 LT 503 at 514) that the court should construe commercial contracts 'fairly and broadly, without being too astute or subtle in finding defects', should not be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v Australian Chilling and Freezing Co. Ltd . [1968] HCA 8 ; (1968) 118 CLR 429 at 437) (per Gibbs J, as his Honour then was, in Australian Broadcasting Commission v Australasian Performing Right Association Limited [1973] HCA 36 ; (1973) 129 CLR 99 at 109-110) . 53 Subsequent conduct is not admissible as an aid to construction of a contract. 54 In seeking to ascertain the intention of the parties to a written contract extrinsic evidence may not be resorted to except where such evidence may be called in aid in the interpretation of the written instrument. Clearly enough, it is not to the point to make an independent examination of extrinsic facts, even if they were within the knowledge of both parties, and upon such evidence to conclude that a particular provision was or was not of importance to the parties or to either of them. The question for determination is the intention of the parties as disclosed by the contract into which they have entered (per Taylor, Menzies and Owen JJ in Whitlock v Brew at 461). But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract. The collateral agreement cannot impinge on the main agreement. The consideration for a collateral agreement may be the making of the main agreement (per Knox CJ in Hoyt's Proprietary Limited v Spencer [1919] HCA 64 ; (1919) 27 CLR 133 at 139 and per Isaacs J at 147-8; see also Chapman v Chapman [1983] 2 NSWLR 420 at 432-5 and Gates v The City Mutual Life Assurance Society Limited [1986] HCA 3 ; (1986) 160 CLR 1 at 11). 60 Trusts may be classified in a variety of ways. (Underhill and Hayton, Law Relating to Trusts and Trustees, 16 th Edition, 2003, D J Hayton at 73. Prima facie there is a resulting trust but where satisfactory proof is forthcoming that a purpose of the transaction was to confer beneficial ownership, the presumption is rebutted (see Russell v Scott ('Russell v Scott') [1936] HCA 34 ; (1936) 55 CLR 440 --- the case of an aunt who put money into a joint bank account in her name and that of her nephew on the basis that it would be held in trust for the aunt during her lifetime but thereafter the beneficial interest would pass to the nephew). 63 There is no jurisdiction in an Australian court of equity to declare an owner of property to be a trustee of that property for another merely on the ground that, having regard to all the circumstances, it would be fair so to declare: Wirth v Wirth [1956] HCA 71 ; (1956) 98 CLR 228 at 232 ; Hepworth v Hepworth [1963] HCA 49 ; (1963) 110 CLR 309 at 318 ; Bloch v Bloch [1981] HCA 56 ; (1981) 180 CLR 390 at 400; Muschinski v Dodds ('Muschinski') [1985] HCA 78 ; (1985) 160 CLR 583 at 594-5, 608 and 615-6. 64 In rejecting the notion that a constructive trust will be imposed in accordance with idiosyncratic notions of what is just and fair Deane J in Muschinski acknowledged that general notions of fairness and justice are relevant to the traditional concept of unconscionable conduct, this being a concept which underlies fundamental equitable concepts and doctrines, including the constructive trust. His Honour pointed out that the constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle (see per Mason CJ, Wilson and Deane JJ in Baumgartner v Baumgartner ('Baumgartner') [1987] HCA 59 ; (1987) 164 CLR 137 at 148. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf. Atwood v. Maude , and per Jessel M.R., Lyon v. Tweddell . As it transpires, Rolls Razor Ltd went into voluntary liquidation prior to the payment out of the dividend. 67 In Carreras Rothmans Ltd. v. Freeman Mathews Treasure Ltd. [1985] 1 Ch 207 it was found that moneys paid by a company to an advertising agency, which were placed in a special account after the agency experienced financial difficulties, to be paid out to media interests with whom advertising had been placed for the company was held in trust by the agency for the payment over of the monies to the third party media interests. Most of the cases in this line are cases where there has been an agreement for consideration so that in one sense each party has contributed to providing the property. But if the common intention is that property is transferred for a specific purpose and not so as to become the property of the transferee, the transferee cannot keep the property if for any reason that purpose cannot be fulfilled. It acquired no more than what Dixon J called a dry legal interest: see [Perpetual Trustee Company (Limited) v Commissioner of Stamp Duties of New South Wales [1941] HCA 15 ; (1941) 64 CLR 492] (at 510). On its part, Quistclose had both a contractual right to repayment out of the general assets of Rolls Razor, as a general creditor, and the beneficial interest in a fund, whether by way of resulting trust or as the second limb of an express trust. There is no need for particular caution in drawing the inference that a trust was intended: see Bahr v Nicolay (No 2) [1988] HCA 16 ; (1988) 164 CLR 604 at 618-619. However, it also is important to appreciate both the flexibility of the institution of the express trust and the range of equitable institutions which fall short of but have some of the characteristics of a trust. But the facts in such cases are susceptible of infinite variation and the trust is a supple instrument. Hence the suggestion by Professor Finn that if the facts disclosed no contractual obligation by the borrower to the lender to pay the creditors, there could hardly be present a concurrent intention to create a trust in their favour; rather, the borrower would hold the moneys borrowed as trustee of an express trust for the lender, subject to a mandate for the lender (sic) to use the fund to pay the creditors. On that footing, there would be but one trust, created to give the lender security for its rescue operation of the financially unhealthy borrower, but not to render the creditors beneficiaries under any trust. However, the principles which are to be applied are clear, as indicated above. Three witnesses were called in the respondents' case, namely Luke Song, Sue Song and Ji Song. It seemed to me that the Songs had a sense that Mr Ku had, metaphorically speaking, pulled the wool over their eyes and in particular those of Mrs Song, securing for himself advantages in respect of Sushi World to which he was not entitled. Likewise, it seemed to me that Mr Ku had a sense that he had helped the Songs develop and expand the Sushi World business, especially when Luke Song was absent from the business and Sue Song was tired, overworked and ill, in such a way as to entitle him to some worthwhile fruits from his endeavours. 75 In this context, I have endeavoured to evaluate the oral evidence that has been given. All the witnesses impressed me as being intelligent, if not highly intelligent. It is regrettable that each of them appeared to me to give evidence that was tailored to fit in with the cases that they were seeking to advance or support, rather than simply provide direct and truthful answers to the questions that were asked of them. I felt that the Songs' evidence, in particular, smacked of being given to accord with a pre-set agenda. At times, I felt the answers provided by Luke Song were devious and/or evasive. Senior Counsel for the applicant submitted that, in assessing the credibility of the respondents' witnesses, I should rank them as Sue Song --- most believable, then Ji Song, followed by Luke Song as least believable. I would incline to the view that Ji Song was more believable than his mother. Leading counsel for the respondents submitted that Mr Ku should not be found to be a witness of truth. Notwithstanding the concerns that I have with Mr Ku's evidence, I would, generally speaking, prefer his evidence to that of Luke Song. 77 Even before those proceedings were instituted, there had been discussions between the Ku and Song interests in relation to the resolution of differences concerning the ownership of various Sushi World outlets and shares in frachisees of businesses utilising the Sushi World name. These led to the preparation of documents which contemplated the 'private' transfer of Sushi World outlets or shares in various companies associated with Mr Ku to one or other of the Songs' three sons. Documents in the form of Letters of Agreement were prepared which were variously dated 1 January 2006 (a Sunday) and 1 June 2006. The meeting had been convened at the instigation of Mr Park. The fighting between us is started because of lack of mutual trust and blocked communications, because many people say all kinds of created allegations against you and against us, that escalate the situation more worse and worse. Let's resolve this fighting and end this legal case without further going. But this fighting started when you set up LSU Pty Ltd without my knowledge and sent letter to all Franchisees on 16 Aug 2006. As long as we tell the truth to the franchisees currently very upset and correct the wrong action, I don't have any reason to proceed with this legal action. We are not fighting to kill each other. Let's resolve this problem with mutual understanding and trust with the truth'. Let's talk and finalise all legal actions doing or preparing to do against each other. We should make new regulations with them. It is regrettable that we are all in the legal dispute each other. Let's solve this problem through negotiations between us. On this occasion, Sue Song was also present. You want to fight with me? OK you do whatever you want to do and I will show you what I can do against you. When was that company incorporated? For what reason did you send letters to all of my franchisees who are all my friends and demand compensation or that they cease trading? That's the action you would regret later on and that's the action breaking our mutual trust and making me in the middle of this legal fighting. You know Sushi Nara Australia is the company developing franchising systems and that's the reason why you have paid all material costs to Sushi Nara Australia for the last three years. This totals around 2 million dollars. You were the person giving all of the background information when I made the franchise manual and disclosure statement with Richard Jang. You think the mistakenly not changed trade mark is still under Sushi World Australia's name and you tried to transfer it to LSU Pty Ltd a few months ago. You valued it at $100.00 and now you want to try to act as a franchisor? None of the franchisees believe that nonsense and they will not accept LSU Pty Ltd as Franchisor or IP holder, because when they started the sushi world business they knew which company is IP holder and which company is franchisor. Even you told them when they phoned you with issues that they should contact me at Sushi Nara Australia who is the Franchisor. You already knew Kjun International Pty Ltd is IP holding company and Sushi Nara Australia is Franchisor. Why are you doing this and breaking our mutual trust and betraying me and my friends? Why did you send that kind of stupid letter to all our franchisees and make me in the middle of start legal action against you? We worked as family member before? Aren't we? I don't care which company holding IP and which company is franchisor. The thing makes me very upset is how can you start legal action against me and why you did not consult me when you or your franchisees got that kinds of letter and you should come and see me instead of starting this legal action. You told me you were in Liverpool Westfield Shopping Centre having a meeting with the center manager. You told me that you will call back to me after finish that but no phone calls. I realized that you were staying with your solicitor. My Solicitor at the time, MNA Lawyers, called me and said your solicitor had told them to ask me not to contact you privately and that they would try to get the injunction for all our franchising plan and project. You know all the true story and what is current Sushi World Franchising system and structure. Why you did this to the person who worked as family member together? That letter says LSU Pty Ltd which is incorporated only a few months ago is IP holding company and act like franchisor. You know Kjun International Pty Ltd is the IP holding company and Sushi Nara Australia Pty Ltd is Master Franchisor. From the year 2002 to up until now we and all franchisees know that our franchising structure and you and I worked in the same office for last 4 years, how you can plan like this without my knowledge and sent letters caused all this legal dispute between you and me? : I don't know why you are doing this to me. I know you are not the person doing things like this to me. If you really don't know nothing about the letter sent to franchisees on 16 Aug 2006, there is no reason to continue this legal action for me. Let's stop this and return back to the good relationship we had before. Do you think Sushi World is yours? I should fix the problem. You are no longer working for me so I ask my solicitor to send letter to the store managers. I don't know whether he sent it or not. Sushi World company is mine and you were just an employee. There was no such agreement between us like the Deed of Agreement. 84 I am satisfied that conversation took place on 18 October 2006 generally to the effect of that set out above. Mr Park was in attendance for a brief period of time but he left the meeting early. So I can save face with my friends then I will transfer the shares in Kjun International to your son, then the legal fight will be over. I want to continue the franchise work after Court case. I agree with you, conversation is the best solution. They worry because your solicitor send letters to them. They are going to sue me if they are forced to change name. So please recognise my work for 2002 to 2005 for my franchise work. To show my loyalty, I will transfer my shares to your son, so everything will belong to Ji. IP will be yours. I will have nothing. You just recognise my work so I can save face with my friends. But please don't tell my friend Keith Rhee or my solicitor or my friends. If they know, they give me hard time. They will think I am so stupid. I wish after this Court case you give me something like shares or whatever franchise work. It's up to you. I am sure we will be friends again and I can trust you and maybe we can work together again. I hope all Court case will be over from this agreement. Mr Ku denied that conversation took place as alleged by Luke Song in the first three passages quoted above. He also disputed that conversation took place in the terms of the passages that have been quoted from 'I didn't claim any shops' to the end of Luke Song's account of the alleged conversation. 88 Mr Ku says that prior to the meeting he had decided that there needed to be demonstrations of good faith. I have a possible way we can settle our dispute instead of fighting about it in Court. This is the case, notwithstanding Luke Song's suggestion that the words 'this agreement' were used as part of the second version. I consider the evidence as expressed in the last two passages to be nothing other than a regurgitation of the first version. It encapsulated the matters as discussed and should be preferred. 91 In giving their evidence in the English language, Mr Ku's expression, and to a lesser extent, Luke Song's, was not particularly clear. '... Because Sue Song and me, we work together. She was the founder and I respect that, but knowing the franchise [es] , after getting that letter from the LSU Pty Limited, they are very upset and they don't want to work with Sue Song. They thought that the letter [was] sent from Sue Song. So ... if Sue Song is not working, but I am happy to appoint another person [to take her place in dealings with Su-shi World Australia Pty Limited] and they learn the franchising from me. That is what I mentioned to Luke Song. 'And you said on 19 October that you would transfer the shares to Ji Song, the shares [in] Kjun International, didn't you? 'Yes. 'And you were concerned then not about retaining [any] intellectual property rights, but simply getting on and working with the Songs to build Su-shi World up, weren't you? 'No. '... there is no mention there [in a conversation attributed to 29 October 2006] of the intellectual property, is there? 'No. In 19 October 2006. '... when talk about ... being prepared to transfer the shares of Kjun International to Ji Young Song, there is no mention there ... of the [intellectual] property being retained by you, is there? 'Intellectual property is owned by Kjun International Pty Limited. 'But you are going to transfer the Kjun International to Mr Song, aren't you? 'Yes, that is my intention. 'You knew you had no right to the intellectual property of Su-Shi World when you swore this affidavit on 20 December last year, did you? 'When I make this affidavit I knew that Kjun International Australia (sic) is transferred to Ji Young Song but ... I thought the agreement is a condition [i.e. a conditional one] and that one is assigned, so it is only as a franchise --- Sushi Nara Australia Pty Ltd keep on doing the franchising and protect the franchise [e] s. It is okay, that is always my intention. That is all I knew at the time. '... you understood ... that what Mr Ku was suggesting at that early first stage or early stage in the meeting was a way to re-establish trust between the parties? 'Yes. 'So that with the trust established, you would afterwards be able to go on and try to agree a way in which you could settle the dispute itself? He may have believed that a transfer of the shares would be conditional upon a retention of rights by Sushi Nara Australia Pty Limited to continue to work as a head franchisor of the Sushi World name. Whether his belief, if indeed he held that belief, was communicated to the Songs at any relevant time, is another matter. One thing is clear and that is that Mr Ku's primary focus was upon re-establishing a relationship of trust with the Songs following his institution of the trade mark proceedings against them and their interests on 30 August 2006 to which they took offence. In my opinion Mr Ku's actions were strongly influenced by cultural overtones, where trust, loyalty and good faith, as such words are used in general parlance, were paramount. 95 Whilst re-establishment of a relationship of trust with the Songs was a primary concern of Mr Ku in October 2006, his evidence was that he was also focussing upon the trade mark ownership and the franchising arrangement. '... he [Mr Ku] was saying that he would transfer the shares to (sic) Kjun International to establish a trust which would enable the dispute to settle? 'You knew, didn't you, that Mr Ku wanted to settle the dispute on a basis which left Sushi Nara's franchisees carrying on business as franchisees of Sushi Nara? 'I don't know how he think, but in my idea, he wanted to continue work with me --- or for me on the franchise area. '... what were the possible terms of settlement that you discussed with Mr Ku, to the extent you can recall them now? 'I think that he transfer share [s in Kjun International Pty Limited] to my son. The first court case trade mark [the trade mark case] will be over. Then he [Mr Ku] will work for me [Luke Song] on the franchise area. '... you recall, don't you, talk about Kjun's role as licensee? 'No, he didn't tell me about it at this meeting. He didn't tell me about it at all over the Kjun. 'He didn't tell you anything about the role [of Kjun International] ? This is only wasting time, a waste of money. Maybe it looks like fighting between son and the father. Mr Ku advised that his friends were 'not happy' because they had received a letter from LSU Pty Limited's solicitor. ... I know it's very hard to reach agreement to make all side happy because my wife Sue, also my solicitor, doesn't want me [to] talk with you. So ... they told me it's not that easy to end this case through the conversation or negotiations. Maybe they told me, "You may be misleading or cheating [i.e. you, Luke Song, may be mislead or cheated] by Mr Ku's tactics". I didn't ... you at all. I still want to work for you. So to prove my loyalty also my hardworking trading the period of time when I [referring to Luke Song] was absent, I transfer these shares to your son. If you transfer shares to my son, I trust you. We can work together in the future ... you are good in the franchise area so you can work with me in the franchise area, so we can develop our company for the future. 'You said to him, "If you can transfer the shares, the case will be over" didn't you? 'Yes, the trademark case will be over. '... And he said to you that if anything went wrong in those proceedings, and they weren't settled, then the shares would come back to him, didn't he? 'No. 'So you say that he was saying to you, "You can have these shares, and I trust you to bring the case to an end. " Is that what you say? 'Yes. 'It's the case, isn't it, that he said to you that he was not getting any money for the transfer of the shares that he proposed to you? 'Yes, he told me, "It's up to you. You give me some shares or anything for this --- for the transaction of shares. 'He said, didn't he, that, "You can transfer back to me Kjun shares as part of the settlement of the dispute," didn't he? 'No. 'He said to you that, in the future, you could give him back shares in Kjun International, didn't he? 'No, he told me, "It's up to you. You give me back something. 'He said to you, didn't he, that you could give him some number of shares in Kjun International later? 'Yes, he told me, it's up to me. 'And he said to you that that would be in the context of the settlement of the dispute, that the trademark proceedings were about, didn't he? 'No, he didn't mention like this. 'It was quite clear to you, wasn't it, as a result of what was said, that Mr Ku wanted to get back shares as part of the dispute resolution? 'No. 104 In relation to that passage in his affidavit where Luke Song said 'I hope all Court case will be over from this agreement' Luke Song informed me that he was speaking of an agreement between himself and Mr Ku under which Mr Ku would transfer shares to Ji Song. He explained that then the court case will be over with Mr Ku working for Luke Song in the franchising of the Sushi World name. Three things, the main issues, are agreed. That is the Kjun International transfer and trade mark and the other one is franchisee. 'The first was the agreement you reached on 19 October that you would transfer the shares to Ji Song in Kjun International? 'No, from Kjun International (sic) to Ji Song. 'But the transfer of the shares you had agreed to undertake on 19 October was not conditional upon the agreement whether it be by the short form or long form that was agreed on 25 October, was it? 'No, this is the settlement, like a settlement agreement. I am giving everything and show my trust but if I am not getting any other agreement why I give share to Ji Song. Furthermore, I am not satisfied that there was any promise on the part of Mr Ku to transfer the shares to Ji Song or that any such promise formed part of an agreement reached between Mr Ku and Luke Song in accordance with the principles enunciated above, for which there was any consideration. Luke Song did not want to make a commitment that would bind his wife without her authority and Mr Ku was going away to prepare a settlement agreement in documentary form for the parties to consider. 109 In my opinion, Mr Ku's proposal that he transfer the shares to Ji Song was simply an exercise undertaken at his instigation, directed at rebuilding a relationship of trust with the Songs. It was not directed at constituting Ji Song a trustee of the shares for Mr Ku. Rather, it was an act of faith, uninfluenced by any representations made by Luke Song or Sue Song. He was prepared to put his interest in Kjun International Pty Limited at risk, relying on Ji Song's beneficence to allow him to enjoy or share in it again. 111 In the meantime, Mr Ku says that he 'prepared a form of transfer' of the shares to Ji Song and that this occurred between 19 and 25 October 2006. He deposed to filling in 'a printed form'. The form which Mr Ku would appear to have prepared was not a share transfer form at all but rather a form of notification to ASIC to the effect that Ji Song had become the owner of the shares and that Mr Ku was no longer the owner of them. A copy of the six page 'Change to company details' form which Mr Ku filled in, dated 23 October 2006 and signed is attached to these reasons as 'Schedule 1'. No suggestion was put to Mr Ku that the document was not brought into existence and signed by him on the date that it bears. As mentioned at [26] no traditional form of transfer of the shares was ever executed by Mr Ku. This is now common ground. ... Before my meeting with Luke Song on 25 October 2006 (but after 19 October 2006) I had already prepared a form of transfer of my shares in Kjun International Pty Limited to Ji Young Song. ... It was just a printed form that I filled in. Before 24 October 2006 I had given that to Mr Kim, a solicitor ... and asked him to send it to ASIC. ... In the end he did not lodge the document and so I worked out how to do it over the internet. 113 For a gift inter vivos to be effective, it must be established that the donor intended to make an immediate gift and that he has 'done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him', (referring to the principle applied in Milroy v Lord (1862) 4 DeGF & J 264 [45 ER 1185]) (per Taylor J in Cope v Keene [1968] HCA 53 ; (1968) 118 CLR 1 at 12; see also per Kitto J at 6 --- 7). 114 An intended donee cannot obtain equitable remedies against the donor compelling him to give legal effect to his intention to give (per Dixon J, as his Honour then was, in Brunker v Perpetual Trustee Company (Limited) ('Brunker') [1937] HCA 29 ; (1937) 57 CLR 555 at 599). 115 In respect of the requirement that for a gift to be effective the donor must have done all that was 'necessary to be done', 'necessary' means 'necessary for the purpose of passing the property'. The word is not used in an obligatory sense. The donor is under no necessity, no obligation. What the Courts look at is what the donor might have done to perfect the gift (per Higgins J in Anning v Anning ('Anning') [1907] HCA 13 ; (1907) 4 CLR 1049 at 1082). 116 There is nothing unconscientious in a donor refusing at any stage to perfect a mere bounty (per Isaacs J in Anning at 1063). If property in the transfer remained in the transferor, his power of recalling it must also remain. For he would be entitled to possession of the paper, he could refuse to present it for registration and he could destroy it. ... I gave to Mr Kim the original transfer in the express post envelope and asked him to send it. ... Later I became aware ... that the share transfer had not gone through and I said I would check what had happened. ... Later when I checked with Mr Kim and realised he had not sent the transfer I did phone Luke Song and say I would do the transfer on the internet. 121 Mr Ku also gave oral evidence in respect of his giving the original of the completed 'Change to company details' form (a copy of which is reproduced in Schedule 1) to Mr Kim together with an envelope for use by him in transmitting the form to ASIC. '... you have given evidence about providing Mr Kim with an envelope which contained documents that you asked to be sent to the Australian Securities & Investments Commission in Melbourne? 'Yes. '... When you gave the documents to Mr Kim, or the relevant document that you wanted to go to the Australian Securities and Investments Commission ... [w] as the document, or documents, already in the envelope when you gave it to Mr Kim or was it separate from the envelope? 'It was separate. 'So you gave him the document and an envelope which he could use? 'Yes. 'Two things? 'Yellow, it's passport [I heard the witness saying express post] envelop (sic) ... and then inside the original one ... I put it inside and go there and I take it out and show him. 'So that when you spoke to Mr Kim you had the document in the envelope but it wasn't sealed? 'Yes, it wasn't sealed. 'Did you, at any stage, seal the envelope yourself? 'No, I didn't. In that meeting Jun Ku gave me an ASIC form "Change to Company Details" ... He gave me an express post envelope. However, although I said that, I did not post the transfer because I was worried that he might be cheated by Luke Song and Sue Song. ... Additionally, I had not seen the agreement in Korean which Jun Ku was preparing. ... I still held back the ASIC document because of my concern. I disclosed that I didn't follow his request, and then I was still holding the documents in my hand. I think about 10 November, he [referring to Mr Ku] told me he transferred the shares. So ... I chucked it [referring to the original completed "Change to company details" form signed by Mr Ku, a copy of which is reproduced in Schedule 1] out and throw it into the rubbish bin. A copy of that document is attached to these reasons as 'Schedule 2'. It recorded that on 1 November 2006 Mr Ku's shareholding in the register of members of Kjun International Pty Limited had become nil and that Ji Song's shareholding had become 1,000 shares on that date. 'The fact is you didn't transfer the shares until 9 November; correct? 'Yes. 'Even though you thought you had an agreement that you wanted on 25 October, isn't that correct? 'But I already --- before I go there, as I promised and we already came to an agreement on 19 October, I arrange to sending that copy of company change form to ASIC to other people [meaning as I understand it that before 25 October Mr Ku had provided Mr Kim with the "Change to company details" form in Schedule 1 for lodgement with ASIC]. And then I bring the copy of that paper and show them to Luke Song [meaning that Mr Ku brought with him to the meeting on 25 October 2006 a copy of the 'Change to company details' form which he had already provided to Mr Kim for lodgement with ASIC and showed the copy to Luke Song. It would appear that the copy reproduced in Schedule 1 was made from the copy so shown to Luke Song and apparently kept by him. ] --- I already kept my promise to reveal our trust. the day before Mr Ku provided the original of the form to Mr Kim for lodgement with ASIC. The copy of the form provided to Luke Song reproduced an Australia Post adhesive sticker CN7685802 as a postal record. Luke Song deposed that he was shown 'the express post envelope with the number CN7685802' at the meeting on 25 October 2006 that Mr Ku said he had used to send the 'Change to company details' form to ASIC. I do not accept that the envelope was shown by Mr Ku to Luke Song. All that Mr Ku produced was the copy of the 'Change to company details' form as reproduced in Schedule 1. The copy reproduced the Australia Post adhesive sticker at the top of the first page of the form. The original envelope had been left with Mr Kim on the previous day. 127 The meeting on 25 October 2006 between Mr Ku and Luke Song again took place at the Avillion Hotel in Sydney. It would appear that the meeting commenced mid afternoon. 128 As contemplated by the concluding discussion at the meeting on 19 October 2006, Mr Ku attended with some draft documents which he had prepared. After the legal dispute I can't continue the working relationship with Sue. But for the future of Sushi World I am happy for your son, Ji Young Song, to take his mother's role in the business. To make things fair I can appoint another person to represent the franchisees to work with Ji Young Song instead of me to rebuild Sushi World. I want you to meet with him to discuss the future of Sushi World. As you admit and accept what happened in 2002 regarding IP transfer and admit my right of franchising system development for 4 years continuously and permanently, I will transfer all my shares of Kjun International Pty Ltd to your son first as good gesture if you sign this agreement. You tell Ji Young Song to return the shares back to me after talking with his mother about what was promised verbally with me when we worked together. That's the way we can rebuild our trust again. I will show what is my intention first because you signed and trusted me. Everyone will say I am the most stupid person doing this but I value more our trust than who is got what and who has the right. But I will not receive one single dollar for transferring these shares. Kjun has another asset not connected with Sushi World, and I am demonstrating my good faith. If anything goes wrong I didn't get [when called to give oral evidence Mr Ku said that this word should be "get' rather than "give" as he had originally sworn] a single dollar so I can get the shares back. Thank you. Now I trust you forever. Amongst other things he expressed uncertainty as to whether he had said words to the effect 'There is one change to the agreement'. I would place greater emphasis upon the words 'Everyone will say I am the most stupid person doing this but I value more our trust than who is got what and who has the right'. Equally, I have difficulty in accepting that the conversation included the words 'If anything goes wrong I didn't get a single dollar so I can get the shares back'. This is not a case where a resulting trust should be implied if it be found that the shares were duly transferred by Mr Ku to Ji Song. As was said in Russell v Scott there will be no resulting trust where satisfactory proof is forthcoming that a purpose of the transaction was to confer beneficial ownership. In my opinion such a transfer was intended in respect of the shares but not perfected, there being no duly executed share transfer form which was delivered to Ji Song or another person on his behalf. 132 Mr Ku says that, at the meeting on 25 October, he and Luke Song addressed the longer form of agreement which he had prepared on 24 October 2006. This is hardly illuminating. There was no form of agreement which included clauses A, B, C, D, E, F and G. There were, however, two different forms of agreement which began with 'A' and ended with 'G'. 137 I do not accept Luke Song's evidence that the first form of agreement which he addressed on 25 October 2006 was the shorter form of agreement and prefer the evidence of Mr Ku who said that it was the longer form of agreement which was addressed first. 138 Mr Ku deposed to the signing of the longer form of agreement by Luke Song and himself. ... To the best of my recollection Luke Song picked up the bundle of documents which were in the plastic sleeve and which had the copy of the Korean Deed on top [the longer form of agreement] and he commenced signing each page. When he came to the first copy of the first version [the shorter form of agreement] he said words to the effect "Is this the same, it's not as long as the other copies. There are only 5 paragraphs. There are 7 in the other copies" . I realised then that the first version was included in the bundle. In reply I said words to the effect "All of the contents of that agreement are in the one you have signed so that it doesn't matter. It's up to you whether you sign it or not. In the process of signing the documents, when he came to the share transfer from Ji Song back to me, I explained to him what it was. I recall that it had already been signed by me at that point. I cannot now recall signing it but it must have been when I printed the documents out the night before because I do not recall touching the documents in the plastic sleeve between then and the meeting [the copy attached to Mr Ku's affidavit was of a blank unsigned form] . When Luke Song had signed four of the documents in the bundle I had given him (two copies of each of the [longer form of agreement and the shorter form of agreement] ) he handed them back to me and I signed all four copies. I then gave one of each back to Mr Song. The meeting concluded shortly after that. According to Mr Ku he said to Luke Song words to the effect 'that one is included in the one we already talked about ... for one hour'. 'Well, why did you have him sign it? 'He signed it and then gave it back to me, so I just signed it and gave that back to him. 'He signed it after he picked up the difference and after you had explained that it was only a draft. Isn't that correct? 'I didn't say it is only a draft. I said that all the contents included in the one we already talked about it more than one hour. Why do you want more paper signed? You don't need to read it. We need this franchise clause because I want to continue the franchise work. Chairman, there is no difference. 143 I do not accept Luke Song's account of the sequence in which the two forms of agreement were signed. I do not accept that any documents were signed after Luke Song had 'had a few drinks'. I do not accept that Luke Song had any difficulty reading the characters on any document. I accept that at the meeting on 25 October 2006 the parties addressed the longer form of agreement considering each clause seriatim and at the conclusion of the consideration by the parties of the longer form of agreement, it was signed by Luke Song and Mr Ku, with an inadvertent execution of the shorter form of agreement as well, to which the parties gave no real attention. I do not accept that Mr Ku said 'you don't need to read it' with reference to any document. 144 Luke Song gave evidence to the effect that he was oblivious to the difference between the two documents which he signed on 25 October until 26 October. However, he did not contact Mr Ku on 26 October to suggest any concern about the differences between the two documents he had signed and in particular the additional clauses appearing in the longer form of agreement which it was said by him was not signed until after he had had a couple of drinks. 145 I am not satisfied that there was any trickery involved in the securing by Mr Ku of the execution of the longer form of agreement by Luke Song. Indeed, as I have previously observed, I am satisfied that the agreement which the parties considered in detail and intended to sign was the longer form of agreement. Luke Song and Mr Ku undoubtedly signed the two copies of the shorter form of agreement as well. I am satisfied that they did so knowing that the shorter form of agreement included no additional provisions. I am satisfied that they did not intend the shorter form of agreement to become the agreement by which they would be bound. I hope Ji Young Song join us and start his role. Then I will do my best to help him to take his mother's role in Sushi World. 'In the course of those conversations you recall, don't you, that Mr Ku said if anything went wrong he could get the shares back? 'No. 'You don't recall that? 'No, he didn't mention that. 149 I do not accept Luke Song's evidence in this regard. His previous meeting with Mr Ku had been on 19 October. He left that meeting in the belief that Mr Ku would bring with him to the next meeting a document embodying an agreement. Luke Song had been cautious to ensure that he did not commit himself to any agreement with Mr Ku unless and until he had his wife's authority to do so. Had he lacked his wife's authority to enter into the agreement on 25 October, I have no doubt that he would have refrained from signing it. I am of the opinion that when he signed the documents he believed he had his wife's authority. I would infer that Luke Song discussed the matter with Sue Song between 19 and 25 October and secured her agreement to a settlement of the trade mark proceedings. 'The understanding you have given me is that you were very cautious not to commit to any agreement with Mr Ku when you had your discussions with him in mid October 2006; is that right? 'Yes. 'My understanding is the reason you were cautious not to commit was because your wife had not indicated her willingness to agree? 'Yes. 'Why did you sign any documents on 25 October? 'Because she [presumably intended to be "he"] showed me the share transfer form and the express post envelope copy, then I was happy, then I thought I can sign certain. 'Mr Song, all I want to know is whether or not, by applying your signature to a piece of paper on 25 October, you were intending to make an agreement with Mr Ku? 'I want to make agreement but I thought I still needed my wife's consent. ' Did you say anything to Mr Ku to the effect that by signing this I am not agreeing to be bound because I will have to obtain my wife's approval before it will be binding? 'I didn't tell him at the moment. 'You didn't say that? 'No. 'After that meeting that you went to with Mr Ku did your husband tell you he was going to meet with Mr Ku again for a third time? 'After ... meeting after I have a meeting Mr Ku, yes. 'After you had a meeting with Mr Ku did you discuss that meeting with your husband? 'No. 'Did your husband tell you after your meeting with Mr Ku that he was going to see Mr Ku and Mr Park again? 'No, he don't tell me. 'Did he tell you after your meeting with Mr Ku that he had had discussions with Mr Ku and meetings with Mr Ku? 'My husband? 'Yes. 'I think so he have the meeting. 'But did he tell you he had the meetings? 'No. Presumably Sue Song had knowledge of discussions between her husband and Mr Ku about 'the share transfer' because her husband told her about such discussions. 154 Sue Song was asked further questions about pre and post meeting discussions between herself and her husband. The manner in which her answers were expressed in the English language needs to be carefully considered in the light of her difficulties in expressing herself in English. '... After you met personally with Mr Ku did you and your husband talk about the trademark proceedings started by Mr Ku at any time before your husband told you that Mr Ku was going to transfer shares in Kjun International to your son Ji? 'That did I have the conversation --- have a meeting Mr Ku after my husband told me Ku want to transfer the share Kjun International share transfer I post to son. My husband told me he wanted this way. Given that the possibility of such a transfer was first raised at the meeting between Luke Song and Mr Ku on 19 October 2006 and the copy of the 'Change to company details' form was shown by Mr Ku to Luke Song on 25 October 2006, I am satisfied that Sue Song knew of an intended transfer of the shares from Mr Ku to Ji Song at some stage in the period between the 19 October and the 25 October meeting. 'Do you recall your husband showing you a copy of that document signed by him in October 2006? 'Yes. 'I want to ask you whether you remember whether before he showed you that document he had talked to you at all about the fact he was discussing making an agreement with Mr Ku? 'No. 'Did you know at any time from the time you had the personal meeting with Mr Ku and the time your husband showed you this paper that he was discussing making an agreement with Mr Ku? 'Did you know that he was having discussions with Mr Ku about making an agreement? 'No. [I understood her to be saying that Luke Song expressed his pleasure with the fact that by virtue of the agreement the trade mark proceedings had been settled. ] Ku and Luke they finish the Court case and he [referring to Luke Song] told me that Ku is transfer the share for my Ji, that everything finish the Sue Song [whilst I cannot comprehend what was meant by the last phrase, the gist of what Sue Song was saying was that Mr Ku had or would be transferring the shares to Ji Song]. Any more it is going to the Court [meaning that the trade mark proceedings would not be going to the Court]. I remember that but still I am very upset. [My understanding of the last sentence is that Sue Song was seized of the fact that the matter was settled but she was still upset by its terms. 'What did you say to him? 'He wanted the share transfer to my big son but this is my one. What is it Kjun, these ones. Su-Shi World they're mine. This is the reason I don't accept the share transfer. The reason this one is mine. '... when you read the agreement, did you notice that the piece of paper said nothing about transferring shares in Kjun International? 'Yes, this is some, sir, the ..., the ... section is costs, is the costs over them, all over them, he charges the pay, he charges, I'm so angry I'm fighting of them my husband. This is just stating Ku, why we pay them my legal costs and at that time my husband mention about Ku and the share transfer all Kjun International Ji. '... you were particularly angry about the fact that it had something about the legal costs? 'Legal costs and I don't know allow the Ku if you continue the franchise or our friend is something Su-Shi World that is your answer. 'Can you tell me which part of the agreement you saw dealt with Ku continuing in the franchise? 'This is correct, isn't it, Mrs Song, one of the reasons you were upset about this agreement when you read it was the fact that it included clause G? 'Clause G and F, yes. 'And is it correct to say that you said to your husband in that discussion when he first showed you the agreement that you did not accept it? 'I'm not accept it, this one, yes, I don't accept it. 'And you said that to him, didn't you? ' Yes. 161 Sue Song says that she wanted the trade mark proceedings to go to Court up until the time she was told, in November 2006, that the shares had gone into Ji's name. 162 Mrs Song's evidence did not sit particularly comfortably with the evidence of her son, Ji Song. Ji Song gave evidence that from August 2006 through to October 2006 he was involved from time to time in discussions with his mother about the trade mark proceedings. He also had discussions with his father about those proceedings and participated in meetings with the solicitors for Su-Shi World Australia Pty Limited and the Songs from time to time. He was personally aware of two meetings in which his father participated with Mr Ku. He gave evidence that he found out about those meetings from his father shortly after they occurred. 163 Ji Song gave evidence that his father informed him of a desire on the part of Mr Ku to transfer the shares to Ji Song. When asked when he was first told about that his response was 'It wasn't the first time the idea had been thrown around'. 164 Ji Song cautioned his father not to trust Mr Ku and suggested that Mr Ku was 'trying to buy time'. 165 Ji Song gave evidence that his father informed him that Mr Ku was going to transfer the shares into Ji Song's name. Ji Song couldn't recall whether he discussed this conversation with his mother. However he responded to the question 'did your mother discuss with you before you became aware of it the possibility of the shares in Kjun [International Pty Limited] being transferred to you' in the affirmative. After he learnt that the shares had been 'transferred' into his name Ji Song discussed with Sue Song the consequences of that having occurred. 166 Ji Song rejected the suggestion that his mother was very unhappy with the settlement of the case. His response was to the effect, 'No, she said to me the case would be finished. If I own Kjun International she wouldn't keep fighting her own son. 'What about legal costs; Did she say anything about them? 'What did you [r] mother say about legal costs? 'We want our legal costs to be paid by Ku but given the situation, it's not really necessary. It was more a ... best scenario but not something we expected. I do not accept that Sue Song knew nothing about the intended settlement of the trade mark proceedings to which Luke Song subscribed his signature until after the event. I find that she, like Luke Song, wanted to secure a settlement, she was prepared to pay her own costs and was aware of the discussions which had taken place between Luke Song and Mr Ku on 19 October 2006. 170 In the days following 25 October 2006 the Songs became aware of the fact that the change to company details form which had been shown by Mr Ku to Luke Song on 25 October 2006 had not been registered with ASIC. They were not aware of the steps taken by Mr Ku to secure the registration of the document through Mr Kim. When queried about it Mr Ku is said to have responded with words to the effect, 'It's in the mail, I posted it'. I'm going to call ASIC to see if it's OK for me to transfer the shares on the internet. However, following the re-listing of the matter on 10 July 2007 to allow submissions to be put on the legal requirements for a valid transfer of shares in Kjun International Pty Limited, it emerged that it did have a constitution. The respondents sought, and I readily agreed, as did the applicants, to a further adjournment to allow evidence, whether by the tender of documents or further cross-examination of Mr Ku, to be placed before the Court to ensure that the matter did not end up being decided on assumptions and understandings between the parties which may be in conflict with the true legal position. 172 Following the reopening of the applicant's case on 6 August 2007, the applicant tendered as Exhibit B a copy of the constitution of Kjun International Pty Limited. (1) shall be executed by or on behalf of both the transferor and the transferee. Gaining an understanding of the relevant law on this subject back in 1961 involved a five minute exercise, reference being had to a couple of consecutive sections in the then Uniform Companies Act along with a couple of clauses in the relevant company's Articles of Association or in a set of 'Table A' Articles as recorded in the Fourth Schedule to that Act. Today, a like exercise requires hours of study, reference to numerous sections and regulations, which themselves make no sense without reference to numerous definitions, often shrouded in obfuscation, and, needless to say, strewn throughout the Corporations Act and the Corporations Regulations in various places such as ss 9 and 761A and regulations 1.0.02 and 7.11.01 . 176 Why the law had to be expressed in such an obscure way beggars belief. Be that as it may, this case requires an understanding of the requirements for a valid transfer of shares in 2006. 179 The next step along the tortuous road towards discovering the requirements of the Corporations Act in relation to share transfers is to go to Subdivision A of Division 2 of Part 7.11 of the Corporations Act . Such an instrument of transfer must meet the requirements of s 1071B(3) showing the details specified in the relevant regulations, and also s 1071B(4) , if it applies, and the relevant regulations. 182 Division 3 of Part 7.11 of the Corporations Act deals with the 'Transfer of certain securities effected otherwise than through a prescribed CS facility'. It commences with s 1073A and concludes with s 1073F. The application is subject to the same conditions as it would be if it had been made by the transferee. It is also necessary to have regard to Forms 1 --- 4 inclusive which are to be found in Schedule 2A to the Corporations Regulations . 189 The first matter to address by reference to the Regulations is the identification of the 'the details, specified in the regulations' which an instrument of transfer of a share must show in order to be a proper instrument of transfer for the purposes of s 1071B(2) of the Corporations Act (see s 1071B(3)). So much for s 1071B(3) of the Corporations Act . 192 The next task is to ascertain what is necessary to render an instrument of transfer of a share, a proper instrument of transfer within the meaning of s 1071B(4) of the Corporations Act . When will an instrument of transfer answer the description of 'a sufficient transfer of the securities under regulations made for the purposes of [Division 3 of Part 7.11 of the Act]'? 193 Division 3 of regulation 7.11 of the Corporations Regulations commences with regulation 7.11.10 and concludes with regulation 7.11.22. 195 Regulation 7.11.14 provides an express link to s 1071B(4) of the Act. Notwithstanding the paramountcy conferred on Division 3 of Part 7.11 of the Act and the regulations made for the purposes of that Division, it may be that s 1073F(6) prevails even over the other provisions of Division 3 of Part 7.11 of the Act and the Regulations made for the purposes of that Division. As noted above it provided that nothing in the provisions of Division 3 of Part 7.11 and the regulations made for the purposes of that Division should prevent or affect the use of 'any other form of transfer of securities [which would include shares]' that is 'otherwise permitted by law'. 199 I would conclude that a traditional form of share transfer signed by a transferor and transferee in relation to shares in a company effected otherwise than through a broker could constitute a 'proper instrument of transfer' within the meaning of s 1071B(2) of the Corporations Act , notwithstanding the provisions of s 1071B(4) and the lack of a 'sufficient transfer' within the meaning of that subsection. What I have just said does not imply that an instrument of transfer which fails to comply with regulation 7.11.22(1) could be validly registered under s 1071B(2) of the Corporations Act . We also remind you that Mr Ku transferred the shares on his own volition. On 15 December 2006 Suk Joon Song (sic) executed Consent to Act as Director for Kjun International. Our client accepts such repudiation and reserves his rights in relation to damages. (b) Mr Ku indicated his intention to transfer the shares to Ji Song with a view to effecting a gift inter vivos of those shares. (c) On 23 October 2006 Mr Ku executed a 'Change to company details' form (see Schedule 1) which he believed would, upon being recorded by ASIC, have the effect of validly transferring the shares to Ji Song. (d) On 24 October 2006 Mr Ku gave the original of the 'Change to company details' form signed by him and dated 23 October 2006 to Mr Kim so that Mr Kim might forward it to ASIC. (e) Mr Kim never forwarded the signed document to ASIC. On or about 9 November 2006 he threw it into his rubbish bin. (f) No proper instrument of transfer of the one share in Kjun International Pty Limited that was held by him as at 23 October 2006 or of any other shares, as required by s 1071B(2) of the Corporations Act , was ever executed by Mr Ku, delivered by him to Ji Song or delivered by him to Kjun International Pty Limited for registration. (g) In accordance with clause 32 of Kjun International Limited's constitution, Mr Ku remained the holder of whatever shares he may have held in Kjun International Pty Limited, notwithstanding his electronic lodgement on 9 November 2006 of the 'Change to company details' form with ASIC (see Schedule 2). The prima facie evidence of a transfer from Mr Ku to Ji Song (under s 1274B(2)) was negated by the evidence that no transfer was ever executed or delivered. This is now common ground. (h) Mr Ku never did everything that was necessary to be done in order to transfer any shares in Kjun International Pty Limited to Ji Song and render himself bound by his intended gift inter vivos. (i) No question of an implied resulting trust or any other form of trust or of a collateral contract to constitute a trust, arises. (j) No mention of Mr Ku's intended gift of the shares or any other shares was made in either form of agreement as signed by Luke Song and Mr Ku on 25 October 2006, even though the common understanding of the parties at that time was that the 'Change to company details' form (Schedule 1) had not been received or recorded by ASIC at that stage. (k) When at the Avillion Hotel on 25 October 2006, Luke Song and Mr Ku considered in detail the terms of the longer form of agreement with a view to effecting a settlement of the trade mark proceedings. (l) They then proceeded to execute the longer form of agreement and also inadvertently signed the shorter form of agreement. Neither party was under the influence of alcohol or unable to read and approve the terms of the agreements which were executed. (m) The parties intended that their execution of the longer form of agreement, but not the shorter form, should give rise to legal relations. (p) When Mr Ku executed the longer form of agreement he intended to bind not only Kjun International Pty Limited but also Sushi Nara Australia Pty Limited. (q) It is clear from paragraphs B, D, D [the second D], F and G in the longer form of agreement that Luke Song and Mr Ku intended the party described as 'A' to include all the respondents in the trade mark proceedings and by the party described as 'B' in that form of agreement to include all the applicants in those proceedings. (r) As at 25 October 2006 Luke Song was the sole director of Su-shi World Australia Pty Limited and he, together with Sue Song, were the directors of LSU Pty Limited. (s) In my opinion, it may be inferred that Sue Song authorised Luke Song to enter into a settlement agreement at some time between 19 and 25 October 2006 on her own behalf and also on behalf of LSU Pty Limited and that the longer form of agreement contained terms which were within the scope of Luke Song's authority. (t) As at 25 October 2006 Mr Ku was the sole director of Kjun International Pty Limited and also Sushi Nara Australia Pty Limited. As such, he had authority to bind both of those companies to a settlement agreement. (u) The longer form of agreement was not void for uncertainty. Its terms may be ascertained from the words used in the longer form of agreement and the relevant surrounding circumstances. (v) The reference in clause G of the settlement agreement to the parties' agreement to 'solve all problems harmoniously through a mutual talk and agreement, and help and cooperate with each other for mutual development without slandering each other' did not constitute an agreement to agree. Rather the words were indicative of a promise by the parties to use their respective best endeavours to resolve future disputes that may arise between them by negotiation, bringing to bear goodwill in so doing. (w) The settlement agreement provided for the applicants in the trade mark proceedings to refrain from continuing those proceedings and to refrain from bringing any further claims against the respondents arising out of the disputes between them in relation to the trade mark. It may be inferred that the applicants in the trade mark proceedings agreed to file a notice of discontinuance with the consent of the respondents. (x) The agreement also provided for no claims to be brought by the respondents against the applicants in the trade mark proceedings arising out of those disputes. Whilst the second clause D speaks of ' If "B" withdraws the lawsuit against "A" brought in the Federal Court of Australia New South Wales District Registry, "A" accepts it without reservation and agrees that there will not be any legal proceedings against "B" from "A"' (emphasis added), it is clear from the terms of the agreement and, in particular, the preamble to clause G that by the agreement the parties mutually agreed that they would 'not continue' with their respective claims so that no right was reserved to the respondents in the trade mark proceedings to institute their cross-claim as they did on 9 November 2006, in the absence of a formal notice of discontinuance to be filed by the applicants with the consent of the respondents in the trade mark proceedings. (y) The settlement agreement recognised the rights of Kjun International Pty Limited to the trade mark 'Su-shi World' and the continuation of the licensing arrangement, such as it was, whereby Sushi Nara Australia Pty Limited acted as a franchisor of the 'Sushi World' name. It provided for a recognition of the rights of the parties presently using the 'Sushi World' name in respect of shops, to continue to do so, and it conferred a right on the respondents in the trade mark proceedings to 'open new Sushi World' shops. (z) Notwithstanding the settlement agreement which had been concluded, the respondents, including JHJ Brothers Holdings Pty Limited, filed their cross-claim in the trade mark proceedings on 9 November 2006 and proceeded to serve same on 13 November 2006 (see [27]-[28] above). Furthermore, Ji Song purported to remove Mr Ku as a director, secretary and public officer of Kjun International Pty Limited, replacing him with Sue Song (see Edwin Davey's letter of 15 December 2006). Needless to say, the purported removal and replacement of Mr Ku by Sue Song was of no force and effect given that Ji Song never became the holder of any shares in Kjun International Pty Limited. (aa) By their conduct in filing and serving the cross-claim as they did, the respondents in the trade mark proceedings repudiated the settlement agreement reached on 25 October 2006. That repudiation was accepted by the applicants in the trade mark proceedings on 18 December 2006 thereby terminating the settlement agreement. (bb) In the circumstances, the restraints imposed upon the parties in relation to continuing the trade mark proceedings, whether as applicants or cross-claimants, came to an end with the consequence that the trade mark proceedings may now proceed to a hearing. (cc) None of the conduct engaged in by any of the Songs or Su-shi World Australia Pty Limited whether by action or omission constituted misleading and deceptive conduct or conduct likely to mislead or deceive. The circumstances which prevailed between 25 October and 9 November 2006 did not give rise to an obligation on the part of the Songs or any of them to disclose any intention that they may have had to file a cross-claim on 9 November 2006 nor did the circumstances give rise to an obligation upon them or any of them to disclose the fact that the cross-claim had been filed following its filing on 9 November 2006 and before its service on 13 November 2006 (see Henjo Investments Pty Limited v Collins Marrickville Pty Limited (1988) 79 ALR 83 at 94-5). (dd) Su-shi World Australia Pty Limited did not engage in any unconscionable conduct within the meaning of s 51AA of the Trade Practices Act . However, he is entitled to a declaration that the third respondent has no right, title or interest in any shares in the fourth respondent and also a declaration that the purported removal of the applicant as a director, secretary and public officer of the fourth respondent and the purported replacement of the applicant as a director, secretary and public officer of the fourth respondent by the first respondent, by the third respondent's resolution signed and dated 15 December 2006, was of no force and effect. 204 Given the basis upon which the case has been decided and the late emergence of evidence, which, if addressed prior to the commencement of the proceedings, may have obviated the need for the proceedings, the question of costs should be reserved for later decision. I propose to direct that the parties file and serve written submissions thereon within 7 days. | requirements for a valid transfer of shares in an unlisted company intention to make a contract when void for uncertainty construction principles implication of terms collateral contracts express trusts implied resulting trusts incomplete gift corporations contracts trusts gifts inter vivos |
I gave reasons for my decision to dismiss the appeal ( SZHWI v Minister for Immigration and Citizenship [2009] FCA 64). Those reasons record that when the matter was called for hearing, the applicant did not appear. On the basis of the information made available to me at that time, I was satisfied that the appeal should be dismissed by reason of the applicant's failure to appear. I was also satisfied that, in any event, the documents relating to the appeal did not disclose any jurisdictional error. I provided reasons for this conclusion in paragraphs 3 to 11 of my decision. The notice of motion to set aside my decision arises in the following circumstances. On 8 January 2009, the applicant apparently attended the Court and filed a notice of change in address for service. On the same day, he collected a letter from the Court to both parties which notified him that the hearing had been listed for 9.30 am on 9 February 2009. On 9 January 2009, the solicitors for the Minister sent a letter to the applicant at his old address for service, confirming the hearing for 9 February 2009. However, the applicant did not receive that letter because it had been sent to his old address for service. Similarly, it appears that the applicant did not receive a further letter from the Court of 12 January 2009, also sent to his old address for service, notifying him of the hearing scheduled for 9.30 am on 9 February 2009. The applicant says, however, that he did receive a letter from the Court dated 13 January 2009, although again it was sent to his old address for service. According to the applicant, he did not receive a further letter from the solicitors for the Minister notifying him of the hearing date, dated 4 February 2009, because, again, that was sent to his old address for service. He did receive a letter from the Court dated 9 February 2009, enclosing a copy of the Court's decision dismissing the appeal, despite the fact that that letter also was sent to the applicant's old address for service. The applicant submits that he was confused by the correspondence and that, for this reason, he did not appear at the hearing on 9 February 2009. Further, the applicant submits that under no circumstances would he have missed the date of the hearing as it would have given him the opportunity to present his claims, but certain misleading information caused him not to attend the Court. The Minister opposes the notice of motion essentially on two grounds. First, in my reasons for decision of 9 February 2009, I did not simply dismiss the appeal because of the applicant's failure to appear. I considered all of the appeal documents and the decision of the Federal Magistrates Court, as well as of the Tribunal. I came to the conclusion that the Tribunal's decision did not disclose any jurisdictional error and that the decision of the Federal Magistrates Court, in consequence, was itself not affected by any jurisdictional error. Second, the Minister says that the applicant did receive a letter of 8 January 2009 stating that the matter would be listed for hearing on 9 February 2009 at 9.30 am. Although the applicant, in common with the respondent, then received the letter of 13 January 2009 identifying the range of hearing dates and stating that a further letter would be sent to notify the parties of the date set for hearing, that letter also said that if a party had any queries, they should contact the Deputy District Registrar on a given number. According to the Minister, if the applicant had any confusion in his mind about when the matter was listed for hearing by reason of the correspondence which he did receive, then it was a simple matter to contact the Deputy District Registrar to obtain clarification. Not without some hesitation, I accept the Minister's submissions. In short, I did consider, as my reasons for judgment disclose, the Tribunal's decision, the decision of the Federal Magistrates Court, and the applicant's grounds of appeal, and reached the conclusion that no error was disclosed. Further, although I accept that there was the potential for confusion in the course of the correspondence from the Court, which was not assisted by the fact that correspondence was forwarded to the applicant's old address, the applicant did receive clear notification on 8 January 2009 of the date for hearing. The later letter of 13 January 2009, at worst, should have raised some doubt about the hearing date with the reasonable course of action in those circumstances, particularly given the letter of 8 January 2009, being to contact the Deputy District Registrar as invited in the final paragraph of the letter of 13 January 2009. In my view, I should not set aside the orders I made on 9 February 2009, which I have a power to do pursuant to section 25(2B)(bc) of the Federal Court of Australia Act 1976 (Cth) and Order 52 rule 38A(2) of the Federal Court Rules in circumstances where, as is the case here, it is my view that it would be futile to do so given the reasons for decision which I have already published (thereby exposing the Minister to unreasonable additional costs) and where, notwithstanding the potential for some confusion in the correspondence from the Court, the reasonable course of action would have been for the applicant to contact the Court to resolve his confusion, rather than simply deciding not to appear at all on the date notified in the letter of 8 January 2009. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | notice of motion application to set aside court orders and judgment applicant did not attend hearing of the appeal notice of change in address for service confusion about date of hearing whether a new hearing warranted practice and procedure |
On 24 October 2007, by consent, a declaration of infringement of copyright by Metricon as well as declarations that Palazzesi and Popple authorised such infringement were made. Those orders were made following my judgment in the matter which was delivered on 28 September 2007: Barrett Property Group Pty Ltd v Metricon Homes Pty Ltd [2007] FCA 1509. The question of costs which was held over for further argument is now before the Court for resolution. 2 The applicants seek an order that costs be taxed and paid forthwith, and that in respect of half of the costs of preparation and trial, these be taxed on an indemnity basis. The respondents oppose the application but say that if indemnity costs are to be paid then this should be in respect of only 4/13ths of the costs. The trial took thirteen days. The discretion must be exercised judicially. In the normal course, costs are ordered to be paid on a party and party basis: Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 at 232; Re Wilcox; Ex parte Ventura Industries Pty Ltd (No 2) (1996) 72 FCR 152 at 158 per Cooper and Merkel JJ. A costs order is not intended to punish the unsuccessful party but rather to compensate the successful party: Hurst and Devlin v Education Queensland (No 2) [2005] FCA 793 at [5] . This is so even where the ordinary practice is departed from. The aim is not to punish or deter future litigants but simply to compensate a party fully for costs which normal party-party costs could not be expected to do, where it was unreasonable for that party to be subjected to any expenditure of costs, such as where a hopeless proceeding is brought: Cirillo v Consolidated Press Property Ltd (No 2) [2007] FCA 179 at [4] - [5] . Any departure from this general rule requires a special reason: Access For All Alliance (Hervey Bay) Inc v Hervey Bay City Council [2007] FCA 974 at [10] ; Pacific Publications Pty Ltd v Next Publishing Pty Ltd [2005] FCA 971 at [5] . The categories in respect of which departure from the usual rule are contained are not closed: John S Hayes & Associates Pty Limited v Kimberley-Clarke Australia Pty Limited (1994) 52 FCR 203; Jianshe Southern Pty Ltd v Turnbull Cooktown Pty Ltd (No 2) [2007] FCA 903 at [32] . 4 In Colgate-Palmolive, (at p 233) Sheppard J identified various categories which might give rise to an award of indemnity costs. 5 Whatever the case, the Court should not make such an order for costs unless there is some clear basis or "some special or unusual feature in the case": Pacific Publications at [5] . Whilst discrete matters, they are, in a significant way, overlapping questions. 7 These complaints concern the conduct of the respondents both in preparation for and at trial, going to the issue of the derivation of the accused plans and houses and whether or not these had been copied from the Copyright Works. 8 Prior to the trial the respondents put on very detailed, and obviously considered, affidavits from Mr Palazzesi, one of its directors, Mr Bujega, one of its designers, Mr Popple, its product development manager and Mr Biasin, its then design sales manager. In combination, these affidavits contain approximately 1000 pages including many exhibits. These individually and in combination were tendered to establish a design evolution of the accused plans and homes which was independent of the Copyright Works. The cross-examination of these witnesses by senior counsel for the applicants took in excess of three days. Initially there was a lengthy opening including a significant part of it concerning the question of derivation and copying. There was also a view of the homes, the subject of the Copyright Works as well as the accused homes. This took an entire day. 9 I rejected the defence of independent derivation and found that the 'alfresco quadrant' in each of the accused homes had been copied from the applicants' 'Seattle 31' project home design, in order to produce the alfresco quadrant in Metricon's Prada 35 project home design and that the other accused homes had in turn been designed by direct reference to the Prada 35 as well as the 'Memphis 33' another project home designed by the applicants. I accept that submission. However the question before me concerns the conduct of the respondents in relation to the related issues of derivation and copying. These are discrete issues and may be considered as such. The respondents say that there is nothing to warrant departure from the usual rule as to costs. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. That is so. It is said that even a finding that a party has fabricated evidence is not necessarily sufficient to warrant the grant of an indemnity costs order. That is so. An example of that can be found in Walker v Citygroup Global Markets Pty Ltd [2005] FCA 1866 at [31] - [32] . However, each case requires to be considered on its own facts. In that case, there had been a finding that a witness was unreliable which included a finding that he had fabricated some of his evidence to support the respondents' case. However Kenny J concluded at [32], in the context of the entire proceeding, that the conduct of that witness did not take the case so far outside the ordinary range of cases as to justify an award of indemnity costs. In the end, that was a matter of judgment upon the particular facts. 13 In this case, on the issues of derivation and copying, I made findings of a conscious and deliberate effort on the part of the respondents to mislead the Court on both of those matters. These were of central importance in the case. Had those attempts to mislead been successful, it would have seen the case determined in favour of the respondents. It was left to the forensic efforts of the applicants' solicitors and counsel and some belated and limited concessions made by Popple and Bugeja during their oral evidence, which led to these attempts to mislead the Court being exposed. 15 The result of this was that very significant costs have been incurred by the applicants both in preparation for and the conduct of the trial which ought never to have been required. Had this not been done then only those issues legitimately before the Court involving both questions of fact and law would have been tried. 16 The question then is whether the respondents' conduct in relation to its defence on the issues of derivation and copying constitutes a sufficient reason to take this case, in that respect, out of the ordinary, so far as concerns the exercise of my discretion on the question of costs. I am persuaded that it does. This is not a case where merely arguments 'attended by uncertainty' were before the Court as in Hamod [20]. It is not a case involving witnesses who gave evidence believing it to be true but as to which they were mistaken. It is not a case where judgment depended essentially upon the inherent probabilities of one version of events against another but not involving questions of credit. It is not even a case, such as Walker, where one witness gave fabricated evidence as to part of a case. This matter involved a concerted effort on the part of four key witnesses to present a false defence which has led to the applicants incurring very considerable costs over a long period in meeting and overcoming that defence. The submissions put to me on behalf of the respondents concerning the abandonment by the applicants of its case for infringement of the whole of the Copyright Works, as opposed to merely a substantial part and the abandonment of cases involving houses other than the accused homes, do not respond to the application for indemnity costs. There was no application by the respondents for any variation of a normal costs order by reference to these matters and I did not treat the submissions concerning those separate issues as such. I am concerned merely with the issues of derivation and copying. 17 In any event, the claim for infringement of the whole, was as I found, not seriously pressed by the applicants at trial. Rather, as I found, the case concerned whether, in respect of each plan and home, a substantial part had been reproduced by copying. The applicants say that a fair albeit conservative assessment is that 50% of the cost of preparation and trial should be subject to an order for indemnity costs. The respondents say that those issues were taken up by no more than 4 out of the 13 days at trial and that this ratio should also inform the period of preparation for trial. This produces a range of between approximately 30-50%. My own assessment of the trial was that the derivation and copying issues were absolutely central in the evidence and, I estimate, consumed more than half of the trial time involved. A further indicator is that approximately two-thirds of my reasons for judgment are concerned with those issues. 19 Such matters are generally not capable of precise arithmetical calculation or analysis and are to a considerable extent matters of impression and judgment. See by analogy Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) [2005] FCA 1400 at [7] . 20 I also consider that this conduct led to wasted costs in relation to much of the evidence of the respondents' expert Mr John Permewan. I did not afford his evidence any weight, because as I found, he was significantly misdirected by Metricon on a number of significant matters and was not told in the witness box before giving evidence about significant revisions to Metricon's witness statements. As a result, his opinions as to independent derivation were founded upon significantly incorrect assumptions and were of no real assistance to the Court. One example of this was that he incorrectly assumed that the Tyrell, Connolly and Streeton designs and homes were not designed by reference to the Prada 35. In fact, as I found, they were. He did not deal expressly in his report with the actual design drawings from which, according to the respondents, Prototypes 20A and 20B were derived. He assumed that certain evidence given by Bugeja, but which was disavowed by him at trial, was correct and he relied upon it. He accepted that Gallery 32 was used in the derivation of Prada 35. It was not. [252]-[256] Furthermore the applicants put the respondents on notice that Mr Permewan had been misinstructed. It is clear from his report that Mr Permewan has taken as truthful, and without qualification, the evidence of Metricon's lay witnesses. I accept that consideration of Mr Permewan's affidavit evidence would have required significant amount of time before analysis on the part of the applicants' solicitors and counsel and indeed also by Dr John Cooke the expert architect obtained by the applicants. The matters deposed to by these lay witnesses may be overridden by the impressions formed by the Court following cross-examination. The order should cover the period from early April 2006 when the respondents filed the first of the affidavits of Bugeja, Popple, Palazzesi and Biasin. The applicants submit that they should have the benefit of the judgment in their favour and that the question of damages is unrelated to payment of those costs. There is no suggestion that the respondents are not capable of paying costs forthwith or that the applicants will not be in a position to repay those monies in the event of the appeal being successful. 23 The general rule under Order 62 rule 3(3) may be departed from where the party in whose favour the costs order was made was required by the interlocutory proceeding to "incur significant costs over and above those which it would have incurred had the opposing party acted with competence and diligence": Life Airbag Co of Australia Pty Ltd v Life Airbag Co (New Zealand) Ltd [1998] FCA 545 ; where the proceeding is complex and its final resolution is a long time away: Allstate Life Insurance Co v ANZ Banking Group Ltd [1995] FCA 660 ; Readymix Holdings International Pte Ltd v Wieland Process Equipment Pty Ltd [2006] FCA 1297: Courtney v Medtel Pty Ltd (No 3) [2004] FCA 347. That is particularly so in lengthy and complex cases where substantial costs have been thrown away as a result of ill-considered pleadings being drawn. Such costs should be capable of being recovered without the innocent party having to wait, possibly for years, for that to occur. I will deal with these in turn. The order had been opposed on the ground that the amount of final relief offered might be insignificant and disproportionate to the quantum of damages asserted by the applicants and that a prior offer of settlement may prove to be relevant at a later stage in the proceedings. It was not apparent that there was a pending appeal at the time that the order was made. If there was, no submissions were made in that regard. There Heerey J departed from the ordinary rule under Order 62 rule 3(2). No reasons were provided although the effect of his Honour's judgment (p 41) was that the work, the subject of the costs order, was substantially referrable to liability and therefore distinct from the resolution of the quantum aspect of the case. It concerned engineering drawings. There, Merkel J stated that although the applicant had failed on certain incidental claims, this did "not warrant a departure from the usual order that costs follow the event". However the actual order made was that the relevant respondents pay the applicant's costs "to be taxed and paid forthwith". That, of course, is in fact a departure from the usual order concerning costs in respect of an interlocutory judgment, the quantum aspect of the case not then having been resolved. 29 These cases are not of any particular assistance. The discretion to order costs to be paid forthwith will generally be informed most helpfully by a close consideration of the relevant facts and circumstances in the instant case. 30 This case was complex both factually and legally. It involved a trial lasting thirteen days and many volumes of affidavits, exhibits, expert reports and architectural drawings. The proceedings commenced on 5 March 2007. The judgment was reserved for a period of six months. The applicants were represented by a major law firm in Melbourne and leading senior and junior counsel in copyright, as indeed were the respondents. This was reasonable in a case of this kind. Undoubtedly, the applicants have incurred very substantial legal costs. 31 The respondents have sought leave to appeal. The application for leave to appeal to the Full Court from this judgment and any appeal is to be heard by the Full Court in the February 2008 sittings. 32 I would think it likely that leave to appeal will be granted. The judgment, whilst interlocutory, is one on points of substance: Yap v Granich & Associates [2001] FCA 1735 ; Dunstan v Orr [2007] FCA 873 at [6] ; Duncan v Secretary, Department of Family and Community Services [2007] FCA 507 at [18] . 33 The taxation of costs, in a case such as this, is likely to be an expensive exercise. The Court will eschew multiple taxations in a proceeding: Vasyli v AOL International Pty Limited [1996] FCA 804. The appeal may be successful, in which case, the significant costs of preparation for taxation will have been wasted: Brasington v Overton Investments Pty Ltd [2001] FCA 571 at [13] . On the other hand, the disposition of the quantum case, assuming an unsuccessful appeal, is likely to be a long way off. I propose to order that the applicants' costs be taxed and paid, including the costs of this motion, forthwith but to stay the operation of that order pending the determination of both the application for leave to appeal, and the appeal, if leave is granted, or until further order. I will grant liberty to apply in this respect to allow for any unforeseen and undue delay in that determination. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | indemnity costs misconduct of respondents undue prolongation of defence. time for taxation of costs departure from general rule in federal court rules order 62 r 3(3) time for payment of costs o 62 r 3(2) costs to be paid forthwith. stay of orders for taxation and payment of costs pending disposition of application for leave to appeal and any appeal. costs costs orders |
By notice of motion the respondent, the Parliamentary Service Merit Protection Commissioner ('Ms Godwin'), seeks an order that the application be dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act') on the basis that the application has no reasonable prospect of success. Ms Godwin submits that there is no obligation under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act') to provide a statement of reasons because, first, there is no ' decision to which this Act applies ' for the purposes of s 13 of the ADJR Act and, secondly, even if there were a ' decision to which this Act applies ', Mr Priestley is not a person aggrieved by that decision. She also submits that s 23 of the Federal Court Act is not a source of jurisdiction pursuant to which the Court can grant the relief Mr Priestley seeks. That letter was "a whistleblower's report" in that it contained allegations by a Parliamentary Service employee of breaches of the Code of Conduct (Schedule 1 of the Parliamentary Service Determination 2003/2 (Cth) ('the Determination')). On 17 September 2007 Mr Priestley emailed Mr Budak to inquire whether Mr Budak had received his letter of 27 August 2007 and whether he had accepted it pursuant to paragraph (1)(b) and subclause (2) of clause 2.4.3 of the Determination. Mr Budak replied on 18 September 2007. After setting out some short conclusions he said ' I do not consider that any further inquiry is warranted into your allegations against the Parliamentary Service Commissioner '. In that statement Mr Budak set out his decision and findings on material questions of fact. The statement of reasons was dated 17 October 2007. It is accepted that the September date on the covering letter was incorrect. In relation to the first two matters for which Mr Priestley requested reasons, Mr Budak stated that, while he considered the letter of 27 August 2007 ' as potentially being ' a whistleblower's report, as a report pursuant to paragraph (1)(b) of clause 2.4.3 of the Determination, he did not consider that the matter warranted further investigation. Mr Budak also set out the findings which formed the basis of his decision that the matter did not warrant further investigation. In relation to the third of the matters for which Mr Priestley requested reasons, Mr Budak stated that Mr Priestley's letter of 27 August 2007 did not contain a request for investigation of the conduct of the former Merit Protection Commissioner. Instead, Mr Priestley had made reference to the fact that allegations against the former Merit Protection Commissioner had been included in material referred by the Presiding Officers to the Parliamentary Service Commissioner for inquiry and report. Therefore, the reasons set out by Mr Budak in the 17 October 2007 statement of reasons related only to his decision not to conduct further inquiries into the allegations made by Mr Priestley against the Parliamentary Service Commissioner. However, he added that: ' You correctly concluded that my letter of 27 August 2007 was a whistleblower's report as it was intended by me and as I had indicated in the letter. In consequence, therefore, you were obliged to reconsider the issue and in so doing [you] came to a new decision and refused to make a decision '. It is apparent from the detailed submissions and assertions in his letter of 19 November 2007 that Mr Priestley considered that there had been a variation or revocation of the original decision. He asserted that the terms of the original decision showed that there had been a ' fundamental procedural failure ' to consider his letter of 27 August 2007 in accordance with s 48(1) of the Parliamentary Service Act and clause 2.4.3 of the Determination. It followed, he said, that Mr Budak had been obliged to revisit the issue and in so doing had come to a new decision and refused or failed to make a decision. He says that his application in these proceedings is for an order requiring Ms Godwin, the present Parliamentary Service Merit Protection Commissioner, to prepare and furnish a statement of reasons pursuant to s 13(1) of the ADJR Act ' for the decisions of the Acting Parliamentary Service Merit Protection Commissioner dated 17 October 2007 '. As set out above, 17 October 2007 is the date of the reasons provided by Mr Budak for the decision of 18 September 2007. Ms Godwin asserts that the statement of reasons from Mr Budak was precisely what it purported to be: a statement of reasons following a request from Mr Priestley that such a statement be provided for the decision that had been made and which was communicated to Mr Priestley on 18 September 2007. Mr Budak's response to Mr Priestley's request for a further statement of reasons, dated 14 December 2007, stated that he had considered the contents of Mr Priestley's letter of 27 August 2007 as a potential whistleblower's report, that he did not come to a new decision in explaining the actions he had taken on receipt of the letter and that he did not accept that there was a requirement to provide a further statement of reasons. Mr Budak also informed Mr Priestley that, as from 19 November 2007, he was no longer the Acting Parliamentary Service Merit Protection Commissioner and that Ms Godwin had commenced in that role. That is, Mr Budak was acting in the position at the time of the September decision and the October reasons but was not acting in the position when he notified Mr Priestley of his refusal to provide further reasons. Ms Godwin submits that Mr Priestley has no reasonable prospect of successfully prosecuting the proceeding and that his application ought to be dismissed pursuant to s 31A(2) of the Federal Court Act. Her factual contention is that no decision of any kind described by Mr Priestley was made on 17 October 2007 and that all that occurred on that occasion was the production of a statement of reasons relating to an unchallenged decision made on 18 September 2007. Ms Godwin submits that the statement of reasons was specifically drafted in response to the request made by Mr Priestley for such reasons and that the reasons addressed each of the decisions that, in his letter of 25 September 2007, he asserted had been made. The statement of reasons did not, she says, include any fresh or different decisions from those made previously and recorded in Mr Budak's letter of 18 September 2007. Ms Godwin submits that Mr Priestley's assertion that Mr Budak reconsidered the decisions that he made on 18 September 2007 and then remade them on 17 October 2007 is a matter of pure speculation on the part of Mr Priestley and that there is no evidence or inference available to support a contrary contention. WAS THERE A NEW DECISION? Before one looks to see whether there is a decision under an enactment, which must be expressly or impliedly required or authorised by the enactment and must confer, alter, or otherwise affect legal rights or obligations ( Griffith University v Tang [2005] HCA 7 ; (2005) 221 CLR 99 at [89] ), a threshold question must be considered: was there a decision made on that date? An examination of Mr Budak's reasons of 17 October 2007 for his decision of 18 September 2007 discloses that he considered the substance of the allegations against the Parliamentary Service Commissioner, Ms Briggs. Mr Budak explained in his reasons that he formed the view that Mr Priestley's allegations against Ms Briggs were not sufficiently persuasive to warrant further investigation. Specifically, Mr Budak said that the letter and attachments that were said by Mr Priestley to have been divulged by Ms Briggs to the former Merit Protection Commissioner, Mr Lamond, were in fact received by Ms Briggs after Mr Lamond's departure for a position in another Department. Accordingly, the allegation that the documents had been passed by Ms Briggs to Mr Lamond for purposes connected with Mr Lamond's then current position as Parliamentary Service Merit Protection Commissioner was unfounded, as was the allegation that the receipt of the letter and attachments by Mr Lamond had prompted his resignation. He had already left the position. Mr Priestley's letter of 27 August 2007 also contained allegations concerning breaches of the Code of Conduct by Mr Lamond himself. Mr Priestley appears to submit that Mr Budak was obliged to make a decision pursuant to clause 2.4.3 of the Determination to refer the allegations concerning Mr Lamond to the relevant officer holder. Clause 2.4.3(2) provides that a person who receives a whistleblower's report and is not the office holder mentioned in relation to the report in clause 2.4.3(1) must refer the report to the office holder. Clause 2.4.3(3) provides that a person who receives a whistleblower's report and considers on reasonable grounds that the report would be more appropriately dealt with by another office holder may refer the report to that office holder. Mr Budak explained in his reasons that he did not consider that any request for an investigation of the former Merit Protection Commissioner's conduct had been made. For this reason, Mr Budak did not take any action in respect of Mr Priestley's allegations regarding breaches of the Code of Conduct by Mr Lamond. To the extent that Mr Budak made a decision not to consider any of the allegations against Mr Lamond further, that decision was implicit in his letter of 18 September 2007, for which reasons were given on 17 October 2007. In his request of 25 September 2007 for a statement of reasons, Mr Priestley alleges a refusal to accept his report of 27 August 2007 and a failure to investigate the allegations in it. It is apparent that the report was accepted and, with respect to the allegations against Ms Briggs, the matter was investigated and a decision reached as a result of and flowing from the investigation. It is quite apparent that the letter of 18 September 2007 communicating the decision and the reasons for that decision of 17 October 2007 referred to the complaints about Ms Briggs and Mr Lamond and to the decision that no further inquiry into Mr Priestley's allegations in relation to Ms Briggs was warranted. Reasons were given for that decision. The statement of reasons also made it clear that Mr Budak did not consider that Mr Priestley's letter of 27 August 2007 contained a request for investigation of Mr Lamond's conduct. Whether or not Mr Priestley considers that the reasons of 17 October 2007 were adequate with respect to the allegations against Ms Briggs and Mr Lamond is not the question. No challenge has been made to the adequacy of the reasons. Rather, Mr Priestley says that the statement of reasons of 17 October 2007 contained new decisions for which he seeks a further statement of reasons. Mr Budak said that, in explaining his reasons for the action that he took on receipt of Mr Priestley's letter dated 27 August 2007, he did not come to a new decision. Ms Godwin does not accept that there is a requirement to provide Mr Priestley with a further statement of reasons. No decisions were made by Mr Budak, the Acting Parliamentary Service Merit Protection Commissioner, on 17 October 2007. There was no fresh decision made, nor was any reconsideration required or undertaken. The statement of 17 October 2007 provided reasons for the decisions that had been made on 18 September 2007. As Ms Godwin points out, the assertion that there was a new decision in the statement of reasons is not borne out by the terms of the decision of 18 September 2007, or the statement of reasons dated 17 October 2007. The reasons given on 17 October 2007 are consistent with the outcomes expressed in the decision of 18 September 2007. I accept Mr Priestley's contention that he made allegations concerning Ms Briggs and Mr Lamond. With respect to the allegations concerning Mr Lamond, Mr Budak explained that Mr Priestley's letter of 27 August 2007 did not contain a request for investigation of Mr Lamond's conduct but referred instead to the fact that allegations of a breach of the Code of Conduct by Mr Lamond had been included in material that had been referred by the Presiding Officers to the Parliamentary Service Commissioner. With respect to the allegations concerning Ms Briggs, Mr Budak made a decision on 18 September 2007 not to investigate those allegations further for reasons that he gave on 17 October 2007, which were based on the chronology of the asserted events. It is not relevant whether the allegations concerning Ms Briggs were of breaches of the Code of Conduct due to a breach of the Privacy Act or due to a breach of the secrecy provisions of the Determination. It is clear that the alleged breach of the Code of Conduct by Ms Briggs related to Mr Priestley's allegation that she passed privileged and protected information to Mr Lamond. The reason for not proceeding further in respect of the allegations against Ms Briggs applied whichever piece of legislation or legislative instrument was alleged to have been breached resulting in a breach of the Code of Conduct. Mr Budak gave reasons for his decisions and actions concerning the totality of the allegations concerning Ms Briggs and Mr Lamond. That decision having been communicated in September, there was no new decision in the reasons of 17 October 2007. Section 23 does not invest the Court with jurisdiction. Jurisdiction is conferred by other statutes ( Thomson Australian Holdings Proprietary Limited v The Trade Practices Commission [1981] HCA 48 ; (1981) 148 CLR 150 at 161). Relevantly for these proceedings, Parliament has invested the Court with jurisdiction in relation to statements of reasons pursuant to s 13 of the ADJR Act. Section 13(4A) of the ADJR Act provides that the Court may, on application, make an order declaring that the person who made a request for a statement of reasons was, or was not, entitled to make the request. That section is the source of the Court's jurisdiction to make orders with respect to statements of reasons and, Ms Godwin submits, limits the Court's powers in granting relief to declaring that a person does, or does not have, an entitlement to make a request for a statement of reasons. A declaration that a person was entitled to make a request for a statement of reasons then requires the person to whom the request was made to provide such a statement within 28 days (s 13(4) of the ADJR Act). Ms Godwin points to the procedures in s 13 of the ADJR Act. Mr Priestley made a request to Mr Budak for reasons for the decisions he says were made on 17 October 2007 (s 13(1)). Mr Budak formed the opinion that Mr Priestley was not entitled to make the request because there was no decision as alleged and gave Mr Priestley notice in writing of his opinion (purportedly under s 13(3)). Following the receipt of a s 13(3) notice, the course available to Mr Priestley would have been to apply to the Court for an order declaring that he was or was not entitled to make the request (s 13(4A)). Accordingly, the ADJR Act provides the mechanism for a person aggrieved to obtain reasons for a decision where no reasons have been given. However, for the reasons given above, I have concluded that there were no new decisions made on 17 October 2007. Whether or not Mr Priestley could seek another source of jurisdiction to obtain reasons, he is still faced with the fact that there was no decision. She submits that there is nothing in Mr Priestley's application which indicates the manner in which Mr Priestley alleges his interests were affected, adversely or otherwise, by the decisions he alleges Mr Budak made on 17 October 2007. Accordingly, she submits, Mr Priestley is not a person aggrieved within the meaning of s 3(4)(a)(i) of the ADJR Act for the purposes of ss 5 and 13 of that Act. Ms Godwin submits that Mr Priestley has no special interest as described in Australian Conservation Foundation Incorporated v The Commonwealth of Australia (1980) 146 CLR 493 at 530-531. She submits that, as the High Court pointed out, a belief that particular conduct should be taken or prevented is not sufficient to give the possessor of that belief locus standi . Mr Priestley is not, she says, a person interested, in that he is not likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest. Ms Godwin submits that Mr Priestley cannot demonstrate and has not demonstrated an interest in Mr Budak's alleged decision beyond an interest being held by virtue of being a member of the public, albeit a public linked to Parliamentary Service employees ( Tooheys Ltd v Minister for Business and Consumer Affairs [1981] FCA 121 ; (1981) 36 ALR 64). Mr Priestley asserts a special interest by reason of being a whistleblower and an employee of the Department of Parliamentary Services. He asserts, without giving specific examples or reasons, that he has an interest under the Parliamentary Service Act relating to his employment. It is hard to see how the interest Mr Priestley identifies necessarily constitutes an interest other than that as a member of the public within the confines of Parliamentary Service employees. However, while I accept that Mr Priestley has not demonstrated any particular interest outside his conviction concerning his position as a Parliamentary Service employee, there may be facts that need to be considered. I would not make an order under s 31A of the Federal Court Act that the proceedings be summarily dismissed on the basis that Mr Priestley is not a person aggrieved for the purposes of the ADJR Act. For the purposes of this notice of motion, I accept that, had there been a decision as alleged by Mr Priestley, he would have been a person aggrieved. One such example is his assertion that the reasons that were sent to him on 17 October 2007 were sent under a covering letter signed by a person other than Mr Budak and were not therefore "furnished" to him by the person who made the decision as required by s 13(2) of the ADJR Act. Mr Priestley does not deny that he received the letter containing the reasons of 17 October 2007. The document was delivered specifically to Mr Priestley. I am prepared to infer that it was delivered on behalf of Mr Budak ( Australian Foreman Stevedores Association v Crone (1989) 20 FCR 377 at 385). This leaves open the question whether the requirement in s 13(2) that ' the person who made the decision shall, subject to this section, as soon as practicable, and in any event within 28 days, after receiving the request, prepare the statement and furnish it to the person who made the request ' requires that the decision be furnished personally by the decision-maker. "Furnish" means "provide or supply" ( Macquarie Dictionary , Revised 3 rd Edition). Section 13(2) cannot, in my opinion, be read to preclude, for example, the sending by post. This itself involves the use of other persons to furnish the reasons. I see no substantive difference in asking another person to arrange to have the reasons of the decision-maker sent to the person who made the request. In this case, Mr Budak's reasons were enclosed in a letter signed by Ms Karen Labrum, Acting Regional Director, ACT, Australian Public Service Commission. The basis of Mr Priestley's application is that he was given no reasons for an alleged decision made on 17 October 2007. The complaint that he received reasons but that they were not furnished to him by the decision-maker does not seem relevant to this application. In any event, I do not accept that they were not furnished as required. In his submissions, Mr Priestley raises various complaints about previous orders made by a judge of the Court. No appeal or application for leave to appeal was brought against the making of those orders in this Court. However, it appears that those orders were the subject of consideration by the High Court in Priestley v Godwin (Parliamentary Service Merit Protection Commissioner) (2008) 251 CLR 612. In that case, French CJ said that Mr Priestley's allegations regarding those previous orders were ' baseless '. I will not consider them further. Mr Priestley also provided detailed submissions on the obligation to provide a statement of reasons within the meaning of the ADJR Act. That obligation is not disputed. Ms Godwin does not deny that such a general obligation exists as provided by the ADJR Act. Rather, she says that a decision was made on 18 September 2007, that reasons were given on 17 October 2007 and that no further decisions were made. It is the receipt of such notice that entitles the recipient to make an application to the Court under s 13(4A) of the ADJR Act. However, it may be noted that s 13(3) of the ADJR Act provides that the person who gives the notice be the person to whom the request for reasons was made. In this case, Mr Budak was the person who provided the statement of reasons, the person to whom the subsequent request for reasons was made and the person who gave notice that he was of the opinion that Mr Priestley was not entitled to make the request for reasons for the alleged further decisions. However, by the time that Mr Budak gave the notice, Ms Godwin was the Parliamentary Service Merit Protection Commissioner. Ms Godwin appears to accept that Mr Priestley's request for a further statement of reasons was made under s 13(1) of the ADJR Act. While this is so, Ms Godwin says that Mr Priestley was not entitled to make that request because there was no decision made on 17 October 2007 or, in the alternative, because Mr Priestley is not a person aggrieved by any decision made on that date. Ms Godwin characterises the notice sent by Mr Budak on 14 December 2007 as a notice pursuant to s 13(3) of the ADJR Act. The available evidence indicates that Mr Budak ceased in the office of Acting Parliamentary Service Merit Protection Commissioner from 19 November 2007. Mr Priestley asserts that Mr Budak ceased in that role from 30 October 2007 but there is no evidence to support that assertion. In any event, it does not affect the outcome of this notice of motion. Mr Priestley requested reasons for the alleged further decisions on 19 November 2007. It may be the case that the Mr Priestley's request was made to the person who did not then hold the office. Even if the request were made to the person who then held the office, it may be that the prerequisite for the application under s 13(4A) has not occurred, as the subsequent notice to Mr Priestley of 14 December 2007 was given by Mr Budak and not Ms Godwin. Section 17 of the ADJR Act was designed to make provision for the case where a person, in performing the duties of office, has made a decision in respect of which an application may be made to the Court and that person has since ceased to hold office (Administrative Decisions (Judicial Review) Bill 1977 (Cth), Explanatory Memorandum). That is, it is facilitative and provides for continuity in circumstances of changing office holders, including in the effect of the ADJR Act following the making of a decision. Ms Godwin submits that s 17 of the ADJR Act should be construed so as not to invalidate the notice given by the previous office holder for the purposes of s 13(3) of the ADJR Act because it was given by the decision-maker who was also the person to whom the request was made and who formed the opinion that Mr Priestley, the person who made the request, was not entitled to make it. There is no provision in the ADJR Act to which Ms Godwin has drawn attention that suggests the contrary. The alternative construction contended for by Ms Godwin would result in a "lacuna" in the application of the ADJR Act. For example, if Mr Budak had retired, he could hardly be expected to have provided the notice or, if he retired before forming the opinion that Mr Priestley was not entitled to reasons, to have continued to be involved in dealing with Mr Priestley's request. Further s 33(2) of the Acts Interpretation Act provides that, where an Act confers a power or imposes a duty on the holder of an office as such then, unless the contrary intention appears, the power may be exercised and the duty shall be performed by the holder for the time being of the office. It follows that, in this case, by reason of s 17 of the ADJR Act, the person who gave the notice for the purposes of s 13(3) of the ADJR Act should have been Ms Godwin and not Mr Budak. Mr Priestley submits that, '[u] nless notice under section 13(3) of the [ADJR] Act is given by the person holding the office, an order by the Court requiring reasons in writing for the decision, or an order to make a decision is a nullity '. This would seem to suggest that his application before this Court is futile. If the notice under s 13(3) was a nullity, as Mr Priestley appears to submit, he may be precluded from making an application under s 13(4A) for a declaration as to whether he is or is not entitled to reasons. However, Ms Godwin does not rely on any such argument and I am prepared to assume for the purposes of this notice of motion that Mr Priestley would not have been precluded from making an application under s 13(4A) of the AJDR Act by reason of the fact that it was Mr Budak and not Ms Godwin who gave the purported notice under s 13(3). In any event, those seeking reasons for a decision require, as a threshold, that there be a decision to which the ADJR Act applies. There was no such decision and on this basis any application under s 13(4A) by Mr Priestley would be unsuccessful. It follows that there is no prospect of his success, let alone a reasonable prospect of success, in obtaining the orders he seeks. The proceedings should be dismissed pursuant to s 31A of the Federal Court Act, with costs. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | application for order pursuant to s 23 of the federal court of australia act 1976 (cth) (federal court act) that the respondent provide a statement of reasons for decision pursuant to s 13(1) of the administrative decisions (judicial review) act 1977 (cth) (adjr act) respondent seeks summary dismissal pursuant to s 31a of the federal court act whether alleged decision was made whether s 23 of the federal court act is a source of jurisdiction pursuant to which the order sought by the applicant can be made whether the applicant is a person aggrieved whether s 17 of the adjr act meant that notice given by previous officer holder not valid for the purposes of s 13(3) of the adjr act administrative law |
The application was made by using the form referred to in the Native Title (Federal Court) Regulations 1998 (Cth) reg 5(1)(a) Form 1. I will refer to this application as the original application. In the original application, the applicant claimed that she was entitled to make the application as "spokesperson" for what she described as the "Brown Family Group". In Schedule A, the applicant named 22 persons as the persons who constituted the native title claim group. The claim area was defined in the original application; it is a large area in central South Australia, including Coober Pedy. The right to make decisions regarding the land and debate decisions made by government or any other non-indigenous groups in the claimed area. Alternatively, that the application be dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) on the basis that it has no reasonable prospects of success. The first respondent's notice of motion was supported by an affidavit of Mr Simon McCaul, a solicitor employed in the Crown Solicitor's Office of South Australia. On 11 April 2008, the solicitors acting for the Antakirinja Matu-Yankunytjatjara Native Title Claim Group ("AM-Y claim group") filed an affidavit of one David Brown, who is a member of that group. On 15 April 2008, the second respondent, the AM-Y claim group, filed an application in this proceeding seeking an order that it be made a party to the applicant's application. The second respondent is the applicant in a native title determination application made many years ago (SAD 6007 of 1998), and the area claimed by the applicant is the same area as the area claimed by the AM-Y claim group in its application. It may also be noted that the area claimed overlaps a portion of a native title claim made by the Arabunna Peoples (SAD 6025 of 1998). The first respondent's notice of motion came on for hearing before me on 1 December 2008, and on that occasion I was asked to, and did, make an order that the second respondent be joined as a respondent to the applicant's application. On 30 June 2008, the applicant filed an Amended Native Title Determination Application. I will refer to this application as the amended application. She did not have leave to file an amended application, but that defect was cured when, on 15 September 2008, a judge of this Court made an order that the applicant have leave to file and serve an amended application and that the document entitled "Claimant Application" filed on 30 June 2008 stand as the amended application and leave be given "now as then" to file and serve that document. The relevant application for the purposes of the first respondent's notice of motion is the amended application, although it will be necessary to refer to the original application because of changes made in the claim group. Unless there is a need to indicate otherwise, I will refer to the claimant group as particularised in the amended application as the Brown Family Group. Since the first respondent filed its notice of motion, further affidavits have been filed by the parties. The first respondent filed an affidavit of Ms Sandra Joan Jarvis, an anthropologist employed at South Australian Native Title Services Limited, and an affidavit of Mr Andrew Jantke, a solicitor employed in the Crown Solicitor's Office of South Australia. The second respondent filed an affidavit of Mr Bobby Brown and an affidavit of Mr Sandy Brian Buzzacott. Both Mr Bobby Brown and Mr Buzzacott are members of the AM-Y claim group. The applicant filed four affidavits sworn by her, one filed on 8 October 2008, two filed on 10 November 2008, and one filed on 13 November 2008. That material was put forward by the applicant in addition to the material in, and accompanying, the original application and the amended application. Although an affidavit of the applicant accompanied the original application, it consisted of no more than the form in the Regulations and did not provide any information which was specific to the original application. An affidavit of the applicant accompanied the amended application and it does address (to an extent) the matters which an applicant's affidavit is required to address by virtue of s 62(1)(a) of the Native Title Act 1993 (Cth) ("NTA"). The first respondent's notice of motion seeks to engage s 84C(1) of the NTA. That subsection provides that this Court may strike out an application which does not comply with one or all of s 61 , s 61A or s 62 of the NTA. In the alternative, the first respondent's notice of motion seeks to engage s 31A of the Federal Court of Australia Act 1976 (Cth) ("FCAA") which provides that this Court may dismiss an application on the basis that it has no reasonable prospect of success. The test to be applied on an application under s 84C(1) of the NTA is clear. It is now well accepted that applications under s 84C(1) should be approached in the same cautious way as applications under O 20 r 2: see Bodney v Bropho [2004] FCAFC 226...at [51]---[52]. The court's powers should be exercised only where the claim as expressed is untenable and upon the version of the evidence favourable to the respondents to the strike out: Landers v South Australia [2003] FCA 264 ; (2003) 128 FCR 495 at [7] . A clear case has to be made out: Williams v Grant [2004] FCAFC 178...at [48]---[49]. Nonetheless, it may require extensive argument and may be necessary to adduce evidence to establish the futility of a case: General Steel Industries Inc v Commission for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 130; Bodney v Bropho at [51]---[52]. In this case, I have reached the conclusion, having regard to the principles applicable to s 84C(1) of the NTA, that the amended application should be struck out under that section. In the circumstances, it is unnecessary to consider the possible application of s 31A of the FCAA to the circumstances of the case. The first respondent contends on its notice of motion that the NTA allows for an application to be made by a native title claim group, but not by a sub-group. It contends that the Brown Family Group, as defined in the amended application, is not a native title claim group but, rather, it is a sub-group and therefore the amended application is incompetent. The first respondent further contends, as an independent basis for the orders sought in its notice of motion, that a native title determination application is competent only if the applicant is authorised by all persons in a native title claim group and all the persons in the Brown Family Group have not authorised the applicant to make the application and to deal with matters arising in relation to it. The first respondent submits that it follows that the applicant's amended application is incompetent. The second respondent supports the first respondent's contentions. It is convenient to begin by stating briefly the relevant legal principles. Relevantly, in relation to an application for a determination of native title made to the Federal Court, a native title claim group means a native title claim group mentioned in relation to the application in the table in subsection 61(1). Section 61(1) specifies the persons who may make a native title determination application, being an application, as mentioned in subsection 13(1), for a determination of native title in relation to an area for which there is no approved determination of native title. Note 2: Section 251B states what it means for a person or persons to be authorised by all the persons in the native title claim group. (First emphasis added, second emphasis in original. It provides that a claimant application must be accompanied by an affidavit sworn by the applicant which provides (among other things) "that the applicant is authorised by all persons in the native title claim group to make the application and to deal with matters arising in relation to it" s 62(1)(iv). A note to that paragraph provides that s 251B states what it means for the applicant to be authorised by all the persons in the native title claim group (see Acts Interpretation Act 1901 (Cth) s 13(3) and s 15AB(2) as to the use of notes). A native title determination application does not comply with s 61 of the NTA if it is clearly established that it is not made by a native title claim group. A native title claim group is a group consisting of all the persons who, according to their traditional laws and customs, had the common or group rights or interests comprising the particular native title claimed. These propositions follow from the provisions of ss 61(1) and (4), 251B and 253 of the NTA and have been stated in the cases: Risk v National Native Title Tribunal [2000] FCA 1589 at [60] - [61] per O'Loughlin J; Tilmouth v Northern Territory of Australia [2001] FCA 820 ; (2001) 109 FCR 240 (" Tilmouth ") at 241-242 [4] per O'Loughlin J; Landers v State of South Australia [2003] FCA 264 ; (2003) 128 FCR 495 (" Landers ") at 504 [33] per Mansfield J; Dieri People v State of South Australia [2003] FCA 187 ; (2003) 127 FCR 364 (" Dieri People ") at 377-378 [55]-[56] per Mansfield J; McKenzie at 223 [41] per Finn J; Hillig as Administrator of Worimi Local Aboriginal Land Council v Minister for Lands for the State of New South Wales (No 2) [2006] FCA 1115 (" Hillig ") at [60] per Bennett J; Harrington-Smith (on behalf of the Wongatha People) v Western Australia (No 9) [2007] FCA 31 ; (2007) 238 ALR 1 at 230-232 [1206] - [1217] per Lindgren J; Reid v State of South Australia [2007] FCA 1479 (" Reid ") at [27] per Finn J; Kite v State of South Australia [2007] FCA 1662 (" Kite ") at [21]-[22] per Finn J. The propositions have been applied most commonly in circumstances where it is clear that the claimant group is a sub-group or sub-set or part of a native title claim group. Cases such as Tilmouth , Landers , Dieri People , McKenzie and Reid are all cases in which it was clear that the claim group was not a native title claim group. The cases also make it clear that caution needs to be exercised before concluding on a strike-out application that a claim group is a sub-group, sub-set or part of a native title claim group: Colbung v The State of Western Australia [2003] FCA 774 at [23] - [26] per Finn J; McKenzie at 223 [41] per Finn J; Hillig at [60] per Bennett J; Reid at [28] per Finn J; and Kite at [22] per Finn J. For example, it may be that a sub-group of a community sharing traditional laws and customs alone possesses rights and interests in a particular area and that sub-group may itself constitute a native title claim group: Hillig at [60] per Bennett J (see also the obiter observations of Wilcox J in Bodney v State of Western Australia [2003] FCA 890 at [41] ; Perry M and Lloyd S, Australian Native Title Law (Lawbook Co, 2003) [3.130]. It is clear from the terms of s 61(1) of the NTA that the applicant to a native title determination application must be authorised by all the persons comprising the native title claim group. Section 251B of the NTA provides for the manner in which such an authorisation is to be given. Prior to the 1998 amendments there was no requirement under the Native Title Act that an applicant have such authority. The absence of that requirement led, in some cases, to conflicting and overlapping claims all carrying with them the statutory right to negotiate in respect of the grant of mineral tenements and the compulsory acquisition by Commonwealth or state governments of native title rights and interests. Although many aspects of the 1998 amendments were the subject of controversy in the public and parliamentary debates that preceded their enactment, the need for communal authorisation of claims was largely a matter of common ground. Where there is no traditional process of decision-making, s 251B(b) comes into play. Two points about s 251B(b) have been noted in the authorities. First, the paragraph envisages two steps, namely, the native title claim group agrees to the process whereby a decision authorising a person to make an application is made, and then the making of the decision itself: Wharton on behalf of the Kooma People v State of Queensland [2003] FCA 790 at [42] per Emmett J. Secondly, the paragraph does not include the word "all". There will clearly be cases where it will not be possible to secure the agreement of each and every member of the native title claim group. For example, members of a native title claim group may include infants, those who are mentally defective and those whose whereabouts are unknown. In recognition of this practical reality, it has been said that there will be no defect in the authorisation where all members of the native title claim group are given a reasonable opportunity to take part in the decision-making process: Lawson on behalf of the 'Pooncarie' Barkandji (Paakantyi) People v Minister for Land and Water Conservation for the State of New South Wales [2002] FCA 1517 ; Moran v Minister for Land and Water Conservation for the State of New South Wales (2000) 5(2) AILR 61 at 69 [40]. In cases where an applicant claims that he or she was authorised at a meeting of members of a native title claim group, it will often be necessary to consider the notice given of the meeting in order to determine if all members of the claim group were given a reasonable opportunity to participate in the decision-making process. For each of the applications there is a defined native title claim group which is set out earlier in these reasons. The connection between those who attended the various meetings referred to and the respective native title claim groups was not established either in respect of notification nor, more importantly, in respect of attendance. The native title claim groups are defined in each case by reference to apical ancestors and biological descendants of those persons and persons adopted by them. The advertisements and notices did not refer to the relevant native title claim groups except by use of the generic title of the applications in question. The membership of the native title claim group by those who attended each meeting was not demonstrated. Rather it was reported as an asserted self-identification. Mrs Morich made some statements from the bar table doubting the representativeness of those who attended at the Southern Noongar meeting. Her statements might be right or wrong. They were not evidence. But my inability to make any judgment about them illustrates the inadequacy of the evidence as it presently stands for the purposes of a s 66B application. And even if it be accepted that each of the members who attended each of the meetings was a member of the relevant native title claim group, it is not established that they were in any sense representative of the various components of the native title claim group concerned. The evidence in this case leads me to the conclusion that the Brown Family Group is a sub-group or sub-set of a native title claim group. The Brown Family Group, as defined in the original application, consisted of 22 persons, some of whom are deceased. Twelve or thirteen of the persons, including the applicant, are also listed as claimants or antecedents in the AM-Y claim group. The applicant is the daughter of Ms Jessie Brown, a person who, with her descendants, is named as a member of the AM-Y claim group. The persons named in the original application as part of the Brown Family Group included Mr Billy Brown, Ms Ida Brown, Ms Nellie Brown and Mr Johnny Wongan. The Brown Family Group, as defined in the amended application, consists of 22 persons and their descendants, but the four persons previously named have been removed and replaced by Mr Johnny Fatt, Ms Eva Fatt, Ms Beverly Fatt and Mr Ronald Fatt. In Attachment S in the amended application, the applicant provides an explanation for the changes in the composition of the Brown Family Group. She states (among other things) that Ms Nellie Brown has been excluded "as one of her granddaughters, Ms Maureen Williams, was on the AM-Y governing committee and did not want to be part of the Brown Family Group". She states that Ms Edna Williams is Ms Nellie Brown's daughter. She also states that Mr Johnny Fatt, Ms Eva Fatt, Ms Beverly Fatt and Mr Ronald Fatt are children of Ms Nellie Brown and that they have agreed to be members of the Brown Family Group. The AM-Y native title claim group is defined in the application made by that group as "those people (now living) who hold in common the body of traditional laws and customs governing the area the subject of the claim". Three groupings of persons are alleged to be members of the claim group. For present purposes, only part of the first group is relevant. Mr Billy Brown and Ms Ida Brown are part of the Brown Family Group as defined in the original application. In his affidavit, Mr David Brown states that the applicant's mother is Ms Jessie Brown and that his father is Mr Billy Nungki Brown and that Ms Jessie Brown and Mr Billy Nungki Brown are brother and sister. He states that all of their descendants are part of the AM-Y claim group. Mr David Brown is unsure whether he is the David Brown referred to in the definition of the Brown Family Group in the original application and in the amended application. Mr David Brown states that the descendants of Mr Jack Brown (a person said to form part of the Brown Family Group in both the application and amended application), namely, Ms Hazel Brown, Mr Ricky Brown and Ms Martha Edwards, are part of the AM-Y claim group (see para 1.6 above). In his affidavit, Mr Bobby Brown states that he is the son of Ms Linda Brown, as is his brother, Sammy. Ms Linda Brown and her descendants are named as members of the Brown Family Group in both the original application and amended application and they are members of the AM-Y claim group (see para 1.14 above). In his affidavit, Mr Sandy Brian Buzzacott states that his father is Mr Bulla Brown (also known as Brian Buzzacott). Mr Bulla Brown and his descendants are named as members of the Brown Family Group in both the original application and amended application and they are members of the AM-Y claim group (see para 1.14 above). The applicant claims that there was a meeting of the Brown Family Group on 8 November 2008. The minutes record the applicant advising the meeting that affidavits had been received from Mr Bobby Brown and Mr Sandy Buzzacott, respectively, and that those present at the meeting agreed that Mr Bobby Brown and Mr Sandy Buzzacott should be taken off the claimant list. The affidavit evidence from the applicant establishes the following: The applicant is dissatisfied with the way in which the AM-Y claim is progressing and, in particular, she is concerned about alleged errors by Ms Jarvis, an anthropologist involved with the claim. The applicant told Ms Jarvis to "withdraw the Brown Family Group from the AMY claim". The applicant disputes the claim of at least some of the applicants in the AM-Y claim group to a connection to the claim area. It is unclear whether the applicant disputes that Mr Bobby Brown and his brother, Sammy, are part of the Brown Family Group. At one point, she seems to accept that they are. At a later point, she seems to suggest that they have lost their connection with the claim area and, at a later point still, she suggests that they never had any connection with the claim area. The applicant states that the Brown Family Group know there are other families with native title interests in the area. The applicant asserts that many members of the AM-Y claim group have lost their "continuous cultural connection in the Aboriginal law". The applicant states that the "growing claimant list for the AMY claim"..."has gone out of control". In my opinion, the first respondent has established by reference to the evidence as a whole, that the Brown Family Group is a sub-group of the AM-Y claim group or, at least, of a larger group than the Brown Family Group. I have reached that conclusion by reference, in particular, to the following matters: Thirteen of the 22 members of the Brown Family Group, as defined in the amended application, are members of the AM-Y claimant group. Two of the people who were in the group in the original application, but removed in the amended application, are members of the AM-Y group. The evidence from the applicant suggests that she considers membership of the Brown Family Group depends on whether or not the relevant person agrees to be a member. The applicant is dissatisfied with the way in which the AM-Y claim is proceeding and asked that the Brown Family Group be withdrawn from "the AM-Y claim". The applicant states that the Brown Family Group know that there are other families with native title interests in the claim area. In my opinion, the amended application does not comply with s 61 of the NTA. In the amended application, the applicant claims that she is authorised to make the application and deal with matters arising in relation to it by virtue of two facts. First, she claims that she was authorised by the elder men and women of the Anangu Pitjantjatjara-Yankunytjatjara Lands (APY) and that they had stated that the applicant was responsible for the women's dreaming in the claim area and had to speak for her grandfather's country. This evidence does not establish a valid authorisation. It is far from clear that the statement by the elder men and women constitutes an authorisation to make the native title determination application and deal with matters arising in relation to it. Furthermore, even if it does, it is not established that the elder men and women had the power to grant the relevant authorisation. There is no evidence of a traditional decision-making process conferring power on elder men and women to confer the relevant authority. Secondly, the applicant asserts that she was authorised by a meeting of the Brown Family Group on 30 May 2008. That was after the original application had been filed and before the amended application was filed. There are a number of reasons why it must be concluded that the events at the meeting held on 30 May 2008 did not give rise to a valid and effective authorisation. First, none of Messrs David Brown, Bobby and Sammy Brown and Sandy Brian Buzzacott were given notice of the meeting and none of them authorise the applicant to make the application or deal with matters arising in relation to it. They, or at least some of them, appear to be part of the Brown Family Group and the failure to give them notice of the meeting is fatal to the applicant's claim that she has been authorised to make the application and deal with matters arising in relation to it. Even if she could overcome these difficulties, she faces other obstacles in the way of establishing a valid authorisation. There is no evidence that any advertisement or notice was given in respect of the meeting held on 30 May 2008. Furthermore, as in Bolton , the connection between those who attended the meeting referred to and the native title claim group is not established in respect of attendance. The applicant called another meeting of the Brown Family Group on 8 November 2008. That meeting was advertised in the "Coober Pedy Regional Times". The applicant said that in addition to the advertisement, she sent out 50 letters to "Bfg claimants members" of the intention to hold a general meeting on 8 November 2008. However, the identities of the addressees were not established, and copies of the letters were not put before the Court. The meeting held on 8 November 2008 did not result in a valid authorisation for the same reasons the meeting held on 30 May 2008 did not result in a valid authorisation. The applicant has not established that she was authorised by all the persons in the Brown Family Group, even assuming for the purposes of argument, that it was a native title claim group. I will hear the parties as to any other orders. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | native title determination application striking out whether group identified in application constitutes native title claim group within meaning of act whether applicant was authorised within meaning of act native title |
It is necessary to state "at least purportedly" because one of the issues in this case is whether that DPO was made by Ms Vivian either at all or lawfully. 2 Mr Pattenden has instituted an appeal to this Court pursuant to s 14V of the TAA against the making of the DPO. 4 The regime in the TAA for the making of a DPO replaced, after an interval of some 22 years, a longstanding, more sweeping regime for the restriction of departure of persons from Australia while subject to a taxation liability, the last manifestation of which was found in the former ss 210 to 212A of the Income Tax Assessment Act 1936 (Cth) (ITAA36). Under the earlier regime any person about to leave Australia had to obtain from the Commissioner a certificate which attested either to an absence of income tax liability or to the making of satisfactory arrangements for the payment of all income tax that was or might become payable by the person. Apart from criminal sanctions, an owner or charterer of a ship or aircraft who issued an authority to travel to a person who had not presented such a taxation certificate was made personally liable for the tax, if any, for which that person was or might become liable. Provision was made for the lodgement with the Commissioner before departure by a ship or aircraft owner or charterer of passenger lists and taxation clearance certificates. 5 Unsurprisingly, with the increasing advent on and from the 1960s of international travel and related tourism, this blanket regime became increasingly impractical, a circumstance confirmed by regard to the Ministerial Second Reading Speech made by the then Treasurer, the Rt Hon Harold Holt, in 1962 in respect of the Bill proposing the repeal of the regime. Though the potential for some revenue loss was there acknowledged, a countervailing benefit was considered to exist in the benefits that it would bring in facilitating international tourism to Australia. Sections 210 to 212A were repealed in 1962 upon the enactment of the Bill. 6 The utility of there being some provision for the restriction of the ability of a tax debtor to depart Australia without either wholly discharging the debt and prospective debts or making arrangements satisfactory to the Commissioner for that discharge came to commend itself to Parliament in 1984 when Part IVA , in which s14S and s 14V are found, was inserted into the TAA. 7 Though termed an "appeal", a proceeding under s 14V of the TAA either in this Court or a State or Territory Supreme Court, each of which is concurrently invested with Federal jurisdiction for this purpose, is a proceeding in the original jurisdiction. Features of such an appeal were considered by the Full Court in Poletti v Commissioner of Taxation (1994) 52 FCR 154 (Poletti's Case). Poletti's Case remains the only appellate authority in relation to such appeals. Not all of the decisions in the exercise of original jurisdiction which preceded Poletti's Case are readily reconcilable with that case or each other in relation to the nature of an appeal under s 14V. There questions provide a convenient framework within which to commence consideration of the merits of this appeal. 10 It was submitted on behalf of Mr Pattenden that there were two stages to an appeal under s 14V; deciding whether, on the evidence, the three questions posed in Poletti's Case ought to be answered in favour of the appellant on the material before the decision-maker and then deciding whether, on that material and such further material as then existed, reasonable grounds existed. 11 The Commissioner's submission was that there were no such "stages". I agree. 12 There is nothing in Poletti's Case which supports the notion that there are two stages to the answering of the identified questions. As noted above, it is recognised in Poletti's Case that, while it is possible to challenge the decision to make a DPO on administrative law error grounds, an appellant is not confined to the making of a challenge on such a basis. For example, to be able to contend that, on the evidence before the Court as to the position at the time the decision was made, reasonable grounds did not exist, it is not first necessary to demonstrate that reasonable grounds did not exist on the material which was before the Commissioner or that the decision as made was tainted by some administrative law error. Was Mr Pattenden subject to a taxation liability? In the main, the recited income tax liability and related administrative penalty is referable to a series of amended assessments which issued on 25 January 2008. These assessments were in respect of the 2003, 2004, 2005 and 2006 income years. So far as income tax liability is concerned, the schedule also makes reference to a net amount of $12,197.77 ($15, 582.85 less payments or credits of $3,475.08) remaining outstanding under an original assessment dated 16 April 2007 in respect of the 2006 income year. 14 It emerged in the course of the hearing that Mr Benson, the officer within the Australian Taxation Office (ATO) to whom the submission for the making of the DPO was directed, was not informed of the amount outstanding under the original 2006 income year assessment or, for that matter, of a payment or credit of $26,390.08 in respect of the amended assessment for the 2005 income year which is also noted in the schedule to the DPO. References to this net liability and to this payment or credit were added after Mr Benson had considered the submission by unnamed persons in the "Debt Management" branch of the ATO who seem to have prepared the draft of what became the schedule to the DPO. There was no evidence that, after he had considered the submission on 21 April 2008 and before the DPO was issued in the name of Ms Vivian a month later, the entries in the schedule were ever drawn to Mr Benson's attention. In all other respects, the amounts shown in the schedule to the DPO are reconcilable with the tax liability figures set out in the submission made to Mr Benson. 15 I consider the ramifications of the additions to the liability position known to Mr Benson later in these reasons for judgment. 16 Copies, authenticated by the signature of a Deputy Commissioner, of each of the notices of assessment in respect of the various assessments or amended assessments which appear in the schedule to the DPO were each in evidence. 17 Also in evidence was a series of deemed assessments which, by the operation of s 166A of the ITAA36, were occasioned upon the lodgement with the ATO on (as was conceded) 30 April 2008 by Crown Insurance Services Limited (Crown Insurance), a company incorporated in Vanuatu, of income tax returns for the income years ended 30 June 2003 to 30 June 2006 inclusive. It transpired that Crown Insurance later paid the amounts of these deemed assessments. This payment did not occur until after the date when the DPO was issued. 18 The submission to Mr Benson made reference to an audit which the ATO had conducted and was continuing to conduct of the taxation affairs of Mr Pattenden and companies with which he was associated. Crown Insurance is mentioned in this regard. It is described in the submission as "Mr Pattenden's underwriting company" and the recipient of the net amounts of premiums (net of salaries and other costs) collected in Australia from members of various Aboriginal communities in respect of funeral benefit insurance plans by other companies with which Mr Pattenden was associated (of which more detail below). 19 Though, on 21 April 2008, Mr Benson had this general awareness of the position of Crown Insurance as known to the ATO, it was not thereafter and prior to the issuing of the DPO drawn to his attention that Crown Insurance had lodged tax returns which resulted in its being deemed to be assessed for the 2003 to 2006 income years. 20 Mr Benson's understanding was that the amended assessments which were issued to Mr Pattenden in January 2008 were cast by reference to the amounts of premiums which had been sent to Crown Insurance from Australia and upon the assumption that he was in some way or another able to enjoy the use of this income. The returns lodged by Crown Insurance return the net amounts of the premium income as taxable income of that company. 21 Unbeknown to Mr Benson at the time when he considered the DPO submission or at any time thereafter before the issuing of the DPO, Mr Pattenden had, on 11 April 2008, lodged objections to each of the amended assessments. In each case, the grounds of objection were that the taxable income assessed was income of Crown Insurance, not Mr Pattenden and, further or alternatively, that Mr Pattenden was not, in any of the income years in question, a resident of Australia for income tax purposes. Those objections had not been determined by the Commissioner at the time when the DPO was issued. 22 On behalf of Mr Pattenden it was submitted that the existence of a "genuine dispute" was a relevant consideration not taken into account. It was further submitted that another relevant consideration not taken into account was the ATO "receivables policy". 23 Originally, these submissions were made in conjunction with a submission that the issuing of the DPO was unlawful because it sought the double recovery of a taxation liability in respect of income which had also been assessed to Crown Insurance. I did not understand this particular submission to be pressed given that Crown Insurance had only paid the amounts of its deemed assessments after the date when the DPO issued. In that circumstance, the abandonment of the submission was appropriate. 24 The Commissioner is entitled to raise alternative assessments. What he is not entitled to do is twice or more to recover tax in respect of the same income. Ltd. And the courts, if not the Commissioner, can diminish the difficulty of concurrent assessments by ensuring that there is no double recovery of tax. The co-existence of tax liabilities arising from concurrent assessments is entirely consistent with the operation of s 177(1). If the Commissioner employs s 177(1) in a proceeding to recover tax from taxpayer A, the liability of that taxpayer cannot be avoided by pointing to an outstanding assessment against taxpayer B. Section 177(1) operates as between the Commissioner and the taxpayer served with the notice of assessment in a proceeding between them and the notice of assessment issued to another taxpayer does not qualify or affect the operation of s 177(1). (Footnote references omitted) See also to like effect in that same case the reasons for judgment of Dawson J at p 216-217 and of Toohey J at p 228. The relevant root authority is Richardson v Commissioner of Taxation [1932] HCA 67 ; (1932) 48 CLR 192. 25 Had Crown Insurance paid the deemed assessments prior to the making of the DPO and either this fact not drawn to the attention of Mr Benson or if it had and its implications had not been taken into account in considering the extent to which Mr Pattenden's tax liability had thereby been discharged, there may have been a basis for the submission which came not to be pressed but it is unnecessary to decide the point. The mere fact that Mr Benson was unaware that deemed assessments existed in respect of Crown Insurance had no impact on the reaching of a conclusion that Mr Pattenden was subject to a taxation liability that had not been wholly discharged. I consider below whether there is any other ramification of his ignorance of the deemed assessments. 26 There was no suggestion that bad faith on the part of the Commissioner or his staff attended the issuing of the amended assessments to Mr Pattenden in January 2008. The production and tender in evidence of the authenticated copies of those amended assessments and the other assessment establishes conclusively in this appeal that those assessments were duly made and that the amount and all particulars of each assessment are correct: s 177(1) ITAA36. 27 Upon the production and tender of the authenticated copies of the amended and other assessments, that Mr Pattenden was subject to a taxation liability became a given in this appeal. Section 177 of the ITAA36 operated "to change what would otherwise be the operation of the relevant laws of evidence": Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32 ; (2008) 82 ALJR 1177 at 1191, [65] . In these circumstances and to adapt, in light of subsequent legislative changes to the forums in which taxation appeals or reviews are heard, language employed by Lee J of the New South Wales Supreme Court in 1985 in Winter v Commissioner of Taxation (1985) 16 ATR 977 at 981, one of the first appeals of the present kind, it is not for a court entertaining an appeal against a DPO to usurp the function of the Federal Court or the Administrative Appeals Tribunal when deciding an appeal against or, as the case may be, when reviewing, an objection decision in respect of an assessment. There was, even in 1985, nothing new in such a conclusion. A like position prevailed by virtue of the effect of s 177(1) of the ITAA36 in respect of recovery related proceedings arising under the earlier regime for the restriction of the departure from Australia of taxation debtors: Re Scottish Loan & Finance Co Ltd (1944) 44 SR (NSW) 461 at 466-467 (Nicholas CJ in Eq). 28 For the purposes of this proceeding it must be accepted that Mr Pattenden was subject to total taxation liabilities of $6,435,103.31 in the way particularised in the schedule to the DPO at the time when the DPO issued. So much in the end seemed to be accepted in the submissions made on his behalf. 29 As to the submissions concerning the relevance, if any, of the there being an objection and of the "receivables policy", neither can go to the existence of a taxation liability. That being so and because of the way the submissions came to be developed, it is preferable to consider their merits under a separate heading, "Residual Discretions? " later in these reasons. Did the Commissioner hold the requisite belief? In this sense, elements of s 14S(1)(b) of the TAA were addressed in his decision-making process. 31 Mr Benson's response to the submission made to him by subordinate officers is brief, "I support your recommendation to seek a DPO for Mr Pattenden". Read in the context of the submission and related recommendation made by subordinate officers, the response is consistent only with his holding the belief that I have mentioned. I do not read the words "I support" as evidencing Mr Benson's endorsing an approval decision made by an unauthorised subordinate, as opposed to evidencing his making a decision in terms of the subordinate's recommendation. 32 There was some exploration of Mr Benson's state of mind in cross examination and a related endeavour to persuade that his interest was only in securing the immediate payment of the income tax component of the debt rather than as well the additional tax. The end to which that was directed was a submission that Mr Benson's belief was not related wholly to discharging his taxation liability. That is not consistent with the contemporary evidence in the quoted response to the submission. 33 Though an officer of some seniority within the ATO, Mr Benson was neither the Commissioner nor a Deputy Commissioner and delegate of the Commissioner. After Mr Benson saw and approved on 21 April 2008 the submission made to him in relation to the making of a DPO a month elapsed before it was issued. Further, as noted above, when the DPO issued it made reference to a particular taxation liability of which Mr Benson was ignorant when he decided that a DPO should be made. 34 The submission for the making of the DPO was authored on 11 April 2008 by Mr Sivasubramaniam, an officer with particular responsibility for the audit of the income tax affairs of Mr Pattenden and entities related to him. That day, Mr Sivasubramaniam dispatched the submission by email to his "Team Leader", Mr Roberts. Also he has shown intentional disregard of the law. Accordingly, I agree that this client represents a serious flight risk and that he has demonstrated this by the resent [sic] disposal of several major assets. Please support [Mr Sivasubramaniam's] submission to issue a [DPO]. 35 An allegation that Mr Pattenden represented a flight risk is made in the DPO submission. 36 Mr Benson then considered the submission and replied directly to Mr Sivasubramaniam on 21 April 2008 in terms already noted. On the evidence, it was Mr Sivasubramaniam who thereafter came to affix the facsimile signature of the then Deputy Commissioner of Taxation Micro-enterprises and Individuals, Ms Vivian to the draft of the DPO, which issued in her name. 37 A draft of the proposed DPO did not form part of the submission made to Mr Benson. While so to do may be good public administration and perhaps obviate the vices I describe below, there is nothing in s 14S which mandates that practice, as opposed to the decision-maker's having an awareness of the taxation liability and considering the other elements set out in s 14S. 38 Why it took a month after Mr Benson had decided that a DPO should be made to issue the DPO was not explained in evidence. Mr Sivasubramaniam was not called to give evidence. It would seem, with respect, to be antithetical to the very purpose of a DPO for a subordinate not forthwith to carry into effect a decision by the Commissioner, a delegate or an authorised person (in the name of the former) to make a DPO. That same sentiment of expedition applies to what should be the procedural or "ministerial" act of giving form to the decision to make a DPO. I am not satisfied that this is what occurred in this instance. 39 Events did not remain static in the interval between 21 April and 21 May 2008. I have already mentioned the Crown Insurance deemed assessments. Further, there was correspondence generated on behalf of the Commissioner by Mr Sivasubramaniam with Mr Pattenden in relation to the provision of information further to what was termed an "Interim Decision Summary Report 2" which had been furnished to Mr Pattenden in early April 2008. In that report, the prospect of raising of further amended assessments directed to Mr Pattenden in the total sum, inclusive of penalties, of $1.69 million was foreshadowed. The existence of that interim report and that contingency were mentioned in the submission made to Mr Benson. There is no mention of the decision to make the DPO in this correspondence. Yet further, as described below, an explanatory letter in respect of one identified in the DPO submission as a concern was received by the ATO. 40 Tendered in evidence was an instrument of delegation signed by the Commissioner pursuant to s 8 of the TAA delegating, materially, his power to make a DPO to, inter alia , the holder of the office of Deputy Commissioner of Taxation, Micro-enterprises and Individuals. Also tendered was an instrument of authorisation by the holder of the office of Deputy Commissioner of Taxation, Micro-enterprises and Individuals which, materially and at least purportedly, authorised the holder of the position held by Mr Benson to exercise in the name of the person for the time being holding the office of Deputy Commissioner of Taxation, Micro-enterprises and Individuals the power of making a DPO. Persons holding positions subordinate to that held by Mr Benson were not so authorised. 41 In terms of Australian jurisprudence, the lawfulness in particular circumstances of a practice within public administration of delegates of a responsible Minister or permanent head or equivalent such as the Commissioner authorising subordinates to exercise delegated powers in their name finds recognition at ultimate appellate level in O'Reilly v State Bank of Victoria Commissioners [1983] HCA 47 ; (1982-1983) 153 CLR 1 at 12-14 per Gibbs CJ, Murphy J agreeing in this regard and at 30-33 per Wilson J. It is also the subject of an influential advisory opinion given by Brennan J in his Honour's then capacity as President of the Administrative Appeals Tribunal in Re Reference under Ombudsman Act s 11 (1979) 2 ALD 86. These, in turn, give local recognition to a principle of public law in the United Kingdom in relation to the administration of large Departments of State which has come to be known as "the Carltona principle", so named for a leading authority on the subject in that country, Carltona Ltd v Commissioners of Works [1943] 2 All E R 560. These and other authorities on the subject are helpfully collected and discussed in Aronson, Dyer and Groves, Judicial Review of Administrative Action , 3rd Edition, at pp 310-318. 42 Whether it is lawful for a power consigned by statute to a designated person (or a delegate where there is provision for delegation) to be exercised in the name of that person by a duly authorised subordinate depends on whether the statute concerned requires the power personally to be exercised by its designated repository (or a delegate). That, in turn, depends on the nature of the power and the other circumstances of the case. The latter include considerations of whether one should assume knowledge by Parliament of factors going to practical administrative necessity for such authority to be exercised such as the size of the department for which the legislatively designated repository of a power is responsible, the geographic area for which the department is responsible and the apprehended frequency of the occasion for the exercise of the power concerned. 43 I am relieved from considering whether authorisation in accordance with the Carltona principle was possible at all in relation to the making of a DPO because it was not submitted that the power to make a DPO, though described in Poletti's Case (at 160) as a "severe intrusion into a person's liberty, privacy and freedom of movement", was of such a nature as to require the decision personally to be made by the Commissioner or a delegate. It was accepted by the Appellant that it was permissible for the authorised person to decide to make the DPO with that decision being the act of the delegate. 44 The submission made on behalf of Mr Pattenden was that, accepting that the regime of delegation and authorisation was lawfully possible, it was not permissible for the authorised person, in turn, to consign substantive aspects of the making of the decision to subordinates. It was, rightly, no part of that submission that it was impermissible for an authorised person such as Mr Benson, having made a decision to make a DPO, to consign to a subordinate consequential, wholly procedural, clerical or "ministerial" tasks such as the affixing of a facsimile of the Deputy Commissioner's signature to the DPO or the communication to Mr Pattenden of the making of the DPO. Rather, the submission was that, when one examined the facts of this case, the decision as made and evidenced by the DPO was not that of Mr Benson in all key respects. 45 Two authorities were principally relied upon, Din v Minister for Immigration and Multicultural Affairs (1997) 147 ALR 673 (Wilcox J) and passages in the dissenting judgment of Mason J (as his Honour then was) in O'Reilly's Case, supra. Din's Case though was determined on a basis not relied upon for Mr Pattenden i.e. that the nature of the statutory power and administrative necessity were not such as to make it impractical for decisions personally to be made by the Minister and his appointed delegates. The dissent of Mason J in O'Reilly's Case was influenced by similar considerations. 46 The authorities relied upon do not directly support the submission, which is not to say that it lacks merit. The essential point advanced was that, in permitting a decision by an authorised officer to make a DPO in the name of the delegate, the law did not thereby allow the authorised officer to give a blanket authority to an unauthorised officer to affix, at some uncertain time in the future, the signature of the delegate to a DPO in respect of whatever the total tax liability of the recipient might then be and irrespective of whatever other changes may have occurred in the interval. 47 Paragraph 14S(1)(a) uses the indefinite article to qualify "tax liability". "Tax liability" is defined by s 2 of the TAA to mean "a liability to the Commonwealth arising under, or by virtue of, a taxation law". In turn, s 2 defines "taxation law" by reference to the definition of that term in the Income Tax Assessment Act 1997 (Cth) (ITAA97). No intention which would displace the interpretive rule found in s 23(b) of the Acts Interpretation Act 1901 (Cth) that "words in the singular number include the plural and words in the plural number include the singular" is evident. It would, for example, have been possible to have included reference to the 2006 original assessment liability in the submission made to Mr Benson but the fact that reference to that liability was omitted does not, ipso facto , invalidate his decision. 49 Section 14S contemplates the making of a decision to issue a DPO by the Commissioner (or a delegate) who has formed a belief on reasonable grounds that it is desirable that person subject to a particular tax liability not depart Australia without wholly discharging that tax liability; or making arrangements satisfactory to the Commissioner for that tax liability to be wholly discharged. The value judgment entailed in the decision is necessarily referable to wholly discharging or making satisfactory arrangements for wholly discharging the tax liability in respect of which the decision is made. These same requirements necessarily attend the making of a decision by an authorised person for a delegate. It is a usurpation of that authority for that person's unauthorised subordinate to presume to insert into what purports to be a DPO made by and on behalf of and in the name of a delegate a tax liability that is different to that in respect of which the authorised officer has made his decision on behalf of that delegate (I refer here to primary or additional tax liabilities which are fixed, not to general interest charges which necessarily accrue from day to day). 50 There is authority that the ability of a subordinate to exercise in the name of a Minister of State a statutory power conferred on the Minister need not be found in a formal instrument of authority but may permissibly be found in departmental practice: Woollett v Minister of Agriculture and Fisheries [1955] 1 QB 103, at 125 per Jenkins LJ and at 136 per Morris LJ. In this case the delegate has executed a formal instrument of authority. That instrument carefully delineates the extent to which particular subordinates are entitled to exercise delegated power in the name of the delegate. It is necessarily to be inferred that the instrument evidences a considered decision by a Deputy Commissioner of Taxation as to which subordinates, having regard to the knowledge and experience required to hold particular subordinate positions, ought responsibly to be given authority to make a particular type of decision in the name of that Deputy Commissioner. The instrument of authorisation gives a desirable certainty of authority to subordinates, as opposed to consigning such matters to informal practice and to the uncertainty of whether that practice would be regarded as acceptable having regard to the nature of the power and the level at which authority was exercised. The deliberate exclusion in the instrument of persons of lesser seniority than Mr Benson from having authority to decide on behalf of the delegate to issue a DPO tells against such persons possessing any authority by informal practice. 51 For the Commissioner, the submission was advanced that, in a relative sense, the assessment debt and the credits which were inserted were minor. That, with respect, is an unattractive submission. Assuming, as the parties have, that the nature of the power to make a DPO admits of the application of the Carltona principle at all, it nonetheless remains a power that entails a serious intrusion on a person's freedom of movement. There is therefore every reason to expect that the non-procedural aspects of the decision will be made only by the authorised officer. Mr Benson never made a decision to make a DPO in respect of the taxation liability specified in the purported DPO of 21 May 2008. The decision to insert a different taxation liability in that order was that of unauthorised subordinates. 52 I have no reason to doubt that, when Mr Sivasubramaniam affixed the Deputy Commissioner's signature to the DPO which issued to Mr Pattenden, he did so in good faith. It was nonetheless not only an insubordinate act but an unauthorised one. In so doing, he presumed that on 21 May 2008, knowing of the further taxation liability and of the credits, Mr Benson would remain of the view that the making of a DPO was appropriate. Like comment may be made in respect of the actions of whomever it was in "Debt Management" who presumed, without authority, to insert into the draft of the DPO liabilities and credits or payments of which Mr Benson was unaware when he made the decision to make a DPO on 21 April 2008. The addition of the additional taxation liability and of the further payments or credits was not a procedural step. Neither, in light of that, was the affixing of the facsimile of the Deputy Commissioner's signature to a DPO in that form. 53 What Mr Benson's subordinates have done is to conflate two features of the DPO regime. Section 14S contemplates the making of a DPO in respect of a taxation liability. It is the amount of that liability which must be inserted into the DPO. It looks both to a present totality and to the future, not just to the tax liability that occasioned the making of the DPO. Once a DPO is made, it is s 14T that gives the order an ambulatory quality in respect of other taxation liabilities and prospective taxation liabilities. Merely to discharge the taxation liability that prompted the making of the DPO does not entitle its recipient to the revocation of the DPO. 55 Though not expressly advanced in defence of the DPO, I have considered whether the additional entries might be severable. Such is the intrusion that a DPO makes into personal freedom that I do not consider this to be possible. 56 The purported DPO of 21 May 2008 did not reflect the decision made by Mr Benson on behalf of the delegate. It reflected the decision of persons not authorised to make a DPO in the name of Ms Vivian. Even if for no other reason, it should be set aside. Reasonable Grounds? 58 Whether reasonable grounds existed for the holding of the requisite belief is "an objectively determined postulate", Poletti's Case, at 161. That was the point of Lord Atkin's famous, and now orthodox, dissent in Liversidge v. Anderson [1941] UKHL 1 ; [1942] AC 206: see Nakkuda Ali v. M.F. De S. Jayaratne [1951] AC 66 , at pp 76-77; Reg. v. I.R.C. ; Ex parte Rossminster [1979] UKHL 5 ; [1980] AC 952 , at pp 1000, 1011, 1017-1018; Bradley v. The Commonwealth [1973] HCA 34 ; (1973) 128 CLR 557 , at pp 574-575; W.A. Pines Pty. Ltd. v. Bannerman (1980) 41 FLR 169, at pp 180-181; [1980] FCA 79 ; 30 ALR 559 , at pp 566-567. That requirement opens many administrative decisions to judicial review and precludes the arbitrary exercise of many statutory powers: see, for example, Attorney-General v. Reynolds [1980] AC 637. Therefore it must appear to the issuing justice, not merely to the person seeking the search warrant that reasonable grounds for the relevant suspicion and belief exist. 59 Put in the context of an appeal under s 14V, what this means is that it is for the appellant to prove that, viewed objectively and on the material before the decision-maker or otherwise then available, reasonable grounds for the requisite belief did not exist. • After the 1-2 weeks had expired, the ATO office re-contacted Mr Duly on 26/03/08. Mr Duly stated that he not yet contacted Mr Pattenden's solicitor, who was tasked to prepare the objection. • On 28/03/08, Mr Duly stated that he not yet contacted Mr Pattenden's solicitor, who was tasked to prepare the objection. • As on 11/04/08, there is no record of an objection being received anywhere in the ATO. Mr Duly is also not contactable. • A second Interim Decision Summary (Position Paper) was issued by facsimile and by post on 4/4/08. • In the above correspondence, the ATO provided a reply by date/timeframe of 09/05/08 for Mr Pattenden to provide comments and any additional information or evidence. • The second Interim Decision Summary proposed ITR amendments and penalties of a further $1.69 million. • During the interview of 18/05/07, Mr Pattenden advised that both his luxury home units (in RUNAWAY BAY, QLD) had been sold two weeks prior to 18/05/07. The units are cumulatively worth at least $2 million. • Mr Pattenden previously sold a portion of his equity in his associated ACBF Group in July 2001 for $1 million. • Mr Pattenden reportedly sold his racehorses at a significant loss. • In his letter of 31/10/07, Mr Hughes advised that Mr Pattenden had now ceased all involvement in the ACBF Group, other than his shareholding. By virtue of this statement, Mr Hughes conceded that Mr Pattenden maintained substantial business ties (directorships and shareholdings) in Australia in the recent past. • Also in the recent past, Mr Pattenden has made numerous trips in and out of Australia. • In light of all of the above, I believe that this evidence shows Mr Pattenden is in the process of divesting himself of his Australian assets and is removing them from our jurisdiction. Due to this behaviour together with the fact that he holds a British passport, he also represents a flight risk. • I also specifically make mention of my earlier minute of 2/12/07 that Mr Pattenden knew conclusively that his PAYG(W) obligations under the TAA 1953 and intentionally chose to disregard them in the 2001 FY. • In his responses of 09/01/08 and 25/01/08, Mr Duly has neither refuted nor provided any evidence to the contrary. • Mr Pattenden's noncompliant history clearly evidences his disregard for Income Tax and other laws. It seemed clear though from his affidavit and oral evidence that he agreed with the findings of fact and comments made in the submission. Though the submission was the only document before him at the time when he made his DPO decision, Mr Benson had a general awareness of certain other matters concerning Mr Pattenden and companies with which he was involved derived from his supervisory responsibilities within the ATO. 62 Mr Benson had also earlier received briefings either by Mr Roberts or by Mr Sivasubramaniam about the course of the audit. He was aware that, though he is an Australian citizen, Mr Pattenden also holds a British passport. 63 Mr Pattenden gave affidavit and oral evidence, as did his solicitor, Mr Hughes and his accountant, Mr Duly. I formed a favourable impression of the evidence given by each of these gentlemen, as I did for that matter of that given by Mr Benson and by Mr Alchin. Mr Alchin is a director and internal company accountant of ACBF Funeral Plans Pty Ltd ("ACBF Funeral Plans") and related companies which comprise the ACBF Group of Companies. By "favourable" I mean that I thought each of these witnesses gave his evidence honestly. 64 Mr Pattenden at times had difficulty focussing on the question asked and was also sometimes emotive and impatient when under cross examination. Having observed him closely in the course of the hearing, it seemed to me that these features were a combination of personality as well as the particular stress not only of giving evidence but of finding himself subject to a DPO. I detected also, I thought, a degree of frustration on his part that investigating officers within the ATO had not, as he saw it, understood his circumstances. 65 There was evidence that, in the course of an audit related interview with Mr Pattenden, Mr Roberts had shown a degree of exasperation with him. I mean no disrespect to Mr Pattenden in observing that I can well understand how such a reaction might be engendered by him. The relevance of that for present purposes is only that, when Mr Benson came to consider the submission made to him by Mr Sivasubramaniam through Mr Roberts, he was unaware that there had been some tension between Messrs Roberts and Pattenden in the course of one of the audit interviews. 66 Yet another factor to be taken into account in relation to the 2007 audit interview is that, even though he had a choice of residence abroad, Mr Pattenden attended that interview. Apparently he attended earlier interviews concerning the audit as well. I note, further, that he had attended before 21 May 2008 Australian court proceedings relating to his divorce. 67 The evidence given in Mr Pattenden's case gave a much more complete picture of his circumstances than that known to the ATO in general and Mr Benson in particular either as 21 April 2008 or as at 21 May 2008. In a sense, that is only to be expected for it is in the way of things that the intimacy of knowledge of an individual's personal and financial affairs will repose with that individual and his contemporary advisors, not with the Commissioner and his staff. In part though it seemed to me in this case also to have been the result of communication lapses and difficulties as between Mr Pattenden and his advisers and the ATO. 68 The position which emerges from the evidence given in Mr Pattenden's case in the appeal and which I accept is as follows. 69 Mr Pattenden was born in the United Kingdom in 1948. He turned 60 earlier this year. He left the United Kingdom many years ago. Within the last five years he has returned there to visit an elderly mother and a sibling. Overwhelming now though, his ties of friendship, assets, remaining business interest and retirement lie in the Antipodes and in Vanuatu, not in the United Kingdom. 70 ACBF Funeral Plans was, prior to 2004, an administration company known as ACBF Administration and Sales Services Pty Ltd. From 2004, it commenced trading as a provider of funeral benefit plans, particularly for members of the aboriginal communities throughout Australia. He explained that, in the first year of ACBF Funeral Plans operation as a provider of funeral plan benefits, its taxable income of nil was referable to substantial set up costs and the application of losses. He also voiced the opinion that, in his experience, the taxable income amounts returned by ACBF Funeral Plans were consistent with a company in its early years of operation. 72 Further, it seems that ACBF Funeral Plans and other companies in the ACBF Group substantially decreased their trading activities in 2004 as a result of proceedings taken by the Australian Securities and Investments Commission (ASIC) concerning whether a funeral expense policy was a financial product to which the Corporations Act 2001 (Cth) applied. Since then, the ACBF Group has developed what Mr Pattenden described as an "ongoing dialogue with ASIC and other government bodies as part of their ongoing compliance programmes". Mr Pattenden has little involvement in this other than to give the present directors the benefit of his background knowledge. 73 It is hardly necessary to state that it is no part of the Court's task on this appeal to make any assessment of whether there was any merit in the issue raised by ASIC. The companies in the ACBF Group apparently continue to trade in Australia and in Vanuatu. 74 Since 2003 Mr Duly has been dealing with the ATO on behalf of Mr Pattenden and the ACBF Group of Companies in relation to enquiries which later led to the audit. Based on that involvement, his evidence was that the scaling back of the activities of the ACBF Group of Companies during the course of the proceedings by the ASIC was known to the ATO and Mr Sivasubramaniam in particular. 75 Crown Insurance has an Australian tax file number which was issued to it on 7 March 2008. There was no evidence either before the Commissioner or otherwise introduced on the appeal which would suggest that Crown Insurance made supplies which would require it to be registered for the purposes of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). 76 Mr Pattenden sold an interest in the ACBF Group of Companies to a Mr Mark Conry in 2001 for $1M. In November 2004, Mr Pattenden bought out Mr Conry's interest for $1,350,000. Mr Pattenden funded the reacquisition of the interests he had sold to Mr Conry by borrowing and via his receipt of an eligible termination payment (ETP) from his superannuation fund. The amount of the ETP was $784,102 of which $664,879 was deemed to be an excessive component for taxation purposes. This attracted income tax at a higher rate. In the result, Mr Pattenden came to pay assessed Australian income tax in the 2005 income year in the amount of $252,654.02. 77 As a result of his acquisition of the interest sold to Mr Conry, Mr Pattenden came to hold and still holds the whole of the legal and beneficial interest in the shares issued in the ACBF Group of Companies. He is no longer actively involved in the day to day operations of the companies in the group. He now describes himself as retired. 78 The racehorses to which Mr Sivasubramaniam refers in his submission of 11 April 2008 were sold by Mr Pattenden by the end of June 2004. They were sold at a loss. 79 As to "luxury" (An ATO description) residential units at Runaway Bay, Mr Pattenden continues to own one of two units which he previously held. The other unit was sold with all proceeds being used to repay indebtedness to a bank. Mr Pattenden did not advise those interviewing him from the ATO on 18 May 2007 (who did not include Mr Sivasubramaniam) that he had sold both of the "luxury" units. Insofar as there is a note to this effect on an ATO file the note is in error. It may be that the error has its origin in a reference to the two units being for sale which, it appears, at one stage they were. 80 So far as the controversy concerning pay as you go (PAYG) withholding in 2001 is concerned, Mr Duly's firm made what he acknowledges to be an error in the preparation of Mr Pattenden's income tax return. An Australian Business Number was incorrectly specified. In fact all PAYG withholdings had been correctly paid and accounted for. The typographical error was not detected at the time by Mr Duly, nor, for that matter, by Mr Pattenden when he came to sign the taxation return. The fact of this typographic error and of the due making of payment was fully explained by Mr Duly in a letter which his firm sent to the Australian Taxation Office on 7 May 2008. 81 The delays perceived by the ATO in the lodgement of objections by Mr Pattenden to the amended income tax assessments are readily explicable by the lags which can attend the preparation, delivery and return of briefs to counsel for settling of such documents following the receipt of instructions from a client. I am quite satisfied that Mr Pattenden took all necessary steps within his control to lodge as soon as possible objections to the amended assessments which issued in January 2008. 82 The bank accounts said not to have been disclosed by Mr Pattenden to the ATO were held with the Commonwealth Bank's Beaudesert, Queensland Branch. There is in fact reference to these accounts in the response which Mr Pattenden gave to a questionnaire sent to him by the ATO via Mr Duly's firm. It is there stated that an amount of $500,000, being part of the sale of equity in the ACBF Group of Companies in 2001, was "rolled" into superannuation. Such a transaction is evident in the July 2001 for the superannuation account at the Commonwealth Bank. 83 Mr Duly assisted in the preparation of the answers but those answers were given by Mr Pattenden. It is fair to say that the references in the answers to the bank accounts in question were elliptically put. I did not understand either Mr Duly or Mr Pattenden to maintain that there could not have been a more full answer. 84 Mr Handley Jones, manager of the Oxenford Branch of the Bank of Queensland has dealt with Mr Pattenden and the ACBF Group of Companies on behalf of the Bank since 1997. He has found Mr Pattenden to be thoroughly reliable in all of his dealings with that bank. He trusts the man. Mr Jones does not consider Mr Pattenden to be a flight risk. In his experience, accounts of which Mr Pattenden has control have been operated in their usual course with their being nothing extraordinary about them which would suggest to him as a banker that Mr Pattenden was trying to move assets from Australia. Mr Jones was not required to attend for cross examination on his affidavit. 85 Mr Pattenden holds a Vanuatu residence permit. It was issued to him in 2003. The permit has a life of five years. It is renewable thereafter for a further five year period. There was no evidence before me that Mr Pattenden did not intend to seek renewal of the permit whenever it expired this year. I propose to proceed on the basis that he has and is likely to continue to have an ability to reside in Vanuatu if he chooses. 86 Mr Pattenden has access to a residence in Vanuatu. He also has a residence in New Zealand which he is renovating and to the remaining "luxury" unit at Runaway Bay. The evidence was that, apart from attending as necessary to affairs in relation to companies incorporated there, Mr Pattenden has a particular recreational interest in game fishing which attracts him to Vanuatu. The evidence also was that he has found Vanuatu's climate trying. He intends to base himself in retirement in New Zealand. That is why he has acquired and is renovating the residence there. 87 Mr Pattenden regularly travels to and from Australia. By the time when the DPO was made (and for that matter now) he was tending to spend less time in Vanuatu than hitherto and more time in New Zealand. 88 It is not for me to judge in this case whether or not Mr Pattenden is a resident of Australia for the purposes of our taxation laws. What I do accept is that, since at least 2003, he has sought to be in Australia for less than half of any given income year. 90 As to the obtaining of licences to operate an insurance business in Vanuatu and the related payment of a bond, Mr Pattenden explained that the ACBF Group of Companies had hitherto been able to obtain reinsurance in Australia from another insurer, National Mutual. When it did not prove possible to obtain renewed reinsurance from that source Mr Pattenden initially investigated the possibility of establishing a reinsurer for the group in Australia but found that the capital (a bond of $A5,000,000 was required) and regulatory requirements for this did not make it feasible. On the other hand, investigation showed that setting up a reinsurer in Vanuatu was feasible (a bond of $A200,000), which then led to the securing of licences and the payment of the bond. Crown Insurance, incorporated and based in Vanuatu, became the underwriter for the ACBF Group of Companies. 91 One consequence of the links which came to exist between the Australian companies in the ACBF Group of Companies and companies in Vanuatu was and is, as Mr Alchin explained in evidence, that inflows and outflows of funds have been occurring in the ordinary course of insurance business ever since 2003. Thus it is not to be taken as a given that, in every case, the departure of the person from Australia will make it unlikely, or at least less likely, that the tax liability will be discharged, or that the ability of the Commissioner to recover the tax will be impaired. These are things which must be considered by the Commissioner in every case. The purpose of s 14S, and accordingly a central purpose of Part IVA , is not the prevention of persons (owing tax) from leaving Australia simpliciter: it is the prevention of such persons from leaving Australia where, in the Commissioner's belief reasonably arrived at, the recovery of tax would or might thereby be impaired. 23 In that result, at least so far as revealed by s 14S, the general scope and objects of Part IVA of the Administration Act are as contended for by both sides in the present case. As contended for by the Commissioner, they are the protection of the revenue. As contended for by the applicant, they are the prevention of persons (owing tax) from leaving Australia where that would affect the recoverability thereof. In particular I prefer it to the submission made on behalf of the Commissioner that the use of the word "desirable" in s 14S(1) meant that not much was required to warrant the making of a DPO. "Desirable" is certainly a word of lesser moment than "essential" but, to repeat an observation of Jessup J, "The purpose of s 14S ... is not the prevention of persons (owing tax) from leaving Australia simpliciter ". That was a purpose evident in the earlier regime. The word "desirable" must be read in the context of affecting recovery. Further, part of that context, are the words "reasonable grounds" which, as the passage quoted above from George v Rockett underscores, are a protection against the exercise of arbitrary power. The word "desirable" does not offer a basis for trivialising that protection. 94 Having regard to this approach to the construction of s 14S(1)(b) it is, in my opinion, relevant to take account when considering whether reasonable grounds for the requisite belief existed, to take account of the ability to enforce an Australian revenue debt in places for which a debtor might reasonably be expected to reside abroad, insofar as it may be possible to identify the same. 95 So far as the United Kingdom is concerned, the consensus between the parties was that, though provision is made by and under the Foreign Judgements (Reciprocal Enforcements) Act 1933 (UK) for the registration of, materially, judgments of this Court or of the Supreme Court of a State, an exception prevails in respect of "a sum payable in respect of taxes or other charges of a like nature" (see s 1(2)). That being so and having regard to Government of India v Taylor [1955] AC 491 , it was common ground that a judgment obtained here in respect of a revenue debt could not be enforced in the United Kingdom. Accepting this though, the conclusion reasonably to be drawn on the whole of the evidence that existed when the DPO was made was that the prospect of Mr Pattenden's returning to the United Kingdom for anything other than short term visits was remote. Further, there was no evidence that he had any assets of any significance in that country. 96 There was no evidence before me as to the position which prevails in relation to the enforcement of an Australian revenue debt in Vanuatu. If there were some benign feature of the law there that would permit the enforcement of an Australian revenue debt judgment there it was for Mr Pattenden to prove that. Mr Pattenden does, it seems, have assets there, but the impression reasonably to be formed on the evidence of his situation in May this year was that, in his retirement, he is increasingly likely to spend less time there than he does in New Zealand. Mr Pattenden's physical presence in Australia can have no effect on the position which prevails under Vanuatu law in relation to the enforcement of an Australian revenue debt judgment. 97 So far as New Zealand is concerned, it appears that the common law public policy against the enforcement of a foreign revenue debt judgment as described in Government of India v Taylor has been reversed by domestically enacted treaty. In 2006 the TAA was amended so as to include in Sch 1 a new Div 263 --- "Mutual assistance in the collection of foreign tax debts": s 3 and Sch 1, item 8, International Tax Agreements Amendment Act (No 1) 2006 (Cth). The new Division makes provision for bilateral enforcement treaties for tax debts. The first country with which Australia entered into treaty relations for bilateral enforcement of tax debts was New Zealand. This was achieved by the inclusion of a newly numbered Article 27 into the Double Taxation Agreement between the two countries. That Protocol was included in Schedule 4A to the International Tax Agreements Act 1953 (Cth) by the International Tax Agreements Amendment Act (No 1) 2006 (Cth). The Protocol entered into force on 22 January 2007. Any Australian revenue law judgment in respect of Mr Pattenden's Australian tax liability could be enforced in New Zealand against assets which he has there. 98 Mr Pattenden's history is one of attending requests made by the ATO for interviews. He has known that he and companies in the ACBF Group were the subject of increasing scrutiny by the ATO for some five years. He had ample opportunity, prior to the making of the amended assessments in January 2008, to depart Australia permanently and to send his wealth abroad. One might reasonably apprehend that he could have adopted a like attitude to divorce proceedings here. There is no evidence that he did. For all of that time, he has held a British passport. Notwithstanding this, he has resisted the temptation either to "flee" there (to adapt the language of the ATO in the DPO submission) or to retire there. Instead, the only temptation to which he has succumbed is to retire to New Zealand, a country in which the recovery of Australian tax is readily possible. 99 Further, in terms of assets against which recovery in respect of the liabilities noted in the schedule to the DPO might readily be possible, he has shares in the ACBF Group worth some $4M, a luxury unit at Runaway Bay (by inference on the available evidence worth in the order of $1M) and his residence in New Zealand. 100 Mr Pattenden's frequency of international travel hardly makes him a "flight risk" from Australia when one considers the travel venues and related reasons for travel over time --- ties of business and friendship in Australia and Vanuatu (and recreational game fishing in the latter), remaining family in the United Kingdom and retirement and friends in New Zealand. 101 In the period since 2003, Mr Pattenden has increased, not decreased, his investment in the ACBF Group of Companies, which continue to operate here, and done so at the price of paying a hefty amount of Australian tax. In reality, there was no default in the meeting of PAYG obligations. The evidence concerning the sale of his racehorses is stale so far as providing any reasonable indication that he constituted in May 2008 a "flight risk". Further, that sale was nothing more than a manifestation of a decision to end ownership of racehorses. Insofar as a supposed sale of each of his "luxury" units at Runaway Bay is concerned contributed to that "flight risk" conclusion, that conclusion was founded on a false premise. Moreover, his explanation for why he came to sell one is credible. He had hoped to be able to join the two units but this did not prove possible. 102 The ebb and flow of funds to and from Australia as noted by Austrac has been explained. There is nothing sinister in it. 103 By 21 May 2008 deemed alternative assessments against Crown Insurance existed. The contingency of double recovery existed. Mr Benson was ignorant of this as at 21 May 2008 when the DPO was made. In forming a view in relation to whether on reasonable grounds recovery would or might be impaired it is relevant, in my opinion, to take into account this contingency. That is not in any way to detract from a liability that Mr Pattenden had under the amended assessments but rather to recognise a factor which might intrude on recoverability of the whole of that liability. 104 A ready and plausible explanation has been given for the modest income of ACBF Funeral Plans in its early years in the funeral insurance business. 105 While it would not have been irrelevant for Mr Benson to have taken into account the merits of the amended assessments and, for that matter, of the deemed assessments against Crown Insurance in making a DPO decision, he was not obliged so to do i.e. the merits were neither a "relevant consideration" nor an "irrelevant consideration". I have not had any regard to the prospective merits of either the amended assessments or the deemed assessments. 106 Mr Pattenden is a long standing and reliable customer of a local bank. This was not known to Mr Benson. Neither did Mr Benson know from his immediate subordinate Mr Roberts of the tensions that had occurred at interview between him and Mr Pattenden. 107 The conclusion drawn in the submission about the presumed delay in the lodgement of the objections to the amended assessments is unwarranted on the evidence now to hand. It may, with respect, even have been unwarranted at the time if the matter were viewed dispassionately. 108 On what Mr Benson knew, it is by no means impossible to see how it was open for the requisite belief to be held on reasonable grounds not just subjectively but objectively. That though is not the test. On the evidence before the Court as to the position as at the time when the DPO was made and doing the best I can to consider the position objectively, the factors to which I have adverted do not warrant a conclusion that reasonable grounds for the requisite belief then existed. 109 For this alternative reason also the DPO should be set aside. Residual discretions? In that case, the Court of Appeal had concluded, inter alia, that the existence of a "genuine dispute" as to the underlying tax liability may be taken into account as one factor in exercising the discretionary power to set aside a demand under para (b) of s 459J(1) of the Corporations Act 2001 (Cth). 111 In this fashion it was submitted that it was relevant, as a matter of discretion, to take into account the merits of the objections to the amended assessments. 112 As it happens, I have answered two of the three questions described in Poletti's Case favourably to Mr Pattenden. I did not understand the Commissioner to submit that, if so, I retained a discretion to preserve the DPO. Nonetheless, some comment ought to be made about this further submission of Mr Pattenden. 113 At the time when the submission was made the appeal to the High Court from the Queensland Court of Appeal's submission had yet to be decided. Shortly after I reserved my decision on this appeal, the High Court in Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41 ( Broadbeach Properties ) unanimously reversed the decision of the Queensland Court of Appeal, thereby exposing a false line of Queensland authority the origins of which may be traced back via Willemse Family Co Pty Ltd v Deputy Commissioner of Taxation [2003] 2 Qd R 334 to Re Softex Industries Pty Ltd; Softex Industries Pty Ltd v Commissioner of Taxation (2001) 187 ALR 448. I therefore invited the parties to make such further submissions as they may be advised in relation to the relevance of the objection. 114 For Mr Pattenden, the submission was that the existence of an objection remained relevant with it being put that Broadbeach Properties concerned a provision which deemed a company to be insolvent whereas the present, as with an order for the winding up of a company or a sequestration order against the estate of a debtor concerned a change in status, in this case "the fundamental right to freedom of movement". Further, the focus of the "residual discretion" seemed to change from that said to be possessed by the Court to one said to be possessed by the Commissioner. The Commissioner maintained his position that the existence of the objection was not a relevant consideration. 115 Just what purpose is served by the words, "in its discretion" in s 14X of the TAA is moot. It is, for example, difficult to envisage a circumstance in which, even assuming that they bespeak a "residual discretion", a court which had concluded that reasonable grounds did not exist for the belief referred to in s 14S(1)(b) of the TAA would do anything other than set the DPO aside. Likewise, if each of the questions inherent in an appeal against the making of a DPO were resolved against the appellant, it is difficult to envisage how any order other than the dismissal of the appeal might be made. In the event that all existing tax liabilities had been paid, that there were no prospective tax liabilities and that the Commissioner refused to revoke the DPO under s 14T, the appropriate course would be to challenge the adverse revocation decision, not to institute or further to prosecute an appeal against a DPO the making of which satisfied each of the three questions derived from Poletti's Case in the hope of nonetheless securing a favourable exercise of a "residual discretion" from a court. 116 Further and more fundamentally, as the Full Court reminded in Poletti's Case (supra, at 157), "[F]ederal courts or other courts exercising federal jurisdiction exercise only the judicial power of the Commonwealth, and do not act administratively or exercise administrative or executive powers by, for example, substituting their own discretion for the discretion of the original decision-maker". It is the Commissioner, not the Judiciary, who administers the TAA. Whatever the words, "in its discretion" mean, they do not offer a basis for any consideration of the merits of an objection in the face of the engagement of s 177(1) of the ITAA36 by appropriate tender of duly authenticated copies of the assessments concerned. In that circumstance, for reasons given above, the tax liability is a given. While, as an administrator, it would not be an "irrelevant consideration" (as opposed to being a "relevant consideration") for the Commissioner, if so disposed, to consider the merits of an objection in deciding whether to make a DPO, it is not for a court to do that on an appeal, even assuming that there is a "residual discretion". In this regard, this particular submission of Mr Pattenden is subversive of s 177(1) of the ITAA36 and seeks to resurrect what I have described as a false line of authority. I reject it. 117 A discrete part of the Commissioner's Receivables Policy (Exhibit 5 --- Part B, Section 13 of the Policy) is directed to the subject of departure prohibition orders. Though that part of the policy is not expressly cited in the DPO submission, it is evident from the submission that criteria specified in that policy have been addressed. The omission gave rise to no administrative law error. Whether the omission constituted good public administrative practice is for the Commissioner, not the Court, to determine. 118 Even assuming that a "residual discretion" for the Court existed, Mr Pattenden's reliance on another part of the Receivables Policy (Exhibit 5 --- Part B, section 28 of the Policy) directed to the subject of "Recovering Disputed Debts", which was said to give rise to "legitimate expectations" (a term the use of which in administrative law is hardly to be encouraged: Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1 at [81] --- [83] per McHugh and Gummow JJ, at [121] per Hayne J and at [140] --- [150] per Callinan J) which were not honoured by the Commissioner in making the DPO was doomed to fail at the outset. That part of the policy is patently not relevant to the making of a DPO. 119 Given the answers reached in respect of the questions derived from Poletti's Case, it is unnecessary to devote any further attention to the "residual discretion" submission. The departure prohibition order of 21 May 2008 should be set aside. The Commissioner should pay Mr Pattenden's costs. I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | appeal against making of a departure prohibition order whether the person was subject to a taxation liability whether the commissioner held the belief on reasonable grounds that it was desirable to make a departure prohibition order where neither an objection nor the australian taxation office receivables policy are relevant to existence of a taxation liability where different taxation liability to that considered by delegate's authorised officer inserted into departure prohibition order by an unauthorised subordinates where no reasonable grounds for the requisite belief departure prohibition order set aside decisions of delegates by authorised officers carltona principle where different taxation liability to that considered by delegate's authorised officer inserted into departure prohibition order by an unauthorised subordinates departure prohibition order set aside taxation administrative law |
I have now heard the parties on the final orders which should be made, and on the question of costs. These reasons deal with those matters. They should be read together with my reasons of 13 March 2009. The first matter concerns the penalties, if any, which should be imposed on the respondents for the contraventions to which I have referred. There were two such contraventions. First, I found that the respondents had procured a stoppage of work on the site on 31 July 2006 with intent to coerce Kane to employ a person as a building employee, or to engage a person as a building contractor, in the role of a labourer with occupational health and safety responsibilities and as a peggy on site. Secondly, I held that the respondents had threatened to procure further stoppages on the site with the same intent. Each contravention is such as would attract a maximum penalty of $110,000 in the case of the first respondent, the Union, and $22,000 in the case of the second respondent, Mr Mates. The task of the court is "to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations": Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 ; (2008) 165 FCR 560 , 580 [91] per Buchanan J. The conduct of the respondents on 31 July 2006 was, in my view, squarely within the general class of conduct with which s 43(1) of the BCII Act is, as a matter of policy, concerned. Mr Mates (in his role as a representative of the Union) visited the site and procured a stoppage of work in circumstances where, as would have been apparent to him, important construction work was interrupted. He did so with the intent of coercing Kane in the respects indicated above. He was acting in the course of his employment as an organiser of the Union, and there was no suggestion in the evidence that the Union disapproved of his actions. Counsel for the respondents submitted that the contraventions found to have occurred in this case should be regarded as towards the less serious end of the spectrum. First, it was said that there was no extreme or reprehensible industrial conduct (such as violence, damage to property, or the like) involved here. I accept that there was no such conduct, but its absence does not, in my view, justify the placement of the contraventions at the lower end of the spectrum of seriousness. Even absent such conduct, the present contraventions remain, as I have said, squarely within the range of conduct which it is the concern of s 43 to proscribe. Secondly, it was said that, subjectively, Mr Mates' concern was with the health and safety of the workers on the site, and that his insistence on the employment of a labourer was his way of ensuring that the deficiencies in the condition of the site, as he perceived them, were addressed. It was put that these factors were mitigatory, or at least should set the case apart from one in which the employment of additional labour was demanded with no colourable justification. Counsel for the applicant submitted that the respondents' submissions failed to recognise the essence of Mr Mates' wrongdoing, which was that, however strongly-felt were his reservations about the condition of the site, he sought to rectify the matter by recourse to coercion. I think there is some substance in each of these submissions, the difference between them being a matter of perspective. It is, of course, not only legitimate but important that union officials in the building industry maintain a concern with on-site health and safety. The BCII Act itself recognises the importance of the subject, but it does so in a limited way: a stoppage of work on account of a worker's reasonable concern about an imminent risk to his or her health or safety is excluded from the definition of "building industrial action" under Ch 5 of the Act, but there is no corresponding exclusion from the operation of s 43. I consider that the explanation for the difference is to be found in the circumstance that s 43 is concerned only with action taken with a particular intent. If someone in the position of Mr Mates took action with the intent only of protecting his or her members from exposure to an imminent risk to their health or safety, the section would not have been contravened. But that was not the present case. I have held, in effect, that Mr Mates did not have reasonable grounds to suppose that the workers on site could only be protected by a cessation of work. Indeed, in procuring a stoppage of work, Mr Mates' intent was to coerce Kane. While I recognise the importance of a workplace which is safe and without risks to health, I consider it no less important that such issues, when they arise and become matters of controversy, be resolved according to procedures established for the purpose (as existed in the present case). Thus I substantially accept the case put on behalf of the applicant that Mr Mates had no need to procure a stoppage of work on 31 July 2006 even if he did hold the concerns that he expressed in his evidence, and that the source of those concerns should not be regarded as mitigatory apropos the inherent seriousness of his conduct. Thirdly, it was said on behalf of the respondents that the work stoppage on the site was of short duration and that there was no evidence of any loss having been sustained by Kane as a result. It seems that work did not resume on the site until 2 August 2006, and that two days' work (save for the unloading of the steel) were lost. There was no evidence that any person suffered financial loss as a result of the stoppage. Mr Chambers gave evidence that the client would not "pursue" Kane for any losses resulting from the stoppage. In the circumstances, I do not consider that the seriousness of the stoppage, or the losses arising from it, should be regarded as aggravating factors in the fixing of penalties. On the other hand, I would not regard the absence of evidence of loss as mitigatory. The work scheduled to be done on 31 July 2006 was the erection of structural steel and would, to someone in the position of Mr Mates, have appeared to be on the critical path (which it was). I am not prepared to depreciate the inherent significant of the stoppage --- as a means of placing illegitimate pressure on Kane --- by reason only that there was no evidence of any resulting financial loss. Counsel for the respondents made a number of other points in his very comprehensive submissions, but they were, if I may so observe with respect to him, based on isolated observations by Judges in individual cases, each concerned with its own facts. While I have considered them, I do not propose to rehearse them in these reasons as they do not, in my view, affect what would otherwise be the appropriate penalties to be fixed in the present case. The next submission by counsel for the respondents concerned the inter-relationship between the two contraventions (the stoppage and the threat) which have been found in the case of each of the respondents. It was submitted that the second contravention in each case should not be separately penalised, on the basis that what was involved here was a single "course of conduct", relying in this respect upon the discussion of the subject in the joint reasons of Stone and Buchanan JJ in Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 ; (2008) 168 FCR 383 , 396-401, [41]-[58]. Where, whatever the number of technically identifiable offences committed, the prisoner was truly engaged upon one multi-faceted course of criminal conduct, the judge is likely to find concurrent sentences just and convenient. Although, factually, Mr Mates was in a sense engaged in a single course of conduct on 31 July 2006, that conduct had two elements which s 43 recognises as separate and which were, qualitatively, distinct in the impact they may be presumed to have had on Kane. That is to say, Mr Mates sought to coerce Kane in two ways. By procuring stoppage of work he placed immediate pressure upon Kane and, necessarily, demonstrated his capacity and preparedness to do so. By threatening to procure later stoppages, he asserted, in effect, control over when work would resume on the site, and in what circumstances. In its coercive effect, the threat should be viewed as additional to, and not merely as a continuation of, the conduct involved in procuring the stoppage as such. The next matter for consideration is the relevance of prior contraventions of s 43 or of similar statutory proscriptions. Counsel for the applicant drew the court's attention to a number of previous occasions upon which the Union (and in one case Mr Mates) had been found to have contravened s 43, or another provision, of the BCII Act, or a provision of the Workplace Relations Act 1996 (Cth) ("the WR Act") which, according to counsel, proscribed similar conduct to that proscribed by s 43. April 2003 Contravention of s 170NC of the WR Act: Alfred v Walter Construction Group Limited [2005] FCA 497. August 2003 Contravention of s 187AB(1)(a) and (b) of the WR Act: Cruse v Multiplex Limited [2007] FCA 2015 , and on appeal [2008] FCAFC 179. August 2003 Contravention of s 187AB(1)(a) and (b) of the WR Act: Ponzio v B & P Caelli Construction Pty Ltd [2006] FCA 1221 , and on appeal [2007] FCAFC 65 ; (2007) 158 FCR 543. October 2003 Contravention of s 170 NC of the WR Act (and s 45D of the Trade Practices Act 1974 (Cth)): A & L Silvestri Pty Ltd v CFMEU [2007] FCA 1047. May 2004: Contravention of s 187AB(1)(a) and (b) of the WR Act: Cahill v CFMEU [2008] FCA 495. October 2004: Contravention of s 170NC of the WR Act: Martino v CFMEU and Maher (unreported, Magistrates Court of Victoria, 10 May 2006). May 2005: Contravention of s 298SC(c), and s 170NC, of the WR Act: Cruse v CFMEU [2008] FCA 1267. October 2005: Contravention of ss 38 and 43 of the BCII Act: Stuart-Mahoney v CFMEU [2008] FCA 1426. February 2006: Contravention of s 43 of the BCII Act: Cahill v CFMEU (No 3) [2009] FCA 52. In addition, in the most recent instance (that of February 2006), Mr Mates was found to have contravened the provision referred to. (b) In the case of contraventions of provisions other than s 43 of the BCII Act, are those contraventions relevant to the consideration of penalties in the present case, which involved contraventions of that section? (c) Is it proper to have regard to previous contraventions found to have occurred in States or Territories other than Victoria, where the contraventions in the present case did occur? (d) May the court have regard to contraventions which occurred prior to 31 July 2006 (when the contraventions in the present case occurred), or is the court limited to contraventions in relation to which findings had been recorded before that date? The first is that the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v Ottewell [1970] AC 642 at 650. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties. The contraventions established in those proceedings are of a different nature than the contraventions now being considered and did not involve contraventions of the Act. In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) [1999] FCA 1714 ; (1999) 94 IR 231 at 232 Branson J listed a number of matters that are relevant to penalty in relation to contraventions under Pt XA of the WR Act. One matter her Honour considered was whether the respondent had previously been found to have engaged in conduct in contravention of Pt XA of that Act. In my view, that is the correct approach. It is not appropriate to consider all contraventions of any industrial legislation by any Branch of the first defendant anywhere in Australia. The first defendant is a very large organisation that operates throughout Australia. Branches, Divisions, officers and representatives of the first defendant are involved in dealings with employers in relation to industrial matters every day. It is inappropriate to take account of conduct of the first defendant through various Branches, Divisions and officers or representatives that is of a different character than the contravening conduct in question and are contraventions of different legislation. In the present case, the applicant invites the Court to have regard to previous contraventions by the CFMEU of the WR Act in determining the appropriate penalty for the CFMEU's contraventions of the BCII Act. Similar previous conduct demonstrates that the respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions. Conduct which is of a different character does not assist this assessment see: Leighton Contractors Pty Ltd v Constructions, Forestry, Mining and Energy Union [2006] WASC 317 ; (2006) 164 IR 375 at [67] . Similar conduct which has been found to contravene other legislative provisions will have potential relevance. In this case, any previous contraventions of the provisions of Part 9 of the WR Act which relate to unlawful industrial action and coercion are relevant in determining the appropriate penalty. (b) Whether the respondent has previously been found to have engaged in conduct in contravention of PtXA of the Act. (c) Where more than one contravention of PtXA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct. (d) The consequences of the conduct found to be in contravention of PtXA of the Act. (e) The need, in the circumstances, for the protection of industrial freedom of association. (f) The need, in the circumstances, for deterrence. Insofar as they rely upon Coal & Allied , it is clear that the considerations referred to by Branson J were not intended to be exclusive. Her Honour's judgment could not, in my view, be read as implying that contraventions arising otherwise than under the particular Part of the Act in question might not, in appropriate circumstances, be relevant to penalties. The second difficulty relates to the extract set out above from Leighton Contractors . There, Le Miere J expressed his views rather categorically, and in terms with which, with respect, it would be difficult to disagree. I would accept that it would not be appropriate to consider all contraventions of any industrial legislation, including contraventions which were of a character quite different from those presently under consideration. For example, under s 230(2) of Schedule 1 to the WR Act, a registered organisation must, within 28 days after a person becomes a member of the organisation, enter that person's name and postal address in the register of members. That is a civil penalty provision, contravention of which exposes the organisation to a maximum penalty of 100 penalty units: see s 306(1) of the Schedule. One can readily appreciate why such contraventions, for instance, ought not normally to be taken into account for the purposes of fixing a penalty for a contravention of s 43 of the BCII Act. The reason is obvious: they would be irrelevant to the matters which, according to the judgment of the High Court in Veen , might appropriately guide the exercise of the court's discretion. There is, however, no reason, in point of principle or of policy, why contraventions, of themselves having the potential "to show whether the instant [contravention] is an uncharacteristic aberration or whether the [respondent] has manifested in his commission of the instant [contravention] a continuing attitude of disobedience of the law", should be excluded from consideration simply because they arose under legislation different from that presently before the court. What is important, in my view, is the quality of the conduct in each case, and the relevance of the conduct to the norms of industrial behaviour which the instant legislation seeks to establish or support. In this respect I agree with the views expressed by Tracey J in Stuart-Mahoney . In the present case, the prior contraventions on which the applicant relies are those of ss 38 and 43 of the BCII Act, and of ss 170NC, 298P(3) and 187AB of the WR Act (as those provisions were numbered at the relevant times). Each of those provisions of the WR Act was concerned with resort to coercion to compel another person to act in a way which was, presumptively, against his or her own interests and which, necessarily, involved an outcome which the legislative provision in question viewed with disfavour. There is, in my opinion, a close similarity between these provisions and the one with which I am presently concerned. Contraventions of the former should not be excluded from present consideration simply on the ground that they arose under legislation different from that now before the court. Turning to the third question, counsel for the respondents submitted that "prior contraventions of another autonomous division and/or branch of the first respondent should not be taken into account". There is substance in that submission. Whether previous misconduct is relevant to fixing a penalty is a question of logic. In some cases a pattern of conduct across the country may suggest a nationwide plan of action or a national culture of misconduct. In other cases it may appear that a particular branch or geographical region has acted alone in adopting a plan of action or has developed a particular culture. An official of one geographic or industry branch will observe the manner in which policies are applied by the federal body in relation to other branches. These various cases illustrate that the federal body has not been effective in ensuring that officials act in accordance with the law. I note that there is no evidence of offending officials (including Lane) suffering any serious disciplinary penalties. For reasons which follow, I am attracted to the approach taken by Gyles J in Silvestri . The starting point, of course, is that an organisation registered under the WR Act is a single incorporated body, present wherever it has divisions, branches or other internal components. In a case such as the present, where the unlawful acts in question are the direct doing of an employed organiser acting within the scope of his or her employment, the organisation would be responsible therefor according to normal principles. Where the BCII Act applies, the situation is covered also by s 69, which attributes to the building association itself the conduct of the employee. In the present case it was uncontroversial that s 69 had the effect of making Mr Mates' conduct also the conduct of the Union. Neither was it submitted that the Union itself was not appropriately regarded as the relevant actor in each of the circumstances in which a prior contravention is now relied on by the applicant, whether or not a provision such as s 69 then applied (which it did: see the provision which is now s 826 of the WR Act). Turning specifically to the matter of the relevance of prior contraventions, the basic question is whether they have the potential to which I referred in par 16 above. In the context of a corporate respondent with a presence in different States, I consider it to be almost self-evident that prior contraventions in State A have at least the potential to answer in the negative the question whether a particular contravention in State B is an uncharacteristic aberration. It may be aberrant of the officials in State B, but it need not be aberrant of the corporation itself. Both the BCII Act and the WR Act are relevantly concerned with the conduct of organisations, and I consider that the deterrent effect of a penalty would be significantly compromised if the court were obliged to turn a blind eye to a prior contravention merely because it occurred in a different division or branch of an organisation. The respondents' case on this question was based on the proposition, said to be apparent from the rules of the Union, that the Union consisted of a series of autonomous divisions and branches. I shall turn to a consideration of the correctness of that proposition in a moment, but, assuming it to be correct, I do not accept that it follows that prior contraventions by the Union through the agency of one division or branch should never be regarded as relevant to the fixing of a penalty for unlawful conduct by the Union done through the agency of another division or branch. How the Union --- or any incorporated body --- organises itself internally is a matter for its own members. Some bodies employ a highly centralised system of control. Others vest the real decision-making power in divisions, branches or, indeed, groups of members at the workplace. In the latter case, however, no less than in the former, it is the body itself which acts when the internal group or individual having generic responsibility for the relevant area of activity does something with legal consequences. In the case of trade unions, if ever there was any doubt about that proposition, it was laid to rest by Heatons Transport (St Helens) Ltd v Transport and General Workers' Union [1973] AC 15. And just as a union may not, by a judicious decentralisation of authority, avoid responsibility for things done by its servants or agents acting within the scope of their authority, neither, in my view, can a union (or, for that matter, any like body) by the same process render irrelevant to the matter of fixing penalties its own prior contraventions merely by reason that they were committed in some other section, division or branch of the larger body. As it happens, the contention that the prior contraventions on which the applicant relies were done in compartments of the Union which were truly autonomous (in the presently relevant sense that I should regard the Union itself as being effectively powerless in the matter) does not withstand examination. Under the rules of the Union, the primary basis of association is that of membership of the Union itself. Within the Union, both divisions and branches are established. The divisions are established "on a basis of industry or occupation", and each division is to have branches "along a geographic, occupational or area basis" which are called "divisional branches". All of the prior contraventions which are presently relevant were committed within the Construction and General Division of the Union. That division has divisional branches in all the States, and in the Australian Capital Territory. The conduct of Mr Mates in the present case occurred in Victoria. Of the previous contraventions listed in par 11 above, one ( Hamberger ) was committed in Queensland, four ( Alfred v CFMEU, Hadgkiss , Walker Constructio n and Silvestri ) were committed in New South Wales, and the balance were committed in Victoria. Presumably the individual actors involved in each case were employees, officials or members of the Union within the relevant divisional branch of the Construction and General Division. Under the rules of the Union, the "supreme governing body" of the Union is the biennial National Conference. Subject thereto, there is a National Executive which has the "care, control, superintendence, management and administration in all respects of the affairs, business, national funds and property of the Union". And there is a National Executive Committee which has like powers, subject to the National Executive. Notwithstanding these provisions, it is provided that each division "shall have autonomy to decide matters which do not directly affect the members of another division", with respect to, amongst other things, "the industrial interests of its members". However, my attention was drawn to no rule which gave the divisional branches of the Construction and General Division autonomy within that division. Indeed, the rules of the division provide that "the supreme governing body of the Division shall be the Divisional Conference", and that "all divisional branches ... shall for all purposes be and remain an inseparable part of the division by which they are established". Counsel for the respondents relied upon a rule (in the rules of the Union) which, he submitted, had the effect of giving branches of the Union control over the investment and disposition of moneys received by them which is independent of other organs within the Union. I accept that to be so, but the rule in question is concerned with branches as such, which appear to be different from divisional branches. Further, the existence of local control over property and funds does not, in my view, compel the conclusion that the industrial conduct of members attached to those branches is not still the conduct of the organisation itself, and conduct for which the organisation should bear responsibility when the stage arrives that prior contraventions are being taken into account. However that aspect may be, at least on the industrial axis, there seems to be little or no autonomy for the divisional branches of the Construction and General Division within the division itself. For the above reasons, I consider that the five prior contraventions relied upon by the applicant which involved conduct in places outside Victoria are not disqualified from consideration merely by reason of that circumstance. That contravention occurred on 15 October 2002. However, the relevant judgment of the District Court of New South Wales was published after the date of the conduct with which this proceeding is concerned. For this reason I do not consider it appropriate to fix the amount of the penalty to be imposed on the basis that the third respondent engaged in the contravening conduct after having been found to have earlier contravened s 170NC. However, nor do I consider it appropriate to mitigate the penalty otherwise appropriate on the basis that the contravening course of conduct on the Site was an isolated instance of contravening conduct entirely uncharacteristic of the third respondent. Her Honour said that she would not fix a penalty on the basis that the third respondent (in that matter) "engaged in the contravening conduct after having been found to have earlier contravened s 170NC". Branson J did not say that it was inappropriate to fix the penalty on the basis that the respondent had previously engaged in conduct which contravened the section. The position for which the respondents contend is contrary to the authority of the Full Court of the Supreme Court of South Australia and of the Queensland Court of Criminal Appeal. It is clear that his Honour's words apply to a situation in which the prior offence occurred before the current offence, but was the subject of a conviction recorded after the commission of the current offence. The offender has committed the offence not as a first offender but as a person whose character is affected by previous offending. He must be sentenced against the background of his record: Director of Public Prosecutions v Ottewell (1968) 52 Cr. App. R. 679. The effect of the prior offences is more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies. It was only a 1972 judgment of the Full Court itself --- Rainbird v Samuels (1972) 4 SASR 187 --- that cast any doubt upon that principle. Ultimately, Cox J (with the agreement of King CJ and Bollen J) held that Rainbird v Samuels should be regarded as having been overruled. Likewise, in R v Aston (No 2) [1991] 1 Qd R 375 , 382, Cooper J, with the assent of the other members of the Queensland Court of Criminal Appeal, said: "Evidence of convictions and the sentences imposed for offences committed both before and after the offence for which sentence is to be imposed is both relevant and admissible when the sentencing discretion is to be exercised. He relied in this respect upon the observation of King CJ in McInerney (included in the passage set out at par 27 above) that the effect of prior offences was "more cogent" if they had been the subject of a conviction before the commission of the immediate offence, and on the observation of Cox J in the same case (at 124) that the existence of a prior conviction "adds a significant dimension". I accept this distinction, and shall apply it in the present case. The overall position with respect to the contravention of s 43 constituted by the procurement of the work stoppage on 31 July 2006, then, is this. The contravention fell squarely within the range of conduct which s 43 proscribes, and had what I might call, perhaps inelegantly, a mid-range seriousness. The events surrounding the contravention appear to have been unremarkable, and generally devoid of any mitigating or aggravating circumstances. At the time of the contravention, the Union had previously been found to have contravened provisions of the WR Act which I accept to be relevant for present purposes on four occasions --- in Hamberger (December 2000), Alfred v CFMEU (March 2004), Hadgkiss (June 2004) and Walter Construction (May 2005). At that time, the Union had in fact contravened relevant provisions on the eight further occasions mentioned on the list in par 11 above, albeit that findings were made only subsequently. The impression I get from this history of contraventions is that the conduct of Mr Mates in the present case was, for the Union as contravenor, not an aberration. Indeed, the history tends to suggest that the Union has, with respect to anti-coercion and similar provisions of industrial laws, what the High Court in Veen described as "a continuing attitude of disobedience of the law". The circumstances do, in my view, make specific deterrence a matter of particular importance in the fixing of a penalty in the present case. All of the considerations to which I have referred in my reasons above lead me to the view that penalties of $75,000.00 and $60,000.00 would be appropriate for the Union's contraventions of s 43 constituted by the stoppage and the threat, respectively. I do, however, consider that a total penalty of $135,000.00 would be disproportionate in the light of the close relation between the contraventions in point of time, context and purpose. Applying the totality principle, I do not believe that a total penalty of more than $100,000.00 should be imposed. To give effect to that principle, I propose to impose penalties on the Union of $55,000.00 and $45,000.00 respectively. Save with respect to prior contraventions, the reasoning set out above applies also in the case of Mr Mates. As it happens, in the last matter on the list in par 11 above, a finding of three contraventions of s 43 of the BCII Act was made against Mr Mates on 5 February 2009. The conduct in question occurred in February 2006. Although singular, these findings demonstrate at least that the conduct of Mr Mates on the site on 31 July 2006 was not an aberration for him. In all the circumstances I consider that penalties of $11,000.00 and $9,000.00 would be appropriate for Mr Mates' contraventions of s 43 constituted by the stoppage and the threat, respectively. Again, however, I consider that a total penalty of $20,000.00 would be disproportionate in the light of the close relation between the contraventions in point of time, context and purpose. Applying the totality principle, I do not believe that a total penalty of more than $15,000.00 should be imposed. To give effect to that principle, I propose to impose penalties of $8,250.00 and $6,750.00 respectively. The only remaining matter concerns the question of costs. The applicant alleged four contraventions of the BCII Act, and was successful in establishing two. On that basis, counsel for the respondents submitted that there should be no order as to costs. Counsel for the applicant submitted that it would in any event have been necessary, in order to understand the context for the purposes of deciding such issues as Mr Mates' intent, to call evidence about the whole dispute, including that which related to the events, and conversations, of 28 July 2006. He sought an order for costs in favour of the applicant. I consider that there is substance in each of these submissions. It would have been quite unrealistic to have attempted to deal with the applicant's allegations about Mr Mates' conduct on 31 July 2006 without carefully considering the lead-up events which occurred on 28 July 2006. On the other hand, there were undoubtedly aspects of the proceeding which related only to allegations of wrongful conduct on 28 July as such. Giving appropriate credit for those respects in which the respondents succeeded, but rejecting the submissions made on their behalf that the costs of the proceeding were incurred by the parties equally with respect to the points on which they succeeded and failed, I consider that justice would be done by requiring the respondents to pay one half of the applicant's costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | contraventions of anti-coercion provisions of legislation penalties to be imposed inherent seriousness of conduct whether aggravating or mitigatory circumstances existed relevance of prior contraventions whether prior contraventions of another statute, or by officials of another branch or division of corporate respondent, or in relation to which no finding of contravention had been made before the conduct relevant to the instant case, should be taken into account. industrial law |
It sought a ruling that it was exempt from any obligation to pay income tax on the basis that it is a charitable institution or an association established for community service purposes. The ruling was not forthcoming. Eventually VWL and the Commissioner agreed that VWL would lodge income tax returns claiming exempt status, the Commissioner would reject the claim of exempt status and the question would be taken to the Court for hearing and determination on a test case funded basis. 2 VWL lodged company tax returns for the financial years up to and including the year ending 30 June 2001. The Commissioner issued assessments to which VWL objected and ultimately the Commissioner disallowed those objections. VWL has now commenced these proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth). For the reasons that follow, I am satisfied that VWL is a charitable institution, being an organisation whose purposes are beneficial to the community according to the established definition of a "charitable institution". The appeals will be allowed. In respect of the tax year ended 30 June 1997, it claimed exemption under ss 23(e) and 23(g)(v) of the Income Tax Assessment Act 1936 (Cth) (the ITAA 1936). For the subsequent years it claimed its exemption under s 50-1 of the Income Tax Assessment Act 1997 (Cth) (the ITAA 1997). In the alternative, VWL claimed that its assessed taxable income should be reduced by excising in whole or in part specified amounts described in the profit and loss statement included with its return. Alternatively the sum of $4,978 was received by VWL on behalf of AWL and should not be included as assessable income. 1998 Year --- A deduction under Div 36 of ITAA 1997 for a tax loss incurred in the year 30 June 1998 of $63,479.14 comprising amounts of income described in the profit and loss statement included with the returns for the year ended 30 June 1998 less the net loss of $6,183 for that year and any carry forward loss available in respect of the year ended 30 June 1997. A deduction was again claimed for $1,000 for sponsorship of AWL. 6 In the event, the various objections were disallowed. The Commissioner rejected, inter alia, the contention that VWL was exempt as a charitable institution, a public educational institution or as an association established for community service purposes. Applications by way of appeal against the Commissioner's objection decisions were filed in this Court on 14 December 2006 for all years except the year ending 30 June 1998. An application by way of appeal was filed in relation to that objection decision on or about 10 August 2007. In some cases, the exemption is subject to special conditions. The tables are set out in ss 50-5 and 50-10 of the ITAA 1997. A person is eligible for ordinary membership if admitted to practice as a barrister or solicitor of the Supreme Court of any State or Territory of Australia or any other part of the British Commonwealth or is a graduate in Law of any University within the Commonwealth of Australia (clause 4.2). There is provision for associate membership by persons considered by the committee of VWL to be "supportive of the objects of the Association" (clause 4.3). Honorary membership may be conferred on any person "in recognition of meritorious work in the legal field" (clause 4.4). 12 There is a Committee of Management. It has responsibility for managing the affairs of the Association (clause 21.1). The committee consists of those officers together with two members and any other members as may be appointed from time to time. The retiring convenor is an ex officio member. The members of the committee are elected at the annual general meeting of the association in each year. 14 The income and property of VWL is to be applied solely towards the promotion of its objects and purposes. No portion is to be paid or transferred directly or indirectly to any member of the association except with the authority of the committee (clause 30.1). Nevertheless, the committee may pay to a member of VWL remuneration for services actually rendered or goods supplied to it by the member in the ordinary course of business or reimbursement of expenses incurred by the member on behalf of VWL (clause 30.8). 15 The Rules and the Statement of Purposes of VWL are not to be altered except in accordance with the Associations Incorporation Act (clause 32). 16 In the event of the winding up or cancellation of the incorporation of the association, its assets are to be disposed of in accordance with the provisions of the Associations Incorporation Act (clause 34.5). It is convenient to reproduce that schedule here. In 1993 she was the Chair of the Young Lawyers Section of the Law Institute of Victoria (LIV). On 26 November 1993 she attended a seminar organised by the Young Lawyers Section in conjunction with the Law Council of Australia Young Lawyers Section entitled "Women in the Legal Profession". The seminar was chaired by the then Chief Justice of Victoria, the Hon JH Phillips AC. A large number of women lawyers, some hundreds, according to Ms Weir, attended. The theme of the seminar was to consider why an increasing proportion of women, who had been graduating from Law Schools in about the same numbers as men since the 1980s, were leaving the profession. An LIV study demonstrating this trend also showed that women lawyers who stayed in the profession were progressing more slowly and earning less money than their male counterparts. the desirability of involving women lawyers in the areas of recruitment and performance assessment in order to avoid entrenchment of male values, perspectives, priorities and culture. consideration of the need to redefine acceptable work practices while recognising the commercial imperatives attaching to law firms as businesses. Ms Weir said that at the end of the seminar those attending resolved to form a working party which they called the WILP Working Party. She was a member of it. 20 Initially Ms Weir was not in favour of establishing a separate women lawyers' organisation considering that the issue was a broader one, namely the way in which the law was practiced as a profession in terms of equality and justice. Established patterns of work practices impacted adversely on both men and women. She referred to the publication by the Working Party of an article in 1994 in the Law Institute Journal. The article was entitled "Child care options for solicitors". 21 In October 1994 Ms Weir travelled to London to study for a Masters Degree in commercial law at the University of London. She maintained her interest in problems confronting female legal practitioners. She became less opposed to the idea of establishing a women lawyers' association. Upon her return to Australia in October 1995, she formed the view that there had been little progress in the improvement of women's experience in the practice of the law and work practices. 22 In or about March 1996 Ms Weir attended a meeting in Sydney to discuss the establishment of a national peak organisation for women lawyers. At the time there was a Women Barristers' Association in Victoria, but no association for women solicitors. Ms Weir felt that the time had come to establish an organisation for women lawyers in Victoria. She thought it could be fulfil a need that the LIV could not. A VWL Steering Committee was formed. At a meeting of the committee on 25 July 1996, apparently chaired by Ms Weir, it was reported that the constitution for the proposed VWL would be finalised that coming weekend and would be given to solicitors to proceed with incorporation. The Steering Committee would form the Interim Executive of VWL until a first annual general meeting. 23 The VWL was launched at a ceremony held on 29 August 1996. Its patron was the Chief Justice of the Supreme Court of Victoria, the Hon JH Phillips AC. Also present at the launch were the then Attorney-General of Victoria, Mrs Jan Wade, and Ms E Mahlab AO who delivered the keynote address. The association was incorporated on 19 September 1996 and held its first annual general meeting on 2 December 1996. At that meeting an Executive was elected. Ms Weir was elected convenor, Ms Liz Bishop as treasurer and Ms Kriss Will as an executive member. This occurred until sufficient numbers of members had joined to enable the formation of committees. Eventually the association came to have six standing committees entitled "Networking", "Communications", "Justice", "Work Practices", the "Mature Age Practitioners Group" and "Country Liaison". Through its Communications Committee, VWL began to produce a quarterly publication entitled "Portia". Four copies of the quarterly Portia for the years 1996 and 1997 were exhibited to Ms Weir's affidavit. They gave a snapshot view of the activities and interests of VWL in the years following its formation. 25 Under the heading "Who and What are We? ", the first edition of Portia provided an outline of the constitution of VWL. It referred to the Networking, Work Practices and Communications Committees and the Mature Age Practitioners Group. The committee was proposing to establish a mentoring program for women within the profession who might not have another woman lawyer to turn to for guidance or ideas or to act as a sounding board. 27 The Work Practices Committee considered a joint project with the Equal Opportunity Commission on sexual harassment and anti discrimination practices, issues relating to working from home, paid parental leave, the Federal Court Childcare Centre and research into the Victorian Law Foundation Report, particularly the cultural change issue which law firms needed to address. 28 The Mature Age Practitioner Group was concerned with mentoring older women entering or re-entering the profession, younger women in the profession, peer group support and dealing with recruiting problems and networking. 29 The Communications Committee, which was responsible for the production of Portia, investigated the possibility of establishing a website. 30 The second edition of Portia included an article about "Glass Ceilings", a reference to "invisible barriers to promotion and career advancement" facing working women. It made reference to issues of gender bias, sexual harassment, the limited opportunities afforded women lawyers for development of a client base and the costs and consequences of gender bias to law firms. It reported that the Networking Committee had commenced the 1997 year with a Career Issues lunch seminar at the LIV. It reported that the work practices project team had decided to focus its efforts for the first half of 1997 on raising awareness about parental leave and the implications for employees of legal firms. VWL was conducting a joint survey of law firms with the Legal Practice Management Association to inquire about their current practices, the logic behind them and the issues they face when handling parental leave issues with their employees. The results of the survey would be used as an information source and a tool to encourage firms to embrace more progressive policy. A forum on the "Glass Ceiling" issue was announced for 1 May 1997 and conducted on that day. 31 The third edition of Portia was published in the second half of 1997. The cover story related to the proposed Constitutional Convention for an Australian Republic. It raised the question whether or not the Convention would allow for the proper representation of the views of women. through our involvement with Australian Women Lawyers. through our work with the Victorian Women's Trust, the Women's Electoral Lobby and other Victorian women's groups who are working together to ensure the involvement of Victorian women in the debate. The Mature Age Practitioners Committee had held a networking evening. The Justice Committee had identified a number of areas of interest including police attitudes to domestic violence and police and judicial attitudes to sexual assault and rape. The committee was contemplating the formation of a liaison group within the Police Force to review and help change attitudes. Access to counselling services to deal with children's issues in family separations was also on the committee's agenda. A review of changes to crimes compensation and the effect on women victims, the effects of proposed changes to the property provisions of the Family Law Act and the provision of information to women and families generally involved with the Department of Human Services were all mentioned. 33 Two sessions organised by VWL and the Victorian Women Barristers at the 30 th Australian Legal Convention were promoted, one being a session on Sex, Stereotypes and the System - Equal Opportunity before the Law, and the other on human rights in the context of cultural differences. 34 The fourth edition of Portia included a career profile feature on a particular lawyer, a report on the launch of the AWL which had occurred at the Australian Legal Convention, a general interest guide to the use of the internet for legal research and a report on the establishment of a professional women's networking group set up by a Melbourne law firm. There was more on the Constitutional Convention and the role of women delegates at the Convention. 35 Ms Weir described VWL as seeking to act as an agent for change through education, enforcement and encouragement. It did this through activities and undertakings directed at raising the level of awareness and understanding of women's legal and human rights, whether within or outside the legal profession. During her time as convenor and later as an executive member, VWL directed its activities to women lawyers, law firms, professional associations, human rights and equal opportunity bodies, non-government organisations, governments, universities, schools and the general public. 36 Ms Weir was the convenor of VWL from August 1996 until the end of 1997. Georgina Frost succeeded her as 1998 convenor. The report of the second annual general meeting of VWL held on 12 November 1997 indicated that the association then had over 450 members. It identified as a key event the May "Glass Ceiling" forum. It also referred to VWL's "important role" in the launch of the AWL in September. 37 Georgina Frost succeeded Deanne Weir as convenor of VWL in 1998. Her evidence overlapped with that of Ms Weir in relation to the formation of the association and its early activities. She gave evidence of VWL projects in which she had been involved. One was the production and use of a video entitled "Willpower" designed to inspire and encourage secondary school students to seek a career in the law. It was particularly directed to girls. Ms Frost and other members of VWL executive visited secondary schools in Victoria and used the video as part of a presentation to students. 38 The VWL executive also sought to involve law students at its meetings, committee meetings and functions. VWL members spoke to law students at Melbourne and Monash Universities about the realities of legal practice. Ms Frost spoke in 1999, on behalf of VWL, to the Australian Law Students' Association Conference in Hobart. She spoke about her experiences in practising the law and the issues which faced women in the law. 39 Ms Frost gave evidence of VWL's endeavours to involve women practising law in regional Victoria. She referred to her attendance with another VWL member, Angela Clelland, at the Country Legal Practitioners' Convention in Corowa in Victoria in November 1997 and their presentation of a seminar about VWL, its aims and plans. Female practitioners present followed the seminar with a workshop exchange of ideas on how VWL might be of assistance to them. Sometime after this a Country Committee was formed. 40 In September 1998 VWL published a revised report on flexible work practices entitled "Living and Working Together --- Looking to the Future". The revised report was published two years after its first edition. It included guidelines setting out practical steps that law firms might take to introduce flexible work practices. For example, the report recommended that employees be encouraged to take annual leave regularly and that employers be open to requests by employees to take several weeks of their leave together. Research showed that one longer break per year could be of more benefit to an individual than several shorter breaks. Observations about sick leave, carer's leave, compassionate leave, study and examination leave, special leave and leave without pay appeared to be gender neutral. There was a reference to parental leave and, in particular, unpaid maternity leave. 42 With respect to part-time work, the report recommended that employers be open to and seriously consider requests by employees to work part-time. Such an approach would help retain long serving staff no longer willing or able to work fulltime due to other commitments. The discussion of part-time work and office sharing, inter alia, again was expressed in a gender neutral way but may have had more practical application to women lawyers. 43 Flexible work arrangements relating to scheduling of meetings, training and client functions, flexible working hours and working from home, while expressed in a gender neutral way, obviously enough reflected the particular concerns of women lawyers with family commitments. 44 The case study referred to in the report concerned the introduction of a flexible work practices policy at a particular law firm, Dunhill Madden Butler, in early 1996. The report discussed the steps taken by women lawyers working at the firm to support and accelerate its development of a flexible work practices policy which was eventually adopted in November 1996. A model policy for dealing with sexual harassment was set out in the report. The schedule dealt with occupational health and safety and working from home. 45 In the course of 1998 Ms Frost and Ms Will co-edited a publication entitled "Taking up the Challenge" which was released in May 1999. Further reference is made to this publication as part of the activities of the association in 1999. 46 In 1998, VWL supported the Women Barristers' Association in their submission to the Victorian Bar Council in response to the report "Equality of Opportunity for Women at the Victorian Bar". That report had found gender bias in the briefing of barristers. VWL also had a number of joint events with the Women Barristers' Association in order to increase its member's knowledge of women barristers so they could possibly brief them in the future once they were acquainted with them and knew their areas of practice. She wrote an article in Issue 8 of Portia entitled "Equality of Opportunity for Women at the Victorian Bar" which referred to the findings of the report. 47 1998 was a Federal election year. VWL did make public comments on cuts to child care rebate, expressed support for the tax deductibility of child care payments and drew attention to the impact of cuts to legal aid on women in the community. It made a submission in September 1998 on a State government draft "Two Year Action Plan for Women 1998-2000" which highlighted the need for equitable access to justice and the detrimental effect of the diminished access to legal aid. 48 In the submission, signed by Ms Frost as convenor, VWL referred to the need to create an environment "where women and families feel safe". VWL agreed with the State draft's observation that it was of crucial importance for women to take up leadership positions in both the private and public sectors. It referred to the male organisational culture within the legal profession. 49 Ms Frost made the point in her evidence that while VWL made submissions to government and other bodies and used the expertise of its members, it did not endorse any political party for a federal or state election nor did it support any particular candidate. It was not about lobbying. VWL did not seek to push or force anyone to agree with us or to say that we will not vote for you or will not support you if you do not agree with us. 50 Following her involvement with the "Taking up the Challenge" publication, Ms Frost began working on a further report which culminated in the VWL publication entitled "Flexible Partnership - Making it work in Law Firms". She interviewed members of ten Victorian law firms to determine the experience of those that had flexible working arrangements in place for partners and compared them with other firms that had not introduced similar measures. Perceived inhibitors of part-time partnerships and flexible work arrangements were identified in the report. lack of female role models. practical assistance to facilitate timely delivery of client service. work out ways to change work practices and job design to enable employees to have control over how, when and where they worked. She concluded that the real inhibitor to part-time partnership was more of a cultural or social problem about the practitioner's commitment to the firm. 52 Overviews of the work of each of the VWL committees were provided in Committee Reports submitted at the annual general meeting on 11 November 1998. The Networking Committee also arranged social events which were listed. The committee appointed a Country Liaison Member who had formed links with country associations throughout Victoria by writing letters to them. The production of Portia remained the major task of the Communications Committee. It had grown from a 14 page to a 20 page magazine over the preceding 12 months. The aims of the editors as described in the committee report were "... to highlight issues of particular importance to women lawyers --- whether those issues revolve around their professional practice or life enjoyment". The editors also sought to present articles of interest to lawyers not featured in other law magazines. The committee had also embarked on the development of the VWL website. A general plan of content had been developed. It had funding to print the guide from the Victorian Law Foundation (VLF). 56 The Work Practices Committee reported that all members of VWL had been sent a copy of the flexible work practices and policies guide. The committee proposed to follow up the guide with a campaign in 1999 publicising its content and promoting the benefits of adopting flexible work practices. The committee proposed a Joint Hypothetical in February 1999 with the Children and Youth Issues Committee at the LIV exploring the legal, moral and ethical dilemmas facing the legal and medical communities and the community as a whole in relation to developments concerning reproductive technology. The committee also helped to arrange legal representation for an indigenous family experiencing difficulties in relation to a stolen generation problem. She served as convenor until the next annual general meeting on 25 November 1999. One of the issues with which VWL and Ms Bishop specifically were concerned with in 1999 was the law of provocation. On 21 April 1999 the then Chief Justice, John Phillips, delivered the Lesbia Harford Oration entitled "Women and the Law, Progress and Challenge". In his speech the Chief Justice called for an overhaul of the law of provocation and self defence. As a result of that Oration the Justice Committee started considering the issue of provocation, the so-called battered wife syndrome and the associated issue of domestic violence. It made oral submissions to the Attorney-General. The Justice Committee also organised various VWL International Women's Day Dame Roma Mitchell lunches which were inspired by comments made in a speech delivered by Dame Roma Mitchell on International Women's Day on 3 March 1999. 60 On 9 March 1999 VWL executed a Sponsorship Agreement with the LIV, the terms of which are set out later in these reasons. 61 In March 1999 Ms Bishop, on behalf of VWL, began to organise the production of a child care kit called "Child Care is a Family Issue". This was designed to provide practical assistance and a step-by-step guide for parents when selecting child care services for all women in the legal profession and women generally with dependent children. The child care kit was launched in December 1999 in conjunction with the Community Child Care Association of Victoria. Ms Bishop believed that the production of the kit was important because the issue of childcare very much affected VWL's members. There was a general lack of information in the community at the time on how to evaluate child care options. Shell Australia sponsored the child care kit. 62 As noted earlier the publication entitled "Taking up the Challenge" was launched in May 1999. In the Preface it was described as summarising "... major findings from various research sources to allow VWL to come up with an action plan that addresses the changing nature of work and what this means for lawyers and the law". In the Introduction it noted that, although women were graduating from Law Schools in roughly equal proportions to men, their presence was not reflected at the higher levels of the profession. The balance of work and private and family life commitments became increasing difficult for women as they attempted to progress within the profession. The task of motherhood was seen as particularly difficult to reconcile with a demanding career in the law. 63 The "Background" section of the Introduction observed that the dissatisfaction with the profession's inability to accommodate family and private life was a challenge to be faced by men as well as by women practitioners. Male lawyers as well as female lawyers with less than five years' experience were leaving private firms in ever increasing numbers. The authors claimed that the private profession was losing a highly skilled and valued human resource base on which the future of the private firms relied. They concluded by identifying a number of strategies and areas of future research. In a section entitled "The Way Forward", they said that the identification of barriers and opportunities for change provided a good starting point for strategic planning of future projects. This required a multifaceted approach involving a range of key players and a range of strategies. Reference was made to a New South Wales report: Keys Young, "Research on Gender Bias and Women Working in the Legal System", Report prepared for the New South Wales Department for Women on 6 March 1995. 2. Consideration of establishing a permanent sub-committee of LIV or other appropriate body to regularly review the issues raised in the project findings. 3. Coordination between women lawyers in different States. 4. Further coordination between VWL and the Women Barristers' Association. Educational strategies involving firms and other legal workplaces on the value of flexible work practices and the cost of losing good employees was also proposed as a strategy. Lobbying parliament for legislative change and the LIV/Law Council for procedural guidelines or disciplinary procedural changes (if required) was also proposed. 65 After the launch of "Taking up the Challenge" Ms Will helped organise a session with representatives from VWL's sponsoring law firms to discuss key aspects of the document. The session was held on 8 June 1999 and, in her own words, "... provided a forum for exchange of ideas and management of workplace practice issues". She said that participants drew up action plans for implementation of workplace change and improvement. 66 Ms Bishop met with the Chief Justice of the Federal Court and others in August 1999 to discuss proposed strategies for the implementation of the report. Also present at the meeting were three serving judges of the Federal Court, the President of the Victoria Bar Council, the President of the AWL, the convenor of the Women Barristers' Association and the Immediate Past President of the LIV. The outcome of the meeting was a proposal that a series of small high level workshops be conducted in each capital city. the low retention rate of members of the legal profession, particularly women. a second conference meeting a year from the date of the workshops would be beneficial in ensuring a sense of continuity. Ms Bishop said in her evidence that she and Ms Will conducted a series of workshops for partners and human resources managers under the auspices of the LIV. It does not appear from her evidence that the workshops contemplated in the meeting actually eventuated. 67 On 28 September 1999, Ms Will spoke at a seminar organised by VWL entitled "De-mystifying Practice Management --- What it is about and how can you position yourself". The other speaker was the Director of Human Resources at Freehills. An article entitled "Tips for New and Old Players" which summarised that seminar appeared in Issue 12 of Portia. Ms Will said that after the publication of "Taking up the Challenge" she was involved in organising and presenting seminars which considered issues arising from the report. They aimed to raise awareness of those issues and to engage stakeholders in the profession in discussion and dialogue in order to educate them and hopefully to facilitate change. 68 At the annual general meeting held on 22 November 2000 Ms Angela Clelland was elected as convenor, succeeding Ms Bishop. Committee reports attached to the minutes of that meeting indicated the range of activities which VWL undertook in 2000. 69 The Networking Committee organised a cocktail reception at the State Library at the beginning of the year. It held two Career Option Seminars hosted by sponsor firms. Members heard from a range of speakers comprising judges, journalists, barristers, company secretaries, sole practitioners, corporate lawyers, partners of law firms and VCAT Tribunal members. A media function was conducted in May 2000 held jointly with "Women in Chartered Accountancy". The Dame Roma Mitchell Memorial Lunch was held in June in conjunction with the LIV. 170 practitioners attended and listened to a presentation by Professor Hilary Charlesworth on Australia's human rights record. A seminar entitled "Taking up the Challenge --- Taking it up in your workplace" at the premises of one of VWL's sponsor firms, Mallesons was also held. Other social activities were also organised. 70 The Communications Committee continued to make the publication of Portia the focal point of its activities. Its 1999-2000 report indicated that the content and visual form had been reviewed to produce a more sophisticated publication, keeping members informed of matters of interest to women lawyers as well as the profession while not abandoning Portia's distinctive traits. In the preceding year it had included regular articles on career issues and financial matters, child care, rural women lawyers, the Taking up the Challenge project and reports of VWL's activities and achievements. Reference was made to the VWL website and the effort that had gone into producing a relevant, interesting and member-friendly website. 71 Other Communications Committee projects during the year included the formation of a subcommittee to review and develop a media relations policy on the basis that VWL was well placed to articulate issues of importance to women and the legal profession. Also mentioned was the strengthening of ties with university law student societies with a view to sponsoring a publication or event in keeping with VWL's objectives. 72 The Work Practices Committee reported that it had completed and issued a survey for completion by law firms in preparation for the compilation of a Flexible Work Practices Guide. The project was sponsored by Monash University and the results of the survey were to be compiled on the association's behalf by the Monash National Key Centre in Industrial Relations. It was anticipated that the first Guide would be ready for publication by early 2001. innovative work practices implemented by firms. This project was said to have taken up the majority of the committee's time in 2000. 73 Another project mentioned was the "Part Time Partnership Project" designed to generate ideas and discussion in the profession about part time partnerships and perhaps come up with some models. The committee's report expressed the belief that an extensive and comprehensive discussion of the issue should lead to more opportunities for women lawyers. 74 The Justice Committee wrote prospectively about organising the Lesbia Harford Oration for the year 2001 and liaising with the Law Institute in relation to the Dame Roma Mitchell lunch. Other prospective activities included developing a relationship with the State Attorney-General's Office, an "access to justice" meeting with the Attorney-General and liaison with the State Government in connection with law reform. 75 2000 was the first year of operation of the Country Committee. It had received a number of invitations to Regional Law Association dinners to represent the voice of VWL. It then referred to plans for 2001 including the presentation of a "Taking up the Challenge" symposium in regional Victoria. 76 A committee designated the "Employment Register Committee" reported that the Employment Register was still being maintained. It was maintained to assist any member seeking employment. 77 Angela Clelland was succeeded as convenor at the annual general meeting on 22 November 2000 by Wendy Kayler-Thomson. Ms Kayler-Thomson continued as convenor until 28 November 2001. The minutes of the meeting of the annual general meeting held on 28 November 2001 were said to have been exhibited to Ms Kayler-Thomson's affidavit but the minutes actually exhibited were those of the annual general meeting held in the preceding year. Nevertheless, the convenor's report and the committee reports exhibited all related to the 2000-2001 year. 78 The Communications Committee Report referred again to the establishment and maintenance of the VWL website and the issue of a "User ID" and password to members to allow access to a members' section. The Committee also produced a VWL Membership Pack to be sent to new members and displayed at careers fairs and VWL functions. Ongoing projects described in the committee report were the development of the VWL media policy, liaison with University Law Student Societies and the design of new VWL banners, business cards and stationary. 79 The Country Committee reported on two country functions held in 2001, one at Geelong and the other at Morwell. Christmas parties were planned at Ballarat, Geelong and Bendigo. A country survey had been prepared by members of the committee and would be incorporated into a wider survey being developed by VWL. 80 The Employment Register Committee reported that, although there had not been a great deal of interest in the Register to that date, VWL was continuing to maintain the service. 81 The Justice Committee hosted a luncheon celebrating the life and work of Dame Roma Mitchell. The committee organised the Lesbia Harford Oration for 2001 delivered by the Hon Justice Kirby and entitled "Women in Law --- What Next?". The committee assisted in a project organised and run by the Springvale Community Aid and Advice Bureau. This was the "Health and Well-being day" which it described in its report as a "know your rights" event for high school students with a significant legal rights component. The Justice Committee would co-chair the opening day on 27 November 2001 for over 200 students. The Justice Committee had also drafted a media policy for adoption by VWL. 82 The Networking Committee referred to a number of events which it organised in the year covered by its report. These included a public speaking seminar, a career options seminar and a welcome for Judge Lewitan QC upon her appointment to the County Court. In addition, a Professional Women's Alliance had been established in conjunction with a body called "Women in Chartered Accountancy". The Alliance was launched by the Hon Cheryl Kernot MP at a luncheon attended by over 400 professional women. 83 The Work Practices Committee reported on the prospective launch, on 28 November 2001, of a Work Practices Guide entitled "A Snapshot of Employment Practices 2001". The Guide detailed the work practices of 44 firms responding to a survey which had been distributed between October 2000 and January 2001. The Guide set out the responses of the firms to questions about leave arrangements, flexibility in working arrangements, paid leave entitlements, innovative work practices and the promotion of staff using flexible work practices. The committee expressed the hope that the Guide would have a twofold effect. Persons changing positions and those newly entering the profession would have a resource by which to inform themselves about the employment practices of firms in Victoria. They would also have access to information otherwise available only through questions in an interview. A second effect which was hoped for, was that more firms would see the value of promoting and extending innovative work practices. 84 The part time partnership project was discussed. It was said to be in its "final stages". An extensive literature survey had been conducted by a law graduate who had previously worked as a policy development officer in the Federal government. The researcher reviewed recent Australian and American literature about alternative to partnerships in the legal profession and drew out what were described in the report as "many interesting influences on the nature and extent of alternatives to partnerships". Funding had been obtained from the Victorian Law Foundation for the publication costs for the report and the committee expected to launch the project in the middle of 2002. The main draft of the agreement was finalised on 10 December 1997 but it was not signed until 9 March 1999. The agreement recited, inter alia, that LIV wished to provide sponsorship to VWL to assist VWL in the achievement of its goals on the terms and conditions set out in the agreement. Subject to LIV editorial discretion, LIV will provide space in LIV publications for VWL to promote VWL membership, events, issues and activities. It agreed to place the LIV logo on VWL material and LIV signage at all VWL events. Subject to VWL editorial discretion it would provide space in VWL publications for LIV to promote its membership, events, issues and activities. VWL agreed to promote amongst VWL membership the benefits of LIV membership and the fact of LIV sponsorship. LIV was to have access to VWL's database of current members for the purposes of the agreement. LIV was entitled to terminate the agreement if after 31 March of the current year less than 75% of VWL's eligible membership had taken out membership of the LIV for the current year. VWL acknowledged LIV sponsorship through the display of the LIV logo in Portia and at VWL functions. 88 There was also before the Court affidavit evidence from John Corcoran who was elected as a member of the Council of LIV in 1997 and who, with the exception of a short period in 1998, continued to serve on the Council until 2004. He was Vice President of the LIV in 2000-2001 and President in 2001-2002. 89 The LIV was founded in 1859 and it was given regulatory functions with respect to Victorian solicitors under the Legal Profession Practice Act 1946. Mr Corcoran said that when he first became a member of the Council of LIV in 1997 more than half of the law graduates from Victorian and Australian universities were women and represented approximately 30% of the overall profession. From the point of view of the LIV, women lawyers represented an important and growing constituency. He said that the LIV considered it was important to support that constituency and this was the main reason that it supported VWL. The LIV has given support, inter alia, by providing meeting rooms and administrative and public support. 90 Mr Corcoran said that there had never been any suggestion within the LIV that the VWL should be made a section of the LIV. He considered that issues confronting women lawyers could much more effectively be dealt with through an independent body such as VWL. 91 At the time he swore his affidavit, which was 18 June 2007, Mr Corcoran said that LIV continued to support VWL. It provided, at that time, the same measure of support as it had done in 1996 through its then administrative assistant, Bernadette Forbes. Mr Corcoran described VWL as having "achieved the respect and confidence of the legal profession, the media and the community". 92 An internal memorandum from the Manager of the Research and Information Department of the LIV to one of the LIV employees Suzanne Jukic allocated to provide administrative support to VWL, set out her duties with what some might have regarded as unrealistic precision. The memorandum stated that her work time as an employee of the LIV would be divided on the basis of 2.5 days per week devoted to VWL and 2.5 days per week devoted to the LIV. The 2.5 days applicable to the VWL were Tuesdays and Wednesdays from 9am to 5pm with a one hour break for lunch between 1pm and 2pm and Thursdays from 9am to 1pm. This means that on the days and times applicable to VWL no work of any kind in relation to section activities is to be undertaken by you under any circumstances. Conversely, on the days and times applicable to the R & I Department activities no work of any kind in relation to VWL is to be undertaken by you under any circumstances. When the days applicable to VWL or the R & I Department activities expire, any unfinished VWL or R & I Department other business must then be put aside to be resumed during the hours then next applicable. There is to be no exception to this requirement. She indicated that sponsorship payments were designated by VWL, in correspondence with the sponsoring firms, as "sponsorship fees". It appeared to be the practice of VWL to send out an invoice to a sponsoring firm for the amount of the "sponsorship fees". 94 In a letter dated 27 March 1998 to Corrs Chambers Westgarth (Corrs) Ms Frost, as convenor of VWL, indicated that the association was seeking a two year period of sponsorship from that firm with a payment of $3,000 per year. acknowledgment of sponsors at the Annual Forum, the annual general meeting and the Christmas Party. This would include reference to sponsors on programs and during speeches and welcomes to representatives from sponsors who attended. . promotional display signs for use at the careers fair. These were said to be used by VWL sponsor firms to let undergraduate students know which firms are actively involved in VWL. . general recognition as supporters of VWL and the issues it promotes. events run at the firm's premises to promote it (such as the proposed joint seminar with the Corrs' Women in Business Group which would feature speakers from JB Were & Son. . acknowledgment of the firm's sponsorship at the Annual Forum, the annual general meeting and the Christmas party and similar functions. In addition the sponsoring firm would be noted on the proposed Child Care Kit, at the launch of the updated Work Practices Guidelines and in the proposed profession working paper "Taking up the Challenge" and the subsequent seminar series. 96 In a letter dated 21 April 1998 to the managing partner at Minter Ellison in Melbourne, Ms Frost noted that the firm had agreed to continue its association with VWL for a further two year period. She requested a cheque for $3,000 for the 1998 period pursuant to discussions between the managing partner and Ms Bishop and Ms Verity of VWL. Mallesons Stephen Jaques provided a sponsorship cheque in the sum of $10,000 directed to VWL and AWL on 30 June 1998. As was evidenced by correspondence in August 1999 with the President of the AWL, the contribution from Mallesons was divided on the basis of $7,000 to AWL and $3,000 to VWL. There was evidence of sponsorship support from other firms which it is unnecessary to recount for present purposes. 97 In a letter dated 29 November 2000 to the managing partner of Blake Dawson Waldron, Ms Kayler-Thomson as convenor of VWL, set out the benefits of sponsorship in terms generally similar to those set out in the 1998 letter to Corrs. 98 In 2001, VWL raised a GST charge on its itemised requests for sponsorship fees. There were some seven letters which had been sent to various law firms. Treasurer's report for 8 November 1996 --- 30 September 1997. Expenditure for the period, which was itemised in an attachment, totalled $20,783.95. In addition there were bank charges and duties of $631.96. At the end of the period the association had a balance in its bank account with the Bank of Melbourne of $34,578.18. 2. Over that financial year the association received $16,500.00 in "Sponsorship" income, $19,400.00 in "Membership" income, $6,014.44 from seminars and a further $901.41 in interest. The expenditure over the same period was $44,753.72, with an additional $50.00 representing "unpresented cheques". The value of VWL's "total assets" at the end of the reporting period was $25,063.39, expressed to be subject to the possibility of being required to pay income tax. 3. Interest amounted to $594.79, and a further $2,182.12 was received under the heading "Other deposits". Outgoing payments totalled $59,722.22, leaving "total assets" of $55,333.92 as at 30 June 1999. Again, this figure was subject to potential liability for income tax. 4. $30,000.00 was received from sponsorship, $19,844.00 from membership fees, $13,915.00 from seminars and $1,001.23 from interest. $955.00 was received as "Other deposits". Total expenditure was $46,984.65. The value of "total assets" was reported at $74,064.50, expressed to be subject both to potential income tax liability and to a GST liability of $757.00 for the period 1 July 2000 to 30 September 2000. 5. The sponsorship income for that year was $35,900.00, membership income $21,980.00 and seminar income $16,710.50. Interest earned was $2,286.90. The report shows $75,743.85 in total outgoing payments, and $75,168.05 in total assets at the end of the financial year. The note about potential tax liability appears again. 6. Treasurer's Report - 2001/2002 Financial Year. This was made up of $7,557.27 from functions, $1,723.23 from interest, $22,708.18 from membership subscriptions and $35,000 from sponsorships. Total expenses were $66,142.41, leaving a net income of $846.27. The largest single item of expenditure was the cost of printing the quarterly magazine Portia, which were $16,605. Surveys conducted by the association cost $12,130.28. Expenses associated with functions put on by the association were $9,185.84. 106 The balance sheet as of 30 June 2002 showed total assets of $81,512.49 and a total "equity" of $54,204.41. The affidavits were received subject to objection by the Commissioner. The objections for the most part concerned relevance and form. There were also objections that some material was argumentative. The history of the VWL from its formation up to the end of 2001 has been drawn from evidence which is direct and admissible and is, in any event, uncontentious. So too is the account of its activities and the sponsorship arrangements with the LIV and the various law firms which contributed to its finances. 108 The evidence contained much in the way of material arising from reports, inquiries and articles about the position of women in the legal profession in Victoria and, indeed, in other parts of Australia. In some cases these reports provided an impetus for particular activities of the association. It is not necessary to base any findings on the truth of particular factual claims or conclusions offered in them. Speeches made at VWL functions by prominent figures in the judiciary and the profession were also mentioned in evidence. These, along with the reports and other papers exhibited to the affidavits, evidenced a degree of discourse and debate within the profession about the position of women lawyers. They were evidence of that fact rather than the truth of the particular assertions or conclusions offered. That does not prevent the Court from taking judicial notice of the long-standing and yet to be overcome differences between the position and participation of women and men in the legal profession in Australia in general and Victoria in particular. The question of judicial notice is discussed below. 109 The activities of VWL which have been described in these reasons were broadly in accordance with its objects during the relevant years. There was an ongoing emphasis on creating an awareness in the profession and in government of the barriers to participation and career advancement of women practitioners, finding ways of reducing those barriers and creating opportunities for enhanced participation. These included opportunities to practice law in ways that could be consistent with family commitments without prejudice to career advancement. They also included attempts to persuade law firms to brief women barristers with the same frequency as male barristers and initiatives to encourage the appointment of women to judicial office. Some of the activities of VWL in the relevant years were directed to broader human rights issues and women's welfare generally. 110 A comprehensive summary of the activities of the association for each of the relevant years was set out in tabular form in schedules prepared by the Commissioner which accompanied closing submissions. It is not necessary to reproduce it here. It was derived from, and referred to, the various affidavits and exhibits. It pointed to the introduction in Australia of remedial measures such as anti-discrimination and equal opportunity laws. It contended that the adjustment of discriminatory social norms and practices was likely to take some time and that progress towards the full participation of women in the practice of the law would be slow. It submitted that the Court could take judicial notice of the disadvantage of women in society and of women practitioners in the legal profession. This disadvantage may be characterised broadly as a "social fact". 113 Authority for the Court to take judicial notice, without proof, of matters of common knowledge is found in s 144 of the Evidence Act 1995 (Cth). (3) The court (including, if there is a jury, the jury) is to take knowledge of that kind into account. (4) The judge is to give a party such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced. That observation was made in a case in which the question whether s 144 of the New South Wales Act displaced the common law was not before the Court. A majority of the Court of Appeal of New South Wales had taken judicial notice of the fact that banking institutions such as Westpac used standard forms of guarantee. The High Court held that to be erroneous. The error was not defended before the High Court and nothing turned on any difference between the common law and s 144. 115 The relationship between s 144 and the common law was not agitated in these proceedings. I am content to act upon the basis that the section states the applicable law, authorising this Court to take judicial notice of matters of common general knowledge. 116 The Court is invited to take judicial notice of the disadvantage of women practitioners in the legal profession as a matter of "common knowledge ... generally" within the meaning of s 144(1)(a). VWL, in its written submissions, identified the social fact for which it contended. The Commissioner was thereby on notice and not unfairly prejudiced were the Court to act upon the submission. The social fact propounded was the historical and persisting disadvantage of women in relation to their participation and career advancement within the legal profession. At that level of generality there was no dispute. I am prepared to take judicial notice of it. It informs a consideration of whether the VWL was "established for community service purposes" or otherwise met the public benefit requirement of the common law understanding of a charitable institution. It is not, however, critical to the characterisation of the association for the purposes of the ITAA. Characterisation depends primarily upon the objects and, to a degree, upon the activities of VWL in the relevant years of income. To the extent that the answer requires assessment of social norms or community values, it may sometimes rest upon an uncertain and shifting foundation. Nevertheless such judgments are often required of the courts in a variety of jurisdictions, civil and criminal. In the present case the task is made easier because there are clear statutory indications of community recognition of historical and persisting gender based discrimination and the need to take positive steps to overcome it. Discrimination on the grounds of sex, marital status, pregnancy or potential pregnancy in the performance of functions or the exercise of powers under Commonwealth law or for the purposes of a Commonwealth program is also prohibited by s 26 of the Act. The legislation and the Convention to which Australia is a party can be taken as indicative of a now long standing social norm or community value that attaches public benefit to the removal of barriers to the advancement of women, on an equal basis with men, in all fields of human endeavour, including participation in the professions and in public life. It is convenient to commence with a consideration of the "charitable institution" exemption and its application in this case. The origin of that technical legal sense appears in the Preamble to the Statute of Charitable Uses Act 1601 (UK) 43 Eliz 1, c 4. Under the Statute commissioners were appointed to supervise the administration of charities and to prevent abuses. The Preamble set out a variety of charitable purposes which, as Dal Pont has pointed out "... could be interpreted to deal with a range of philanthropic activities completely divorced from poor relief": Dal Pont G, Charity Law in Australia and New Zealand (Oxford University Press, 2000) p 47. 125 The concept of charitable purposes was elaborated in a passage, which has literally acquired statutory status, from the judgment of Lord Macnaghten in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 at 583. That case concerned the Income Tax Act 1842 (UK) 5 and 6 Vict. c 35 which provided for special allowances in relation to income tax on rents and profits of lands vested in trustees for charitable purposes so far as they were applied to charitable purposes. The trusts last referred to are not the less charitable in the eye of the law, because incidentally they benefit the rich as well as the poor, as indeed, every charity that deserves the name must do either directly or indirectly. It is accepted that purposes which are "beneficial to the community" must also be "within the spirit and intendment of the preamble to the Statute of Elizabeth". 126 The High Court recently reaffirmed the application of the technical meaning to the word "charity" and its derivatives used in statutes unless a contrary intention is evident. In Central Bayside General Practice Association Ltd v Commissioner of State Revenue [2006] HCA 43 ; (2006) 229 ALR 1 , Gleeson CJ, Heydon and Crennan JJ referred, in a footnote, to the technical legal sense of "charitable" as that defined by Lord Macnaghten in Pemsel [1891] AC 531 "by reference to the spirit and intendment of the preamble to the Statute of Charitable Uses Act 1601 (UK)". Their Honours referred also to "... the general rule that, the word "charitable" being a word that has a technical legal meaning, when it is used in a statute it should be understood in its legal sense unless a contrary intention appears". They noted that the general rule has been accepted as the law of Australia at least since the decision of the Privy Council in Chesterman v Federal Commissioner of Taxation [1925] UKPCHCA 2 ; (1925) 37 CLR 317. It is reasonable to assume that parliamentary counsel, taxpayers, revenue authorities, settlors, testators and others have acted on the faith of an understanding that the general rule applies. The Full Court of the Federal Court in Commissioner of Taxation v Word Investments Ltd (2007) 164 FCR 194 at [8] accepted, and there was no dispute before it, that the word "charitable" in the relevant provisions of the ITAA 1997 bears its technical legal meaning. It relied upon Bayside [2006] HCA 43 ; 229 ALR 1 for that purpose. 128 The political purposes limitation is not well defined and is more difficult of application today having regard to the change in social conditions since 1917 and the involvement of legislatures in areas unthought of at that time: see Santow GFK , " Charity in its Political Voice --- A Tinkling Cymbal or a Sounding Brass? " (1999) 18 ABR 225. 129 In my opinion however, despite argument from the Commissioner based on the "law reform" object in the VWL constitution, this is not a significant element of the association's purposes such as to affect its characterisation. His Honour referred to Royal Australian College of Surgeons v Federal Commissioner of Taxation [1943] HCA 34 ; (1943) 68 CLR 436 and the analysis of the judgments in that case by Lockhart J in Cronulla Sutherland Leagues Club Ltd v Commissioner of Taxation (1990) 23 FCR 82 at 90-93. These authorities demonstrated that the question as to the true nature or character of the entity is to be assessed having regard to its objects, purposes and activities (at [11]). It is an integrated, holistic enquiry directed to whether a body of facts and circumstances satisfies a legal category or conception. 131 Importantly, the Commissioner had submitted to the Full Court that a charitable institution could conduct commercial activities but only as incidental or ancillary to its charitable activities. After referring to relevant authorities, Allsop J observed that the cases did not support the submission. Stone J agreed with Allsop J. 132 The approach taken by the Full Court is consistent with that set out by Kenny J in Commissioner of Taxation v The Triton Foundation [2005] FCA 1319 ; (2005) 147 FCR 362. If the main purpose of such a body is charitable, it does not lose its charitable character simply because some of its incidental or concomitant and ancillary objects are non-charitable. The fourth class of charitable trust in Pemsel [1891] AC 531 brings in the public benefit requirement through the words "beneficial to the community". An association may have a public benefit purpose although some of its subsidiary or ancillary functions may benefit particular persons such as members of a profession: Royal Australian College of Surgeons v Federal Commissioner of Taxation [1943] HCA 34 ; (1943) 68 CLR 436 at 447 and other authorities cited in The Triton Foundation 147 FCR at [23]. It submitted that it was not an association that benefited only its members. The only evidence of benefit received by members, as opposed to non-members, was the journal Portia and, on occasion, discounted entry fees to seminars and functions. The real benefit to VWL members was said to derive from their membership of the section of the community to which VWL's purposes were directed. 135 VWL cited examples of judicially enunciated criteria for identifying purposes falling within the spirit and intendment of the Preamble to the Statute of Elizabeth. which raise the standard of life: Re Blyth [1997] 2 Qd 567 at 581 (Thomas J). 136 VWL argued that its dominant and principal purposes were accurately expressed in clauses 3.1 and 3.2 of the constitution. Its purposes were said to advance the purposes of interests of women lawyers in seeking to redress inequality of opportunity and the removal of obstacles and barriers to the full and effective participation by women in the law. 137 VWL submitted that full participation and contribution by women to the practice of law would benefit women in the community generally and their access to the law. Its stated purposes were said to be aptly described as socially fundamental and indispensable in a society which recognises all persons as equals. 138 The social functions of the association (not including those of an educational nature) were characterised as incidental and ancillary to its dominant purposes. They were carried out to further the esprit de corps of its members and to cultivate the eradication of the discrimination sentiment explicitly in its stated purposes. The functions were said to be necessary in the provision of important networking opportunities to advance employment prospects within the profession. 139 In relation to the political purposes question, VWL submitted that it was not formed for the purpose of changing a specific law or laws or government policy. One of its primary activities have been directed to maintaining and educating the community about and enforcing existing laws. The promotion of humanitarian objects and those relating to basic human rights were said to be charitable even though, on occasion, (although not in this case) they might involve or require a change in policy or law. The line between an object directed at legitimate educative activity compared to illegitimate political agitation is a blurred one, involving at the margin matters of tone and style. VWL submitted that, to the extent to which any of its purposes could be regarded as political, they were incidental to its principal objects. The organisation would not be eviscerated if any reference to legislative change were removed from its constituent documents. 140 The mere statement of purpose contained in clause 3.1(d) "to work towards the reform of the laws" was said not to be political. No political outcome was specified nor the reform of any law in a manner or by any means contrary to public policy or contrary to existing laws and government policies. 141 Some reliance was placed on the judgment of Whitford J in Halpin v Seear [1977] Ch Com Rep. That case considered the validity of a trust established in 1926 to promote the equality of women with men in political and economic opportunity. Under the trust payments were to be made to the London Society for Women's Service for so long as it should, in the opinion of the trustee, continue to promote the objects of the trust. Whitford J noted that it was not suggested that the society as such was a charity in the eyes of the law although some of the activities would undoubtedly qualify as charitable. I think that it cannot seriously be contended that the object here is essentially a political object. It seems to me quite clear that the dominant or essential object is the achievement of equality albeit in political and economic fields, that the founder in no sense is concerned with any particular political or economic doctrine or cause; she is concerned merely to ensure that within these fields there should be equality of status between women and men. 142 The Commissioner contended that VWL was not a charitable institution. He argued that not all purposes which are beneficial to the public are in fact charitable. A trust of the fourth class in Pemsel [1891] AC 531 must be of direct and general benefit to the public. The mere fact that it is for purposes which may tend to be of general public utility would not be sufficient. He cited Taylor v Taylor [1910] HCA 4 ; (1910) 10 CLR 218 at 237 and Barby v Perpetual Trustee Co Ltd [1937] HCA 64 ; (1937) 58 CLR 316 at 324. He did not dispute that a trust for the promotion of the mental or moral improvement of the community could sometimes fall within the fourth class. The requirement of benefit to the public was said to commonly exclude from the status of charitable institutions organisations such as professional bodies established to help those persons who furnish the organisation's funds. These would usually be members or persons eligible for membership but could also be contributors or sponsors. If the main objects of an institution were the protection and advancement of persons practicing in a particular profession, the institution would not be regarded as charitable because the element of direct public benefit was lacking. 143 The absence of direct public benefit was said to be evident from various of VWL's objects relating to the provision of a meeting ground for women lawyers, their continuing education and development and providing for their entry and advancement within the legal profession. The direct benefit from these and similar objects was said to be private to women lawyers actual or potential as individual members of the public, rather than a public benefit. 144 The Commissioner submitted that on the facts VWL's main objects related to the advancement of women lawyers, including members of VWL, and that those objects did not manifest a charitable purpose. They were not the same as the second class of its objects for the advancement of women generally. The provision for "such other objects as the Association may in general meeting decide" was not limited to "charitable" objects. 145 The Commissioner also contended that since its purpose was to secure a change in the existing law, VWL's object "to work towards the reform of the law" was not charitable. This object was said not to be merely incidental or ancillary to charitable objects. It was another and separate object of substance in its own right. In making that assessment the primary focus must fall on its formal objects as stated in its constitution. But they are to be read in light of the history of its formation, together with the activities it has undertaken since its formation. 147 In my opinion, VWL's principal purpose was to remove barriers and increase opportunities for participation by and advancement of women in the legal profession in Victoria. That object was reflected in clause 3.1(c) of its constitution. Some of the other objects in clause 3.1 were incidental to, or in aid of, that object. 148 It was established to overcome a well-known social deficit, namely the substantial under-representation of women in the legal profession, in its upper reaches and in the judiciary. Having regard to the social norms reflected in the Sex Discrimination Act , cognate State legislation and Australia's membership of the Convention for the Elimination of all Forms of Discrimination Against Women , that objective was a purpose "beneficial to the community". It was within the spirit and intendment of the Statute of Elizabeth. The wider purposes of the AWL which were adopted and endorsed by clause 3.2 of the Constitution and also reflected in clause 3.1(f) placed the principal object which I have identified in the context of a larger purpose which is of itself beneficial to the community. 149 The activities of the association, including the social and networking functions, may have benefited its members. They were, however, plainly directed to the larger object and in many cases to a larger audience, the legal profession in Victoria. They were in aid of the principal objective. There was certainly a relentless push by the association for changes to attitudes and practices affecting women within the profession. There were representations and public positions taken from time to time on matters affecting the position of women generally. None of these things translated into a political purpose that would disqualify the organisation from being characterised as a charitable institution. 150 In my opinion the VWL fell within the description of a charitable institution within the meaning of s 23 of the ITAA 1936 and Item 1.1 in s 50 - 5 of the ITAA 1997. 151 On this basis the appeals of the VWL will succeed. I do not consider that there is any material difference between its activities in the various years of income with which this appeal is concerned that would affect its characterisation as a charitable institution. 153 Item 2.1 of s 50 - 10 of the ITAA 1997 is to like effect. The term "community service purposes" is not defined. However, many organisations that undertake a range of activities for the benefit or welfare of the community are not charitable, and so such bodies as the traditional community service clubs --- Apex, Rotary, Lions, Zonta, Quota and the like --- have not qualified for exemption. ... subparagraph 23(g)(v) ... will exempt from income tax the income of not-for-profit bodies established for community service purposes. The words "for community service purposes" are not defined but are to be given a wide interpretation. The words are not limited to those purposes beneficial to the community which are also charitable. They extend to a range of altruistic purposes. The words would extend to promoting, providing or carrying out activities, facilities or projects for the benefit or welfare of the community, or of any members of the community who have particular need of those activities, facilities or projects by reason of their youth, age, infirmity, or disablement, poverty or social or economic circumstances. An exclusion from the exemption will apply to bodies established for political or lobbying purposes. His Honour held in that case that the trust deeds of a "Protestant Hall" did not fall within the exemption provided in s 23(g)(v) because it held the title to the relevant land and kept a building on it for use by other organisations but did not carry out any activity for the benefit or welfare of the community. 155 In National Council of Women of Tasmania v Federal Commissioner of Taxation (1998) 38 ATR 1174 , the Administrative Appeals Tribunal (the AAT) considered whether the National Council of Women of Tasmania fell within the scope of the exemption. It was an unincorporated association, the objects of which included the advancement of the interests of women and children and humanity in general. It also brought together representatives of other women's organisations including the promotion of their activities and projects directed to community welfare. The AAT held that the Council's predominant purpose was not that of a social club or discussion group. Its political and lobbying activities had been minimal. It played an active role in community service activities and not a passive one. 156 The AAT found that the Council would hold one annual general meeting each year, nine monthly general meetings, ten monthly executive meetings and a number of lunches and seminars. One of the "subtle roles" of the Council was to widen the support network of its affiliated organisations. Delegates and members who attended Council meetings and executive meetings would support the activities of affiliated organisations financially and by doing unpaid work. Council delegates and members assisted by donating and collecting goods for the needy such as baby clothes and by knitting items for the needy during general meetings. Most of the member organisations appeared to qualify as community service organisations. 157 The AAT held that the predominant purpose of the Council's meetings involved the coordination of community service work and the provision of exchange of information for the purpose of facilitating such work. It held the Council to be an association established for community service purposes, not being political or lobbying purposes and so exempt from income tax. 158 In Navy Health Ltd v Deputy Federal Commissioner of Taxation (2007) ATC 4 ,568, Jessup J considered the characterisation of a non-profit single member company providing private health insurance through a fund. Membership of the fund was limited to serving members of the Australian Defence Forces and cognate classes of person. The company contended that its objects promoted the efficiency of the Australian Defence Forces which benefited the community as a whole so that it would fall within the description of a "charitable institution" for the purpose of an exemption under the Fringe Benefit Tax Assessment Act 1986 (Cth). Alternatively, it submitted that it was a "non profit association" established for community service purposes and thereby attracting a life exemption. 159 The fringe benefit tax exemption provision was based on s 23(g)(v) of the ITAA 1936. Jessup J referred to the Explanatory Memorandum and accepted that it was clear that the words of the exemption were not limited to charitable purposes. Here the word "service" is used in the sense of "health, benefit or advantage", particularly "the action of serving, helping or benefiting, conduct tending to the welfare or advantage of another" (OED 2nd Ed). His Honour held the term "community" to refer not only to the community as a whole but also to any identifiable section of the community. It did not follow that the receipt of a service by any group of persons should be regarded as the receipt of that service by a section of the community. 160 The question of characterisation of the VWL in this respect is not straight forward. It submitted that it provides for the welfare of the community or a section of it. Its purposes included the carrying out of activities and undertaking of projects for women in the law who have a particular need for those projects and activities by reason of their social and economic circumstance, namely their sex. 161 VWL also submitted that it was not involved in the furtherance of political or lobbying purposes. To influence (members of a house of legislature) in the exercise of their legislative functions by frequenting the lobby. 2. To frequent the lobby of a legislative assembly for the purpose of influencing members' votes, to solicit the votes of members. VWL submitted that "lobbying" in its statutory context bore a narrow political meaning tying proscribed political activity to direct interaction with members of parliament for stated ends and purposes. It is not clear to me that the term "lobbying" is to be construed so narrowly given the width of the concept of political purposes. In my opinion it could extend to representations to government or members of parliament for changes in policy as well as changes in the law. 162 The Commissioner submitted that the concept of "community service" is similar to that of "public benefit" in the law of charitable trusts. It would not follow that receipt of a service by any group of persons should be regarded as the receipt of that service by a section of the community. In the Commissioner's submission "community service" requires the community or a section of the community to benefit by way of receipt of some identifiable help, benefit or advantage bestowed or provided directly by the putative benefactor. Such a requirement is not satisfied, it was submitted, merely because an association's activities or some of them might have a tendency to benefit the community as a whole or a section of it. In this regard the Commissioner relied upon the observation of Jessup J where he found that the community service requirement was not satisfied merely because the operations of the organisation had a tendency to promote the efficiency of the armed forces thereby benefiting the community as a whole. 163 In my opinion the concept of "community service" was intended to pick up a broader range of organisations than those covered by the concept of "charitable institution" and in particular that class of charitable institution falling within the rubric "beneficial to the community". However, an organisation may be beneficial to the community without delivering a "community service" in the sense contemplated by that term as explained in the Explanatory Memorandum. For the reasons I have already expressed, I am of the view that the purposes of VWL are beneficial to the community in the sense necessary to qualify it as a charitable institution. The concept of "community service" does seem to import the notion of the delivery of some practical "help, benefit or advantage" in the sense used by Jessup J. That criterion is not necessarily met by an organisation whose purpose is to change practices and attitudes in such a way as to facilitate the entry and advancement of women within the profession generally. 164 The matter is not without difficulty and it is unnecessary to reach a concluded position on it. It is sufficient unto the day that I have found that VWL is a charitable institution, that it attracts the relevant exemption and that its appeals must therefore be allowed. The appeals will be allowed. The appeal be allowed. 2. The respondent's notice of assessment the subject of the appeal be set aside. 3. There is no order as to the costs of the appeal. I certify that the preceding one hundred and sixty-five (165) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French . | income tax charitable institution association for advancement of women in legal profession whether association charitable institution whether purposes "beneficial to the community" public benefit political purposes whether association established for community service purposes political or lobbying purposes taxpayer held to be charitable institution appeals allowed taxation |
In the course of submissions as to when the matter should be listed for hearing I was asked by the respondent, Mr Ljupco Slaveski, whether I hold any shares in the Commonwealth Bank of Australia (CBA). I confirmed that I did. Mr Slaveski then made an application that I disqualify myself because of my shareholding. I had intended that during the directions hearing I would record the fact that I do hold a relatively small number of shares in the CBA as well as having a number of accounts with the CBA. I intended to do that in order to give any of the parties present an opportunity to make an application that I disqualify myself from hearing the matter. In particular, I noted that in the notice stating the grounds of opposition to the application dated 4 June 2009 and filed by Mr Slaveski, he alleges that the applicant, Rotstein & Associates Pty Ltd, is in conspiracy with the CBA to send him bankrupt so that he is unable to sue the CBA. Having considered Mr Slaveski's application that I disqualify myself, I refuse it. The High Court in Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 identified the relevant considerations for an application of this kind. I have had regard, in particular, to whether there is any realistic possibility that the outcome of this litigation could affect the value of my shareholding in the CBA. I am satisfied that there is no possibility that the outcome of this litigation could have any affect on the value of my shareholding with the CBA. In the circumstances, it could not be said that a fair-minded lay observer may reasonably apprehend that I might not bring an impartial mind to the resolution of the application before me. Accordingly, I reject the application and will consider when the matter should be listed for hearing. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. | application for disqualification on grounds of apprehended bias whether fair-minded lay observer may reasonably apprehend judge might bring an impartial mind to the resolution of application whether any realistic possibility the outcome of litigation would affect value of shareholding practice and procedure |
The property was called 'Appletrees'. In 1955, Appletrees was owned by Warwick's father. Warwick's father died in 1955, leaving a widow and three young children, being Warwick and his siblings, Philip Wall and Helen Wall. Mr Wall Snr left Appletrees to his widow, Mrs Irene Wall. 2 In 1961, in order to avoid death duty in respect of Appletrees on her death, Mrs Wall caused Appletrees Pastoral Company Pty Ltd ('the Company') to be formed. The Company then purchased Appletrees from her. Shares in the Company were vested in Warwick, Philip and Helen, as to one third each. While the children remained infants, their respective shares were held on trust by their aunt and uncle. When they ceased to be infants, their shares were registered in their own names. 3 In 1987, the Company sold Appletrees. After discharging its liabilities, there was a surplus in the Company of some $2,200,000. At that time, the Company had accrued losses of $1.6 million which, subject to certain prerequisites being satisfied, it was entitled to carry forward for tax purposes, such that the accrued losses could be set off against income derived in future years. 4 In 1988, a restructure of the Company was effected. Various transactions were entered into, which resulted in payments being made to Mrs Wall's three children, Warwick, Philip and Helen. Part of the payments to the three children was the subject of a gift by them to their mother, who then lent the money to the Company. Warwick, Philip and Helen, however, continued to hold their shares in the Company. Warwick's continued holding of shares in the Company gives rise to this proceeding. The question is whether he continued to hold them beneficially, or whether he held them as trustee for his mother. In June 2001, the applicant, the Secretary of the Department of Family and Community Services ('the Secretary'), cancelled the pension from 28 August 2001. The reason was that the value of Warwick's continued shareholding in the Company meant that the pension was not payable. The Secretary also decided to take steps to recover from Warwick the amounts paid to him by way of disability support pension from 1994 to August 2001. 6 Warwick subsequently transferred his shares in the Company to his mother. He then made a new claim for a disability support pension. That claim was rejected by the Secretary because the shares in the Company were still regarded as property beneficially owned by Warwick. 8 Warwick then sought review of the decisions of the Social Security Appeals Tribunal by the Administrative Appeals Tribunal ('the Tribunal'). The Tribunal concluded that there was a constructive trust created in favour of Mrs Wall from the time of the restructure in 1988. That conclusion was reached by reason of the Tribunal's finding that Warwick sought to retain no rights in, and no capacity to dispose of, or encumber, his shares without the consent of his mother. The Tribunal found that, while Warwick continued to be the legal holder of his shares, the shares were not property with a value in his hands, capable of being converted into an assessable basis for reducing his entitlement to a pension. 10 The Secretary now appeals to the Federal Court of Australia, pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the Tribunal Act'), from the Tribunal's decisions of 22 August 2005. The Secretary says that there was an error of law on the part of the Tribunal in relation to all three decisions. Before dealing with the Secretary's grounds of appeal, it is necessary to describe the relevant statutory provisions. Section 11 relevantly provides that a person who wants to be granted a disability support pension must make a claim in accordance with the Administration Act. Under s 16 of the Administration Act, a person makes a claim by lodging a written claim or making a claim in a manner approved by the Secretary. 12 Under s 36(1) of the Administration Act, the Secretary must determine a claim by either granting or rejecting it. The issue is what amount, if any, was payable to Warwick by way of pension. 13 Section 117(a) of the Entitlement Act provides that a person's disability support pension rate is worked out using Pension Rate Calculator A. Pension Rate Calculator A, which is at the end of s 1064, provides that the rate of pension is an annual rate determined according to the method set out in Module A of Pension Rate Calculator A. One of the steps in that method involves working out a reduction for assets . That involves working out the value of the person's assets and the person's assets value limit . Then a comparison is made to determine whether the value of the person's assets exceeds the person's assets value limit. If it does, a reduction for assets is calculated. The reduction for assets is then deducted from the maximum payment rate giving the assets reduced rate . A similar series of steps provides for the calculation of the income reduced rate . The rate of pension payable is the lower of the income reduced rate and the assets reduced rate. 14 The initial step in that process, and the critical one for present purposes, is determining the value of a person's assets. Section 11 of the Administration Act provides that asset means property or money. While s 11 provides for the meaning of value where an asset is owned jointly or in common with another person, there is no other definition of 'value'. Accordingly, the value of a person's assets will be the value of any property of the person, as that phrase would be understood as a matter of ordinary English. 15 Thus, in order to determine how much, if anything, was payable by way of disability support pension to Warwick after he made a claim, it is necessary to identify any property of his and to attribute a value to that property. There is no dispute that, at relevant times, Warwick had property, in the form of his shares in the Company. The question is what the nature of his interest in those shares was and what the value of that interest was. If his interest was a bare legal estate, its value was nil. On the other hand, if his interest included beneficial ownership, the value was considerable. 16 Section 80 of the Administration Act relevantly provides that, if the Secretary is satisfied that a social security payment is being, or has been, paid to a person to whom the payment is not, or was not, payable, the Secretary is to determine that the payment is to be cancelled or suspended. Section 1223 of the Entitlement Act relevantly provides that, if an amount has been paid to a person by way of social security payment and the amount was not payable to the recipient, the amount so paid is a debt due to the Commonwealth. Although there were assertions, by those involved in the restructure, as to what the object of the restructure was, there is very little contemporary material to explain precisely what happened. However, it is desirable to say something more about the restructure. 18 In January 1988, the Company received advice from Peat Marwick Hungerfords ('the Tax Advisers'). The advice pointed out that, since, at that time, there was no further use for the Company, ideally it would be liquidated and the capital profit distributed to each of the shareholders. The distribution would take the form of a liquidator's distribution, which would be free of tax. However, the Tax Advisers pointed out that such a course was not necessarily desirable at that time, since it would involve forfeiture of the Company's accumulated primary production tax losses. 19 It would be preferable, therefore, that the cash that was surplus to the requirements of the shareholders be invested through the Company and the income thus sheltered from tax by the accumulated tax losses. The Tax Advisers suggested that, if that strategy were to be pursued, the income earned by the Company would ideally be distributed to the shareholders each year by way of loans, structured in such a manner as not to trigger any income tax liability for the individual shareholder, nor any fringe benefits tax liability for the Company. 20 The Tax Advisers also pointed out that the effect of recent amendments to the tax legislation was to enable the Commissioner of Taxation to deem loans made by a company from capital profits to be dividends and thus assessable in the hands of the recipient shareholders. The Tax Advisers therefore outlined three possible courses of action aimed at removing all of the cash from the Company and then lending back to the Company amounts surplus to the private requirements of each shareholder. Income arising from the amounts lent back and invested by the Company could then be distributed to shareholders each year, free of tax, by way of partial repayment of the loans. Each shareholder was to take responsibility for management of one company. 22 The Company subscribed for one million $1 shares in each of the three subsidiaries at a premium of 8 cents. Thus, each subsidiary received $1,080,000 as share capital. Fontas lent the whole of its share capital of $1,080,000 to Warwick. Warwick applied $580,000 of that sum to discharge a loan account owing by him to the Company. He also made a gift of $100,000 to his mother. That left him with cash of $400,000 in his hands. Irthing lent its share capital of $1,080,000 to Helen, who applied $303,000 in discharge of her loan account owing to the Company. Helen made a gift of $300,000 to her mother, leaving cash in her hands of $477,000. Gerede advanced its share capital to Philip who applied $401,000 in discharge of his loan account owing to the Company and made a gift of $100,000 to his mother. That left cash in the sum of $579,000 in his hands. 23 Thus, Mrs Wall received gifts totalling $500,000 from her children. Of that sum, Mrs Wall lent $460,000 to the Company. Since the purpose of the restructure was to enable advantage to be taken of the Company's accumulated tax losses, an inference can be drawn that she lent the money free of interest. Thereafter, she received payments from the Company, which were applied in satisfaction of her loan until it was repaid. After the loan was repaid, the Company continued to make payments to Mrs Wall, which were treated as advances by the Company. 24 It appears that the restructure that actually took place followed the recommendation of the Tax Advisers, but did not adopt the recommendation in its entirety. Thus, each of the three shareholders retained part of the money received by way of loan from the respective subsidiaries associated with them. Instead of the three children taking advantage of the tax losses in the manner proposed by the Tax Advisers, it appears that a decision was taken that Mrs Wall would have the advantage of the tax losses, since she was the only one who made loans to the Company in the manner suggested by the Tax Advisers. 25 Fontas was deregistered in 1992 and Irthing was deregistered in 1996. In 2003, Gerede and the Company were liquidated. However, on 6 March 2003, before the commencement of the liquidation of the Company, Warwick transferred his shares in the Company to his mother. No consideration was paid for the transfer, but stamp duty was paid on the transfer on the basis that the shares had a value of $686,747. The material before the Tribunal included a letter from JMA Legal to Warwick enclosing the final accounts of the liquidator of the Company and Gerede. The letter noted that no loan accounts had been forgiven and that shareholder loans were repaid and distributed in accordance with shareholders' directions. Since, at the time of the liquidation of the Company, Warwick had ceased to be a shareholder, he received no distribution. Those provisions deem certain assets to be the property of a person for the purposes of the Entitlement Act. He asserts that that assumption gave rise to a proprietary estoppel, relevantly binding him, because Mrs Wall acted to her detriment on the basis of that assumption and it would be unconscionable for him to resile from the assumption. Warwick says that the only way of doing equity, as regards his mother, would be for him to be held to the assumption, namely, that he ceased to have any beneficial interest in his shares upon receipt of the payment of $400,000 in 1988. Accordingly, so the contention goes, the shares had no value in his hands for the purposes of determining whether a pension was payable to him. 29 That may be what was contemplated by the Tribunal in its finding that a constructive trust was created in favour of Mrs Wall when Warwick received the payment of $400,000 out of the proceeds of the sale of Appletrees by the Company. However, it is difficult to see how that case was advanced before the Tribunal. Indeed, the Secretary complains that any reliance upon a trust by Warwick was expressly abandoned in the course of the proceeding before the Tribunal. 30 Warwick contends, however, that it should have been apparent to the Secretary's representatives, from the submissions made on behalf of Warwick to the Social Security Appeals Tribunal, and from the material proffered to the Tribunal on behalf of Warwick, which would only have been relevant to support a constructive trust, that some kind of trust was being relied upon. Reference was made to parts of the transcript of the hearing before the Tribunal and to documents before the Tribunal. Accordingly, it is necessary to say something about the submissions to the Social Security Appeals Tribunal and about the conduct of the proceeding before the Tribunal. Tavoularis began by pointing out that the conclusion that the asset value of Warwick's shareholding in the Company was in excess of $1,000,000 was fundamental to the cancellation. They asserted that the issue before the Social Security Appeals Tribunal should be whether, on Warwick's receipt of a payment attributable to the sale proceeds of Appletrees, an express trust was created by Warwick in favour of his mother in respect of his shares in the Company. The submission asserted that such a trust was created and continued to subsist. Therefore, Warwick's shares were not an asset to be taken into account in assessing his eligibility for a disability support pension. 32 Later, the submission asserted that, from Warwick's point of view, given the restructure in 1988, the shareholding in the Company was of no value to him, nor of any continuing relevance or importance to him. The submission then asserted that Mrs Wall had used the structure of the Company entirely for her own investment purposes for a period after the restructure and that Warwick, at no stage, had any control, influence or interest in Mrs Wall's retirement planning and investments. The submission said that the Company was in the process of being liquidated and that it was unlikely that there would be any distribution to Warwick, because Mrs Wall had the beneficial interest in any monies to be distributed. 33 Tavoularis then asserted that the facts and circumstances supported the existence of two separate trusts. The first was that the Company held Appletrees upon an implied trust for Mrs Wall, and that she had no intention, as the sole owner of Appletrees, to relinquish her absolute beneficial entitlement to the property in favour of her three children. The submission asserted that that trust subsisted until Appletrees was sold and that, on completion of the sale, Mrs Wall's control over, and beneficial entitlement to, the net proceeds of the Sale remained. 34 That assertion, of course, was completely untenable. The only possible purpose for the transfer of Appletrees to the Company was to ensure that Mrs Wall divested herself of beneficial ownership of the property, so that it would not form part of her estate for the purposes of assessment of death or estate duties in the event of her death. Her infant children were the beneficial owners of all of the issued capital of the Company. There is no evidence as to the consideration paid by the Company for the acquisition of Appletrees, but there must be a presumption that Mrs Wall divested herself of beneficial ownership of Appletrees. In any event, the Tribunal found no such trust. 35 The second trust asserted by Tavoularis was an express trust in respect of Warwick's shares. The submission began with acceptance of the fact that Warwick had beneficial ownership of his shares in the Company from its incorporation and that, on ceasing to be an infant, he became the registered owner of his shares. However, the submission asserted that an express trust was created by Warwick in favour of his mother in respect of the shares when the net proceeds of the sale of Appletrees were distributed in the restructure. 36 Tavoularis asserted that, in the circumstances surrounding the distribution of the proceeds of sale, a court would be satisfied that there was the necessary intention on Warwick's behalf to create a trust in favour of his mother in respect of his shares in the Company. Following distribution of the proceeds of sale, the Company was a shell. On professional advice, steps were taken whereby Mrs Wall distributed money to each of her children, each of whom was free to go his or her own way. The children made provision for Mrs Wall by their gifts and by allowing her to use the Company as her investment vehicle, carrying the ability to utilise its tax losses. 37 The submission argued that, since it was the intention of Warwick and Mrs Wall that Warwick would retain his shareholding in the Company to allow Mrs Wall to use the Company as an investment vehicle and to allow future profits in the Company to be offset against accumulated losses, an express trust was created consistent with those intentions. The submission asserted that the trust, while not manifested in writing, was evidenced by the conduct of all parties and that the subsequent independent dealings of Warwick and Mrs Wall constituted evidence of a consistent and continual separation of affairs, from which the continuing existence of such a trust could be inferred. The submission asserted that the parties' conduct after 1988 evidenced a declaration of trust inter vivos of the shares, which was enforceable by Mrs Wall against Warwick and that Warwick was obliged, by the existence of the trust, to transfer his shares to his mother upon request. 38 An ancillary submission was made by Tavoularis on 19 June 2002. The ancillary submission asserted that, when Appletrees was sold, the net proceeds were distributed with the clear intention that each of Mrs Wall and her children would thereafter operate independently of each other: the net equity in the Company was distributed to the shareholders, who made provision for their mother at that time. From the point of view of the shareholders, the sale of Appletrees and the disposition of the net proceeds of sale signalled the cessation of a beneficial involvement in the Company and a reduction to zero of the value of their shares. By the children accepting that the Company could thereafter be used by Mrs Wall for her exclusive advantage and benefit, the beneficial interest in the shareholdings of the children was effectively transferred to Mrs Wall. Thus, so the ancillary submission asserted, an express trust was thereby created by the shareholders, albeit without the parties appreciating the legal effect. It was sufficient, so it was said, that future arrangements for Mrs Wall's use of the Company were intended, understood and have subsequently transpired. 39 The ancillary submission then went on to endeavour to explain contemporaneous material that was inconsistent with the existence of such an express trust. For example, the returns to the Australian Securities & Investments Commission ('ASIC') and its predecessor did not reflect the existence of a trust in respect of Warwick's shareholding. Rather, the returns described Warwick as beneficial owner. It was said that the Company's accountants never acted for Warwick and had not previously had reason to consider whether his beneficial interest in the shares had been divested. Accordingly, so it was said, the Company's returns to ASIC did not establish that Warwick retained the beneficial interest in the shares, notwithstanding that the returns said so in express terms. 40 The trust in respect of the shares in the Company thus asserted was an express trust. Such a trust has not been suggested subsequently, presumably because it would have been inconsistent with the stated object of utilising the accumulated tax losses of the Company as deductions from future income. It is very significant that none of the submissions by Tavoularis asserted a constructive trust arising from the application of the doctrine of proprietary estoppel, by reason of Mrs Wall having subsequently acted to her detriment in reliance upon a belief that she was the beneficial owner of the shares held by Warwick. Mr Daly made a written submission to the Tribunal dated 16 November 2004. That submission relevantly said that the true position was that Warwick and his brother and sister disposed of Appletrees in 1988. It said that Warwick's only asset at that time was the shareholding and that was virtually worth nothing. Mr Daly asserted that the solicitor who had acted on the sale of Appletrees left New South Wales and took up practice in Queensland. He said that the solicitor did not finalise the sale of Appletrees, in that he left thousands of shares still in Warwick's name, even though they were worth very little, having been transferred to his mother. 42 Mr Daly also said that Philip had signed certain Company forms after the restructure in 1988, saying that Warwick retained hundreds of thousands of shares in Appletrees and which placed a value on them of some hundreds of thousands of dollars. Mr Daly asserted that that was untrue and that Philip had wrongfully included Warwick's shareholding. Mr Daly said that, when Warwick's pension was stopped and when he discovered the errors of the accountant in 2002, he and his brother arranged for the Company to be wound-up. Mr Daly pointed out that Warwick had had no monies whatsoever from the Company since the mid 1990s and did not receive any funds when the Company was wound-up, as he had received his full third of the value of his interest in the Company when Appletrees was sold. He said that Philip, Helen and Mrs Wall all contributed to the cost of the winding-up, since Warwick had no funds whatsoever. Mr Daly went on to say that he had advised Warwick that he may have a claim at law against the solicitors or the accountants for their negligence. No particulars of the claim were given. (2) Did the shareholdings have a value of thousands of dollars? (3) Did Warwick dispose of assets in accordance with the provisions of the Entitlement Act? (4) Is the sum of $88,000 due back to the Department by Warwick? 44 The Secretary's Statement of Facts and Contentions, lodged with the Tribunal, observed that it was not disputed that Warwick was the legal owner of 8,445 shares, representing one third of the total capital in the Company. The Statement said that the issue was, first, how those shares are to be valued and, secondly, whether Warwick was the beneficial owner of the shares. The Statement referred to Warwick's argument before the Social Security Appeals Tribunal that there was a trust in favour of his mother in existence at all times and said that the Secretary contended that there was no evidence for the existence of such a trust. The Statement referred to a conclusion of the Social Security Appeals Tribunal that ' no implied trust arose by reason of the actions of Mrs Wall in transferring Appletrees to the Company in 1962 '. The Secretary agreed with that conclusion. It is significant that at that point no mention was made of a trust in respect of the shares. The participants in the telephone conference included Mr Daly. 46 At an early stage in the hearing, the Tribunal referred to Warwick's shareholding and said that it understood that his case was that his shareholding was worth nothing or, alternatively, that he held his shares on trust for his mother. That observation reflects the Secretary's Statement of Facts and Contentions. It seems to me then that the critical question is do these shares have any value? 48 After a further brief exchange, Mr Daly said that he wanted to tender his submission of 16 November 2004. The submission was marked by the Tribunal as an exhibit, although nothing further was said about it. So it comes down again to what the value of Mr Wall's shares were when he transferred them to his mother? Tribunal: 'So the issue, Mr Daly is if Mr Warwick Wall transferred shares to her that those shares had a value at the time of the transfer? The issue as you've just said is whether his shares had a value when he transferred them to his mother. So that's where we are. So is it the case, Mr Daly that you accept that the company did have assets? Mr Daly: 'No I don't accept that for one moment. I think I've read out to you all the figures and it looks as though we're looking at something like $2,103,954. I remind you that Warwick Wall had nothing to do with any of these figures. On these documents it looks as though they did. The next question you would say is that they had no value to him. So can I just say, this seems to me they seem to be the crucial document. Mr Larkham, are they the crucial documents? He says that those exchanges demonstrate a recognition by the Tribunal that, although the shares might have had some intrinsic value, they had no value to Warwick, because he held them on trust for his mother. 51 However, the subsequent exchange in the above extract makes it clear that that was not the argument being advanced by Mr Daly. Mr Daly raised the question of whether the stamp duty on the transfer from Warwick to his mother had been assessed as at the date of the transfer or as at 1987, when Appletrees was sold and Warwick received a payment from the proceeds of sale. 52 It is not easy to comprehend just what argument Mr Daly was advancing. It may be that he was intending to say that stamp duty was being assessed on the value of the shares as at 1987, at a time when the shares had a value to Warwick. If that were so, the stamp duty valuation as at the date of transfer was irrelevant. That argument, of course, is completely without substance. Clearly, stamp duty was assessed on the value of the shares at the time of transfer. Duty was paid on the basis that the shares had a value of $686,747. The Tribunal observed that that value was supported by the documentation relating to the liquidation of the Company. 53 Mr Daly's response that someone else prepared the liquidation documents could be taken as an indication by him that the liquidation documents and the assessment of stamp duty on the transfer involved some misapprehension or mistake. The misapprehension or mistake was that those responsible for the preparation of the documents did not realise that Warwick had divested himself of beneficial ownership of the shares. 54 Nevertheless, it is impossible to find in the exchanges a contention on behalf of Warwick that Warwick's conduct in the intervening years was such as to give rise to a proprietary estoppel, the only remedy for which was the declaration of a constructive trust. The Tribunal's response does not indicate that the Tribunal understood that such a contention was being advanced. It would be unfair to suggest that the Secretary's representatives should have perceived that such an argument was being advanced. It is quite apparent that Mr Daly had no comprehension of any such argument. 55 It is simply not possible to discern, from the exchanges to which I have referred, a contention by Mr Daly of the existence of an express trust. A fortiori , it is impossible to discern any contention by Mr Daly, on behalf of Warwick, that there was a different type of trust relationship, namely a constructive trust arising from some form of proprietary estoppel, as found by the Tribunal. At no time did any of the submissions made by Tavoularis or Mr Daly advert to such a proposition. Exhibit D1 consisted of two volumes of material in relation to the Secretary's decision to cancel the pension. Exhibit D2 consisted of one volume of material in relation to the Secretary's decision to recover the debt due to the Commonwealth. Exhibit D3 consisted of material relating to the Secretary's decision to refuse a further pension. All of that material was tendered as being the material before the Social Security Appeals Tribunal. Since Mr Daly expressly eschewed reliance on the trust that had been advanced before the Social Security Appeals Tribunal, no inference could be drawn, from the contents of the material that had been before the Social Security Appeals Tribunal, that some different trust was being advanced before the Tribunal. 57 Exhibit D4 was described as being, in the majority, copies of materials received under summons. It is by no means clear who was responsible for the tender of D4. Exhibit D4 consisted of 23 documents of varying dates from November 1987 down to February 2005. The letter refers to a meeting with Philip in relation to the Company. Mrs Crossing said that there were a number of issues she had been considering, the most important of which was the security of Mrs Wall's investments and income. She referred to the fact that the shareholders of the Company were Philip, Warwick and Helen, who were effectively the beneficial owners of Mrs Wall's investments. Mrs Crossing said that should one of the children die, the shares would be considered assets of his or her estate. • T6 is letter dated 9 July 2001 from Mrs Crossing to Warwick. Mrs Crossing said that she planned to meet with the Company's solicitor to review his file because Mrs Wall's effective ownership of the Company is not documented in the formal records and reports of the Company. The letter said that, when the Company had been formed, Mrs Wall had effectively passed the legal ownership to her children to avoid death duties but that she was regarded as the beneficial owner of the Appletrees property. Mrs Crossing observed that it ' seems almost ironic ' that if Mrs Wall's beneficial ownership of the Company is not recognised, she could have been eligible for the aged pension from 1980, but that she received no benefits as she knew her assets were too high. • T7 is a statement of 22 January 2002 by Godfrey Pembroke, financial consultant. Mr Pembroke said that he has been Mrs Wall's financial adviser for eight years and that it was explained to him by Mrs Wall and her solicitor at a meeting in 1994 that the Company's assets belonged solely for the benefit of Mrs Wall. Mr Pembroke said that he advised Mrs Wall not to apply for an aged pension, given that the Company's assets belonged to her and that ownership would exclude her from an entitlement to a pension. • T15 is a letter of 30 June 2003 from Robert Locke, solicitor, to Warwick. Mr Locke referred to a meeting on 3 February 1999 with Mrs Crossing and other members of the family to discuss issues concerning Gerede Holdings Pty Ltd. Mr Locke said that he subsequently engaged other solicitors to help him in the process of winding-up unnecessary company structures. Mr Locke said that he had been informed by JMA Legal, who were acting in connection with the liquidation, that Warwick would not participate in any distributions of any funds from the liquidation of the Company. The letter made certain statements concerning Mr Locke's belief as to the way in which the affairs of the Company had been conducted. • T16 is a letter of 30 June 2003 from Mrs Crossing to Warwick. Mrs Crossing said that she was aware that Warwick had not taken an active part in the management nor had any beneficial interest in the Company since the sale of Appletrees in 1998. In the light of the unequivocal statement by Mr Daly that there was no trust, it is unrealistic to suggest that the admission of that material as evidence before the Tribunal should have alerted the Secretary to a case such as that now espoused by Warwick, and as was apparently found by the Tribunal. An affidavit by Mrs Wall asserted that Warwick had nothing further to do with the Company following the sale of Appletrees in 1987. Mrs Wall said that she believed that Warwick had received his share of the Company assets. She said that Philip signed tax returns and dealt with other business prepared by Mrs Crossing. Mrs Wall said that she believed that Mrs Crossing had stated that the alleged shareholding by Warwick as shown in the annual returns to ASIC was an initial oversight that was simply repeated. Mrs Wall said that Warwick had not been involved in any business or dealings in relation to the Company. 61 Philip swore an affidavit in which he said that, following the sale of Appletrees in 1987, the remaining assets, after repayment of bank loans, shareholder loans and other accounts, were distributed to the shareholders, namely Philip, Helen, Warwick and Mrs Wall. He said that Warwick had absolutely no further involvement in the Company, which has since been liquidated. He said that Philip, Warwick, Helen and Mrs Wall had received no proceeds since the liquidation and will not, since there are none to be had. Can I ask some questions if you don't mind? Mr Wall, so in 1987 you sold Appletrees and so you can tell me how much you got for it? Tribunal: 'So what happened to the 5.2 million? It was about 2.2 from memory. Obviously it ceased trading, the property was sold, that was the main thing. Philip and Mr Daly were drawing attention to the fact that the three children received cash from the proceeds of the sale of Appletrees. However, the contemporaneous material makes it unequivocally clear that the cash was received by way of loan. There was no suggestion in the evidence that the character of the payment was ever intended to be otherwise than a loan. Neither Philip nor Mr Daly suggested that the loans were not intended to be repaid. In any event, there is no suggestion, in the exchanges, that the payment involved any detriment to Mrs Wall. Indeed, a part of the money received by Warwick, and by his brother and sister, was given to their mother. 64 At a later stage in the hearing, there was an exchange in which a reference was made to submissions made to the Social Security Appeals Tribunal by Tavoularis. Counsel for Warwick suggested that that indicated that those submissions were still to be regarded as the case being mounted on his behalf. However, on any reasonable view of the exchange, it is clear that the reference to the submission was only for the purposes of identifying a document that was attached to the submission. That document was a letter from Mrs Crossing explaining how Warwick came to be described as the beneficial owner of shares in the Company in the return lodged with ASIC. 65 The context is made clear by the observation of the Tribunal, referring to a division of the proceeds of the sale of Appletrees that ' went into companies notionally '. The Tribunal observed that it is a question for the Tribunal to try to follow that through and see what happened, in terms of the value of the assets at the time. The Tribunal said that it was a question of whether there were loans to the children and whether those loans have actually ever been repaid. Thus, there was no suggestion by the Tribunal that the possibility of the existence of a trust, as outlined by Tavoularis, was being examined. In any event, there was no mention of a constructive trust by Tavoularis. 66 Mrs Crossing also gave oral evidence and was cross-examined by the Secretary's representative who said to Mrs Crossing that Warwick had argued that he received distributions from the Company in 1988 and received nothing after that and had got everything he could out of the Company at that stage. Mrs Crossing agreed that that is what the submissions have been. Mrs Crossing was then asked whether, if that is correct, the balance sheets should have reflected that. Mrs Crossing's response was that, once Appletrees had been sold, the only money in Appletrees would have been ' the residences that were earmarked for Mrs Wall '. When asked whether it was suggested that the financial statements should not be relied on, Mrs Crossing said that Warwick really should probably have never been part of the Company from the time Appletrees was sold. She said that Warwick was only left as a shareholder so that his mother had the benefit of the tax losses. That answer, of course, is totally inconsistent with the notion that he was anything other than the beneficial owner of the shares. Mr Daly's express abandonment of the notion of a trust is in stark contrast to the absence of any formal contention by Mr Daly that Warwick had divested himself of beneficial ownership of the shares in 1988, in exchange for a loan by a wholly owned subsidiary of the Company. 68 Unless the arrangements put in place in 1988 were a sham, the clear intention was that there was to be no change in the beneficial ownership of the shares, since that could have prejudiced the availability of the accumulated tax losses. The proposal outlined by the Tax Advisers was that it would be preferable if all the surplus funds were invested in the equity of the new subsidiary companies and then lent to the shareholders for their immediate use, with the balance being lent back to the Company for investment and repayment of the shareholders' existing loans. The advice referred expressly to the question of whether loans funded out of share capital could be regarded as loans funded by profits of the subsidiaries. 69 It is by no means clear just what Mr Daly's contentions were. They did not entail any contention that Mrs Wall had acted to her detriment, in some way, in reliance upon a common understanding or intention that the shares in the Company would be beneficially owned by her with effect from the restructure in 1988. In all the circumstances, it cannot be said that the Secretary was afforded an opportunity to explore matters that would be relevant to the question of a common intention or understanding giving rise to a proprietary estoppel, the only appropriate remedy for which would be the declaration of a constructive trust in respect of the shares. Nor was the Secretary afforded the opportunity of making submission in relation to such a case. However, since it has been argued, it is desirable to say something about the ground. 71 The Secretary does not rely on any error of law on the part of the Tribunal in concluding that there was a constructive trust in favour of Mrs Wall in respect of Warwick's shares. The Secretary accepts that the conclusion that the shares were not property with a value in his hands, capable of being converted into an assessable basis for reducing his entitlement to a social security benefit, was essentially a finding of fact. However, the Secretary impugns the conclusion on the basis that, as a finding of fact, it was not supported by evidence or any probative material. 72 The Secretary contends, in essence, that the evidence would not support the findings necessary to establish a proprietary estoppel binding on Warwick. While the evidence leaves a great deal to be desired as admissible evidence in a suit in equity between Warwick and his mother, it may be that there was material before the Tribunal that was capable of supporting a finding that Mrs Wall acted to her detriment in some fashion in reliance upon some assumption made in 1988. A real difficulty with the Tribunal's conclusions is that the Tribunal's reasoning was not directed to finding the facts necessary for establishing a proprietary estoppel, giving rise to a constructive trust. 73 The object of the remedy that might be ordered by a court of equity in a case of proprietary estoppel is not necessarily to make good the belief and expectation encouraged by the conduct of the true owner. The object is to recompense the claimant for the detriment suffered as a consequence of reliance on the belief and expectation encouraged by the true owner. In some cases, it may be possible for the owner of property to fulfil that equitable obligation only by transfer of the interest, the expectation of which was encouraged by the owner's conduct. On the other hand, in other cases, it will be appropriate for lesser relief to be awarded. For example, where the detriment is slight in comparison to the value of the property in question, it would be inappropriate to penalise the owner by depriving the owner of full ownership of the property. 74 The task of the Tribunal would have been to examine the extent to which a court of equity would require Warwick to compensate his mother, as a term of being permitted to assert beneficial ownership of his shares. That is to say, it would be necessary to enquire whether Warwick's conduct, in receiving $400,000 in 1988 and thereafter having no involvement with the Company, gave rise to an estoppel against his asserting beneficial ownership of the shares. It is only if a constructive trust is the only way in which equity can be done, as between Warwick and his mother, that a court would impose such a remedy. The first step, however, would be to determine whether there was an appropriate equitable remedy that fell short of the imposition of a trust (see Giumelli v Giumelli [1999] HCA 10 ; (1999) 196 CLR 101 at [10] ). 75 The difficulty with the Tribunal's reasons is that it simply did not direct attention to findings necessary to establish that a remedy of constructive trust was appropriate in the circumstances. 76 In addition, it would be necessary to examine the extent to which Mrs Wall obtained a benefit by reason of the tax losses of the Company being carried forward so as to be set off against income derived from investments made with money lent, interest free, by her to the Company. A further matter for enquiry may be the extent to which Fontas, a wholly owned subsidiary of the Company, forwent its claim against Warwick for the loan of $1,080,000 made to him in 1988. Of course, that may not have been a detriment to Mrs Wall, unless it is assumed that she was the beneficial owner of the shares. 77 Those enquiries were not undertaken by the Tribunal. It is impossible to determine precisely how the Tribunal reached its conclusion that there was a constructive trust in favour of Mrs Wall in respect of Warwick's shares in the Company. It is not possible to discern whether or not there was evidence to support that conclusion, because the Tribunal simply did not address the relevant questions. Those considerations, of course, reinforce the conclusion that the possibility of a constructive trust was not adequately ventilated to enable the Secretary to meet such a case. Having regard to the conclusion that I have reached concerning the denial of procedural fairness, it is not strictly necessary to deal with this question. Nevertheless, since it has been argued, I shall say something about the question. It may be a matter that would need to be considered by the Tribunal upon any further consideration of the matters in question. 79 Section 1207Q(1) of the Entitlement Act provides that, for the purposes of Division 3.18, a company is a controlled private company in relation to an individual if the company is a designated private company and the individual passes the control test . Under s 1207Q(2)(a), an individual passes the control test in relation to a company if the aggregate of the direct voting interests held by the individual and the direct voting interests held by associates of the individual is 50 per cent or more. Under s 1207C(1), a relative of an individual is an associate of the individual for the purposes of determining whether a company is a controlled private company in relation to that individual. Clearly, Mrs Wall was a relative of Warwick. Accordingly, shares held by her are to be taken into account in determining whether or not Warwick passes the control test in relation to the Company. The first is to determine that the individual is not an attributable stakeholder. The second is to determine, even if the individual is an attributable stakeholder, that a lower percentage than 100 per cent is to be the asset attribution percentage of that individual. 81 The pivotal provision, for present purposes, is s 1208E(1). Under that provision, if an individual is an attributable stakeholder of a company and the company owns a particular asset, there is to be included in the value of the individual's assets an amount equal to the individual's asset attribution percentage of the value of that asset. At the time when Warwick applied for a further pension, the Company owned substantial assets. Unless the Secretary exercised the discretions in his favour, an amount equal to 100 per cent of the Company's assets would have to be included in the value of Warwick's assets for the purposes of the Entitlement Act. Further, under s 1208M, if an individual ceases to be an attributable stakeholder of a company after 1 January 2002 and, immediately before the cessation, the company owned a particular asset, the provisions are to have effect as if the individual had disposed of an asset and the amount of the disposition was equal to the individual's asset attribution percentage of the value of the company's asset. 82 Section 1123(1) of the Entitlement Act provides that, for the purposes of the Act, a person disposes of assets if the person engages in a course of conduct that disposes of some of the person's assets and the person receives no consideration in money or money's worth for the disposal. Under s 1126AA(2), if the amount of the relevant disposal exceeds $10,000, then the amount of the relevant disposal is to be included in the value of the person's assets for the period of five years starting on the day on which the relevant disposal took place. The effect of those provisions, assuming the Secretary did not exercise the relevant discretions in Warwick's favour, would be that Warwick would continue to be treated, for the purposes of the Entitlement Act, as if he was the owner of the assets of the Company for a period of five years after the disposition. 83 Clearly, the operation of those provisions would need to be taken into account by the Tribunal upon any reconsideration. It may be significant that the Tribunal was not in fact asked to take them into account in the present case. While the failure to do so may conceivably constitute jurisdictional error, the Tribunal could not be criticised in any way for failing to have regard to those provisions in circumstances where it was not asked to have regard to them. 84 Upon a reconsideration, it is common ground that the Tribunal would be in a position to exercise the discretions of the Secretary. There may well be cogent reasons why the discretions would be exercised in favour of Warwick if the question arises before the Tribunal. However, that is not a matter presently before the Court. It is common ground that the denial of procedural fairness was an error of law within s 44 of the Tribunal Act. Accordingly, the three decisions of the Tribunal should be set aside. The whole matter, involving the review of all three decisions, should be remitted to the Tribunal for further consideration and decision according to law. 86 The Secretary, quite properly, does not ask for an order for costs. Accordingly, I will make no order as to the costs of the appeal. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | review of decisions of the administrative appeals tribunal that the respondent's disability support pension not be cancelled, that he does not need to repay the amounts received as a pension and that he is not disentitled from receiving a pension in the future respondent in receipt of disability support pension until applicant's decision to cancel it by reason of the respondent's shareholding in a family company social security appeals tribunal affirmed decision to discontinue pension- respondent appealed to administrative appeals tribunal respondent alleges he held the shares on trust for his mother tribunal found there was a trust in favour of respondent's mother applicant appeals on the grounds that it was not afforded procedural fairness because the tribunal gave it no notice that it might find that there was a trust and that there was no probative material to support such a finding whether applicant was not afforded procedural fairness administrative law |
Whether the Tribunal exceeded the jurisdiction conferred on it by section 14ZZ of the Taxation Administration Act 1953 [(Cth) ('the Administration Act')] in purporting to direct the Applicant to remit in full additional tax imposed on the Respondent for the year ended 30 June 1988. The proper interpretation of sections 14ZQ and 14ZS of the [Administration Act] . Whether the Tribunal erred in law in purporting to direct the Applicant to remit additional tax in full. The Tribunal erred in law in failing to hold that the Applicant's decision on objection refusing to remit additional tax imposed pursuant to sec 223 was an "ineligible income tax remission decision" under section 14ZS of the [Administration Act] and therefore not a "reviewable objection decision" for the purposes of section 14ZQ of that Act. Additional Tax for incorrect return, shown at label D of the notice of amended assessment, in the sum of $586,858.75, was also imposed. 7 The taxpayer, by his taxation agent, lodged an objection to the amended assessment by letter dated 5 July 1994, but the grounds were confined to the inclusion of the sum of $1,228,500 in his assessable income and did not put in issue the imposition of the additional tax of $586,858.75. Indeed, it was not mentioned in the objection at all. 9 By letter dated 31 October 2003 solicitors acting for the taxpayer filed a statement of facts, issues and contentions on behalf of the taxpayer, however, the matter of additional tax was not raised as an issue and it certainly formed no part of the taxpayer's contentions. Not surprisingly, the Commissioner's amended statement of facts, issues and contentions dated 26 October 2004, likewise made no reference to the matter of additional tax. 10 The first time the matter of additional tax or 'penalty', as it is sometimes referred to, was raised was before the Tribunal. How it was raised and why the Tribunal allowed it to be raised is not disclosed in the transcript of proceedings before the Tribunal, nor in the Tribunal's reasons for decision. We say there wasn't full and true disclosure. I mean, it couldn't be the case that having regard to the number of taxpayers and the way the Commissioner must administer the Act that not to put at least copies of the agreements, that that was full disclosure. To that extent we say that the amount of penalty is appropriate in the circumstances. On the hearing of the appeal there was an interruptive protestation on the part of counsel for the taxpayer that any such conclusion would be misleading. However, it was not taken further (apart from what was said to be anecdotal evidence from the bar table) in the written submissions I afforded counsel for the taxpayer, at his request, further time to make. Where a taxpayer omits an item of assessable income from their return, s.223(7) deems the taxpayer to have made a statement in their return to the effect that they did not derive that item of income. The provision applies in this matter. I accept the applicant's submission that this transaction or dealing is one that falls into the clearly arguable category. I also accept that his income tax return gave the respondent some information about the transaction and this should be contrasted with the situation where there is a total omission of any reference to the particular transaction. Having regard to the policy of encouraging accuracy and completeness of returns that is embodied in s.223, but being cognisant also that the discretion has been introduced to mitigate potential harshness resulting from the imposition of penalty under s.223(1) being double the amount of tax avoided, I am satisfied that this is an appropriate case in which to remit the culpability component of the penalty in full. In relation to the per annum component, it is relevant to note that the respondent consented to the matter being held in abeyance for a number of years pending the finalisation of proceedings brought by Jones, extending to his appeals to the High Court. I consider it appropriate that any per annum component be remitted for the entire period from the date of issue of the amended assessment. This latter matter was not, however, the subject of the Tribunal's ultimate decision. It follows that ground 4.5 of the Amended Notice of Appeal is misconceived. 12 I hesitate to suggest this, but it seems to me that the Tribunal's analysis of the 'penalty' issue was a function of the confused thinking inherent in the submissions put to the Tribunal by both counsel below. This is further exemplified in the Commissioner's grounds of appeal and in his original written submissions, both having as their focus the construction and application of s 14ZS and, by force of the definitions therein, s 14ZQ of the Administration Act. 13 It is s 14ZS, as originally enacted (see Taxation Laws Amendment (No. 3) Act 1991 (Cth)), that applies to objection decisions that relate to the remission of additional tax under s 223 of the ITAA 36. 15 It is difficult to understand the focus of the Commissioner on s 14ZS of the Administration Act in the present case when neither the taxpayer's objection nor, in consequence, the Commissioner's objection decision, referred in any way to the remission of additional tax imposed by the amended notice of assessment. In support of that focus I was referred to cases which, correctly in my view, hold that the words 'relates to' are wide words signifying some connection between two subject matters --- with the connection or association signified by the words being either direct or indirect, substantial or real. However, in the present case, there is absolutely no connection or association between the objection decision and the remission of additional tax payable under s 223 of the ITAA 36. In short, the objection decision in the present case is not an ineligible income tax remission decision under s 14ZS of the Administration Act and, insofar as the Commissioner's appeal is grounded on this issue, it must fail. 16 In his written submissions in reply, the Commissioner refocussed his argument, to where it always should have been focussed, on subs 43(1) of the AAT Act. It was not relevant to the making of the decision because the parameters of that decision had already been set by the taxpayer's objection. It could not have been properly raised by the taxpayer before the Tribunal unless and until an order was obtained by the taxpayer under s 14ZZK(a) of the Administration Act which did not occur. As such, there could not be 'an association' between the power exercised by the Tribunal and the decision under review. If an objection had been made to the assessment of penalty and an objection decision had been made in relation to that matter, there may have been (subject to the operation of s 14ZS of the Administration Act) some basis for saying that the exercise of a power to remit by the Tribunal was in the words of Hill J in Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32 'relevant to the making of the decision under review'. There would be present 'an association' between any exercise of discretion by the Tribunal to remit penalty and the objection decision. 19 In my view, this misconceives the matter and puts an impermissible gloss upon s 43. 20 While the taxpayer did not include in his objection a ground putting in issue the imposition of additional tax; and while the Commissioner's objection decision disallowing the taxpayer's objection did not, in consequence, deal with that issue; and while the taxpayer had no right to agitate the issue before the Tribunal unless the Tribunal otherwise ordered (s 14ZZK(a) of the Administration Act), which the Tribunal did not, nevertheless, in deciding the taxpayer's objection, the Commissioner could have further remitted the additional tax imposed at label D of the notice of amended assessment, pursuant to the discretion vested in him by subs 227(3) of the ITAA 36. The fact that he had already exercised this discretion, at the time of assessment to remit the additional tax to $586,858.75 was no bar or impediment to his further remission of the additional tax at the time of making his objection decision. 21 If this be right, then it is difficult to see why subs 43(1) of the AAT Act did not give the Tribunal jurisdiction to make that part of the decision against which this appeal is brought, namely, remission of the penalty matter to the Commissioner with the direction that the assessment for the year ended 30 June 1988 be amended by remitting additional tax in full. Subsection 43(1) of the AAT Act has been construed as not requiring the power or discretion to be exercised by the Tribunal as being necessarily involved in the making of the decision under review: Secretary, Department of Social Security v Hodgson supra at 39 --- 40. Provided the necessary purpose is present, the power conferred upon the Tribunal is not otherwise limited. It is neither necessary nor permissible to put a gloss upon s 43 that would permit the Tribunal to exercise the discretion maker's powers and discretions only when those powers or discretions are necessarily interdependent with the decision under review, or where the power or discretion to be exercised by the Tribunal is necessarily involved in the making of the decision under review --- see Secretary, Department of Social Security v Hodgson [supra]. The test is one of relevance rather than dependence . Where the exercise of a power or discretion is relevant to the making of the decision under review then, if requested, the Tribunal may exercise the discretion. In that sense, the Tribunal exercised the discretion for the purpose of reviewing the objection decision and any argument that it did not must be rejected. 24 For the foregoing reasons, the appeal must be dismissed with costs. | objections and appeals administrative appeals tribunal's powers on review where taxpayer's objection did not raise issue of additional tax imposed where commissioner's objection decision made no reference to additional tax where taxpayer purported to raise issue of additional tax before tribunal where taxpayer could not raise issue of additional tax without an order of the tribunal which was not obtained whether objection decision ineligible income tax remission decision whether tribunal had power to direct commissioner to remit additional tax taxation |
He files a written submission in support of the application together with an affidavit of Mr King. 2 As appears from the affidavit, Mr King is a registered industrial agent/advocate through the Western Australian Industrial Relations Commission. He holds a current certificate of registration as such dated 17 May 2006. The certificate states he is entitled to carry on business as an industrial agent in Western Australia in accordance with s 112A of the Industrial Relations Act 1979 (Cth) and the Industrial Relations (Industrial Agents) Regulations 1997 for a period of five years from the date of the certificate. 3 It also appears from the affidavit that a requirement for registration and maintaining registration as an industrial agent is a professional indemnity insurance. The applicant holds such a policy covering him until 10 May 2007, with a $1 million limit of indemnity and an aggregate limit of indemnity of $2 million. 4 As a registered industrial agent/advocate, Mr King has a duty to comply with the code of conduct in Sch 1 of the abovementioned Regulations. Mr King has completed three years of the course for a Batchelor of Laws (which was not completed) but has since taken post-graduate study in employment law and industrial relations. In addition he is undertaking post-graduate study in dispute resolution, mediation and negotiation through the Murdoch University Faculty of Law. 5 The proceeding brought in respect of the seventy-second respondent is grounded on events which preceded the coming into operation of the Australian Workplace Relations Act 1996 (Cth) (the Workplace Relations Act ). In that Act as it currently stands s 854 makes provision for representation of parties before this Court and the Federal Magistrates Court. Nevertheless, on the face of it, the above provisions in the Workplace Relations Act are broadly procedural in that, if given unconfined operation, it would not affect pre-existing substantive rights or liabilities: Victrawl Pty Ltd v Telstra Corp Ltd [1995] HCA 51 ; (1995) 183 CLR 595 at 615. It is therefore at least arguable that the provisions of s 854 do have application to the seventy-second respondent. I proceed on the basis that such is the case. 7 It will be observed in each of the above subsections that the substantive provision is subject, not only to other provisions of the same Act, but also to 'any other Act'. There is a question whether this latter reference makes the subsections subject to s 23 of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) which enables the Court to make orders as the Court considers appropriate. Absent that possibility, the Parliamentary choice of the word 'only' in each subsection puts a degree of emphasis upon the statement in each subsection read without the qualifying references. It suggests the possibility that the use of the word 'only' in each case can only be negated by an express contrary provision in another Act and not merely by reference to a provision (such as s 23) whereby the Court might be enabled to act to make contrary orders. That was not argued before me. The applicant does not oppose the grant of leave in the present circumstances, although Counsel for the applicant has helpfully assisted the Court in relation to the applicable law. 8 There are a number of authorities to the effect that the words 'subject to' do not of themselves create a conflict with the words that follow but indicate what should prevail in the event that there is such a conflict: see Hot Holdings Pty Ltd v Creasy [1995] HCA 60 ; (1996) 185 CLR 149 at 176; 134 ALR 469 at 488 per Dawson and Toohey JJ; Harding v Coburn [1976] 2 NZLR 577 at 582; C & J Clarke Ltd v IR Commrs [1973] 1 WLR 905 at 911 per Megarry J; Re Bland Bros and the Council of the Borough of Inglewood (No 2) [1920] VLR 522 at 533; Piper v Corrective Services Commn of NSW (1986) 6 NSWLR 352 at 359 per Kirby P; Perritt v Robinson (1988) 80 ALR 441; Thompson (QLD) Pty Ltd [1990] 1 Qd R 278; Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 754 ; and Attorney-General (Cth) v Oates [1999] HCA 35 ; (1999) 198 CLR 162 at 178; [1999] HCA 35 ; 164 ALR 393 at 403, authorities collected in [12.4] of DC Pearce and RS Geddes Statutory Interpretation in Australia , 6 th edn, Lexis Nexis Butterworths 2006 (Pearce and Geddes). I therefore approach ss 854(3) and (5) in the way indicated by those authorities. 9 The significance of the issue of whether s 854 of the Workplace Relations Act is applicable in the first place and secondly, whether subs (3) and (5) are to be understood as subject to the power in s 23 of the Federal Court Act, is that in the absence of the application of s 23 of the Federal Court Act, s 854 does not permit of the grant of leave to a person such as Mr King. 10 The powers of the Court pursuant to s 23 of the Federal Court Act to make orders granting leave for an unqualified advocate to appear were reviewed by Bennett J in Melaleuca of Australia and New Zealand Pty Ltd v Duck [2005] FCA 1481 ( Melaleuca ). It is not necessary here to set out again the other Rules and considerations to which her Honour made reference. She particularly had regard to the decision of the New South Wales Court of Appeal in Damjanovic v Maley [2002] NSWCA 230 ; (2002) 55 NSWLR 149 ( Damjanovic ), where their Honours found that there was nothing exceptional or special to warrant the grant of such leave. That test arrives from what was said by Lord Woolf MR in D v S (Rights of Audience) [1997] 1 FLR 724 at 725B-726G referred to in Paragon Finance PLC v Noueiri (2002) C.P. Rep 5 both of which were referred to by her Honour in Melaleuca . In Melaleuca her Honour examined a number of factors referred to by the Court of Appeal in Damjanovic in the exercise of her discretion on whether to grant the appropriate leave. She found there was no material before her to warrant the grant of leave. Bennett J applied the same reasoning in SZFCX v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 394 to ground a grant of leave. Factors found there to support the grant of leave were the complexity of the case, genuine difficulties experienced by the appellant in representing himself and the ability of the lay advocate to present the case better and more efficiently. Stone J in 'Pooncarie' Barkandji (Paakantyi) People v NSW Minister for Land & Water Conservation [2006] FCA 25 concluded that the applicant for leave there had neither the discipline nor understanding to assist the persons he would represent or the Court so that the grant of leave should be refused. 11 Approaching the provisions of ss 854(3) and (5) in the light of the above authorities, I am satisfied that construing those subsections without the introductory words shows a clear intention to exclude persons such as the present applicant. On the other hand, it is apparent from the application of s 23 of the Federal Court Act to the issue of the grant of leave, as instanced above in the reasoning in Melaleuca and 'Pooncarie' , there is a conflict between the subsections and s 23 of the Federal Court Act when it is utilised to authorise a grant of leave to a non-legally qualified person to act as an advocate. The authorities make apparent that the introductory words are words of subjection which show what is to prevail when a conflict is found to exist. That is, they make apparent that it is the 'other Act' which prevails over the provision of the subsections of the Workplace Relations Act , even though the subsections are expressed in very categorical language involving the use of the word 'only'. 12 That being the case, it is necessary for me to consider the application for leave pursuant to s 23 of the Federal Court Act. Turning to the factors examined by Bennett J in Melaleuca , I accept that this present case could be complex, certainly from the perspective of the seventy-second respondent, a carpenter by trade. It could therefore give rise to genuine difficulties for him, although he has no language difficulties. While Mr King would not have the overall duty of a barrister or solicitor to the Court, he is subject to certain codes which, even though not extending the role for which he seeks leave to perform, could be adversely affected if he were to mis-perform if leave were granted by the Court. There is evidence that Mr King has professional indemnity insurance. Further, from his knowledge of and experience in industrial law he may be able to protect the person whom he would represent. He would, in my view, assist the effective, efficient and expeditious disposal of the litigation in respect of the seventy-second respondent. That is, he would assist the interests of justice. 13 I therefore find that Mr King is in a quite different position to the unsuccessful applicants for the grant of leave in either Melaleuca or 'Pooncarie' . 14 I also take into account that the applicant does not oppose the grant of leave. However, I accept the submission made by the applicant that the leave should be granted 'until further order'. 15 For these reasons I consider that leave should be granted to the seventy-second respondent to have Paul Anthony King represent him as his advocate in this proceeding until further order. | representation of a respondent party before the court whether statutory provision applicable whether statutory provisions precludes grant of leave for person to act as advocate person qualified in industrial law and acting as industrial agent with professional indemnity insurance whether circumstances exceptional or special to warrant the grant of leave consideration of circumstances workplace relations |
The application was made pursuant to the Taxation Administration Act 1953 (Cth) ('the Act') s 340 --- 5 (3) which empowers the applicant to grant such a release, in whole or in part, where the respondent would suffer 'serious hardship' if required to satisfy the liability. The respondent's objection was disallowed but the respondent was successful in his appeal to the Small Taxation Claims Tribunal, a division of the Administrative Appeals Tribunal. The Tribunal ordered that the respondent be released, in part, from his income tax liability for the years ended 30 June 2001 to 30 June 2004. 2 The respondent is married and has four children, the eldest of whom is about fourteen years old. The respondent's wife suffers from a chronic medical condition that makes it impossible for her to work and difficult for her to care properly for her children or maintain the family home. The respondent is an employed solicitor whose expertise is in a specialised area of the law; it involves him in giving advice about financial services such as superannuation, insurance and the like. He earns approximately $250, 000 per annum. Previously he was a partner in a law firm, and it was during this period that he incurred his tax debt. There is no evidence that this debt was incurred because of tax avoidance or participation in a scheme of any kind and no such suggestion has been made. Rather, it appears that the debt resulted from complicated and confusing financial distribution arrangements in the law firm where he was a partner and because the respondent was distracted by his wife's illness and other domestic responsibilities. I was satisfied that the respondent's wife's illness is exacerbated by stress and the publication of the information and the consequential linking of the family with the matters under consideration in this proceeding would have a severely detrimental impact on her health. The impact of stress on the wife's health is one of the factors relied on to support the respondent's claim that he would be exposed to serious hardship should he be denied relief in respect of his tax debt. It is appropriate therefore, to attempt to avoid publication of the information, in the hearing of the application, that might cause the very detriment that the respondent's application for relief was designed to avoid. For this reason I was satisfied, as required by s 50 , that the orders were necessary to prevent prejudice to the administration of justice. 4 To avoid including information in these reasons that would lead to the respondent and his family being identified, it is necessary to state the relevant facts in less detail and with less precision than would otherwise be the case. It is still possible, however, to provide sufficient facts to explain my decision. 6 The Tribunal analysed the schedule of expenses provided by the respondent. They included the cost of renting a house within a reasonable travelling time to the respondent's place of work, the ongoing cost of treatment for the respondent's wife medical condition and the cost of educating and looking after the respondent's children. 7 The children attend systemic Catholic schools which, while not as expensive as independent private schools, are more expensive than public education. The Tribunal accepted that the respondent and his wife have a strong commitment to the education of their children in a religious system. In addition one of the children has a learning difficulty and they have been advised that the Catholic school provides a protective environment. 8 The Tribunal noted that the ongoing illness of the respondent's wife overshadowed any consideration of the respondent's financial circumstances. The wife's illness required the family to have private medical insurance because public health care could not adequately provide the treatment she needed; it necessitated domestic support and made it essential to avoid unnecessary stress. 9 The other major factor was the likelihood, should relief in respect of the tax debt not be granted, of the respondent becoming unemployed. The respondent gave evidence that because of the nature of his work he would very likely be dismissed if a judgment were to be entered against him and particularly if he were to be made bankrupt. Given [the respondent's wife's] ill health and [the respondent's] very real prospects of unemployment, the extraction of the full amount of the tax debt or the attempt to do so, will result in serious hardship. The Tribunal contemplated that the family would have to move 'with consequent disruption to the children's education and negative consequences upon the state of [the wife's] health'. In Powell v Evreniades (1989) 21 FCR 252 (' Evreniades ') Hill J considered the term as used in s 265 of the Income Tax Assessment Act 1936 (Cth). Each of the words in the phrase is an ordinary English word having a well understood meaning. The context in which the words appear makes it clear that the Relief Board is to consider whether the exaction of the full amount of tax would involve the dependants of a deceased taxpayer in financial difficulty which in all the circumstances can be said to be serious. The financial difficulty will be such that the dependants will be in significant need warranting action by the Relief Board to relieve their condition. That is not to say that in any particular case something less than that will not constitute serious hardship. 15 The applicant submitted that its Receivables Policy, which reflected Taxation Ruling IT 2440 provides guidance as to what is meant by serious hardship. Thus, serious hardship would be seen to exist where payment of a tax liability would result in the taxpayer being left without the means to achieve reasonable acquisitions of food, clothing, medical supplies, accommodation, education for children and other basic requirements. In its written submissions it expressed its complaint somewhat differently saying that the Tribunal 'misunderstood the meaning' of the term. It seems to me that the latter expression is less likely to lead to confusion as it recognises, at least implicitly, that "serious hardship" is itself the test that has to be applied to an applicant's circumstances to decide if that applicant is eligible for relief from a tax debt. There is no other test, although there may be issues about which factors, in the particular circumstances, are or are not relevant to this determination. It is because the assessment is based so squarely on the individual circumstances that Hill J in Evreniades thought it was inappropriate to try and identify, in the abstract, the circumstances that would give rise to serious hardship. 17 This is not to say that guidance cannot be given by examples in which the test of serious hardship would clearly be met. In Evreniades, Hill J gave such an example when he recognised that there would be 'severe financial hardship' if persons were left 'destitute without any means of support'. The Taxation Ruling gives a similar example when it says that there would be serious hardship if a taxpayer were left 'without the means to achieve reasonable acquisitions of food, clothing, medical supplies, accommodation, education for children and other basic requirements'. I do not see any inconsistency in these examples. Effect must be given to the qualification of 'reasonable' in the Taxation Ruling and, consistently with the reasoning of Hill J, these examples do not exclude the possibility that something less than destitution will constitute serious hardship. Whether this is so depends on the particular circumstances of each case. 18 It is not entirely clear that the Tribunal appreciated that the Taxation Ruling allowed for consideration of individual circumstances. In commenting on the Ruling the Tribunal said that 'it is no more than policy and cannot bind this Tribunal'. This comment seems to suggest that the Tribunal misunderstood the Ruling as providing a rigid rule. As I have already explained, I do not think that this is the correct interpretation of the Ruling but, as the Tribunal did not apply any such rigid rule, the misunderstanding is not of present concern. 19 The applicant submitted that the Tribunal's rejection of the Taxation Ruling indicates that it used some other unidentified test of serious hardship to make its decision. I do not accept this submission. The Tribunal noted that what is needed for proper maintenance and support is a relative question that can only be answered with regard to the whole of the taxpayer's circumstances. The Tribunal considered all the relevant aspects of the respondent's circumstances including whether he could achieve 'acquisitions of food, clothing, medical supplies, accommodation, education for children and other basic requirements' that were not excessive or unreasonable in all the circumstances. I do not accept that the Tribunal used the wrong test. 20 In summary, I see nothing in the Tribunal's reasons to suggest that it misunderstood the meaning of serious hardship or the way in which it should proceed to make its determination. Other complaints about the way the Tribunal actually applied the test of serious hardship were related to the way the Tribunal dealt with the evidence and are addressed in that context; see [45] et seq. below. One is the proper approach to judicial review of an administrative decision where, as here, the Court's jurisdiction is confined to questions of law; Administrative Appeals Tribunal Act 1975 (Cth) s 44(1) ('AAT Act'). The other is the distinction between errors of fact and errors of law. 22 I am aware that under s 44(7) of the AAT Act there is a limited right for this Court to decide issues of fact but neither party here has sought to rely on that sub-section and for present purposes it can be disregarded. That determination required the Tribunal to consider a variety of factors and to speculate on a number of possibilities. These included the respondent's current expenses compared with his income; whether the applicant would seek judgment against the respondent in respect of the tax debt; if so whether the applicant, or some other creditor, would apply to have him declared bankrupt; if so whether he would lose his present job and, in that event, whether he would be able to obtain other employment and whether or not that employment would be commensurate with his present position. It needed to consider the effect of these possible events on his wife's health; whether he would be able to obtain appropriate medical treatment for her; whether his wife might again require hospitalisation and, if so, for how long; the impact on the respondent's four young children of any deterioration in their mother's health as well as the effect on them of other possible consequences such as needing to change schools and move house especially in the context of their mother's illness. In assessing the cumulative effect of these factors it is for the Tribunal to evaluate the evidence relevant to each factor and, on a relative basis, to apportion weight between them. 24 To isolate each element of this complex factual analysis and subject it, out of context, to a detailed examination of the evidence to see if there is support for that element distorts the review process. The cautions of the High Court in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 against over-zealous scrutiny 'by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed' are peculiarly appropriate here; at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. They must be considered fairly. It is erroneous to adopt a narrow approach, combing through the words of the decision-maker with a fine appellate tooth-comb, against the prospect that a verbal slip will be found warranting the inference of an error of law. Such an approach, 'betrays a misunderstanding of the way administrative decisions are usually made'. 26 In this case the Tribunal, either expressly or impliedly, took into account all the factors mentioned in [23] above. On the basis of evidence about those factors it made inferences of fact about the likelihood of certain events occurring in the future. In my view the Tribunal's conclusions were open to it on the evidence. However even if one regarded the minute analysis suggested by the applicant as necessary, for the reasons given below, I am still of the view that the applicant has not demonstrated that the Tribunal made a legal error. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law ... This is because, before the inference is drawn, there is the preliminary question whether the evidence reasonably admits of different conclusions ... So long as there is some basis for an inference --- in other words, the particular inference is reasonably open --- even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place. But, as the statement of Mason, C.J. at 360 shows, there is virtually no difference between the tests. The danger of using the word 'reasonably' lies in its being taken to suggest that a finding of fact may be overturned, on an appeal which is limited to the question of law, simply because that finding is regarded as 'unreasonable'. That is not the law as I understand it, at least in Australia. A finding of fact will be overturned on an appeal on a question of law only if that finding was not open. 32 Accordingly, to establish that the Tribunal has committed an error of law in drawing its inferences of fact, the applicant needs to establish that the inferences were not reasonably open to the Tribunal in that they were not supported by probative material. It will not be sufficient to establish that the inferences were merely unreasonable or illogical. I do not accept that the Tribunal made such a finding. Nowhere does the Tribunal use the word, 'inevitable' nor can it be inferred that the Tribunal intended to express its conclusion with such precision and without any attendant doubt. It is clear, however, that the Tribunal rated the likelihood of bankruptcy very high should the applicant enforce the full debt. Having examined the respondent's finances, the Tribunal found that he was not able to pay the whole debt. This evidence disclosed that, even without any attempt to pay the tax debt, the respondent faced a yearly net deficit of income over expenses of $3933 . The applicant contended that even if judgment were entered bankruptcy was only one of a number of options. The applicant did not, however, rule out bankruptcy and, given the respondent's other debts, it was not unreasonable for the Tribunal to conclude that, in such circumstances, bankruptcy was a very likely outcome, irrespective of the applicant's actions to enforce the debt. The Tribunal's conclusion was not inevitable but it was not without foundation. The applicant points to the fact that the Tribunal said, 'In the case of bankruptcy, termination of employment is a certainty' and that the respondent would find it 'nearly impossible' to obtain other employment as a practising solicitor 'because of his narrow field of expertise and the opprobrium which comes with bankruptcy'. The applicant seizes on the expression of certainty and says there is no evidence to support this inference; the only evidence as to the likelihood of termination came from the respondent himself and even he did not regard it as certain. This is a good example of the distortion that can result from considering one element of the Tribunal's reasoning in isolation; it ignores, for instance, the fact that the Tribunal also refers to the respondent's 'very real prospects of unemployment'. I do not, however, read these two comments as contradictory. A Tribunal making predictions as to the possible occurrence of future events is unlikely to express its views with mathematical precision. Its reasons must be read as a whole and, so read, the better view is that the Tribunal thought there was a very high degree of likelihood that the respondent's current employment would be terminated if he became bankrupt but not that it was inevitable. 37 Any inference about termination of the respondent's employment is, of course, contingent upon the inference that entry of judgment in respect of the respondent's tax debt would almost certainly lead to him being bankrupted. There is nothing illogical in the Tribunal being less than certain as to the prospect of the respondent being made bankrupt, and more certain that, if bankruptcy did ensue, termination of the respondent's employment would follow. Nevertheless there must be some evidence to support that inference. 40 The applicant referred to the provisions of the Legal Profession Act 2004 (NSW) to show that there was no automatic deprivation of a solicitor's right to practice if he or she becomes bankrupt. Rather a solicitor in that position has to show cause why he or she should not be excluded from practice. The respondent agreed that he was not a principal at the law firm and consequently was not required to operate a trust account and that therefore the need to do so would not be a barrier to his employment. 41 The transcript of the hearing before the Tribunal shows that the respondent's concerns derived more from the practical and commercial factors that he expected would concern his firm than from legal requirements. The respondent testified that even if he were legally entitled to practice, the fact that his area of expertise is in the financial services area would mean that he would be dismissed from his present position and would make it very difficult for him to obtain a position in any other law firm that practised in this area. The respondent's evidence in respect of his present employment and his prospects for future employment was based on his understanding of his employment relationship with the law firm, his general understanding of the culture of law firms and the opprobrium attached to bankruptcy in the specialist field within which he operated. 42 Although the respondent conceded that he might be able to obtain work with a company in the financial services industry at a much reduced remuneration, the Tribunal does not mention this evidence and apparently attached little weight to it compared with the factors referred to above. The Tribunal is not obliged to refer to every element of the evidence in its reasons and there is no error in this. 43 The applicant's submission that there was no proof of any inevitable impediment to the continuation of the respondent's current employment or to his obtaining similar employment elsewhere ignores the impact of the respondent's evidence as to the culture in which he works. The respondent's evidence was necessarily speculative but the Tribunal was entitled to consider it, to assess the weight it was to be given and ultimately to draw inferences from it. While others may have afforded his evidence significantly less weight than the Tribunal that is not to say that the evidence relied upon to draw the inference of fact in question was not probative. The Tribunal's inference that, if the respondent were made bankrupt, he would lose his present position was a prediction expressed, at least at one point in the Tribunal's reasons, in terms of certainty. However, the submission that without unequivocal evidence of inevitability the Tribunal was not entitled to express its conclusion in this way amounts to inappropriate scrutiny of the Tribunal's language. In my view the inferences about the respondent's employment prospects drawn by the Tribunal were reasonably open to it. I accept that there was no evidence to support this inference however I do not regard it as critical to the Tribunal's findings. There is nothing in the Tribunal's reasons to suggest that the Tribunal would have come to a different conclusion if it had not made this error. I do not accept this ground of appeal. The applicant made detailed submissions on this issue and pressed its submission that these consequences left only one conclusion open to the Tribunal, namely that bankruptcy and its attendant consequences would not create serious hardship for the respondent. 46 The transcript of the hearing before the Tribunal shows that these practical consequences were the subject of some discussion between the Tribunal and the respondent and were explored in cross-examination of the respondent by the applicant's counsel. The legal and practical consequences of bankruptcy were brought to the attention of the Tribunal and the Tribunal was well aware that the respondent did not deny that, in the event of bankruptcy, there was a 'possibility' that he could continue in practice. As I have already observed however (see [41]-[43] above), the Tribunal apparently attached more significance to the commercial implications for the respondent, given the specialised area of legal practice in which he was employed and it was entitled to do so. Early in its reasons the Tribunal made a somewhat acerbic comparison between the interest charged by the Commissioner and the bank rate of interest. I would have thought that the public interest was best served by doing everything in the Commissioner's power to assist [the respondent] to remain in well paid employment, paying income tax and making repayments at the top rate, rather than forcing him into unemployment and thus rendering [him] and his family beneficiaries of the Social Security system. Although the Commissioner no longer has a priority in the recovery of debts, it seems that old attitudes die hard. Moreover the applicant takes issue with the Tribunal's assessment of the public interest. 49 Whilst I agree that public interest is an irrelevant consideration in determining serious hardship, I do not accept that the Tribunal was distracted from its task by this issue. The comments appear in the Tribunal's reasons as introductory remarks before it moves on to its consideration of the 'serious hardship' test. Furthermore, the Tribunal's conclusions about the issue of serious hardship (see [6]-[11] above) refer only to the perceived impact of the decision upon the respondent or his dependants; there is no mention of the public interest in this context. 50 It seems likely that the Tribunal's references to public interest indicate either that the Tribunal considered this issue relevant to the exercise of its discretion, or were 'throw away' remarks, not considered by the Tribunal to be germane to any aspect of its task. In either case they do not demonstrate legal error. The applicant says that a finding of serious hardship was not open to the Tribunal on the evidence before it and that the decision was totally unreasonable in the sense referred to by Lord Greene MR in Associated Provincial Picture Houses Limited v Wednesbury Corporation [1947] EWCA Civ 1 ; [1948] 1 KB 223 at 229-230. I say "generally" because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is "manifestly unreasonable". ... However, in its application, there has been considerable diversity in the readiness with which courts have found the test to be satisfied. ... But guidance may be found in the close analogy between judicial review of administrative action and appellate review of a judicial discretion. In the context of the latter, it has been held that an appellate court may review a discretionary judgment that has failed to give proper weight to a particular matter, but it will be slow to do so because a mere preference for a different result will not suffice. ... So too in the context of administrative law, a court should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest it exceed its supervisory role by reviewing the decision on the merits. In particular the applicant submitted there is nothing to suggest that bankruptcy, of itself, constitutes 'serious hardship'. The applicant phrased this complaint in terms that the Tribunal did not apply the correct test of 'serious hardship'. I have discussed this issue above at [16]-[20] and I have nothing further to say on that point. However, the applicant's complaint is more appropriately seen as being about the substance of the Tribunal's findings on the evidence and I shall deal with it on that basis. 53 In considering the consequences of bankruptcy for this respondent, the Tribunal quite properly concentrated on the whole of the respondent's individual circumstances. The Tribunal took into account that the respondent's income was 'considerable' but also noted that he would have to work long hours to generate this income. That factor was relevant to the Tribunal's conclusion that it was not unreasonable for the respondent to rent a house close to the CBD with access to public transport and that it did not consider the costs as excessive. He gave evidence of her previous inmacy in a psychiatric institution and her need for ongoing treatment and support. From my own knowledge in other matters before this Tribunal I know that recourse to public hospitals for ongoing psychiatric treatment is inadequate so non public health care is in reality the only option. There is also a requirement for ongoing medication, one drug of which is not on the Pharmaceutical Benefits Scheme. It referred to the detailed account of the wife's illness and the costs it has imposed on the family and concluded that 'none of these costs can be said to be excessive'. 54 In considering the cost of educating the respondent's children, the Tribunal indicated that it would have regarded the cost of attending a school in the Greater Public Schools system as 'excessive in the circumstances' but did not take that view of the considerably lower cost of the Catholic systemic schools that the children attend. 55 Implicitly, the Tribunal was assessing the respondent's individual circumstances by reference to normal community standards. Although the Tribunal's finding regarding bankruptcy was crucial to its decision, the Tribunal's analysis did not stop at this finding. I do not accept that the Tribunal, in effect, found that bankruptcy per se constituted serious hardship. 56 The Tribunal considered the likely effect of not releasing the respondent from his tax obligation (namely, unemployment and bankruptcy) in the context of what the Tribunal regarded were reasonable expenses (accommodation, medical treatment for the respondent's wife, domestic support and education). In so doing, the Tribunal considered whether the respondent would be placed in a situation of need warranting action, or in other words, whether the respondent or dependants would be deprived of necessities. Accordingly, I find that the Tribunal properly applied the correct legal test in reaching its finding that the applicant faced 'serious hardship'. 57 The Tribunal's decision to grant relief to a taxpayer who is in receipt of what, by community standards, is a very substantial income is initially surprising. However, the decision was based on a consideration of the evidence and the respondent's particular circumstances. As the Tribunal saw it, that income was highly vulnerable should the respondent be made bankrupt and, given the complications arising from the wife's illness, it was very likely that serious hardship would follow. On balance, I find that the Tribunal's conclusion was open to it and that the applicant has failed to establish the high standards of unreasonableness required for a decision to be reviewable on the Wednesbury ground. Whilst other minds might reasonably have disagreed with the Tribunal's inferences of fact and ultimate conclusion, the Tribunal's decision was not so unreasonable that no reasonable decision-maker could ever have come to it; see Zizza v Federal Commissioner of Taxation (1999) 42 ATR 371 at [15]. The decision to release the respondent from his tax obligations is clearly discretionary. The applicant submitted that the Tribunal either failed to exercise this discretion, or failed to exercise this discretion properly. The existence of the Tribunal's discretion is not in doubt. Although the issue of discretion is not addressed under a separate heading there is sufficient indication of this throughout the Tribunal's reasons for me to be satisfied that this is so. 61 It was accepted on all sides that the respondent's debt had not arisen because of avoidance or participation in any scheme. The applicant submitted, however, that the Tribunal failed to take into account that the respondent had earned substantial amounts of money in the relevant period without making adequate provision for his tax liability. The transcript of the hearing before the Tribunal shows that the Tribunal questioned the respondent about the issue. The respondent talked at length about the difficulties he had in the law firm where the income that gave rise to the tax debt was generated. He said that the firm had the capacity to reduce his income retrospectively so that amounts that he was anticipating he would receive did not materialise. He also referred to difficulties he had experienced on a family level in moving from interstate at a time when his wife's illness, with consequent medical expenses, first manifested itself. At the same time one child's learning difficulty and another's serious heart condition (now resolved) were diagnosed. The combination of these factors led to his neglecting his financial affairs and not realising that a debt was accumulated. His subsequent drop in income made it impossible to meet the debt. 62 The applicant's second submission was that in taking into account the perceived public interest in having the respondent remain in a high paying job, paying tax at the top marginal rate the Tribunal took into account a consideration that was irrelevant to the exercise of its discretion. The applicant submitted that the discretion in s 340 - 5 (3) allows the Commissioner to take into account only issues relating to the particular taxpayer. 63 As stated above, it is my view that 'public interest' is an irrelevant consideration in determining whether the respondent faced 'serious hardship' however I am not satisfied that it irrelevant to the exercise of the Tribunal's discretion. It is relevant for the Commissioner or, in this case the Tribunal, to consider how the goal of collecting public revenue would best be served. There is nothing in the language of the statute that confines the Commissioner's discretion in the manner suggested by the applicant and the applicant was not able to point to any authority for its proposition. 64 Accordingly, I find that although the Tribunal did not expressly avert to its discretion, it nevertheless exercised that discretion in a proper manner. This ground of appeal must be rejected. 65 For the above reasons I do not find any reviewable error in the Tribunal's reasons and therefore the appeal must be dismissed. 66 At the hearing of this matter the applicant filed a copy a deed entered into between the parties, entitled Deed in relation to funding under the Test Case Litigation Program . The preamble to that Deed states that the purpose of the Test Case Litigation Program is to provide funding for cases that will clarify the law for the benefit of the community and the government. It states that the aim is to develop relevant legal precedents. Under clause 3.5 of the Deed the parties have agreed that irrespective of the outcome of the case they shall not seek costs orders other than in accordance with Schedule C to the Deed. I have some difficulty with the draft orders in Schedule C and, accordingly, I shall hear the parties as to the appropriate form of orders before making any orders as to costs. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. | judicial scrutiny of tribunal decision tribunal's reasons must be read as a whole distinction between issues of fact and law when an inference of fact may demonstrate an error of law grounds for judicial review 'no evidence' ground failure to take into account relevant consideration taking into account irrelevant consideration wednesbury unreasonableness failure to exercise discretion no error of law in tribunal's decision appeal meaning of 'serious hardship' factors relevant to exercise of discretion to release taxpayer from tax liability administrative law taxation |
They arrived in Australia on 18 July 1997 and lodged a combined application for protection visas with the Department of Immigration and Multicultural Affairs on 24 December 1997. On 8 April 1998, the applications were refused by a delegate of the Minister. The applicants sought review of that decision before the Refugee Review Tribunal ("the Tribunal") on 4 May 1998. On 27 March 2000, the Tribunal affirmed the decision of the delegate. 2 The applicant then applied to the Federal Court for judicial review of the decision of the Tribunal. That application was heard by Moore J on 7 September 2000. Both the applicant and the respondent were represented by counsel at the hearing. On 5 October 2000, Moore J dismissed the application and ordered the applicant to pay the costs of the respondent. 3 On 17 June 2003, the applicant filed an application in the High Court of Australia for an order nisi requiring the respondents to show cause why constitutional writs should not be issued in respect of the decision of the Tribunal. The applicant supported her application for an order nisi by an affidavit sworn by her on 16 June 2003. 4 The application was remitted to this Court pursuant to orders made by Gaudron J following the delivery of judgment in Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601. 5 By letter dated 12 November 2004, the District Registrar of this Court notified the applicant that the Court proposed to consider whether there was an arguable case on the basis of the written material that the applicant had given to the Court and without any oral hearing. The applicant was invited to file written submissions on the question of whether the Court should make an order nisi . Written submissions were filed by the applicant on 10 December 2004. 6 I propose to deal with this application on the papers. The doctrine of res judicata represents a complete bar to a new application because the cause of action is extinguished by the judgment: see Anshun at 612-3 per Brennan J. 8 The question to be determined on a plea of res judicata is whether the cause of action relied upon in the proceedings in which the plea is raised is the same cause of action which has been determined in the earlier proceedings. In determining that question, the Court will have regard to the substance rather than the form of the proceedings: Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 36 FCR 406 (affirmed (1993) 43 FCR 510). 9 In the draft order nisi , the applicants claim that the Tribunal failed to afford them natural justice because they had not been given an opportunity (or at least an adequate opportunity) to prepare and present favourable material at the hearing or an adequate opportunity to respond to unfavourable material. In her supporting affidavit, the applicant does not give any particulars of the material that she wished to present to the Tribunal or the unfavourable material that she did not have an opportunity to respond to. There is no evidence before me that would support the applicant's claim that she was denied natural justice. 10 The submissions filed by the applicant on 10 December 2004 raise a number of grounds of review. First, the applicant submits that the Tribunal erred in failing to determine whether, on the totality of the facts found, she had a well-founded fear of persecution. Secondly, it is argued that the Tribunal misunderstood the elements of the definition of a refugee under the Convention which were supported by the facts of the case. Thirdly, the applicant says that the Tribunal erred in finding that women in India and/or Sikh women did not constitute a social group for Convention purposes. Fourthly, the applicant claims that she was denied procedural fairness as the Tribunal forced her to attend the hearing despite the fact that she had informed it of her psychological condition. Finally, the applicant made a number of claims regarding the merits of the decision of the Tribunal. In particular, the applicant says that the Tribunal did not realise that she suffered because of her husband's involvement in the Sikh movements and that she has a fear of harm by the Indian police authorities, who have provided her with no protection. 11 The grounds of review before Moore J were, in substance, the same as the first and third grounds outlined in the applicant's written submissions in the present case. First, it was argued that the Tribunal failed to determine whether, on the totality of the facts as found, the applicant had a well-founded fear of persecution. Second, it was said that the Tribunal erred in finding that women in India, or Sikh women, did not constitute a particular social group. Each of these errors was said to constitute an error involving an incorrect interpretation of the applicable law or an incorrect application of the law to the facts, and thus to amount to errors of law pursuant to s 476(1)(e) of the Migration Act 1958 (Cth). Accordingly, the doctrine of res judicata applies to the present application because, in substance, it seeks review of the same Tribunal decision that was the subject of the applicant's previous judicial review application. The facts giving rise to the right to review are the same and the grounds of review are the same. The right to relief in each case is informed by the same principles of substantive law and the proceedings do not differ in any material respect. 13 I have considered the reasons for decision of the Tribunal and can see no reviewable error of principle or law which would warrant further consideration of the applicants' case. 14 The application for an order nisi should therefore be dismissed with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | application for review of decision of refugee review tribunal doctrine of res judicata migration |
The respondents include three companies which are members of the Visy group and two individuals, Mr Richard Pratt and Mr Harry Debney, who are officers of that group (collectively, the Visy respondents). The sixth respondent, Mr Rod Carroll, is a former officer of the group and is separately represented. 2 The ACCC alleges that these unlawful arrangements were made between Visy and companies in the Amcor group. The genesis of this proceeding is an unrelated action which Amcor took in late 2004 against some of its former officers. Amcor was granted an Anton Piller order. On viewing some of the documents obtained on the resultant search Amcor and its solicitors took the view that they disclosed contraventions of Pt IV by Visy and Amcor. Amcor reported the matter to the ACCC, which subsequently granted it and its officers an immunity. 3 The present proceeding was commenced on 21 December 2005. The ACCC has filed an amended statement of claim but as yet no directions have been given for any pleading by the respondents. 4 Before the Court is a notice of motion filed on 9 February 2006 by the ACCC seeking an order against itself that it produce to the respondents the documents referred to in the amended statement of claim and that inspection of certain of those documents, identified in schedule A to the notice, be limited to counsel and solicitors for the respondents upon them executing undertakings as to confidentiality. 5 What provoked this motion was a notice to produce served on the ACCC by the Visy respondents under O 15 r 10 of the Federal Court Rules seeking production of all documents referred to in the amended statement of claim, without any restrictions as to confidentiality. 6 The real dispute on the motion is between Amcor, which was given leave to appear on this issue, and the respondents. Amcor says that certain information contained in the documents is confidential and would be highly damaging to it if released to the Visy group which is its principal trade rival in the Australian market for the supply of corrugated fibre packing (CFP). In a document which is an amendment to schedule A, Amcor identifies allegedly confidential information contained in 21 documents which it submits should be redacted (blanked out) from documents shown to the respondents. Amcor says this information should only be shown to the respondents' counsel and solicitors. 7 To understand the issues that have arisen it is necessary to make brief reference to the amended statement of claim, a complex document extending to 134 pages. 8 There then follow allegations of 17 instances in which arrangements were allegedly made which gave effect to the Over-arching Understanding either by agreeing on price increases or agreeing to swap or keep particular customers. By way of example, at pars 73-90 the amended statement of claim deals with what is called the "GFL & Nestlé Price Understanding". The allegations are as follows. 9 Paragraph 73 : In early 2001 Visy and Amcor arrived at an understanding that Visy would not seek to enter into contracts for the supply of CFP to GFL and Nestlé, two of Amcor's principal customers, and that if GFL or Nestlé required Visy to provide a quote Visy would quote prices higher than the prices Amcor quoted to GFL and Nestlé. This understanding was partly oral and partly to be implied. Insofar as it was oral it was arrived at in the course of conversations between Mr Carroll on behalf of Visy and Mr Laidlaw on behalf of Amcor at which Mr Laidlaw said to Mr Carroll "words to the effect that he understood that Visy was to 'cover' Amcor on the upcoming tenders for the GFL and Nestlé CFP accounts" and Mr Carroll said Mr Laidlaw's understanding was correct. The understanding was also said to be implied from the conduct of Visy and Amcor alleged in pars 77-87. 10 Paragraphs 74-76 allege the various ways in which the GFL & Nestlé Price Understanding contravened the Trade Practices Act . 11 Paragraph 77 : In March-April 2001 Mr Carroll and Mr Laidlaw had a discussion in which Mr Carroll said Visy was not interested in picking up the GFL account. Mr Laidlaw provided Mr Carroll with some of Amcor's proposed average dollars per tonne prices for its tender for the GFL account and Mr Carroll said that Visy, in its tender to GFL, would quote prices above the prices provided by Mr Laidlaw. 12 Paragraph 78 : On about 11 April 2001 Visy submitted a tender proposal to supply CFP to GFL. 13 Paragraph 79 : On about 27 April 2001 Amcor provided a tender proposal to supply CFP to GFL. 14 Paragraph 80 : On about 21 May 2001 Mr Pratt and Mr Jones of Amcor had a meeting at the All Nations Hotel in Richmond at which, amongst other things, Mr Jones asked Mr Pratt to confirm that there was an arrangement in place which "involved the prevention of major market share shifts". Mr Jones said he needed to know that Visy would honour the arrangement and that Visy would not try to take the GFL and Nestlé accounts away from Amcor. Mr Pratt confirmed this. 15 Paragraph 81 : In Visy's tender proposal (par 78) and Amcor's tender proposal (par 79) (a) Visy's prices were higher than Amcor's prices and/or (b) GFL "held the belief" that Visy's prices were higher than Amcor's prices. 16 Paragraph 82 : On 8 June 2001 Amcor reached "informal agreement" with GFL for Amcor to supply CFP to GFL. 17 Paragraph 83 : On 23 November 2001 Amcor and GFL entered into a written agreement for Amcor to supply CFP. 18 Paragraph 84 : Between June 2001 and February 2002 Amcor and Nestlé were involved in negotiations for a new CFP supply agreement in which Amcor sought to obtain an increase of approximately 54 per cent. 19 Paragraph 85 : Between July 2001 and February 2002 Mr Carroll and Mr Laidlaw discussed the Nestlé account. Mr Carroll said that Visy's negotiations had not progressed and expected Amcor to retain the account. 20 Paragraph 86 : On about 11 February 2002 Amcor reached an informal agreement with Nestlé for a 37 per cent price increase without Nestlé seeking a formal proposal from Visy. 21 Paragraph 87 : On 23 December 2002 Amcor and Nestlé entered into a written supply agreement. 22 Paragraph 88 : Visy engaged in the conduct alleged in pars 77, 78, 80 and 85 pursuant to the Over-arching Understanding and/or the GFL & Nestlé Price Understanding. 23 Paragraphs 89 and 90 allege various contraventions of the Trade Practices Act . 24 For present purposes the documents in dispute are those referred to in par 83 (the Amcor/GFL supply agreement) and par 87 (the Amcor/Nestlé supply agreement). 25 As to the Amcor/GFL supply agreement the information said to be confidential includes two clauses, 3.2 and 3.3, and also price figures and formulae. Amcor says the content of the clauses cannot be described because the commercial secrecy arises from the fact that such clauses exist in the agreement. As to the Amcor/Nestlé supply agreement, the information said to be confidential consists of certain figures including current annual sales and proposed annual sales. 26 In support of Amcor's case Mr Paul Ward, its General Manager Sales and Marketing, deposed that information of the kind mentioned would enable Visy "to calculate with significant accuracy (or at least with reasonable accuracy)" Amcor's pricing to customers. This would place the Visy group in a position of commercial advantage at a time when supply arrangements became open to renegotiation. Also he says that in a typical supply contract there is a specified base price and variations. This would enable a competitor to estimate current prices at any time during the contract period, including at the end of it. Amcor would also seek to keep confidential information as to the term of its existing contracts because it would be a commercial advantage to Visy to know when existing Amcor supply contracts were due to end. 27 The Visy respondents filed an affidavit by their solicitor, Mr Robert Heathcote of Arnold Bloch Leibler. Mr Heathcote deposed as to his belief in certain features of the conduct of the CFP market from information supplied by Mr Debney. As to the term of agreements, Mr Heathcote says that the term of a current arrangement between Amcor and one of its customers is information generally available to Visy either as a result of previous tenders or proposals made on behalf of Visy to those customers or often because customers provide that information to Visy to create competitive tension in a tender process. An example of this is the disclosure in relation to the term of the Amcor/Nestlé agreement, a matter already known to Visy. 28 As to the question of price, Mr Heathcote says that the initial price and pricing variations during the term of a contract are only some of the factors that customers take into account in assessing competing proposals to determine the overall costs and benefits of a contract. As senior counsel for Mr Carroll pointed out, of the 21 documents in issue, nine were provided to the ACCC by customers of Amcor. These are the documents referred to in pars 79, 114, 119I, 163FF, 163NN, 163OO, 184, 187H and 187K of the amended statement of claim. There is no suggestion, let alone evidence, that these documents were provided by Amcor to its customers in circumstances which imposed obligations of confidentiality on them. The consequence is that the customers were free to make such use of the documents as they saw fit, including making them available to a law enforcement agency such as the ACCC. Any confidentiality which might have attached to these documents has been lost. 31 In determining whether there has been an understanding for fixing prices, or a giving effect to such understanding, the relevant price may not necessarily be just a dollar figure: cf Australian Competition and Consumer Commission v McMahon Services Pty Ltd (2004) ATPR 41-996 at [22]. Allegations in the amended statement of claim itself indicate that this may be so in the present case. As has been mentioned, the alleged Over-arching Understanding includes a provision that the minimum price for supply by Amcor was to be $1250 and the price for Visy $1150. The particulars sub-joined to that paragraph include (sub-par (b)(ii)(B)(6)) an allegation that Mr Debney said to Mr Brown of Amcor that the price for Visy should be lower "having regard to Visy's different cost structure and different product mix". Another example is in the case of the alleged GFL & Nestle Price Understanding. Paragraph 81 alleges that in relation to the prices proposed to GFL by Visy and Amcor, Visy's prices were higher than Amcor's prices "and/or GFL held the belief that Visy's prices were higher than Amcor's prices". This rather suggests that GFL engaged in some form of analysis going beyond a comparison of two dollar figures. Similar allegations are made in relation to the understandings involving other customers. Also Mr Ward speaks of calculating a price "with reasonable accuracy". 32 Accordingly, it may (I stress these are early days) become an important part of the case to assess dollar figures charged to customers in the context of the various factors of which Mr Heathcote speaks to see whether there was an understanding on a price or a giving effect to that understanding. I do not see how the Visy respondents could adequately deal with issues of this kind without input from the individual Visy respondents and other officers of the Visy companies who are familiar with these factors and how they impact on ultimate dollar figures. Counsel for Amcor suggested that an independent expert such as an accountant be interposed, but this would be a cumbersome and inadequate substitute. 33 In contrast to discovery under O 15 rr 1, 5 or 8, production under O 15 r 10 does not depend on any leave being given by the Court. The reason is obvious enough. When a document is directly relied on by an opposing party, basic procedural fairness would require that a party be able to inspect the document, if only to see whether it is what it is alleged to be. It may be that the only options available to the party served with an O 15 r 10 notice are those set out in sub-rule (2), viz, production, claiming privilege, or stating that the document is not in his possession and where he believes it is. On this basis confidentiality, either of the party receiving the notice or an outsider, would not be relevant since confidentiality is not one of the recognized grounds of privilege: Ex parte Fielder Gillespie Limited [1984] 2 Qd R 339 at 341. 34 It is not necessary to decide this question because, assuming the confidentiality claimed by Amcor to be relevant, it is nevertheless outweighed by the centrality of the documents in question to the case against the respondents and the case they seek to make. In this regard I note that the leading Australian case on confidentiality in relation to the production of documents in litigation, the decision of the Victorian Court of Appeal in Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, dealt with ordinary discovery and not any equivalent of O 15 r 10. Hayne JA pointed out (at 39) that the information in the documents in question, which related to calculations of the proposed financial return to the plaintiff's rival bidders for a construction contract, was not directly in issue. The material did not bear on the case which the plaintiff sought to make (at 41). 35 By the end of the hearing it was common ground that if disclosure was not to be limited in the way Amcor sought then no express formal undertakings were required. The parties and their legal representatives are bound by the rule in Harman v Secretary of State for the Home Department [1983] AC 280 which says that parties and their legal representative obtaining documents in the course of discovery in litigation give an implied undertaking to the court not to use the documents, or allow them to be used, for any purpose other than the proper conduct of the proceeding. 36 There will be an order that the ACCC produce to the respondents the documents referred to in the amended statement of claim. The motion is otherwise dismissed. The parties may, within seven days, file written submissions as to costs. 37 Finally, two matters should be mentioned. First, there was some mention of s 157 of the Trade Practices Act . In view of the outcome under O 15 r 10 there is no need to rely on that provision. However, I should note that I am inclined to the view that the section is not concerned with documents on which the ACCC relies. Rather, it is directed towards documents obtained by the ACCC "which tend to establish the case of the corporation or other person": subs (1)(e). The "other person" is a natural person (as distinct from a corporation) against whom a proceeding is instituted: subs (1)(c). In Trade Practices Commission v TNT Management Pty Ltd (1981) 39 ALR 665 at 671 Bowen CJ thought that the section did not extend to documents which might suggest some line of inquiry which could be of assistance to the corporation in conducting its case, although a document tending to impeach the plaintiff's case did tend to establish the defendant's case within the meaning of the section. This reasoning is inconsistent with the section applying to documents which only support the ACCC's case. Anyway, if this were not the case, the section would have simply referred to all relevant documents. 38 Secondly, the Visy respondents, in an argument adopted by Mr Carroll, submitted that in disclosing the documents to the ACCC, Amcor "must have known it was inevitable that documents such as these would be used in proceedings commenced by the ACCC against Visy, and took the risk of disclosure when facilitating serious proceedings against its major trade rival". 39 This argument should be firmly rejected. In disclosing to the ACCC (and also the Australian Stock Exchange) what it believed, on legal advice, to be unlawful conduct Amcor was complying with its legal obligations. The Court could not use Amcor's lawful action as a ground for depriving it of rights it might otherwise have. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | allegations of price fixing and market sharing arrangements contrary to pt iv of the trade practices act 1974 (cth) immunity granted to other party to alleged arrangements (amcor) confidentiality of contents of amcor documents whether amcor documents referred to in amended statement of claim should be produced to respondents procedural fairness centrality of documents to case against respondents use of documents produced to be restricted to proper purposes harman undertaking implied construction of s 157 of the trade practices act relevance of amcor disclosing documents to accc trade practices |
The only remaining issue to determine is whether the Court should order ACI to pay Mr Williams compensation under s 298U(c) of the Workplace Relations Act 1996 (Cth). The Union only seeks compensation for non-economic loss which it alleges Mr Williams suffered. 2 The parties provided written submissions to the Court dealing with the claim for compensation for non-economic loss. It said that an award of that type has yet to be made. The statutory phrase is aimed at giving the Court maximum power and flexibility [to] do what it thinks appropriate in the circumstances. Further, the phrase in section 298U(f); "any other consequential orders" in my opinion, refers to orders consequential upon any order of a kind falling within ... subs (b), (c) or (e). "Compensation" is a broad concept which should not be interpreted in a narrow way. In an appropriate case the Court is able to order compensation for non-economic loss. There is nothing in the scheme of the Act to support the contrary view. I agree, with respect, with the views of Madgwick J as to the flexibility the Court possesses to, in effect, correct injustice by the ordering of compensation beyond the mere reimbursement of lost wages. 5 ACI submitted that if the Court held that it had the power to make an order for compensation which took into account non-economic loss it should be guided by the principles for the award of non-pecuniary loss which have been developed in unfair dismissal jurisprudence. To ensure compensation is confined within reasonable limits, restraint is required. But in this case there were unusual exacerbating circumstances that make it appropriate to include in the compensation an allowance for the distress unnecessarily caused to Ms Burazin. These circumstances include Ms Burazin having to suffer the humiliating experience of being escorted from Blacktown's premises by the police. Having regard to these circumstances, the compensation assessed by the trial judge should be increased by the sum of $2000, to $5,000. It said that there was no evidence about any "unusual exacerbating circumstances" associated with the manner of his termination. 7 The Union submitted that the passage in Burazin relied upon by ACI did not articulate a "benchmark test" but only stated why, on the facts before the Court, compensation for distress was appropriate. The Union contended that there is no warrant for limiting compensation for non-economic loss to situations which are "unusual and exacerbating. First, it said that he was not permitted to leave his work premises in a dignified way but was pressed to leave the factory quickly with security summoned. Second, it said that Mr Williams' sudden unemployment caused him stress and tension as a result of his family losing the income of its sole breadwinner. 9 The Union conceded that Mr Williams gave no evidence about the impact of ACI's treatment on him on the day of his termination. It further accepts that some restraint is called for but contends that, in the circumstances, some compensatory order should be made. It also submitted that some compensation should be given to Mr Williams as a result of his affidavit evidence that his termination caused him shock and emotional strain and placed his relationship with his wife under pressure. The affidavit evidence referred to at [9] above was filed in support of an application for an urgent interlocutory order for reinstatement. The Court, to a large degree, accommodated the concerns of the parties about delay by giving the matter an urgent trial. A prompt judgment was later given. ACI co-operated in effecting the swift reinstatement of Mr Williams. In those circumstances I do not consider that it is appropriate to make an order for compensation for non-economic loss. The stress and uncertainty suffered by Mr Williams and his family was short lived. Any amount of compensation ordered would only be nominal and not worth imposing on ACI which appears to have accepted Mr Williams back into its fold. It has taken no step to seek to stay or delay reinstatement after the Court's judgment of 18 November 2005. 11 I make no order as to compensation in the circumstances of this case. To do otherwise would not be acting with restraint. In my view Burazin establishes that something more is required for compensation for non-economic loss than the usual element of distress which accompanies most terminations. Whilst "unusual and exacerbating circumstances" is not necessarily the yardstick, there must be something attending a termination which justifies an order for non-economic loss. Such an order may have been made in this case had Mr Williams given evidence of the effect on him of his ejection from his workplace by security personnel. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | application for compensation for non-economic loss under s 298u(c) of the workplace relations act 1996 (cth) whether appropriate to award compensation for non-economic loss circumstances in which non-economic loss should be compensated evidence required to support claim for compensation for non-economic loss industrial law |
By an interlocutory application filed in Court on 23 May 2006 in the same proceedings ASIC now applies for the appointment of receivers to a further Westpoint Company, Keypoint Developments Pty Ltd (ACN 115 507 232) (Keypoint). That company is named as ninth defendant. 2 The ASIC application is brought under s 1323 of the Corporations Act 2001 (Cth). Counsel for Keypoint indicated that it is not opposed. 3 Most of the affidavit evidence relevant to the appointment of receivers ordered on 20 April 2006 was also relied upon in the present application. The factual background disclosed by those affidavits is as set out in the earlier judgment and it is unnecessary to repeat it here. The affidavit of Brian Keith McMaster, one of the receivers already appointed to the other defendants --- 4 May 2006. 2. The affidavits of Nicholas Emil Gvozdin, the solicitor for ASIC --- 5 and 18 May 2006. 3. The affidavit of Rodney James Edgell, an officer of Westpac --- 9 May 2006. 4. Five affidavits of Cheryl Lorraine Harrison, process server --- 28 April 2006 (x 2) and 1 May 2006 (x 3). 5. The affidavit of Kevin Mayfield, process server --- 12 April 2006. 6 ASIC relies upon five matters which it submits warrant the appointment of receivers to Keypoint. The assignment to Lanepoint Enterprises Pty Ltd (Lanepoint) by Westpoint Corporation on 10 January 2006 of a debt of $429,105.14 owed to it by Keypoint --- as appears from Mr Zohar's first affidavit. Alan Carey, a brother of Norman Carey, is the sole director of Lanepoint. All of its issued capital is owned by Bowesco Pty Ltd (Bowesco). The effect of the assignment, on ASIC's submission, was to take an amount available to the creditors of Westpoint Corporation and to put it in the hands of another company in the Westpoint Group controlled by Mr Norman Carey's brother. 2. On 24 and 25 November 2005, payments were made from Westpoint Corporation to Bowesco ($1.15 million), Renaissance Mezzaine Pty Ltd ($1 million) and Richstar Enterprises Pty Ltd ($1.37 million) (Richstar). The moneys paid to Bowesco were the subject of two 'Round Robin" transactions referred to in the earlier judgment at [54] to [65]. After completion of the Second Round Robin, $200,000 of the original $1.15 million paid by Westpoint Corporation to Bowesco was used by Keypoint for making payments to a number of its creditors as well as various creditors of Lanepoint and Keyworld Investments Pty Ltd. The effect of the transactions was that Keypoint used $200,000 which, it is said, properly belonged to Westpoint Corporation for the purpose of satisfying its creditors and the creditors of other companies within the Westpoint Group controlled by Norman Carey and his relatives. 3. The third transaction relied upon is the electronic transfer on 31 March 2006 of $875,000 from Richstar to Keypoint in breach of ASIC preservation orders made by Siopis J on 30 March 2006. The evidence is that Mr Norman Carey caused the sum to be electronically transferred but at the time was not a director of either company. ASIC submits that even accepting Mr Carey's explanation that the transfer was carried out before he was personally served with Siopis J's orders, it is a matter for concern that he did not bring the transaction to the Court's attention. Moreover when Mr McMaster asked Mr Carey to repay the sum of $875,000 to Richstar he did not agree to do so, but said he wanted to think about it. ASIC contends that the circumstances surrounding this transaction raise serious concerns about those controlling Keypoint and the use of that corporate vehicle by Mr Carey. 4. The fourth transaction involves an attempt by Mr Carey to withdraw $600,000 from a Keypoint account which then had a balance of $1.06 million, including the sum of $875,000, and to pay that sum to Gemspark Pty Ltd (Gemspark). Gemspark's sole director and shareholder is Mr Carey's sister, Karen Sandra Carey-Hazell. ASIC submits that at the time of this attempted transaction Mr Carey knew that the bulk of the funds held by Keypoint had come from the Richstar payment of $875,000. ASIC contends that this conduct casts further doubt over Mr Carey's bona fides and his excuse for effecting the transfer of $875,000 to Keypoint. 5. The affidavit of assets and liabilities served on behalf of Richstar disclose that it had lent the sum of $917,739 to Keypoint on an unsecured basis. That included the sum of $875,000 paid on 31 March 2006. In addition to that sum, which has been the subject of a repayment order by the Court, Keypoint also holds $42,739 lent to it by Richstar on an unsecured basis. ASIC contends that that money properly belongs to Richstar and should be returned to it forthwith. 8 I am satisfied that the circumstances disclosed by the affidavits relied upon by ASIC and in particular the five transactions asserted, make it necessary and desirable for the purpose of protecting the interests of creditors of companies in the Westpoint Group and in particular creditors of Westpoint Corporation and Richstar, that a receiver be appointed to the assets of Keypoint in terms similar to the appointment of receivers to the other defendants. 9 I will therefore make an order in terms of the order sought by ASIC save that I will deal with the question of the payment of the receivers of all of the corporate defendants in a separate decision shortly. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | appointment of receivers to property of corporation pending investigation by australian securities and investments commission possible contraventions of corporations act 2001 (cth) possible liability of corporation to third parties orders necessary and desirable receivers appointed. corporations |
In Victoria, the Department of Transport (Victoria) (the DOT ) (through the Victorian Taxi Directorate (the VTD )) administers taxi-cab licences: ss 140 , 143 , 143A and 2 (1) of the Transport Act . The "Multi Purpose Taxi Program" (the MPTP ) is a program administered by the DOT, through the VTD, which provides a 50% subsidy of the metered taxi-cab fare (up to a specified maximum per trip and a specified maximum per year) for taxi-cab travel to Victorian residents who suffer from a severe and permanent disability and are unable to independently access public transport (a MPTP Member ). Every taxi-cab licence requires the taxi-cab to be fitted out to facilitate the implementation of the MPTP and to be operated in accordance with the terms of the MPTP. The metered taxi-cab fare payable by a MPTP Member is calculated at the end of the taxi-cab ride. The MPTP Member pays the metered taxi-cab fare, less the subsidy. The taxi-cab trip undertaken by the MPTP Member is reported to the VTD. The DOT pays the MPTP subsidy to the taxi-cab operator (a taxi-cab operator ) (this term includes both a licence holder and an assignee of the rights under a licence --- see [8] and [15] below) or, if the MPTP Member paid the whole of the fare, the DOT pays the MPTP subsidy to the MPTP Member. The DOT was registered under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (the GST Act ). The question for determination is whether the DOT is entitled to input tax credits under s 11-1 of the GST Act for the GST component of the payments made to taxi-cab operators under the MPTP from October 2006 to April 2007? The DOT abandoned any claim for input tax credits with respect to the GST component of the payments of the MPTP subsidy paid directly to MPTP Members. For the reasons that follow, the question for determination should be answered "Yes". One aspect of that function, of course, is the licensing and operating of taxi-cabs in Victoria. This is provided for in Pt VI of the Transport Act entitled "Traffic Regulation, Registration and Licensing". Two provisions of Pt VI should be noted. First, Pt VI binds the Crown in all its capacities (s 88) and, secondly, no compensation is payable to any person in respect of, or as a consequence of, any decision to grant, issue, renew, reject, cancel, suspend or revoke any licence under Pt VI or to add, alter or vary any condition or term of or attached to any licence under Pt VI (s 90). A motor vehicle is deemed to operate as a "commercial passenger vehicle" if passengers are carried for hire or reward: ss 87 and 86 (definition of commercial passenger vehicle). A "taxi-cab" is a commercial passenger vehicle used or intended to be used for hiring by the public on demand and which operates by being hailed, or from a taxi-cab stand or from being previously booked: s 86. A commercial passenger vehicle (which includes a taxi-cab) cannot operate unless it is licensed under Div 5 of Pt VI: s 139. In the case of a taxi-cab, "operate" means to carry passengers for hire or reward and includes to ply or stand for hire or to use the taxi-cab in any other way for the purpose of carrying passengers for hire or reward: s 86. An "operator" in relation to a taxi-cab means either the holder of a licence under which the taxi-cab is operated or if the right to operate has been assigned under the Transport Act , to that person while the assignment remains in force: s 86. A "taxi-cab licence" is defined to mean a commercial passenger vehicle licence in respect of a vehicle which operates or is to operate as a taxi-cab: s 86. On application by the owner of a commercial passenger vehicle, a commercial passenger vehicle licence is granted to the owner by the licensing authority: s 139(2). "Owner" includes every person who is the owner of a commercial passenger vehicle and any person who has the use of a commercial passenger vehicle: s 86. The form of the application for licence is prescribed and must be accompanied by the prescribed application fee: ss 140 and 147B . An annual licence fee is payable: ss 147A and 147B . There are currently 4,614 taxi-cab licences issued in Victoria. The grant of taxi-cab licences is provided for in s 143. Each commercial passenger vehicle licence has a number of implied conditions including that the vehicle is not to be operated by any person other than the owner or a person employed by the owner: s 144(1)(c). Moreover, other licence conditions may be imposed including: that reasonable fares or hiring rates be charged for taxi-cabs as determined by the Minister: s 144(2)(d)(i) ; "such other conditions appropriate to the services to be provided as the licensing authority thinks proper to impose in the public interest": s 144(2)(g). Twenty one different licences are currently in operation in Victoria. The conditions attached to each licence vary according to the type of licence issued. A copy of the various licence conditions imposed on taxi-cabs from October 2006 to April 2007 was tendered in evidence. By way of example, both the DOT and the respondent referred to the "Conditions Governing Operation of Metropolitan Zone Taxi-Cabs" which attached to taxi-cab licences operating in the metropolitan area and took effect from 1 April 2005. Conditions governing fares and hiring rates were set out in section 2 of that document and included that: The only fares and hiring rates permitted to be charged were those specified in the "Schedule of Hiring Rates" attached or approved by the VTD from time to time: condition 2.1. Where the driver of the vehicle processed a non electronic MPTP transaction in accordance with condition 2.5 (see [11(4)] above), the driver was obliged to complete a paper voucher which the MPTP Member signed if able to do so: condition 2.6. The paper voucher could then only be submitted for reimbursement through an approved depot specified in the licence attached to the vehicle in which the hiring was undertaken: condition 2.7. As noted above, a schedule entitled "Processing taxi fares subsidised by the [MPTP]" was attached to the licence conditions. The "General Requirements for MPTP Trips" provided, in part, that: The taxi-cab meter must be switched on and operating for all trips and the metered fare must be used for payment claims, whether claims are made using the EFTPOS terminal or made using paper vouchers. Where the MPTP Member is capable of retaining the card, the Member and the Member's card relating to that payment must be present at the completion of the trip when the payment is processed. MPTP trips cannot be pre-paid using the EFTPOS system. If a MPTP Member is severely disabled and unable to retain possession of the card, and the card is held by the Member's carer at the trip start location, a paper voucher can be prepared at the commencement of the trip and the metered fare entered on the voucher at the end of the trip. If a MPTP Member is severely disabled and unable to retain possession of the card, and the card is held by the Member's carer at the end of trip location, the card must be presented at the end of trip location for processing on the terminal. The MPTP Driver Guide for electronic payments in operation during the relevant period was also in evidence. The Guide was given to taxi-cab drivers when they received an "MPTP Driver Card" (see [22] below). The Guide contains much of the same information as that set out in [13] above. At all times during the currency of the commercial passenger vehicle licence, the licensing authority retains the right to cancel the licence or alter the conditions attached to the licence (see s 146 and Banks v Transport Regulation Board (Victoria) [1968] HCA 23 ; (1968) 119 CLR 222) and, in stipulated situations, to revoke or suspend the licence (s 157) or cancel it (s 153). Commercial passenger vehicle licences can be subject to transfer and the right to operate a taxi-cab under a licence can be the subject of an assignment: ss 149 and 150. When a licence is not under assignment, the licence holder is both licence holder and "operator". Any application by a driver for a certificate had to be in the approved form and accompanied by the appropriate application fee: s 156(1) and (1A). A driver's certificate could be granted subject to conditions: s 156(2). A pro-forma driver's certificate was tendered in evidence. The certificate provided for the imposition of conditions on the type of licensed vehicle the driver intended to drive. Although operators can themselves manage a taxi-cab, they can also do so through a separate agreement with an entity described as a "driver", such agreement usually being in the form of a bailment agreement. The licensing authority retained the right during the currency of the driver's certificate to vary, revoke or impose new conditions attached to the certificate (s 156(5)) and, in stipulated situations, to revoke or suspend the certificate (s 157). Finally, the driver and owner of any licensed commercial passenger vehicle which operates "otherwise than in accordance with the provisions or conditions of any licence, permit or other authority" under Div 5 of Pt VI is guilty of an offence: s 158(3). As noted earlier, it is administered by the DOT, through the VTD. It provides a 50% subsidy of the metered taxi-cab fare (currently, up to a specified maximum per trip of $60 and a specified maximum per year of $2,180) for taxi-cab travel to MPTP Members. Other States operate similar programs although the rates of subsidy vary between States. In Victoria, the budget for the MPTP for the 2008 / 2009 financial year was $44.4 million. Approximately 4.44 million trips were taken by MPTP Members in the 2008 / 2009 financial year. There are presently 187,000 current MPTP Members. 98,000 of those Members used their MPTP card more than once in the last twelve months. MPTP cards cost $16.50 and are valid for six years. A functional specification of the MPTP published by the VTD was in evidence (the Specification ). When an MPTP member takes a trip in a taxi they are only required to pay the taxi driver 50% of the fare up to a maximum value of $25. The trip data is sent via Cabcharge to the VTD. VTD process the trip data and calculates the amount due to the taxi driver on each MPTP trip, and authorises [DOT] to make the outstanding payment to the depot. The depot is responsible for reimbursing the taxi driver for the amount owed on MPTP trips. This prevents the taxi driver from manually entering the metered fare onto the terminal. The fare is automatically transferred to the terminal at the completion of the hiring. The card has the driver's unique Driver Accreditation number and name printed on the front or back. The Driver Accreditation number and the driver's unique pin are stored on the smart card chip. The card has a unique number identifying the member and the member's name embossed on the front. The member number is stored on the smart card chip. This is done at the start of a shift. The driver cannot use the EFTPOS systems unless it is logged on. The system checks that the Driver MPTP Card has not been cancelled or expired and that the pin code is correct before allowing a successful log on. The system checks that the Member MPTP Card has not been cancelled or expired before authorising the card. When the trip is finished and the hiring complete, the driver presses a button on the EFTPOS terminal to identify that the trip has finished. If there is an interface between the taximeter and [the] EFTPOS terminal the fare displays automatically on the EFTPOS terminal. This is a separate transaction and the Member MPTP Card is not used in this transaction. MPTP Member cards identify whether a Member is a wheelchair user and any MPTP payment automatically attracts the wheelchair lifting fee. Details of trips (including the driver's Driver Accreditation number, taxi-cab number, the time the MPTP Member's card was inserted and authorised, the fare amount, the subsidy amount and the date and time the trip commenced and was completed) are stored on the EFTPOS modem computer in each taxi-cab and sent to the Cabcharge host computer whenever the taxi-cab is within range. Cabcharge then sends a file to the VTD every eight hours with the messages collected at the Cabcharge host as well as paper vouchers keyed into the system in the previous eight hours. The VTD processes these messages and makes electronic payments to the network service provider (the NSP ) used by the taxi-cab operator or Cabcharge (at the relevant time, the NSP was known as a "depot"). The bulk amounts transmitted to the NSP or Cabcharge are supported by a remittance advice that details individual amounts for each relevant taxi-cab trip for each NSP for that day. Each payment made by the VTD under the MPTP includes GST. The GST paid flows through to the Business Activity Statement (the BAS ) reports of the DOT and on to the monthly BAS Return as an input tax credit. The facts of this case demonstrate that proposition is easier to state than to apply. Liability for GST arises where a registered business entity supplies goods or services in the course of carrying on an enterprise to its customers. These are called "taxable supplies". The supplier accounts for the GST. If the recipient of the goods or services is a registered business entity, it will normally be able to claim a credit (described as an "input tax credit") for the amount of the GST it has paid. The input tax credits are then offset against any GST on goods and services that the recipient supplies to its own customers. Registered business entities are the collecting agencies of GST. Entities receive an amount representing GST but do not keep it, and when obliged to pay GST, get a credit for the amount paid. The ultimate burden of the GST falls on the private consumer of the goods and services who gets no credit for the GST they pay: see also HP Mercantile Pty Ltd v Commissioner of Taxation [2005] FCAFC 126 ; (2005) 143 FCR 553 at [10] - [13] and [20]-[23]. The two central concepts of the GST Act are "supply" (s 9-10 definition of "supply") and "acquisition" (s 11-10 definition of "acquisition"). The express words of the GST Act, together with the explanatory memorandum (paras 3.6 and 3.21) and the supplementary explanatory memorandum (collectively the memoranda ) which introduced the GST Act, indicate a legislative intent that the concepts of "supply" and "acquisition" are to be interpreted widely. The issue in this case concerns the entitlement of the DOT to input tax credits for the GST paid by it in the payment of the subsidy under the MPTP to taxi-cab operators (see [2]-[3] above). Section 11-20 provides for there to be an entitlement to an input tax credit for any "creditable acquisition" made by a taxpayer. The expression "creditable acquisition" is defined in s 11-5. Relevantly, there must be an acquisition which is solely or partly for a creditable purpose: s 11-5(a). The acquisition must arise from a supply to the taxpayer which is a taxable supply: s 11-5(b). Thus, in addition to ss 11-5(a) and (b) referred to by Hill J in HP Mercantile [2005] FCAFC 126 ; 143 FCR 553 , it is necessary to refer to sub-paragraphs (c) and (d). The taxpayer must provide, or be liable to provide, consideration for the taxable supply (s 11-5(c)) and be registered for GST (s 11-5(d)). There is no dispute in this case in relation to sub-section (d). The dispute is whether the other paragraphs of the section are satisfied. More particularly: is there a acquisition which is solely or partly for a creditable purpose? (par (a)); does the acquisition arise from a supply to the taxpayer which is a taxable supply? (par (b)); and does the taxpayer provide, or is the taxpayer liable to provide, consideration for the taxable supply? (par (c)). Section 11-10(1) provides that "[a]n acquisition is any form of acquisition whatsoever". As Hill J said in HP Mercantile [2005] FCAFC 126 ; 143 FCR 553: .... What a creditable purpose is will be found from s 11-15. In both the GST provision and the income tax provisions, there is a need to pass first through a positive test. In the case of GST, the positive test is the requirement that the acquisition has been in whole or in part acquired in carrying on an enterprise. In the income tax context, there is the need to find that the loss or outgoing be incurred in gaining or producing assessable income, or in carrying on a business. In both cases apportionment arises where the positive test is only partly satisfied. Next, both require consideration of negative tests which exclude the allowance of a credit in the GST context or the allowance of a deduction in the income tax context. In the GST context the negative tests are those set out in s 11 -15(2) of acquisitions relating to supplies that would be input taxed or acquisitions of a private and domestic nature. In the income tax context, the negative tests also involve the case where the loss or outgoing is of a private and domestic nature as well as where it is capital or of a capital nature. In both cases, a question of apportionment arises where the negative tests only partly apply. The legislature might have followed the value added tax model applicable in the United Kingdom, which for present purposes can be said to allow an input tax credit where the acquisition is one that relates to the making of taxable supplies (including within that expression, supplies which in Australian GST parlance are GST free, called, in European countries, zero rated supplies). First, the focus is the "entity" "carrying on [the] enterprise" --- here, the DOT: ss 184-1 and 7-10 of the GST Act. Secondly, the entity must pay the GST on any taxable supply that the entity makes: s 9-40. However, the entity is also entitled to input tax credit in respect of certain acquisitions. Having identified the "entity" "carrying on [the] enterprise", the next question to be asked is - did that entity acquire anything in carrying on its enterprise: s 11-15(1)? There is no dispute that the DOT is an enterprise within the meaning of the GST Act (see s 9-20 of the GST Act) and that the MPTP is an activity or series of activities done by the State through one of its executive arms, the DOT (s 9-20(1)(g) of the GST Act). As has been said on numerous occasions, acquisition by an entity in carrying on its enterprise will normally consist of the supply of goods or services to that entity. However, "it may equally well consist of the right to have goods delivered or services rendered to a third party" where "[t]he grant of such a right is itself a supply of services": Customs and Excise Commissioners v Redrow Group plc [1999] UKHL 4 ; [1999] 1 WLR 408 at 418. Subject to two matters, neither the GST Act nor the memoranda deal generally with arrangements involving more than a supplier and an ultimate consumer (sometimes described as tripartite or multi party transactions or arrangements) and, in particular, whether one set of acts may constitute two or more different supplies of services and may give rise to two or more different acquisitions. First, "consideration" as defined in s 9-15 of the GST Act expressly provides that "the payment, act or forbearance" may be by a person or entity other than "the recipient of the supply". Secondly, the GST Act contains special rules which deal with some tripartite arrangements: Div 78 deals with insurance and Div 111 deals with reimbursement of employees (it will be necessary to consider Div 111 in further detail below). The respondent contends that these special rules are confined to limited circumstances and do not provide a principle of general application to tripartite transactions. However, the respondent does accept that one set of acts can constitute two or more different supplies of services. In the United Kingdom, it is accepted that one set of acts can constitute two or more different supplies of services under the Value Added Tax Act 1994 (UK) and the Value Added Tax Act 1983 (UK): see Redrow [1999] UKHL 4 ; [1999] 1 WLR 408 and Customs and Excise Commissioners v Plantiflor Ltd [2002] UKHL 33 ; [2002] 1 WLR 2287 at [32] , [50] and [55]. However, the Courts in the United Kingdom recognise that such arrangements involving more than a supplier and an ultimate consumer (a tripartite arrangement) "call for close analysis in order to determine their [GST] consequences": Plantiflor [2002] UKHL 33 ; [2002] 1 WLR 2287 at [49] . For a discussion of recourse to foreign authority in dealing with Australian tax cases see Edmonds J, Recourse to foreign authority in deciding Australian tax cases (2007) 36 AT Rev 5 and Lindgren J, The Courts' role in statutory interpretation: the relevance of overseas case law to Australia's GST , speech delivered at the 2009 National GST Intensive Conference, Melbourne, 3-4 September, 2009. Ultimately, we are driven back to the words of the GST Act and the fact that even in the case of multiple supplies, we are concerned with a limited set of relevant concepts: a taxable supply to the taxpayer for consideration (see for example the discussion of the proper characterisation of what was alleged to be two taxable supplies in Federal Commissioner of Taxation v Reliance Carpet Co Pty Ltd (2008) 236 CLR 342 at [42]) and an acquisition for a creditable purpose. The applicable principles may be summarised as follows: An entity is entitled to an input tax credit in respect of certain acquisitions, namely creditable acquisitions: s 11-20; A creditable acquisition will occur when (i) an "entity" taxpayer is registered and (ii) makes an acquisition for a creditable purpose, (iii) arising from a supply to that entity which is a taxable supply (iv) for which the entity does, or is liable to provide consideration: s 11-5 and HP Mercantile [2005] FCAFC 126 ; 143 FCR 553 at [20] . Each element must be satisfied; An acquisition will be made for a creditable purpose to the extent that it is acquired in carrying on the entity's enterprise: s 11-15; An acquisition can include the acquisition of services or the acquisition of a right to require another person to do anything, refrain from an act or tolerate an act or situation: s 11-10; The concepts of taxable supply and acquisition are related. In other words, a taxpayer makes an acquisition if the taxpayer is the recipient of the supply: see for example Sterling Guardian Pty Ltd v Commissioner of Taxation [2006] FCAFC 12 ; (2006) 149 FCR 255 at [15] . As a result, to determine the eligibility of entitlement to input tax credits, the relevant perspective is the standpoint of the entity: cf Redrow [1999] UKHL 4 ; [1999] 1 WLR 408 at 412; There is nothing in the GST Act or its explanatory material to prohibit one set of acts constituting two or more supplies. Relevantly, this may include "the right to have goods delivered or services rendered to a third party...[where] the grant of such a right is itself a supply of services": Redrow [1999] UKHL 4 ; [1999] 1 WLR 408 at 418; Plantiflor Ltd [2002] UKHL 33 ; [2002] 1 WLR 2287 at [32] , [50] and [55]; Ashfield District Council v Customs and Excise Commissioners [2001] STC 1706; The GST Act should be viewed as a "practical business tax": Saga Holidays Ltd v Commissioner of Taxation [2006] FCAFC 191 ; (2006) 156 FCR 256 at [29] - [30] ; Brady King Pty Ltd v Federal Commissioner of Taxation [2008] FCAFC 118 ; (2008) 168 FCR 558 at [22] - [24] ; Travelex Ltd v Commissioner of Taxation [2009] FCAFC 133 at [46] ; Westley Nominees Pty Ltd v Coles Supermarkets Australia Pty Ltd [2006] FCAFC 115 ; (2006) 152 FCR 461 at 477 and HP Mercantile [2005] FCAFC 126 ; 143 FCR 553 at 564-565 citing CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384. As such, it is unhelpful to focus on "strict identity in juridical terms" when attempting to ascertain whether each of the four elements (see [42(2)]) above has been satisfied: Brady King Pty Ltd [2008] FCAFC 118 ; 168 FCR 558 at [22] - [24] . The applicant submits that the "thing" acquired by the DOT was the right as against the taxi-cab operator to ensure that the MPTP was implemented, the services of the taxi-cab operator in implementing the MPTP or the cooperation of the taxi-cab operator in implementing the MPTP. The respondent's position, in both its initial submissions and in oral argument at the initial hearing, was that the applicant did not acquire anything. In further submissions filed after oral argument, the respondent departed from that position and submitted "the respondent does not press the issue of whether the applicant made an acquisition". What the DOT in fact acquired was not described or explained by the respondent. For the avoidance of doubt about the respondent's final position the matter was re-entered for further argument. The respondent submitted that what the applicant acquired was the obligation of the taxi-cab operator to comply with the MPTP and that that obligation, or those rights, were acquired by the DOT when it granted the licence to the taxi-cab operator and not when it made payments to taxi-cab operators under the MPTP. I reject the respondent's contentions. The construction of the GST Act contended for by the respondent ignores the express words of the GST Act, does not give the GST Act a "practical and fair business operation" (see Brady King [2008] FCAFC 118 ; 168 FCR 558 at [24] - [25] ) and would create, or at least has the potential to create, anomalies in the ability to claim input tax credits. It is to be observed that the questions now to be decided require application of terms in the GST Act that usually have their central operation in a commercial setting. Yet, in this case, the questions to be answered require application of the GST Act to a governmental setting in which a State executive department (the DOT) administers a program designed to give relief to persons suffering from disabilities. The program is administered by the DOT through the imposition of licence conditions, not through any commercial bargaining of the kind to which the GST Act finds most common application. It was not submitted that the GST Act cannot apply to dealings of a State Government. The DOT, as already noted, is registered for GST. This being the setting in which the GST Act is to be applied, is there any acquisition by the DOT? In considering whether there is an acquisition, the entire context of the relationship between the taxi-cab operator and the DOT must be considered: see Sterling Guardian Pty Ltd v Commissioner of Taxation [2005] FCA 1166 ; (2005) 220 ALR 550 at [38] - [39] ; Beynon and Partners v Customs and Excise Commissioners [2004] UKHL 53 ; [2005] 1 WLR 86 at [20] . However, it must be recalled that the GST Act is a "practical business tax": see [42(7)] above. The relationship between the DOT and the taxi-cab operator is governed by the licence conditions imposed by the DOT in accordance with the powers provided to it by the Transport Act : see [6] and [10] above. It is through the licence, and only through the direct or indirect enforcement of licence conditions, that the DOT is able to require a taxi-cab operator to facilitate compliance with, and in fact comply with, the MPTP. Should the operator fail to act in accordance with the licence conditions (which relevantly include their various obligations under the MPTP), the remedy available to DOT for breach of the licence conditions is to proceed for an offence or to cancel, suspend or revoke the licence: see [15] above. The DOT could not obtain an order for specific performance of the licence conditions and could not recover damages for a failure on the part of the taxi-cab operator to implement the MPTP. In other words, the taxi-cab operator applies for a licence, pays a licence fee, is granted a licence and is required to operate in accordance with that licence (including the obligations in relation to the MPTP). The respondent may well be correct in asserting that, from the DOT's perspective, it acquired rights within the meaning of s 11 - 10 (2)(g). But that is not the only "acquisition" or, in my view, the relevant acquisition. The DOT acquires from the taxi-cab operator who carried a MPTP Member a service --- the carriage of that person. That carriage is acquired by the DOT in implementation of the MPTP which is a particular form of State Government policy for the assistance of the disabled. The DOT, as an arm of the executive of the State Government, acquires that service for consideration because it agrees to pay and does pay the taxi-cab operator to carry the disabled person: see s 9-15 of the GST Act. The amount the DOT pays is not the whole of the amount the taxi-cab operator charges for the carriage but that does not deny the accuracy of the observation that the DOT pays the taxi-cab operator to carry the MPTP Member (a disabled person who participates in the MPTP). The taxable supply to it is the carriage of the disabled person --- that is what it acquired. Contrary to the respondent's contention, the supply by the taxi-cab operator is not just a supply to the MPTP Member. There is also a supply to the DOT --- the transport of the disabled person for part of the taxi-cab fare and other fees. In other words, there is an enterprise (a State Government department) that acquires a service (transport) for a creditable purpose (the carrying on of the business of the State Government department --- relevantly being "to develop, improve and co-ordinate the provision of transport services" which includes the provision of "services ... in the public interest" (ss 4(2)(a) and 144 (2)(g) of the Transport Act )) which is a taxable supply made to the DOT for consideration (the payment under the MPTP). The respondent's submissions sought to deny the conclusions just stated on a number of other bases. First, that the question of taxable supply for consideration must be determined "from the perspective of the supplier, as it is the entity which has the liability for the GST": para [7] of the Respondent's Further Submissions. Secondly, there is no contract between any taxi-cab operator and the DOT for the carriage of any particular passenger and that there is, so the argument proceeded, no consideration paid and an absence of "some control" by the DOT over the supply: paras [8] and [39] of the Respondent's Further Submissions. Thirdly, that the payment by the DOT was analogous to credit and charge card arrangements. Questions to be asked and perspective? Although acquisition and supply are the flip sides of the same transaction, the express words of the GST Act require the question of supply and acquisition to be looked at from the taxpayer's point of view --- here the DOT: see [42(5)] above. As Hill J said in HP Mercantile [2005] FCAFC 126 ; 143 FCR 553 , such an approach is not unusual: see [34] above. Put another way, as Lord Hope of Craighead said in Redrow [1999] UKHL 4 ; [1999] 1 WLR 408 at 412 (and the High Court has said in relation to deductibility under s 51(1) of the Income Tax Assessment Act 1936 (Cth) and s 8-1 of the Income Tax Assessment Act 1997 (Cth) in, for example, G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 136 citing Scott v Federal Commissioner of Taxation [1966] HCA 48 ; (1966) 117 CLR 514 at 526), "[ t]he answers [to the question posed] are likely to differ according to the interest which various people have in the transaction" (see also Lord Millett at 418). In the end, the "matter has to be looked at from the standpoint of the [entity] who is claiming the deduction by way of input tax": Redrow [1999] UKHL 4 ; [1999] 1 WLR 408 at 412. He must identify the payment of which the tax to be deducted formed part; if the goods or services are to be paid for by someone else he has no claim to deduction. Once the taxpayer has identified the payment the question to be asked is: did he obtain anything --- anything at all --- used or to be used for the purposes of his business in return for that payment? As noted earlier (see [39]), the respondent accepts that one set of acts may constitute two or more different supplies of services and may give rise to two or more different acquisitions. That is what occurred here. Characterising the supply in the manner contended for by the respondent leads to error. It is characterisation of one set of acts from just one perspective --- the wrong perspective. Adopting the language of Lord Millett in Redrow [1999] 1 WLR 1999 , having identified the payment in question (the MPTP subsidy) from the DOT to the taxi-cab operator, the question to be asked is: did the DOT obtain anything --- anything at all --- used or to be used for the purposes of their enterprise in return for that payment? The answer is yes. Next, was the thing that it acquired a taxable supply to it? The answer is yes --- upon production of the MPTP card issued by the DOT, the taxi-cab operator carried the MPTP Member on the terms and conditions specified in the licence conditions. Finally, did the DOT provide consideration for that which it acquired? Yes --- it paid part of the taxi-cab fare. These conclusions do not deny that if the GST Act was applied to the same set of acts from the perspective of the MPTP Member, even if the MPTP Member satisfied s 11-5(d) of the GST Act, the answers to the questions (see [42(2)] above) may well be different. Why? Because one set of acts may constitute two or more different supplies of services and may give rise to two or more different acquisitions. Each may be a taxable supply --- a supply made for consideration: s 9-5(a). That is what occurred here. The GST consequences though are different for each. Contract? It may be doubted that the taxi-cab operator who picks up a MPTP Member has no contractual right to recover the amount due under the MPTP from the DOT. By taking the MPTP Member, the taxi-cab operator may be understood as accepting a standing offer made by the DOT to pay part of the fare incurred by such a passenger: Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 ; Australian Woollen Mills Pty Ltd v Commonwealth [1954] HCA 20 ; (1954) 92 CLR 424 at 455-456; Gippsreal Ltd v Registrar of Titles (2007) 20 VR 157 at [42]. Although the express provisions of the Transport Act limit the compensation payable to a person in respect of, or as a consequence of, alterations or variations of terms attached to a licence (see [7] above), this does not detract from the fact that if a MPTP Member is carried by a taxi-cab using their MPTP card, without some contrary provision in the legislation, a debt is owed by the DOT to the taxi-cab operator. Finally, the respondent's submission that there must be "some control" over the supply made to a payer in a tripartite arrangement is to be rejected. First, it imposes an additional element (to those listed at [42]) for which there is no legislative basis (see [28] and [33] above). Secondly, the concept of "some control" is nebulous (cf for example Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1 ; 160 CLR 16 at 23-27 (per Mason J), 35-37 (per Wilson and Dawson JJ) and 47 (per Brennan J); Hollis v Vabu Pty Ltd [2001] HCA 44 ; (2001) 207 CLR 21 at [45] ). Thirdly, even if "some control" was an essential element (a proposition I do not accept), the DOT exercised "some control" over the supply (see [60] above) --- the DOT made a standing offer to pay to a taxi-cab operator a prescribed part of the fare incurred by a certain passenger --- a MPTP Member (cf for example Redrow [1999] 1 WLR 408 at 418H). In the end, though, resort to a juristic legal analysis of the arrangements is both unnecessary and likely to lead to error: Brady King [2008] FCAFC 118 ; 168 FCR 558 at [22] - [24] . Argument by analogy must never be allowed to obscure the particularity of the arrangements in question. However, the conclusions just stated about the application of the GST Act to the payments by the taxi-cab operator can be tested by looking at what would occur in a commercial context. Take, by way of example, a commercial law firm that provides a Cabcharge facility for the use of its employees who work after a certain hour. To use the facility, an employee is given a Cabcharge card. Subject to certain conditions, the fares charged to the card are paid for by the firm. The Cabcharge card bears the name of the employee and, usually, the name of the employer. Despite underlying conditions as to eligibility (namely, the card is to be used by the employee of the firm named on the card who has had to stay at work after a certain hour), the firm exercises no control over the use of the Cabcharge facility (namely, which taxi-cab is used or the destination to which the employee is travelling). The firm is operating an enterprise --- the provision of legal services. The enterprise requires attendance by its employees beyond standard working hours. In conducting that enterprise, the firm elects to acquire and does acquire a service --- taxi-cab transport --- to see its employees transported to their choice of destination when they are required to work late. The enterprise (the law firm) acquires a service (taxi-cab transport) for a creditable purpose (the carrying on of the business of the law firm) which is a taxable supply made for consideration (the payment of the taxi-cab fare through Cabcharge). In my view, the firm would be entitled to input tax credits for the GST paid on the taxi-cab fare. The respondent rejected that analysis. He submitted that there would be no taxable supply to the employer and, in the absence of some agency arrangement or the firm itself placing the telephone call to organise the taxi-cab, it was a supply to the employee and therefore fell outside s 11-5(b). For the reasons earlier stated (see for example [60] above), I reject such an approach. By way of contrast, under Div 111 of the GST Act, the firm would be entitled to input tax credits for reimbursements to employees for expenses they incur in getting home if they paid for the taxi-cab themselves. Division 111 operates to grant the employer the input tax credit by acknowledging that in the absence of the statutory provisions in the Division, because GST is a consumption tax and the person who both made the acquisition and paid for it was the employee, there would have been no entitlement on the part of the employer to claim an input tax credit in relation to the GST component of any reimbursement. If the respondent's construction of the GST Act was adopted --- the form rather than the substance of the transaction would dictate whether the employer is entitled to an input tax credit for the same acquisition / supply --- transport of the employee. Such a result is absurd. Mention should be made of the respondent's submission that the proper analogy to be drawn is with credit and charge card arrangements. I reject such an analogy. As the applicant submitted, and the respondent accepted, "financial supplies" are an express exemption under the GST Act: see sub-div 40-A reflecting the fact that the GST Act (like many modern acts) is the result of compromise and negotiation (a fact discussed elsewhere --- see Gleeson CJ, The meaning of legislation: Context, purpose and respect for fundamental rights (2009) 20 PLR 26 at 32). Even if "financial supplies" were not exempt, the analogy does not assist. It does not assist because it proceeds on an assumption that "a payment in the discharge of an obligation is not consideration for a supply": para 21 of the Respondent's Further Submissions. There are at least two answers. First, such a contention ignores the definition of "consideration" in s 9-15 of the GST Act and secondly, and no less importantly, the payment of the MPTP subsidy by the DOT to the taxi-cab operator was a payment in the discharge of an obligation --- but it was an obligation that did not arise until a service was supplied to the DOT --- carriage of an MPTP Member selected as a member by the DOT and entitled to use the MPTP. Finally, the respondent contended that the analysis of Stone J in TT-Line Company Pty Ltd v Commissioner of Taxation [2009] FCA 658 compelled the conclusion that the DOT was not entitled to claim the GST component of the payment to the taxi-cab operator as an input tax credit. I reject that contention. The principal issue in that case concerned "consideration" and, in particular, whether the payment in issue fell within one of the stated exceptions in s 9-15(3)(c) of the GST Act. The question was a different question involving a different taxpayer and different arrangements. In that case, TT-Line Pty Ltd operated a passenger, vehicle and freight ferry service between Tasmania and mainland Australia under the trading name "Spirit of Tasmania". Under a scheme established by the Commonwealth Government in 1996, the cost of that travel was reduced by the government granting a rebate to eligible passengers who booked travel on a Bass Strait passenger or vehicle service. The rebate was allowed in one of two ways; by the operator who claimed reimbursement or by an eligible passenger who claimed the reimbursement directly. Moreover, as is apparent, the supply was not in dispute --- it was supply by TT-Line Pty Ltd of travel services to the eligible passenger. Having identified the supply, the real question in dispute was to identify the consideration for that supply. Only one supply was argued to have been made to a single entity. The respondent also referred to the decision of the European Court of Justice in Auto Lease Holland BV v Bundesamt fur Finanzen (C-185/01) [2003] ECR I-1317. The respondent submitted that the decision was inconsistent with Redrow [1999] UKHL 4 ; [1999] 1 WLR 408 and provided further support for the contention that in a tripartite arrangement, a payment will not be consideration for a supply made to the payer unless the supplier has an obligation with the payer to provide the service so that the payer has some control over the provision of the supply. In my view, the decision of the European Court of Justice is of little assistance in the resolution of the issues in dispute in these proceedings. The decision illustrates the difficulties of recourse to foreign authority in deciding Australian tax cases: see [40] above. The facts can be stated succinctly. Auto Lease Holland BV ( Auto Lease ), a car leasing company, offered lessees the option of entering into a fuel management agreement with it. The agreement permitted the lessees to fill up the motor vehicle with fuel and other products in the name and at the expense of Auto Lease. The facility was accessed by a fuel credit card in the name of Auto Lease. The Court held that Auto Lease did not acquire the fuel. A first blush, that might seem an odd result. However, the tax provisions in issue (Arts 2(1) and 5(1) of the Sixth Council Directive 77/388/EEC of 17 May 1977) were concerned with a particular definition of "supply of goods" defined to mean "the transfer of the right to dispose of tangible property as owner". Accordingly, it was necessary to determine to whom the oil companies had transferred the right to dispose of the fuel as owner. The Court decided that the right was not transferred to Auto Lease. The decision is not, in my view, inconsistent with Redrow [1999] UKHL 4 ; [1999] 1 WLR 408. It is dealing with a different provision containing different language and, if it matters, provides no assistance in, or support for, some general proposition about tripartite arrangements whether as submitted by the respondent, or at all. I will direct that by 4:00pm on 4 November 2009, the parties bring in orders to give effect to these reasons for decision. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. | goods and services tax transport of disabled passenger via taxi-cab characterisation of "taxable supply" and "acquisition" taxation |
The application before the Federal Magistrate sought judicial review of a decision of the Refugee Review Tribunal ('the Tribunal') of 2 February 2006 and handed down on 23 February 2006 in which it affirmed the decision of the delegate of the Minister refusing to grant a protection visa to the applicant under the Migration Act 1958 (Cth) ('the Act'). On 7 October 2005 the applicant lodged an application for a Protection (Class XA) visa with the Department of Immigration and Multicultural and Indigenous Affairs ('DIMIA'). A delegate of the Minister refused the application on 9 November 2005. On 12 December 2005 the applicant applied to the Tribunal for a review of that decision. " He claimed that his friends and relatives had introduced him to Falun Gong, and that they "always" exercised together and have "benefited a lot. He claimed that he was arrested by the police whilst in hospital and was placed in a "detaining house" for one month, even though he had not recovered. He further alleged that he was beaten, and released when he pretended to "repent and never practise Falun Gong again". 5 The applicant claimed to be a persistent Falun Gong practitioner that had never thought of giving up his practise of Falun Gong although he practises this secretly. He maintained that he cannot survive in China and had no other choice but to escape to Australia. 6 He alleged that if he were to return to China, he would be arrested and imprisoned. The Tribunal's letter was sent to the address provided in his application for review. There was no record before the Tribunal that the applicant did not receive the letter. 9 On 22 December 2005 the Tribunal again wrote to the applicant at this address and advised that it had considered all of the material before it relating to his application, but that it was unable to make a decision in his favour on that information alone. The Tribunal then invited the applicant to give oral evidence and present arguments before the Tribunal at a hearing on 2 February. The Tribunal also advised the applicant that if he did not attend this hearing, and a postponement was not granted, the Tribunal could make a decision on his case, without any further notice. This letter was an invitation pursuant to s 425 of the Act. 10 The Tribunal noted in its decision record that there was no record before the Tribunal that this letter was not received by the applicant. It noted that the applicant did not respond to the hearing invitation and did not attend the scheduled hearing on 2 February 2006. Consequently, the Tribunal proceeded, in accordance with s 426A of the Act, to make a decision on the review, without taking any further action to allow or enable the applicant to appear before it. The Tribunal determined the matter on the evidence available to it. 11 The Tribunal found that the applicant had made a series of vague and general claims which lacked details. The Tribunal provided the example that although the applicant claimed to be a Falun Gong practitioner, he did not provide details about when and how he practised Falun Gong, except that he has been "pursuing Falun Gong as long as seven years. " The Tribunal also noted that although the applicant claimed that he was "even attacked by a policeman and was sent to hospital for serious injuries", he did not provide any details about when this happened. The Tribunal found that the applicant made general claims that he and others "always" exercised together and have "benefited a lot". 12 The Tribunal was satisfied that the applicant had been given proper opportunity, at both the primary level and review stage, to support his application, but that although he was invited to appear before the Tribunal to give evidence and present arguments, the applicant had not provided any corroborative evidence of his claims. 13 On the basis of the available information, the Tribunal was not satisfied that the applicant had suffered any Convention-related harm nor was it satisfied that there was a real chance of such harm occurring to the applicant in the reasonably foreseeable future. It follows that the Tribunal is not satisfied that the applicant was detained by the Chinese authorities, or that he was beaten, or that he was released because he pretended to "repent and never practise Falun Gong again", nor is the Tribunal satisfied that if the applicant were to return, he would be arrested and imprisoned. In essence and for the stated reasons, the Tribunal is not satisfied tha the applicant has suffered or would suffer any of the claimed harm. The applicant was denied procedural fairness in connection with the making of the decision. It is not reasonable for the Tribunal to point out that I had not been detained by the Chinese Government. The decision did not take into account that the applicant, would be placed in danger if I return to China. 17 The Federal Magistrate found that the Tribunal was within its powers to proceed to decide the case, pursuant to s 426A in the absence of the applicant, as the applicant was sent an invitation to a hearing in accordance with the provisions of Div 7A of the Act and there was no evidence that the letter was returned to the Tribunal (which itself would not invalidate the notice). The Federal Magistrate concluded that the applicant had received the letter inviting him to the hearing. He appeared to have received every other letter sent to the same address. 18 His Honour considered the other grounds raised by the applicant but found that those sought impermissible merits review. At the hearing before the Federal Magistrate, the applicant told his Honour that the Tribunal had not considered his evidence carefully, but had rejected his application without hearing important evidence. The applicant contended that the Tribunal had accused him of 'being here only for illegal work. ' However, there being no such statement in the Tribunal's decision, the Federal Magistrate found that such a claim could not be properly imputed to the Tribunal. His Honour noted that the Tribunal had expressly stated that it had failed to reach the necessary state of satisfaction under s 65 of the Act. No jurisdictional error was found in the decision of the Tribunal and the application was dismissed. It is not reasonable for the Tribunal to point out that I had not been detained by the Chinese Government. It also asserts that there was a denial of procedural fairness. 21 At the hearing of the appeal before me the applicant volunteered that the reason he had not filed an appeal in time was because he forgot to do so. 23 The Tribunal's decision here is a privative clause decision, as defined by s 474(2) of the Act. Section 474 validly operates to prevent the judicial review of all decisions under the Act, except those vitiated by jurisdictional error: Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476. 24 By Order 52 rule 15(1) of the Federal Court Rules , the time limit for filing a notice of appeal is 21 days from the date of the judgment, which was given on 18 April 2007. Taking into account Order 3 rule 2(2), the notice of appeal was required to have been filed on or before 9 May 2007. The application for an extension of time was filed on 22 May 2007. This is a delay of 13 days. 25 By Order 52 rule 15(2), the time limit may be extended 'for special reasons'. To justify an extension of time, there must be 'a special reason why the appeal should be permitted to proceed, though filed after the expiry date of 21 days:' Joss v Scott (1986) 12 FCR 187 at 195. In that case the expression 'special reasons' was characterised as 'an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served'. 26 The discretion of the Court to extend time is given for the purpose of enabling the court to do justice between the parties: WAAD v MIMIA [2002] FCAFC 399 at [7] , Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262; Gallo v Dawson [1990] HCA 30 ; (1990) 93 ALR 479 at 480. However, an extension of time within which to file an appeal will not be granted without a consideration of the putative appellant's prospects of successfully prosecuting his appeal: WAAD v Minister for Immigration & Multicultural & Indigenous Affairs at [9], Hughes at 264. 27 Accordingly, before granting the extension sought, the Court is required to be satisfied that the reasons put forward in the applicant's affidavit in support of the application constitute sufficient grounds for a departure from this general rule. 28 The applicant's explanation for the delay in filing the application, contained in the affidavit attached to his application for an extension of time, is that he did not know how to lodge the application. He also claims that he was denied procedural fairness in connection with the making of the decision. 29 I am not satisfied that these reasons constitute sufficient grounds for the grant of an extension of time. The applicant clearly had no difficulties in filing the application for review before the Tribunal and within the specified time limit, nor any difficulties filing the application for judicial review before the Federal Magistrates Court, again, within the required time. Furthermore, the reason given by the applicant today, namely that he forgot to file his appeal within time, was a different reason, although I suspect the correct one, to that contained in his affidavit. I do not accept his earlier explanation. 30 The applicant has not in any meaningful way particularised its first ground of proposed appeal relating to a denial of procedural fairness. The reasoning and conclusion of the Federal Magistrate in this respect were in my opinion correct. 31 The applicant's second proposed ground of appeal amounts to no more than an impermissible request for a review of the merits of the Tribunal's decision. 32 The applicant's two grounds of appeal noted above, are, in effect, reiterations of the applicant's grounds for judicial review before the Federal Magistrates Court. The proposed grounds of appeal do not point to any jurisdictional error by the Court below. In my opinion, an extension should not be granted in this case because the proposed appeal has insufficient prospects of success. 34 The application for extension of time to file and serve a notice of appeal should be dismissed with costs. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | application for extension of time within which to file and serve a notice of appeal application for protection visa under migration act 1958 (cth) whether proposed appeal has sufficient prospect of success application dismissed no point of principle. migration |
He comes from a tribal area on the North West frontier near Afghanistan. In February 2001 he arrived in Australia after deserting ship and his long employment as a seaman. His subsequent history of visa applications, and the procedural history of this matter, is unusual and requires explanation. 3 On 28 May 2001 an application for protection was lodged with the first respondent's department ("the Department") in the name of Akhtar Mohammed Waisi, a person claiming to be an Afghan national. A migration agent lodged this application purportedly on the applicant's behalf. The application for a protection visa was rejected by a delegate of the Minister on 12 June 2002. 4 On 30 January 2003 the appellant personally lodged an application for a protection (class XA) visa in his own name. On 10 June 2003 the Department advised the appellant that pursuant to s 48A of the Migration Act 1958 (Cth) ("the Act ") he was prevented from making such application because he had made a previous application under a different name which had been refused. 5 An application to the Tribunal for review of that "decision" was rejected on 9 October 2003 on the basis that there had been no reviewable decision and the Tribunal had no jurisdiction to hear the application. The appellant unsuccessfully sought judicial review of this decision: NAWZ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 160 ; NAWZ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 199. Special leave to appeal to the High Court was refused on 7 October 2005. 6 However on 14 December 2005 the then Minister exercised her power under s 48B of the Act in favour of the appellant, so that he was no longer precluded from making a further application for a protection visa, notwithstanding s 48A. 7 The appellant then lodged an application for a protection (class XA) visa on 3 January 2006, on the basis that he and his family had been harassed and threatened in Pakistan as a result of his father's political activities and membership of the Pakistan People's Party ("PPP"). The appellant also claimed to fear a tribal revenge killing because his father had allegedly killed the elder son of a local leader of the political group Jamaat-e-Islami ("JI"). A delegate of the Minister refused the application for a protection visa and, on 24 January 2006 the appellant, through his legal representatives, lodged an application for review with the Tribunal. You stated that you had twice telephoned your family from Sydney and, on the second occasion, you were told that you should not return, as you would be in danger. The Tribunal has reliable information that, two days prior to your arrival in Sydney, you had changed $US5,000. This information is relevant because this information may lead the Tribunal to conclude that your departure from your ship was planned prior to your conversation with your family and your decision to remain in Australia was taken for reasons other than fear of persecution in Pakistan. This email was the source of the Tribunal's indication that it "had reliable information" that the appellant had changed US$5000 two days prior to his arrival in Sydney. The email assumed a central importance in the Tribunal's credibility findings. It says that the Staff Captain had "advised that they have found that he [an unnamed person who had jumped ship] changed USD5000 into Australian currency two days prior to arriving in Sydney" and that a crew member who was on leave had given the absconder his name and address. 10 The copy of the email provided by the Tribunal to the appellant, after a request from his agent, was incomplete. It was missing the name and address of the crew member on leave. 11 The Tribunal affirmed the decision of the delegate not to grant a protection visa on 2 June 2006. The Tribunal was not satisfied that the appellant had a well-founded fear of being persecuted for a Convention reason if he were to return to Pakistan. The Tribunal did not accept the bulk of the appellant's claim and found him to be "a person without credibility". One relates to the death of the applicant's mother and the other to a recent injury to his son. I do not accept that either is authentic. Although they are on the face of it from two different doctors, the handwriting is identical. The wording of the certificate regarding his mother is very similar to that regarding his father and states that his mother suffered head and face injuries in a grenade blast, which caused her death about 7 months later. Again there are no dates and none of the medical details I would expect in such a certificate. This application was dismissed by Lloyd-Jones FM. In particular, the appellant submitted that his Honour erred by not finding that the Tribunal had failed to meet the requirements of s 424A of the Act . The grounds of alleged error fall into four categories. Critical findings as to credit were drawn from this document in conjunction with the email from a shipping agent to the Department. 15 The appellant submitted that the letter to him from the Tribunal dated 1 March 2006 did not discharge the Tribunal's obligation under s 424A to provide him with "particulars of any information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review". The appellant asserts that he was not given a direct extract of the relevant portions of the 2003 Tribunal application, nor any clue as to the context in which the alleged statements were made. 16 The appellant submitted that, in order to deal with the accusation made by the Tribunal in the 1 March letter, the appellant would need to know the context and exact statements alleged to have been made by him. The appellant further submitted that the 1 March letter did not discharge the Tribunal's s 424A duties because he was not given the information itself (rather a conclusion about what the information meant) and was not given the necessary particulars to allow him to respond. Enquiries might have been made of that person as to whether the appellant was in fact the deserting crew member spoken of in the email, amongst other things. 18 The learned Federal Magistrate rejected this ground on the basis that the appellant could "respond to the factual allegation by confirming, denying or explaining away the allegation"; that the supply of the email was sufficient; and that the question of changing money was the information for which the Tribunal sought explanation from the appellant. 19 The appellant submitted that, by selectively providing the information in the email, the Tribunal failed to ensure that the appellant was, in words taken from Paul v Minister for Immigration [2001] FCA 1196 ; (2001) 113 FCR 396 at 429, "fairly informed of information adverse to his or her case ... so that investigation may be made, and steps may be taken, somehow, if possible, to meet it. The conclusion drawn from those documents, that the handwriting was identical, was the information which must be given to the appellant by virtue of s 424A(1)(b). His Honour rejected those submissions on the bases that either the "information" referred to was merely the Tribunal's thought processes rather than information, or because the information had been provided to the Tribunal by the appellant himself and so was excluded by operation of s 424A(3)(b). 22 The appellant also alleged a further error in the application of s 424A(3)(b) on the basis that a submission given to the Tribunal by the appellant's agent was said to have adopted earlier material. Such adoption was held to apply to the statutory declaration that the appellant made for the purposes of the protection visa application, and all other documents provided by his advisors, together with the protection visa application and the application for review to the first Tribunal in 2003, including the document headed "Background". The foundation for holding that this material was information given by the applicant for the purposes of the review at hand was a statement by the appellant's agent in closing written submissions following the 2006 Tribunal hearing. A submission provided with this application contains additional information relating to his case. [The appellant] continues to rely on these submissions. He further submitted that it could not be taken to refer to the material which was provided during the course of the previous Tribunal matter, such as the document titled "Background". The appellant submitted that the general rule in this area is that, as Jacobson J said in NAZY v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 87 ALD 357, s 424A(3)(b) may operate where there has been an express adoption of the material. Here, it was submitted, the only express written reference was to the statutory declaration attached to the protection visa application and perhaps, on a generous reading, the submissions in support of the visa application. The appellant submitted that the Federal Magistrate therefore erred by applying s 424A(3)(b) to material other than the statutory declaration. If those acting on behalf of an applicant send documents to the Tribunal, then the applicant has "given" the information for the purposes of s 424A(3)(b). 25 The respondent further submitted that any negative inference that the Tribunal may have drawn from information supplied by the appellant after the Tribunal hearing could not be considered "information" for the purposes of s 424A. Information in this context is "knowledge of relevant facts or circumstances communicated to, or received by, the Tribunal": SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at [205] , and not "the Tribunal's subjective appraisals, thought processes or determinations": SZEEU 150 FCR at [206]. In NATL v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 112 , the Full Court held at [14] that "[t]he section does not require the provision of evidence. The test is whether an applicant is fairly informed of the information considered to be adverse: Paul v Minister for Immigration and Multicultural Affairs [2001] FCA 1196 ; (2001) 113 FCR 396. " (Emphasis added. ) The respondent also relied on comments of Heerey and Allsop JJ in Paul [2001] FCA 1196 ; 113 FCR 396. The Tribunal' s 1 March 2006 letter clearly identified the information that the Tribunal considered would be, subject to the appellant's response, a reason for affirming the delegate's decision. The factual proposition referred to in the letter was clear: the Tribunal had received information that the appellant had changed money prior to his arrival in Sydney, whereas the appellant had stated that he learned of a danger in Pakistan from his family by telephone after he arrived in Sydney. According to the respondent, the letter also explained the relevance of the information: that the changing of money prior to his arrival suggested that the appellant planned to stay in Sydney before he spoke with his family and it was therefore not true that he decided to stay in Sydney due to fears arising from his conversations with his family. 27 The respondent submitted that the particulars provided by the Tribunal were adequate to allow the appellant to respond effectively to the information. Further, the appellant was supplied with a copy of the email which was the source of the information regarding his having changed money prior to arrival in Sydney. The respondent submitted that there was no obligation to provide the actual "Background" document referred to in the 1 March letter. How the Tribunal derived this information was inconsequential. Consistently with s 424A the appellant was given adequate particulars of the relevant aspects of the information that the Tribunal considered could be the reason or part of the reason for affirming the decision under review. However, the respondent submitted that information which has previously been given for some other purpose, such as the original visa application, can become information given by the applicant for the purpose of the Tribunal application if the applicant expressly adopts that information as part of the application for review to the Tribunal: M55 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 131 at [25] ; NBHH v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1198 at [12] - [13] ; VUAV v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1271 at [10] - [11] . In its reasons for decision the Tribunal referred to a statutory declaration, and accompanying submission, by the appellant that he had submitted with his primary visa application. The appellant's advisor had expressly adopted these earlier documents for the purposes of the application for review to the Tribunal in the submission received by the Tribunal on 7 March 2006. It followed that the information contained therein had been adopted and become information which the appellant "gave for the purpose of the application" for review and so fell within the exception in s 424A(3)(b). 32 In the respondent's submission, the Tribunal's view about the authenticity of documents provided by the appellant is not knowledge of a fact or circumstance "communicated to, or received by, the Tribunal". Rather, it was an aspect of the Tribunal's subjective appraisal of the evidence. There is no requirement in s 424A that the Tribunal give the appellant written notice of such appraisals: SZEEU 150 FCR at [205]-[206]. 33 In any case, the documents themselves were given by the appellant for the purpose of the application for review. As such they fall within the s 424A(3)(b) exception. With respect to all matters raised in this appeal I agree with the submissions of counsel for the respondent and, generally, with the reasons of the court below. 35 The decision of the High Court in SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609, handed down between the hearing of this matter and the publication of these reasons, confirms the arguments of the respondents with respect to the medical certificates that the Tribunal considered had been forged and the application of s 424A. In that case, Gleeson CJ, Gummow, Callinan, Heydon and Crennan examined the operation of s 424A. The appellants were thus correct to concede that the relevant "information" was not to be found in inconsistencies or disbelief, as opposed to the text of the statutory declaration itself. The conclusion that the medical certificates may have been forged cannot be "information" for the purposes of s 424A , rather the medical certificates themselves and the handwriting are the "information". That the handwriting in the two reports appeared identical was, in the language of Allsop J in SZEEU [2006] FCAFC 2 ; 150 FCR 214, a "subjective appraisal" by the Tribunal leading, with other matters also appraised, to a "determination" that the reports were not "authentic". 38 For these reasons, all aspects of the appellant's appeal must fail. The appeal is dismissed with costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. | migration review of decisions refugee review tribunal conduct of review authenticity of documents whether doubts about authenticity "information" for the purposes of s 424a of the migration act 1958 (cth) citizenship and migration |
A number of judgments have already been given: Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus [2007] FCA 1878 ; Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus [2007] FCA 2117 ; Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus (No 3) [2008] FCA 1986 , 69 ACSR 264 ; Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus (No 4) [2009] FCA 1085. The facts giving rise to the litigation need not be now repeated. At the comparative outset of the litigation, on 26 November 2007, orders were made that the Motor Trades Association of Australia Superannuation Fund Pty Ltd ("the Trustee") was to pay the costs of Mr Rickus " forthwith " and that such costs were to be paid on an indemnity basis: Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus [2007] FCA 1878. It gives rise to a considerable degree of disquiet to learn that the making of those orders is still occasioning dispute between the parties. That part of the dispute which presently manifests itself is an application by the Trustee to review a decision of a Deputy District Registrar of this Court. The full taxation proceed on the basis there exists a valid retainer agreement between the First Respondent (Mr Rickus) and his legal representatives for the purposes of the proceedings. The First Respondent is granted leave, pursuant to Order 13 sub-rule 2(1) of the Federal Court Rules , to file and serve an amended bill of costs. The letter recorded (in part) what the Deputy District Registrar referred to as her " preliminary oral decision ... in respect of ... the validity of " a written retainer as between Mr Rickus and his legal advisers. The letter helpfully recorded a finding that " the retainer between Mr Rickus and his lawyers was partly oral, partly written and/or partly to be implied by conduct ". Reference was made by the Deputy District Registrar to s 42 of the Legal Practitioners Act 1981 (SA) and to a decision of the Full Court of the Supreme Court of South Australia in Catto v Hampton Australia Ltd (In Liq) [2008] SASC 231. That decision was relied upon as authority for the proposition that " a successful litigant is entitled to recover from the other party amounts paid by the former in connection with the litigation, notwithstanding the unenforceability of any agreement between the litigant and solicitor... ". A folder of Affidavits to be relied upon by the parties as filed contained some 13 Affidavits . Three more were later filed. When addressing the question as to whether there was a valid retainer between Mr Rickus and his legal advisers, the written submissions went well beyond a reference to the terms of the 16 November 2006 letter. Reference was made to the area of practice of the solicitor named in the letter, the Minutes of meetings at which the Trustee was advised as to the intent of Mr Rickus to obtain legal advice and discussions which apparently took place at the time when Mr Rickus was initially seeking advice. It may be doubted that such evidence would have assumed any relevance had it ultimately been relied upon. At the outset of the hearing this morning, however, the ambit of the evidence was considerably reduced. It may presently be assumed that O 62 r 11 has been properly invoked. Left to one side is a question as to whether the " preliminary decision " of the Deputy District Registrar, albeit a decision given effect by an order, is a " decision " within the meaning of r 11. Also left to one side is the question as to whether or not the Deputy District Registrar had power to make the decision that she did or to make the consequential order. Left unresolved is whether or not the Deputy District Registrar should have referred any question as to the validity of a retainer agreement to a Judge of this Court for resolution. That was the course which was said to be appropriate by the Family Court in Twigg v McIlwraith (1988) 89 FLR 473. As recognised by that Court, it was expected " [a]s a matter of commonsense as well as convenience to the litigants " that the question referred " be one of substance ". And it may further be assumed for present purposes that the " review " to be undertaken is a hearing de novo : Pacific Dunlop Ltd v Australian Rubber Gloves (unreported, FCA, Olney J, 17 August 1993); Boys v Australian Securities Commission [2001] FCA 1440 per Carr J. Whether such an assumption is correct, given the reservation expressed by Hely J in Cachia v Westpac Financial Services Ltd [2003] FCA 817 , need not be now resolved. See also: Miller v Wertheim [2004] FCA 988. The amount of money dividing the parties is comparatively small. There was broad agreement for the purposes of this morning's hearing that: as at the date of the November 2007 orders, no moneys had been paid by Mr Rickus to his legal advisers; since the date of those orders, he has paid a sum of approximately $85,000; if the fees are to be calculated by reference to the Federal Court scale of fees, the amount of fees payable would be approximately $55,000 to $60,000; and if the fees are to be calculated by reference to the terms of the November 2006 letter, those fees would be approximately $114,000. The principal matter dividing the parties is whether the November 2006 letter extended beyond an agreement confined to the provision of advice and extended to an agreement in respect to the litigation which ultimately followed. Notwithstanding the care with which the written submissions have been prepared and the other issues there canvassed, it is nevertheless considered that the question as to the construction and application of the November 2006 letter should be now resolved and the matter thereafter referred to mediation. Such an order may be made pursuant to s 53A of the Federal Court of Australia Act 1976 (Cth). The Deputy District Registrar, who has an intimate knowledge of the factual issues by reason of her consideration of the matters to date, urged recourse to mediation. The dispute is eminently suitable for mediation. The dispute, it is considered, can be more expeditiously resolved by mediation than by a decision of this Court on the limited matters now before it and thereafter further deliberation by the Deputy District Registrar. Further delay will inevitably be occasioned by the taxation process resuming. Although there was a measure of agreement that mediation may serve a useful purpose if the ambit of the November 2006 letter is to be resolved, an order for mediation may be made irrespective of the wishes of the parties. (1A) Referrals under subsection (1) to a mediator may be made with or without the consent of the parties to the proceedings. However, referrals to an arbitrator may be made only with the consent of the parties. (2) The Rules of Court may make provision for the registration of awards made in an arbitration carried out under an order made under subsection (1). A further reason in support of an order for mediation, rather than resolving the application for review as now made pursuant to O 62 r 11 on all of the issues canvassed by the Outlines of Written Submissions , is the fact that the taxation exercise presently being undertaken by the Deputy District Registrar has not as yet concluded. Although the discrete nature of the questions sought to be now reviewed may be appreciated, it is considered generally undesirable to undertake a review of an incomplete taxation process. To do so has the potential to fragment that process and potentially encourage a series of like applications to the present --- each being (arguably) addressed to an equally discrete " decision ". Such a process, if pursued, would have the potential to unjustifiably deny a party the benefit of an order obtained long ago and expose such a party to a forensic course of attrition pursued by an opponent more committed to securing a settlement than to compliance with the terms of an order. There has been no suggestion, it should be noted, that that is the course now being pursued by the Trustee. Mediation at this stage has the potential to resolve all outstanding matters that divide the parties. With respect to the November 2006 letter, it is considered that that letter is nothing other than a letter of engagement with respect to the giving of advice. It is not possible to construe that letter as also being a letter of engagement with respect to the subsequent litigation that engulfed the parties. That conclusion is reached by reason of: the subject-matter summarised at the outset of the letter, namely " Terms of Engagement --- MTAA Super, Directorship Advice "; the terms of the letter expressing the " scope of the engagement " as being " to advise ... in connection with your removal from the office of chairman of directors as well as your removal from office as an independent director which the board of directors of the trustee of MTAA Super resolved to give effect to at its meeting held on 10 October 2006 "; the cost estimate quantified at " approximately $5,000.00 "; and the absence of any reference to such matters as would normally be included in a retainer embracing potential litigation, including such matters as anticipated Counsel fees; the expected duration of any litigation; the risks inherent in any litigation; and disbursements associated with litigation. There is a further reference to litigation in cl 3.5. Passing references to " litigation " cannot transform this letter into an agreement as to the terms upon which the solicitors would conduct litigation on Mr Rickus's behalf. Even if it were permissible to depart from the terms of the letter itself, it is not considered that such further materials as were referred to by Senior Counsel on behalf of Mr Rickus take the matter any further. In contrast to the Affidavit material filed, that additional material was within a limited compass. Reference was thus made to instructions given by Mr Rickus on 14 November 2006, two days before the 16 November 2006 letter was forwarded to him. The prospect of litigation had apparently been raised with Mr Rickus prior to 16 November 2006. But the instructions given on 14 November 2006 were confined to instructions " to confer with Mr Moshinsky of counsel as to his availability to accept a brief to represent my interests ". No agreement to retain Counsel in accordance with the terms of the November 2006 letter --- or any other terms --- can be discerned from the giving of those instructions. Nor is the identification of any agreement as between Mr Rickus and his solicitors to be found in an email forwarded the same day by the solicitors to Mr Moshinsky inquiring in part: " If we need counsel support in this process --- would you be prepared to act? " Nor can any agreement as at November 2007 be discerned from an Affidavit of Mr Rickus sworn on 19 November 2008. The paragraphs of that Affidavit now relied upon merely set forth the reasons why he chose the solicitors he did and the fact that he has continued to retain those solicitors. The final matter relied upon by Senior Counsel on behalf of Mr Rickus to found an agreement is the fact that Mr Rickus is said to be a man experienced in commerce and with a degree of knowledge as to the manner in which solicitors conduct their affairs, that knowledge " including litigious matters ". Knowledge is not agreement. The November 2006 letter is thus an agreement confined to the terms upon which advice was to be provided. Neither that letter taken on its own --- nor in conjunction with the other matters relied upon by Senior Counsel for Mr Rickus --- changes the confined nature of the agreement reached as at November 2006. Although it is with diffidence that consideration is even given to making a further order that anything be done " forthwith " in this litigation, it is envisaged that the mediation that is to take place should occur within the immediate future. Inquiries should be made as to the availability of a mediator suitable to both parties. If agreement is not forthcoming, a list of mediators who are available to conduct the mediation in the immediate future should be provided and one will be selected by the Court. The parties are to bring in short minutes of proposed orders within 14 days to give effect to these reasons. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | review of registrar's decision de novo review potential to fragment the taxation process referral of outstanding issues to mediation practice and procedure |
The Magistrate dismissed an application for constitutional writs in respect of a decision of the Refugee Review Tribunal ('the Tribunal'). The Tribunal affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs ('the Minister') not to grant a protection visa to the appellant. He arrived in Australia on 10 August 2004 and on 24 August 2004 he applied to the Department of Immigration and Multicultural Affairs for a protection visa. His application was refused by a delegate of the Minister. He made an application to the Tribunal for a review of the delegate's decision. On 7 December 2004 the Tribunal affirmed the delegate's decision ('the first Tribunal decision'). The appellant made an application to the Federal Court seeking a review of the first Tribunal decision. On 5 July 2005 this Court set aside the first Tribunal decision and remitted the application for review to the Tribunal to be determined according to law. On 11 November 2005 the Tribunal affirmed the decision not to grant a protection visa to the appellant ('the second Tribunal decision'). On 16 May 2006 the Magistrate dismissed the appellant's application for constitutional writs in relation to the second Tribunal decision. The appeal to this Court is from the Magistrate's order in relation to the second Tribunal decision. 3 The Magistrate described the appellant's claim in terms which are sufficient for present purposes. His grandfather had purchased a piece of land outside Dar es Salaam which he farmed. On his grandfather's death his father took over the land but became an absentee landlord leaving a manager on the farm. There had been no trouble with their neighbours until in 1992 the applicant's father decided to join the opposition political group CUV. In 1995 the applicant joined CUV. The applicant's father put up CUV flags around the coconut trees on the land. After this the neighbours began to cause trouble for the father and claimed approximately eight of his thirteen acres. The father decided that he wanted the matter resolved but he received no assistance from the authorities. The neighbours were members of the Mwadila clan of the Wasukuma tribe. This tribe supports the CCM. In 1998 the neighbours came to the farm and beat the applicant's father. The father complained to the police but they took no notice of his complaint and instead arrested him. The father eventually died in police custody. The applicant believed that his father had been beaten to death by the police at the behest of the neighbours and their political supporters. He did not live on it either. The applicant went to work in Dar es Salaam and the surrounding area. He claimed that he had gone to the farm to look after it but had been attacked by the Wasukuma. When he went to Mbagala he had to keep moving around and received some protection from a friend in the Mwadila clan who, he said, gave him early warning of possible attacks. The applicant believed he was targeted by the Wasukuma because of his membership of the CUF and believes that the police would not provide him with adequate State protection as they support the CCM. I personally would find it extremely [sic] to deny that desire I have to see change and to leave behind my political beliefs. Should I move anywhere in Tanzania and continue to advocate for the CUF the problems would follow me wherever I went. 6 As to the appellant's claim that political affiliations were relevant to how he and his family were treated, the Magistrate noted that the Tribunal said that the appellant was unable to explain why political antagonism had been 'played out' as a dispute over the boundary between property rather than a straightforward clash about politics. The Magistrate noted that the Tribunal referred to independent country information and said that it did not accept that tribal antagonism existed to the extent suggested by the appellant. The Magistrate referred to the appellant's main contention before him to the effect that he suffered persecution at the hands of a small group of politically motivated members of the Sukuma tribe, who were his neighbours. 8 The Magistrate said that there was no basis upon which to interfere with the Tribunal's conclusion based on country information that the appellant would not be subject to persecution if he returned to Tanzania as a voluble and articulate supporter of the CUF. He said that the Tribunal had rejected the appellant's contentions and if there was any indication of hesitancy in the Tribunal findings on relocation it would appear to have arisen because it could not see any need for the appellant to relocate outside Dar es Salaam and noted that the appellant had in any event abandoned his land. 10 The Magistrate concluded that the Tribunal had not committed a jurisdictional error and he dismissed the application. By reason of the grounds of appeal, the Magistrate was called upon only to consider the first and third matters. In my opinion, there was no error in his approach to those matters. 13 The appellant was unrepresented before me. In fairness to the appellant, the first respondent outlined an argument which he accepted may be put on behalf of the appellant, although, in the result, he asked me to reject the argument. 14 It seems that prior to the second Tribunal hearing the appellant's case centred on a dispute between his family and their neighbours and the fact that the two parties belonged to different tribes or clans. Generally speaking, he had not raised the allegation that the dispute was politically motivated in that he and his father were members of the main opposition party, the CUF, and the neighbours were members of the ruling party, the CCM. He had not raised the allegation that the trouble had started when his father had placed CUF flags around the coconut trees on his land. In the course of the second Tribunal hearing, the Tribunal member raised with the appellant the fact that he had not mentioned these matters before. However, this time, in this hearing, he had added politics to the story. I asked why he had made no mention of politics the first time he had recounted this tale. The Applicant said that it was because the interpretation was so bad. It made him concentrate simply on the farm aspects. (For example, CUF was rendered as "cuff" by the Applicant, the interpreter and the Tribunal alike). He said that there had been some mention of politics because the previous Tribunal member had asked him if he was an active or an ordinary member of the party. I put it to him that there was no reference at all to this question or to any question of politics in the decision from the first Tribunal. I put it to the Applicant that he had not raised the issue at all and had not mentioned the words CUF or CCM or the word "politics". I noted that the applicant had spoken Swahili not only at home in Tanzania but also with a number of people in South Africa and, as I discovered at hearing, in conversation with his Australian adviser (who also knew Swahili). In other words, the applicant was able to communicate with a number of Swahili-speakers, including non-native speakers, with a range of accents. The fact that the interpreter at the first Tribunal hearing spoke with a Kenyan accent did not seem to me to give rise to such poor interpretation that any mention of politics would be entirely forgotten. In other words, I was putting it to him that the question of politics had been added more recently to his claims in order to create a convention nexus. This is the addition of material about political party affiliation: his and his father's membership of CUF, and the claim that the neighbour's antagonism was only aroused in 1992 when the applicant's father put up CUF flags in the trees on his farm. This detailed material was only introduced when the Applicant was with the Tribunal for the second time. It had passingly been introduced in one line in the adviser's submission prior to the first Tribunal hearing: "... it is clear that the applicant's fear of persecution relates to actions of other [sic] motivated by reasons of political opinion (the applicant's perceived opposition to the ruling party) and his race (Nyamwezi) ... etc". The decision by the previous Tribunal Member records that "At the hearing the applicant did not pursue the claim made in the submission that he faced harm because of an imputed opposition to the ruling political party". 18 The first respondent sought to meet this possible argument by submitting that what the Tribunal relied upon was not 'information' within s 424A(1). In the alternative, and assuming it was information, the first respondent submitted that it was information the appellant gave for the purpose of the application for review and therefore, by reason of s 424A(3)(b) , exempt from the obligation in s 424A(1). In relation to this alternative argument, the first respondent made two submissions. First, he submitted that, on a fair reading of the Tribunal's reasons, it relied on information given to the first Tribunal hearing and this fell within the exception in s 425A(3)(b). Secondly, he submitted that insofar as the Tribunal may have also relied on information first given prior to the first Tribunal hearing, this also was information the appellant gave for the purpose of the application for review by reason of his subsequent conduct. In the context of this submission the first respondent referred to a submission dated 25 November 2004 and sent to the first Tribunal by solicitors acting for the appellant wherein the appellant referred and relied upon his application for a protection visa, a statement he made on 24 August 2004, his oral statements to the Department of Immigration and Multicultural and Indigenous Affairs and interviews between him and officers of the said Department. 19 The Tribunal has referred to the fact that in the period before the hearing before it the appellant did not claim that political affiliations were important. That may have been relevant to its assessment of the appellant's credit either on that particular topic, or more generally. The Tribunal did not say so in express terms. The fact that the information (assuming for the moment it is information) is used by the Tribunal in the assessment of an applicant's credit, either on a particular topic or generally, may be the reason or part of the reason for affirming the decision that is under review within the provisions of s 424A of the Act: SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 (' SZEEU ') per Weinberg J at 252 [158] and Allsop J at 262-263 [220]-[221]. In other words, the obligation in s 424A(1) may apply even though the information does not of itself lead to a positive factual finding but is of significance only by way of demonstrating an inconsistency with other information provided on a different occasion. 20 In the case of a challenge on the basis that it is said that the Tribunal failed to comply with s 424(1) of the Act, it is necessary for the applicant to show that in fact the information was the reason or part of the reason the Tribunal affirmed the decision that is under review. That is sometimes a difficult question to determine and I agree with Weinberg J in SZEEU (at 253 [163]) that in cases of doubt, the matter should generally be resolved in favour of the applicant. In this case, the first respondent did not argue that the obligation did not arise because the information (again, assuming it is information) was not a reason or part of a reason the Tribunal affirmed the decision that is under review. I think that it was, and I refer to the passages set out in [15] and [16] above. 21 The question whether the matter relied upon by the Tribunal in this case was information for the purposes of s 424A of the Act is a difficult one. The contrast between the information given by the appellant prior to the second Tribunal hearing and the information given by the appellant at the second Tribunal hearing. 2. The failure to mention allegations in the information given by the appellant prior to the second Tribunal hearing. 3. The inference to be drawn from the contrast between the information given by the appellant prior to the second Tribunal hearing and the information given by the appellant to the second Tribunal hearing, namely, that the appellant may not be a witness of credit either on the particular topic concerned or generally. It seems to me that the matter is no more than an inference which the Tribunal drew from the way in which material, which is no doubt information, was provided to it. A number of the difficulties which arise from the use of the word 'information' in s 424A of the Act are identified and discussed by Weinberg J in SZEEU . As to the difficulties raised by a case of the present nature, I refer to his Honour's observations at 255 [176]-[178]. 23 I am inclined to think that the matter relied on by the Tribunal was not information for the purposes of s 424A , but I do not need to decide the point because even if the matter was information within the section, it falls within the exception in s 424A(3)(b). 24 The obligation in s 424A(1) does not apply to information that the appellant gave for the purpose of the application for review (s 424A(3)(b)). It is clear from the authorities that the obligation does apply to information the appellant gave prior to the application for review. In my opinion, the exception applies to information the appellant gave not only to the second Tribunal hearing but also to the first Tribunal hearing. Such information was information that the appellant gave for the purposes of his application for review to the Tribunal. In my opinion, on a fair reading of the Tribunal's reasons the matter (assuming it to be information) was information the appellant gave at the first Tribunal hearing. I refer to the passages in the Tribunal's reasons set out above (at [14]). In those circumstances the obligation in s 424A(1) did not apply to the information. 25 In the alternative, even if the information included information first given prior to the first Tribunal hearing, the conduct of the appellant was such that that information became information the appellant gave for the purpose of the application for review. I have reached that conclusion because of the submission put to the first Tribunal by the solicitors acting for the appellant. I have reached that conclusion without having to rely on the questions asked of the appellant at the second Tribunal hearing and his response to those questions. The authorities draw a distinction between information given for the purpose of the application for review and information elicited by the Tribunal during the course of a hearing. I have not attempted to express the distinction in precise terms and it seems to me to be a somewhat elusive one. Nevertheless, it is one that the authorities suggest must be drawn. It is said to be a distinction between information which the applicant for review puts forward as part of his or her case and adopts, on the one hand, and information elicited by questions from the Tribunal on the other. It is sufficient for me to refer to M55 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 131 ; NAZY v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 87 ALD 357; SZCJY v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 556 and finally, VWBF v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 851 ; (2006) 154 FCR 302 (' VWBF '). 27 In my opinion, assuming the matter relied upon by the Tribunal was information (which, for the reasons I have given, I doubt) the obligation in s 424A(1) did not apply to it because it fell within the terms of s 424A(3)(b). In those circumstances, there has been no breach of the section. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | appeal from federal magistrates court where appellant denied protection visa by minister where appellant appeared at two hearings before refugee review tribunal where appellant made claims at second tribunal hearing not made at first tribunal hearing where tribunal affirmed minister's refusal to grant visa whether difference between claims made at first hearing and second hearing was information which was the reason or part of the reason for affirming the minister's decision within the meaning of s 424a(1) of the migration act 1958 (cth) whether tribunal obliged to notify appellant of information effect of s 424a(3)(b). migration |
Each proceeding relates to a scheme of arrangement between the company and its members --- in PBL's case, the PBL Scheme and in Crown's case, the Demerger Scheme. 2 On 17 October 2007 I made orders in each proceeding under s 411(1) of the Act that PBL and Crown convene meetings of their respective members to consider, and if thought fit, agree (with or without modification) to the PBL Scheme and the Demerger Scheme respectively. In addition, in each proceeding I approved (under s 411(1) of the Act) the form of explanatory statement required by s 412(1)(a) of the Act, being a draft of the relevant Scheme Booklet (the PBL Scheme Booklet or the Demerger Scheme Booklet, as the case may be). 3 These are the reasons why I made those orders. In these reasons I will use defined terms that are used and defined in the applications, supporting affidavits and exhibits, but because their meanings are obvious, generally speaking I will not define them. Its businesses are focused on media and gaming. According to an independent expert's report in evidence, PBL had 74,680 shareholders as at 19 September 2007. One of those shareholders, Consolidated Press Holdings Limited (CPH), holds approximately 38 percent of PBL's issued shares. PBL has only one class of security on issue, namely, ordinary shares (there are 681,004,425, 687,236,925 or 688,526,925 ordinary shares on issue --- all three figures appear in the evidence). 5 Crown was incorporated only as recently as 31 May 2007 for the purpose of offering to acquire the PBL shares under the PBL Scheme, and, subject to the PBL Scheme being approved and to the PBL Shareholders passing a "Demerger Scheme Advisory Resolution", implementing a demerger of the media and gaming businesses. 6 There are only eight issued shares in Crown, and they are held by members of the firm of solicitors representing PBL (and Crown) and officers of the PBL group of companies (the eight are "the Crown Initial Shareholders"). 7 Subject to both Schemes finally being approved, Crown will apply to be admitted to the Australian Stock Exchange (ASX) so that Crown shares that are issued to PBL Shareholders as part of the consideration payable under the PBL Scheme, will be tradeable on the ASX. 8 It is a condition of the PBL Scheme (cl 2.1(f) of that Scheme) that ASX admits the Crown shares to listing, or that that condition is waived. 9 PBL and Crown have the same directors. 10 On 12 October 2007, the two companies entered into an Implementation Deed by which they undertook, subject to various conditions precedent, to do things necessary for the implementation of the two Schemes. 11 Implementation of the PBL Scheme is not conditional upon implementation of the Demerger Scheme, but implementation of the Demerger Scheme is conditional upon implementation of the PBL Scheme. The objective of the demerger is to demerge the media and gaming businesses so that each will be the business of a separate company --- the media business of PBL and the gaming business of Crown. 12 It has been thought that the demerger offers several advantages, including: the focusing of efforts within each company on one business; a more convenient addressing of the different capital requirements of the two classes of business; and the provision of distinct investment opportunities rather than the present single company (PBL) conducting both businesses. Under the PBL Scheme, Crown will acquire all of the PBL shares for a consideration of $3.00 cash plus one Crown share for every PBL share. Thus, if and when the PBL Scheme is implemented, PBL will be a wholly owned subsidiary of Crown, and the shares in Crown will be held by CPH, other former shareholders in PBL, and the Crown Initial Shareholders. 14 The one complicating matter is that the consideration just described is only the "PBL Scheme Standard Consideration", and in fact PBL Shareholders are entitled to elect to receive more or less cash than $3.00 and less or more than one Crown share per PBL share held. 15 The formula to be applied is somewhat complex, and I need not set it out here. Section 21.2 of the PBL Scheme Booklet describes the PBL Scheme Consideration Alternatives and gives worked out examples. 16 It will be noted that if even one PBL Shareholder receives cash alone, it will not be the case that all PBL Shareholders become shareholders in Crown. The total cash consideration is estimated to be of the order of approximately $2 billion. It is proposed that PBL, through its subsidiaries, will provide financial assistance to Crown. 18 Accordingly, it is a condition precedent of the PBL Scheme that PBL Shareholders pass a "Financial Assistance Resolution" at the PBL annual general meeting which will follow the holding of the PBL Scheme Meeting. The Financial Assistance Resolution is to the effect that for the purposes of s 260B(1) and (2) of the Act, approval is given for the provision by PBL and its subsidiaries of financial assistance as described in section 7.6 of the Scheme Booklet to assist in the acquisition of PBL shares by Crown under the PBL Scheme. 19 In fact the funding will be provided by certain banks to Crown Group Finance Limited, a subsidiary of Crown. The financial assistance will be in the nature of guarantees to be provided by PBL subsidiaries if the Demerger Scheme proceeds, and by PBL if the Demerger Scheme does not proceed. 20 If the PBL Scheme proceeds, not only will PBL become a subsidiary of Crown, so will PBL's subsidiaries. That is to say, each PBL subsidiary will be a subsidiary of both Crown and PBL. Accordingly, it is also a condition (cl 2.1(c)) of the PBL Scheme that the Crown Initial Shareholders approve a "Crown Financial Assistance Resolution" at the Crown general meeting by the requisite majority. The Crown general meeting is to take place after the PBL annual general meeting. 22 It is the Crown Initial Shareholders who will vote on the Demerger Scheme. By Deed Poll, they have undertaken to vote in favour of the Demerger Scheme and of a Crown "Capital Reduction Resolution" (see below) if the PBL Shareholders pass a "Demerger Scheme Advisory Resolution", and to vote in favour of a "Crown Financial Assistance Resolution" if the PBL Shareholders pass the Financial Assistance Resolution. 23 In substance, the Demerger Scheme Advisory Resolution is a resolution of the PBL Shareholders requesting the Crown Initial Shareholders to approve the Demerger Scheme and Crown's Capital Reduction Resolution. 24 In effect, therefore, it is the PBL Shareholders who will determine whether the Demerger Scheme is to be agreed to by the Crown Initial Shareholders. 25 PBL is to change its name to Consolidated Media Holdings Limited (CMH). 26 If the Demerger Scheme is agreed to, but before it is implemented, there is to be a reorganisation of Crown to ensure that the media business will remain owned by PBL, and that the gaming business will become owned by a new subgroup of Crown which will be distinct from CMH (also a subsidiary of Crown). The achievement of this new structure is termed the Reorganisation. 27 The result of the Reorganisation will be that Crown will be the 100 percent owner of CMH (previously called PBL) which will own the media business, and Crown will also be the 100 percent owner of another Crown subsidiary which will be the 100 percent owner of the gaming business. 28 Following the Reorganisation just described, it will be possible for the Demerger Scheme to be implemented. 29 There will be a reduction of PBL's share capital after the PBL Scheme has been implemented. A "Reduction of Capital Resolution" will be considered by the PBL Shareholders at the PBL annual general meeting. The amount of the reduction of capital is to be $2,440 million. That amount is to be distributed to the holder of all the ordinary shares in the capital of PBL. That holder will be Crown. PBL's obligation to pay that sum to Crown will, however, be satisfied by PBL's applying the sum in satisfaction of the equivalent amount that will be owing by Crown to PBL as a result of Crown's entering into the agreements to give effect to the Reorganisation. 30 The Reduction of Capital Resolution provides for an "equal reduction" for the purposes of s 256C(1) of the Act, and therefore is to be passed as an ordinary resolution: see s 256C(1) of the Act. 31 I accept that the proposed Reduction of Capital Resolution will satisfy the Act's requirements, even though it will take effect at a future time when the PBL Shareholders who benefit from the equal reduction (Crown) will not be the PBL Shareholders who pass the authorising resolution (the existing PBL Shareholders). 32 The Demerger Scheme Meeting is proposed to be held on the same day as, and following the conclusion of, the PBL Scheme Meeting and the PBL annual general meeting. The Demerger Scheme approval resolution will be considered by the Crown Initial Shareholders. However, they will not participate in the Demerger Scheme because their shares in Crown will be bought back and cancelled by Crown prior to the entitlements to participate in the Demerger Scheme being determined (the "Buy Back"). As noted earlier, in substance it is the PBL Shareholders who, by voting in favour of the Demerger Scheme Advisory Resolution and the Financial Assistance Resolution, will determine whether the Demerger Scheme and ancillary resolutions are to be approved by the Crown Initial Shareholders. 33 Under the Demerger Scheme, each PBL Scheme Participant to whom Crown shares were issued under the PBL Scheme, will receive a transfer (from Crown, the parent company of PBL) of one CMH share for every Crown share held by that PBL Scheme Participant. Accordingly, the shares in the capital of CMH will come to be owned by the former PBL shareholders who became the holders of shares in Crown under the PBL Scheme. That resolution seeks the approval, for the purposes of s 260B(2) of the Act, of financial assistance being given by Crown subsidiaries to assist Crown in acquiring the PBL shares under the PBL Scheme. As noted previously, that financial assistance takes the form of the giving of guarantees by PBL subsidiaries (and therefore also Crown subsidiaries) of the banking facility that Crown (through its subsidiary Crown Group Finance Limited) has put in place to fund its cash consideration obligations under the PBL Scheme. The Crown Capital Reduction Resolution is an integral part of the demerger and is conditional on the Demerger Scheme being approved. It is proposed for the purposes of CA 256C(1) and requires the capital of Crown to be reduced by an amount which is equivalent to the value of the CMH shares (being the shares which are to be demerged from Crown, as ascertained on the day when those shares first trade on ASX after the Demerger Scheme Effective Date) multiplied by the number of Crown shares registered in the names of the Demerger Scheme Participants at the Demerger Scheme Record Date (being all the Crown shares then on issue) and by requiring the Capital Reduction Amount (being the value of one CMH share determined in the manner set out above) to be appropriated in accordance with the Demerger Scheme for the benefit of each Demerger Scheme Participant for each Crown share held by that participant on the Demerger Scheme Record Date. 72. Clause 4 of the Demerger Scheme is the relevant provision relating to the application of the Capital Reduction Entitlement of each Demerger Scheme Participant. Clause 4.1 provides that on the Demerger Date, Crown must reduce its capital in accordance with the Crown Capital Reduction Resolution and must apply the Capital Reduction Entitlement of each Demerger Scheme Participant in accordance with clause 4.2. Clause 4.2 of the Demerger Scheme provides that each Demerger Scheme Participant, including the Nominee on behalf of the Ineligible Overseas Shareholders, directs Crown to apply and Crown must apply the Capital Reduction Entitlement of that Demerger Scheme Participant as consideration for the transfer by Crown to that Demerger Scheme Participant of the number of CMH shares equal to the number of Crown shares registered in the name of that Demerger Scheme Participant on the Demerger Scheme Record Date. Further, under clause 6.1 of the Demerger Scheme each Demerger Scheme Participant acknowledges and agrees that the provision to it of the Demerger Scheme Entitlement in accordance with the Demerger Scheme constitutes the satisfaction of all of its entitlements in and to the Demerger Scheme Participant's Capital Reduction Entitlements. 73. Clause 6.4(d) of the Demerger Scheme Booklet provides information about the Crown Capital Reduction Resolution. It states that the Crown Capital Reduction Resolution is conditional on the Demerger Scheme being approved and states that the amount of the Capital Reduction is to be applied for the benefit of the Demerger Scheme Participants in accordance with the Demerger Scheme. Further, Section 6.4(d)(2) of the Demerger Scheme Booklet states that Demerger Scheme Participants who are entitled to have the CMH shares transferred to them under the Demerger Scheme are not required to pay any money for those shares because their entitlement to the Capital Reduction Amount will be applied by way of consideration for the transfer of those shares. Further, that section states that Demerger Scheme Participants will not have the option of taking any entitlement to the Capital Reduction Amount in cash and that the CMH shares to which the Demerger Scheme Participants are entitled represent all the CMH shares on issue. There was also before the Court the full report by independent experts. In the case of the Demerger Scheme Booklet, the Australian Securities and Investments Commission (ASIC) has granted an exemption in relation to the independent expert's report. The inclusion of the summary of the full report in the PBL Scheme Booklet was also pursuant to relief granted by ASIC. I am satisfied in respect of both Schemes that ASIC has had more than 14 days notice of the hearing of the application (see s 411(2)(a) of the Act) and has had a reasonable opportunity to do the things referred to in s 411(2)(b) of the Act. There was before the Court the "usual letters" from ASIC to the effect that it would not appear on the first court hearing. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | schemes of arrangement applications by two corporations for, in the first instance, orders under s 411 of the corporations act 2001 (cth) that they convene meetings of their members to consider and, if thought fit, agree to a scheme of arrangement ultimate objective of demerging media and gaming businesses carried on by one company into media business to be carried on by it and gaming business to be carried on by the other company (recently formed for the purpose) financial assistance for the acquisition of shares, name change, reduction of capital discretionary considerations. held : orders made that the two scheme meetings be convened and that the two proposed explanatory statements be approved. corporations |
It is a ' State Owned Corporation ': State Owned Corporations Act 1989 (NSW) , s 20A , Sch 5. 2 SFC operates an extensive ferry service on Sydney Harbour and the Parramatta River every day of the year. On any given week day, SFC carries about 35,000 passengers. As at 30 April 2008, it employed 742 staff. Its principal statutory objective is ' to deliver safe and reliable Sydney ferry services in an efficient, effective and financially responsible manner '. 3 The first respondent (' AMOU ') represents the Masters and Inner Harbour Engineers (collectively ' Maritime Officers ') employed by SFC. AMOU is an organisation registered under the Workplace Relations Act 1996 (Cth) (' WR Act ') and has corporate status conferred by the WR Act. The SUA is an organisation registered under the Industrial Relations Act 1996 (NSW) (' NSW Act ') and is not registered under the WR Act. (The first-named second respondent (' MUA ') has been represented in the proceedings by the same solicitors and counsel as SUA and there is no need to refer further to it separately. 6 The present litigation arises out of SFC's attempts to introduce a new ' crew based ' rostering system for its employees. The evidence indicates that it has endeavoured unsuccessfully to reach agreement with the respondents for the introduction of such a roster over a protracted period. The negotiations between SFC and the respondents having apparently broken down, SFC decided that it would introduce a crew based system unilaterally, although not necessarily in precisely the form that had been the subject of negotiations. To that end, on 2 May 2008, SFC gave notice to its employees that it intended to introduce new crew based rosters on and from 2 June 2008. 7 One issue that has arisen is whether SFC is entitled under the terms of the relevant Enterprise Agreements to introduce the new crew based rosters without the agreement of the respondents. In these proceedings, as originally framed, SFC sought declarations to the effect that, on the proper construction of the Enterprise Agreements, it is not required to obtain the agreement of each of the respondents before giving notice of its intention to introduce the new roster. As I shall explain, SFC now seeks relief only against AMOU. The AMOU Agreement is a ' collective agreement ' for the purposes of s 328 of the WR Act and is expressed to bind SFC, AMOU and Maritime Officers employed by SFC (cl 1.2). The AMOU Agreement commenced in July 2006 and has a ' nominal expiry date ' of 30 December 2008 (cl 1.4.1, 1.4.2). This is the critical Enterprise Agreement for the purposes of the live issues in these proceedings. • Sydney Ferries Corporation General Purpose Hands Enterprise Agreement 2006-2008 (' SUA Agreement ') . The SUA Agreement is expressed to bind SFC, SUA and GPHs employed at SFC (cl 1.2.1). • Sydney Ferries Corporation Outer Harbour Engineers Enterprise Agreement 2005 (' AIMPE Agreement '). The AIMPE Agreement is expressed to bind SFC, AIMPE and Outer Harbour Engineers employed by SFC (cl 1.2.1). 10 The issue of construction I am required to resolve does not directly concern the remuneration of Maritime Officers. Nonetheless, it is relevant to note that the current remuneration arrangements under the AMOU Agreement incorporate what is known as the ' aggregate wage ', a concept introduced for Maritime Officers in 1995. These hours are called the employees' "aggregate hours". The difference between aggregate hours and ordinary hours is called "aggregate overtime". The 2004 [Enterprise Agreements] for the afloat staff contain an elaborate system under which some work for which an employee may be called in will be covered by the aggregate wage (and therefore not be the subject of additional payment, commonly called "the Sting") and other work to be undertaken will be the subject of overtime and penalty rates. The features of the aggregate wage system applicable to Maritime Officers in the 2004 AMOU Agreement were placed in Annexure C to the AMOU Agreement. The significant roster changes were said to constitute a ' major initiative under the Ferries 2010 reform program ' that would deliver ' vital safety improvements '. Each employee received a copy of his or her new roster to commence on 2 June 2008 and was told to attend at work in accordance with the roster. The current rosters are not "crew-based". This is largely the result of the different financial entitlements and the 3 separate roster lines that have been negotiated by the different groups of staff and the Respondents over the years. This means that individual employees on a vessel have few opportunities to develop an understanding of the work methods applicable to a particular vessel, and do not have the ability to work cohesively with others as part of a regular crew. The crew members will also be rostered to take their maritime and leisure leave at the same time. As a result, individuals will work together as part of the same crew, and on the same vessel(s) for most of the year. The principal relief sought by it was an order restraining AMOU and SUA from engaging in or organising or encouraging employees to engage in industrial action in contravention of s 494(1) of the WR Act. In the event, SFC withdrew its application for interlocutory relief before argument on the application had concluded. 16 On the following day, 29 May 2008, SFC served an application on the respondents by which it sought orders from the Australian Industrial Relations Commission (' AIRC ') pursuant to s 496 of the WR Act , requiring actual or threatened industrial action to stop or not take place. Before that application could be heard by the AIRC, I granted AMOU and SUA what is commonly known as an anti-suit injunction. This restrained SFC, pending the determination of proceedings in this Court, from taking further action in the AIRC to obtain orders pursuant to s 496 of the WR Act : Sydney Ferries Corporation v Australian Maritime Officers Union [2008] FCA 817. However, I set an early date of 13 June 2008 for the hearing of SFC's claims for final relief in this Court. 17 SFC subsequently filed an amended application in this Court which eliminated its claims for injunctions and penalties against the respondents. The amended application confined SFC's claim to declaratory relief in relation to the proper construction of the three Enterprise Agreements. 18 At the commencement of the hearing on 13 June 2008 the parties handed up consent short minutes of order resolving the proceedings between SFC and SUA and between SFC and AIMPE. After being satisfied that I had power to do so, I duly made declarations in accordance with the short minutes of order. 19 The only issues remaining for determination in these proceedings, therefore, concern SFC's application for declaratory relief against AMOU. A declaration that on the proper construction of clause 7.5.3 of the AMOU Agreement, the Applicant's proposed changes to the rosters for all Permanent and Temporary Maritime Officers employed by the Applicant and about which the Applicant gave notice to all Permanent and Temporary Maritime Officers on 2 May 2008, are a "significant roster change". A declaration that on the proper construction of clause 7.5.3 of the AMOU Agreement, the Applicant is required to give 21 days' notice to all Permanent and Temporary Maritime Officers employed by the Applicant of a "significant roster change" before introducing it. A declaration that on the proper construction of the provisions of the AMOU Agreement, the Applicant is not required to obtain the agreement of the First Respondent before giving notice of a "significant roster change" and introducing such roster change. It is therefore convenient to commence with an overview of the terms of the AMOU Agreement 2004. • Based on existing rosters, the annual ' aggregate wage' was to provide a shift system. The system was to include, for Outer Harbour Masters, a coverage of 98 hours per fortnight averaged over a two-week cycle, such hours to incorporate the current shifts and an aggregate level of overtime (cl 13.1.1(i), (iii)). Where coverage of unscheduled trips could not be accommodated within the 98 hours per fortnight regime, overtime would apply (cl 13.1.1(vii)). The maximum hours to be worked on any one day was to be 12 hours, except in emergencies (cl 13.8.1). • The aggregate wage for Outer Harbour Masters ($84,267 per annum) was set out in Attachment A. It was to incorporate all shift allowances and weekend penalties (cl 13.6.1). • Overtime was to be worked by Outer Harbour Masters only in exceptional circumstances and only where the work could not be accommodated within the 98 hours per fortnight span (cl 13.5.1). All overtime was to be paid at the base rate set out in Attachment A ($900.40 per week), but attracted penalties (cl 15.1). • The aggregate wage was also specified in Attachment A for Inner Harbour Masters and Engineers ($81,991). It was to include coverage of normal rostered hours to an average maximum of 104 hours, averaged over a two week period (cl 14.1). However, hours worked in certain circumstances, such as during periods of approved leave without pay or on Christmas Day, were not to form part of the aggregate wage and were to attract payment of overtime rates (cl 14.1). Overtime was to be paid at the normal weekly base rate ($802.00) but, as in the case of Outer Harbour Masters, was to attract penalties (cl 15.1). Consistently with ' the original intention of the aggregate wage system ', the parties also agreed to identify reasons for any increase in the level of paid overtime outside the aggregate wage system and also to identify strategies and implement strategies to reduce the necessity for paid overtime (cl 16.2). It can be inferred from the terms of cl 16 that SFC considered that the amount of overtime worked by employees and for which they received penalty rates was a continuing problem that required remedial action. It also represents all crews taking responsibility for the performance of their vessels. This will help instill pride of ownership in the vessels and will contribute greatly toward providing a cleaner, safer more reliable service. ' (Emphasis added. 27 The procedure for resolving grievances and disputes under the AMOU Agreement is set out in cl 4 (cl 1.6.2). Clause 4 prescribes a seven step process, commencing with discussions between employees and management and ending with an agreed referral to a third party to resolve the dispute ' by facilitation, mediation or conciliation where appropriate '. 28 Clause 5 states that SFC shall provide employment on a full time, part time or temporary basis (cl 5.1.1). ' Temporary Employees ' are ' engaged on a Full-Time basis for a fixed term ' (cl 5.4.1). 29 Clause 6.2.2 is headed ' Annual Salary for Maritime Officers '. The annual salary covers all aspects of employment with the exception of those matters identified in clause 6.2.2.2 below. Salaries shall be increased over the duration of the Agreement as set out in Annexure A to this Agreement. Provisions for payment for these issues are set out separately in this Agreement. The proposed notional salary for SASS employees is set out in Annexure A. The introduction of the proposed notional salary for SASS Employees shall occur after the necessary legislative change, the introduction of the new agreed hours of work and roster arrangements and the introduction of the annual salary as referred to in Clause 6.2.2.1 above. ' (Emphasis added. The Annual Salary for Outer Harbour Masters, for example, is stated to be $87,667 from 1 January 2006, increasing to $91,174 on 1 January 2007 and $94,821 on 1 January 2008. Each of the specified salaries for 2006 and 2007 incorporates an increase of 4 per cent over the previous year's annual salary. 31 SFC is to increase the ' Employee's wages and salary ' by 4 per cent each year of the AMOU Agreement (cl 6.4.2). It is common ground that this increase applies to the aggregate wage, as distinct from the Annual Salary, although there is no reference to the aggregate wage in the body of the AMOU Agreement. (There are, however, references to the aggregate wage in Annexure C to the AMOU Agreement, to which I refer below. ' (Emphasis added. Those rosters shall meet the operational needs in relation to timetables and services and offer SFC Maritime Officers adequate time off to enjoy their life outside of their work with SFC and effectively manage fatigue. These arrangements are based on a 38 hour ordinary working week. The provisions set out in Annexure C shall continue until the new agreed rosters and annual salaries are put into operation . The Employee shall report on and report off at the commencement and completion of each shift as agreed between the Parties. ' (Emphasis added, other than to sub-headings. The AMOU and the Employees are committed to finalising the agreed rosters by 1 October 2006 in the interests of SFC operational requirements. Upon the introduction of the agreed rosters SFC shall introduce the annual salary and notional superable salary for SASS Employees as contained in Annexure A. These hours of work shall be based on a 38 hour ordinary working week. That work includes ferry operations, standbys, in-service maintenance, trials and drills, special projects, attending meetings and training. ' (Emphasis added. ' (Emphasis added. Annexure C is headed ' WORK ARRANGEMENTS AT COMMENCEMENT OF AGREEMENT '. The provisions of Annexure C replicate, with some variations, the equivalent provisions of the AMOU Agreement 2004 and indeed incorporate cross-references to the latter. For example, cl 2 of Annexure C, which deals with hours of work, allowances and overtime for Outer Harbour Masters, more or less corresponds to cl 13 of the AMOU Agreement 2004. Similarly cl 4 of Annexure C, dealing with overtime, corresponds to cl 15 of the AMOU Agreement 2004, except that it specifies the precise penalties that must be paid for overtime (time and a half for the first two hours and then double time). 37 Annexure C substantially replicates cll 10, 13, 14, 15, 16, 32 (' Call Ins ') and 45 (' Attending for Duty ') of the AMOU Agreement 2004. (I have referred to cll 10, 13, 14, 15 and 16 in [22]-[23] above. ) Annexure C contains no equivalent to cl 44 of the AMOU Agreement 2004. Clause 7.5.1, so SFC argues, specifies the period of notice (seven days) required for an agreed roster change, while cl 7.5.2 and cl 7.5.3 specify the periods of notice applicable to different kinds of roster changes unilaterally imposed by SFC. In the case of a change in shift unilaterally imposed by SFC, only 24 hours notice is required (cl 7.5.2). In the case of ' a significant roster change ' unilaterally imposed by SFC, 21 days notice is required (cl 7.5.3). 40 It follows, according to SFC, that AMOU's agreement to a new roster is necessary only where the new roster is for the purpose of introducing the Annual Salary. This conclusion is said to be supported by the different periods of notice specified in cl 7.5. A relatively short period (seven days) is required for an agreed change, no matter how important the change may be, while a significant roster change imposed unilaterally requires the longer period of 21 days. Moreover, the omission of the word ' agreed ' from cl 7.5.3 must be taken to be deliberate. 41 SFC also relies on the position predating the AMOU Agreement. Clause 44 of the AMOU Agreement recognised SFC's existing right, founded on its entitlements as an employer, to change the rosters unilaterally for ' good and sufficient reasons ' on seven days notice. SFC submits that the AMOU Agreement could not have been intended to deprive SFC of its pre-existing right to introduce a crew based roster without the prior consent of the AMOU. Mr Dixon SC, who appeared with Mr Saunders for SFC, pointed out in argument that cl 7.3.1, which requires SFC to exhibit rosters and provides that they are not to be altered without the notice period set out in the Agreement, does not say that the rosters cannot be altered in the absence of agreement. 42 SFC says that the aggregate wage system was introduced to limit the amount of overtime payable to employees but that, as cl 16 of the AMOU Agreement 2004 acknowledged, the system has not achieved its objective. The point of introducing the Maritime Officer Annual Salary is to deal with this problem. The AMOU Agreement links the introduction of the Annual Salary to changes in the roster system. This link reflects an expectation that, as part of the negotiations for the introduction of the Annual Salary, the parties might agree upon roster changes, perhaps to compensate for the loss of employees' overtime entitlements. SFC submits, however, that the fact that the AMOU Agreement contemplates agreed roster changes as part of the process leading to the Annual Salary does not detract from its right to introduce crew based rosters within the existing aggregate wage regime. 43 In his oral submissions, Mr Dixon distinguished between provisions of general application contained in the AMOU Agreement and provisions which were intended to apply specifically to the new agreed rosters brought into force for the purpose of introducing the Annual Salary. Clause 8.1, for example, sets out hours of duty and other terms applicable to the agreed rosters , while other provisions, such as the maximum hours for shifts provided for in cl 7.3.2, are general in operation. Thus any agreed roster would have to provide for a minimum of 165 days free of duty, as required by cl 8.1.2 of the AMOU Agreement. 44 Mr Dixon accepted in the course of argument that the AMOU Agreement does not give SFC free reign to impose unilaterally any roster changes it sees fit. When pressed to identify the precise limitation, he said that any roster changes unilaterally imposed by SFC must be consistent with the provisions of Annexure C to the AMOU Agreement. On this approach, a proposed roster change which is inconsistent with the provisions of Annexure C must receive the prior approval of AMOU. Mr Dixon gave as an example of such an inconsistency a proposed roster which departs from the average fortnightly hourly cycle mandated by cl 2.1.1(i) of Annexure C. Mr Dixon accepted that, in the absence of agreement by the AMOU to a proposed new roster which is inconsistent with Annexure C, the roster could not be introduced. The Annual Salary arrangements specified in Annexure A to the AMOU Agreement could not come into force. 45 SFC accepts that the introduction of the new crew based roster is a ' significant roster change ' for the purposes of cl 7.5.3 of the AMOU Agreement. It follows, on its submissions, that the giving of 21 days notice to the employees of the new roster system is a necessary and sufficient condition for its introduction. This is because, so SFC contends, the proposed new roster is consistent with the provisions of Annexure C to the AMOU Agreement. AMOU refers to cl 6.2.2.1, 6.2.2.4, 7.1.1, 7.1.2, 7.1.3, 7.1.5, 7.4.1, 8.1.1, 8.1.3 and 11.1 of the AMOU Agreement as provisions indicating that the parties assumed that changes to the roster system could be introduced only by agreement. 47 AMOU argues that cl 7, in particular, indicates that the parties to the AMOU Agreement contemplated that changes to the roster arrangements would require prior agreement with AMOU. It points out that cl 7.1.3 commits SFC to reviewing the rosters on a regular basis and to meet with the Delegates Council to reach agreement on any proposed changes to the rosters. SFC also says that cl 7.1.2 preserves existing roster arrangements until the new agreed rosters are put into operation and is inconsistent with the introduction of a new set of rosters without agreement being reached. It acknowledges that Annexure C, which is referred to in cl 7.1.2, does not set out the rosters themselves. There would have been no point in including elaborate provisions relating to the processes for reaching agreement if SFC could unilaterally impose significant changes on employees. AMOU submits that the AMOU Agreement expressly identifies the introduction of crew based rosters as a matter that is to be the subject of consultation and agreement between the parties (cll 7.1.3, 7.1.5). 49 AMOU accepts that there is a ' degree of ambiguity ' in cl 7.5, which deals with notification of roster changes. But any ambiguity can be resolved by treating cl 7.5 as applying to the notification to individual officers of changes in their work arrangements, rather than to the notification to the workforce as a whole of the comprehensive alteration of all rosters. For example, the reference in cl 7.5.1 to ' an agreed roster change ' is apt to describe a change to an individual roster, as distinct from the expression ' new agreed rosters ' used elsewhere in the AMOU Agreement. Moreover, cl 7.5 makes no provision for notification of any change to AMOU, a party to the AMOU Agreement. In short, so AMOU argues, cl 7.5 is a mere notification provision that cannot control the construction of other parts of the AMOU Agreement. 50 Mr Crawshaw accepted in oral argument that SFC was not completely powerless, in the absence of agreement from AMOU, to alter any element of the roster system. Indeed, we accept that within the parameters of the existing system of rosters, there can be significant changes made. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. The context includes the entire document of which the relevant provisions form part but it extends to the industrial context which gave rise to the agreement: Amcor v CFMEU, at 246 [2], per Gleeson CJ and McHugh J; Short v F W Hercus Pty Ltd [1993] FCA 51 ; (1993) 40 FCR 511 , at 518, per Burchett J (with whom Drummond J agreed). The words of the award or agreement cannot be interpreted in a vacuum divorced from industrial realities. Nonetheless, the words should make sense according to the conventions of the English language: City of Wanneroo v Holmes (1989) 30 IR 362, at 378-379, 380, per French J. For example, one of the declarations proposed by SFC is that, on the proper construction of the AMOU Agreement, SFC is not required to obtain the agreement of AMOU before giving notice of a ' significant roster change ' and introducing such roster change. The reference to ' significant roster change ' is presumably intended to be to the expression used in cl 7.5.3 of the AMOU Agreement. 54 On SFC's own argument, certain roster changes require the prior agreement of AMOU, namely those that incorporate terms inconsistent with the provisions of Annexure C to the AMOU Agreement. A new roster incorporating such terms may well involve ' significant roster changes ', assuming that expression is to be given its ordinary meaning. 55 SFC's arguments seem to proceed on the basis that an agreed change to the roster system requires seven days notice pursuant to cl 7.5.1 while cl 7.5.3, which requires 21 days notice, is concerned only with roster changes unilaterally imposed by SFC. But even if SFC's arguments are correct, it is difficult to see how a declaration in the form proposed would be appropriate. On SFC's case not all ' significant roster changes ' (giving that phrase its ordinary English meaning) can be introduced by it unilaterally. Yet the proposed declaration seems to suggest that SFC is entitled to introduce unilaterally any significant roster change simply by giving notice pursuant to cl 7.5.3. Presumably on SFC's construction argument, the proposed declarations should distinguish between significant roster changes that are consistent with Annexure C and those that are not. But in their current form the declarations make no such distinction. 56 The substantive issue in dispute between the parties seems to be whether SFC requires the prior agreement of AMOU in order to introduce the crew based rosters the subject of SFC's notification on 2 May 2008. Even that question is difficult to resolve on the material before me, since it does not depend simply on the correct construction of the AMOU Agreement. While the parties agree on the broad effect of SFC's proposed crew based rosters, they disagree as to whether, as a matter of fact, the proposed rosters are consistent with the provisions of Annexure C to the AMOU Agreement. Mr Dixon asserted in argument that they are; Mr Crawshaw asserted that they are not. The evidence appears to be inconclusive (at least without explanation and analysis) and was not the subject of detailed submissions. 57 The reason that it may be important to ascertain whether SFC's proposed crew based rosters are consistent with the provisions of Annexure C is that, if they are not, SFC accepts that the rosters cannot be introduced without AMOU's agreement. In that situation, even if SFC's construction arguments are correct, it would not be entitled to a declaration stating or implying that it could introduce its proposed crew based rosters without SFC's prior agreement. 58 There may be something to be said for dismissing the proceedings on the ground that, even if SFC's construction arguments are correct, it is not entitled to the declaratory relief it seeks. (I leave to one side whether s 849(1) of the WR Act authorises the declarations sought by SFC insofar as they do not relate solely to an ' interpretation of a collective agreement '. ) However, the parties have debated the question of whether the AMOU Agreement, on its proper construction, precludes SFC from introducing a crew based roster system without the prior agreement of AMOU. Not only would the time and costs devoted to the debate be wasted if I do not address the question, but the evidence suggests that the public has an interest in having the issue determined because of possible safety consequences for passengers if SFC cannot act unilaterally. If SFC's construction argument is correct, it may be able to reframe the declaratory relief it seeks to avoid the difficulties I have identified. If it is incorrect at least the parties will have a better idea of where they stand. I therefore consider it appropriate to address the question I have identified in this paragraph. The many provisions referred to in argument are not free from the ' apparent inconsistencies ', if not ' illogicality ', that often characterise collective agreements negotiated between employers and employees' organisations: cf City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426, at 440 [57], per French J. The difficulties of construction are compounded by the fact that the AMOU Agreement does not specifically (let alone unambiguously) address whether or not SFC needs the prior agreement of AMOU to introduce crew based rosters. 60 Of course there is nothing unusual in an agreement, even one drafted with the benefit of considered legal advice, not specifically addressing an issue that turns out to be critical to the resolution of a dispute between the parties to the agreement. In this case, however, the omission of any explicit reference to SFC's ability (or inability) to introduce unilaterally crew based rosters is surprising. After all, the AMOU Agreement 2004 extolled the virtues of ' Vessel Teams ' (an expression similar in meaning to ' crew based rosters ') (cl 25.2). Moreover, I infer that SFC has been well aware for a considerable period of the safety benefits it says will flow from crew based rosters. Yet the AMOU Agreement apparently leaves the issue to be determined on the basis of inferences to be drawn from provisions not specifically concerned with the introduction of crew based rosters. 61 In order to evaluate the competing arguments it is necessary to consider the terms of the AMOU Agreement in the light of the surrounding circumstances and in the context of the Agreement as a whole. There are a number of matters that require careful consideration. 62 First , there is no dispute that under the AMOU Agreement 2004, SFC could have unilaterally introduced a crew based roster system in place of the system it had inherited. As I have noted, the virtues of ' Vessel Teams ' were expressly identified in cl 25.2 of the AMOU Agreement 2004, which also recorded that ' [SFC] and Officers [were] committed to working towards having self-managed work groups '. The reasons for SFC's unwillingness or inability to introduce the rosters were not revealed by the evidence. 64 Thirdly , the fact that SFC had the unilateral power under the AMOU Agreement 2004 to impose crew based rosters on employees does not necessarily mean that a later collective agreement between the parties should be interpreted in the same way. It cannot be assumed, regardless of the language used in the AMOU Agreement, that it was drafted on the basis that SFC would retain pre-existing powers. There are many reasons (hypothetically speaking) why SFC might have chosen to relinquish any powers that it may have had. SFC might have realised, for example, that roster changes it imposed unilaterally would provoke serious industrial disputation and accepted that it was better to recognise the industrial realities. 65 Fourthly , as AMOU points out, the AMOU Agreement incorporates many references to ' new agreed ... roster arrangements ', ' new agreed rosters ' and 'agreed rosters ' (see cll 6.2.2.1, 6.2.2.4, 6.4.3, 7.1.2, 7.4.1, 8.1.1, 11.1). These expressions have no equivalent in the AMOU Agreement 2004. The language used by the parties cannot be ignored. 66 Fifthly , the AMOU Agreement expressly links the introduction of the new agreed hours of work and roster arrangements with the payment of the Annual Salary to employees in lieu of overtime entitlements. The parties record their commitment to working together to reach an early agreement on new rosters ' for the purpose of introducing ' the Annual Salary (cl 7.1.1). Once the new arrangements are introduced, Maritime Officers receive the annual salary and lose their entitlement to overtime payments (cll 6.2.2.1, 11.1). 67 Sixthly , the AMOU Agreement does not expressly link the introduction of new agreed hours and rosters to the introduction of a crew based roster. In particular, neither cl 7 nor cl 8 expressly requires the new agreed rosters to incorporate a crew based arrangement. Clause 8 specifies certain principles with which the ' agreed rosters ' must comply, but none necessarily involves a crew based roster. On the other hand, nothing in cl 8 is inconsistent with the introduction of crew based rosters should the parties choose to incorporate them in the new agreed rosters. 68 Seventhly , the AMOU Agreement records that the ' Parties are committed to developing team-based rosters ' (cl 7.1.5). Clause 7.1.5 is one of five provisions included under the heading ' Rostering Consultation '. The first of these is cl 7.1.1, which commits the parties to work together to reach agreement on new rosters for the purpose of introducing the Annual Salary. 69 Eighthly , the AMOU Agreement records that SFC is committed to reviewing rosters on a regular basis and to meet with the Workplace Delegates Council to ' reach agreement on any proposed changes to the rosters ' (cl 7.1.3). It is true, as SFC points out, that a provision in this form does not necessarily mean that agreement is required for any changes to be implemented. But, at the least, the provision is consistent with the parties assuming that the prior agreement of AMOU is required to change rosters that incorporate crew based arrangements. 70 Ninthly , the AMOU Agreement contemplates that the provisions set out in Annexure C will continue until the new rosters and the Annual Salary are put into operation (cl 7.1.2). The language used in cl 7.1.2 is somewhat opaque, if not confusing. For example, it is not correct to record, as cl 7.1.2 does, that the hours of work, rosters and overtime entitlements are set out in Annexure C. Further cl 7.1.2 says that the provisions set out in Annexure C , not the particular rosters then in force, continue to apply until the new agreed rosters and annual salaries come into operation. Moreover, although Annexure C replicates provisions found in the AMOU Agreement 2004, it does not replicate all the provisions. In particular, there is no equivalent in Annexure C to cl 44 (reproduced [25] above) and there is no reference to ' Vessel Teams ' or any similar expression referring to crew based rosters. 71 Tenthly , both SFC and AMOU qualify the scope of their submissions by reference to what can fairly be described as pragmatic considerations. SFC accepts that the AMOU Agreement does not allow it to impose unilaterally any roster changes it sees fit. As I have explained ([44] above), Mr Dixon acknowledged in oral argument that any roster changes unilaterally imposed by SFC must be consistent with the provisions of Annexure C and that any proposed roster changes that are inconsistent require the agreement of AMOU. For its part, AMOU accepts that SFC can unilaterally impose some changes to the current roster system, provided that the changes do not alter the system itself. In other words, AMOU accepts that SFC can impose changes that affect only individual employees, rather than the system as a whole. 72 It seems to me that, having regard to the matters I have identified, the better construction of the AMOU Agreement is that SFC cannot introduce a crew based rostering system except with the prior agreement of AMOU. The AMOU Agreement does not expressly preserve or continue any pre-existing power SFC had under the AMOU Agreement 2004 to impose a crew based roster system unilaterally. Had the parties intended to preserve that power in SFC, they might have been expected to make some reference to their intention, either in the body of the Agreement or in Annexure C (which replicates some, but not all, of the provisions of the AMOU Agreement 2004). The omission of any reference in Annexure C to ' Vessel Teams ' or crew based rosters seems to me significant, although not decisive, on the issue of construction I have identified. 73 As I have observed, cl 8 of the AMOU Agreement does not require the new agreed rosters to incorporate crew based rosters, but nor does it prevent such rosters being incorporated. The parties' ability to include or exclude crew based rosters in the agreed arrangements that trigger the Annual Salary does not, however, resolve the question of whether SFC is entitled to introduce crew based rosters without prior approval of AMOU. In my opinion, cll 7.1.3 and 7.1.5 are of particular significance on this question. They appear in the AMOU Agreement under the heading ' Rostering Consultation '. Clause 7.1.5, which has no equivalent in the AMOU Agreement 2004, states that the parties are committed to developing team-based rosters. This is an odd provision to include in the AMOU Agreement if the parties intended SFC to retain its power to require employees to work to crew based rosters regardless of the opposition of AMOU. The language of cl 7.1.5 suggests that the parties contemplated that they would work together to reach agreement on crew based rosters, whether or not the agreement would ultimately form part of the agreed rosters that would trigger the introduction of the Annual Salary. 74 Similarly, cl 7.1.3 commits SFC to review rosters on a regular basis and to meet with the Workplace Delegates Council to reach agreement on any changes to proposed rosters. The commitment referred to in this provision does not apply only to changes to the new agreed rosters, but to changes to existing rosters. This follows from the fact that cl 7.1.2, which immediately precedes cl 7.1.3, preserves in operation the provisions in Annexure C until new agreed rosters are put in operation. As I have explained, cl 7.1.3 does not mean that all changes to existing rosters, no matter how minor, must be agreed. But it tends to add some support to the conclusion that the introduction of crew based rosters requires AMOU's prior agreement. 75 SFC places particular reliance on cl 7.5 of the AMOU Agreement. In this respect, I think that SFC's submissions place a burden on the language used by the parties that the language cannot bear. The heading to cl 7.5 is ' Notification of Roster Changes '. It is a subsidiary provision, in the sense that it simply sets out the periods of notice required for particular categories of changes to rosters. Seven days notice must be given to Maritime Officers for an ' agreed change ' and 21 days for ' a significant roster change '. It is difficult to see how a notice provision can shed light on the anterior question of whether AMOU's agreement is required for the introduction of crew based rosters. 76 It may be correct, as SFC contends, that 21 days notice under cl 7.5.3 is required for a unilaterally imposed ' significant roster change ', but not for an agreed significant roster change. But this does not mean that cl 7.5.3 has no work to do. As Mr Dixon appeared to accept, SFC might well unilaterally impose roster changes on employees (not including the introduction of a crew based roster system) consistently with the provisions of Annexure C, the operation of which is preserved by cl 7.1.2. Some of these might be significant so far as the affected employees are concerned and thus require 21 days notice pursuant to cl 7.5.3. Indeed new agreed rosters, depending on their terms, might permit SFC to make further ' significant ' roster changes without the agreement of AMOU. In that case, cl 7.5.3 would presumably specify the period of notice to be given to Maritime Officers of those changes. 77 For these reasons I think that the preferable construction of the AMOU Agreement is that SFC cannot introduce the crew based roster (or ' team-based rosters ', as they are referred to in cl 7.1.5) without the prior agreement of AMOU. If such agreement is forthcoming, the crew based roster can be incorporated into the ' new agreed rosters ' that trigger payment of the Annual Salary. Alternatively, they can be introduced independent of the arrangements that will result in the Annual Salary becoming payable to employees. But prior agreement by the AMOU to proposed crew based rosters is required. 78 It is unnecessary to decide the precise extent of SFC's power to alter unilaterally the current roster system. In particular, it is unnecessary to determine whether Mr Crawshaw's formulation of the limits of such a power ([50] above) is correct. It has therefore not made out its claim for declaratory relief. I have reached this conclusion independently of any difficulties presented by the form of the proposed declarations. 80 Since there is no cross-claim, the appropriate course would seem to be to dismiss the application. My present view is that there should be no order as to costs (see WR Act , s 824(1)). Unless either party files written submissions within seven days contending for different orders, these are the orders I propose to make. 81 I wish to add one observation. The task of the Court is to interpret the collective agreement which the parties, for better or worse, have negotiated. The evidence before me indicates that independent inquiries conducted into the operations of SFC have concluded that there are powerful public safety reasons why it should introduce a crew based rostering system. I am not in a position to know why such a system has not yet been introduced. Nor do I know what obstacles, if any, now stand in the path of an agreement being reached between SFC and AMOU concerning crew based rosters. But this judgment should not be understood as expressing judicial support for further delays in introducing measures that will be essential in the interests of the safety and well-being of passengers. I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. | collective agreement between sydney ferries corporation (' sfc ') and union whether on proper construction of agreement sfc can unilaterally introduce crew based rosters construction |
The statutory provisions that provide for the extension of term recognise the length of time taken for research and regulatory approval of the claimed products of such patents and the fact that this reduces the "effective life" of the patent. 2 The Commissioner of Patents, by her delegate the Deputy Commissioner of Patents, decided that an amendment should be made to the Register of Patents ('the Patents Register') to correct the extension of term of four patents ('the Pfizer patents') in the name of the applicants (collectively 'Pfizer') ( Re Pfizer Corporation (2005) 67 IPR 201). • The date from which an extension of term of a pharmaceutical patent is calculated. In the decision under appeal, the Commissioner decided that she was required by reg 10.7(7) to amend the Patents Register ( Re Pfizer Corporation at [41]). 4 The validity of reg 10.7(7) was considered by Lindgren J in H Lundbeck A/S v Commissioner of Patents [2006] FCA 163 ; (2006) 150 FCR 269. His Honour held that reg 10.7(7) is not invalid. Pfizer makes a ' formal submission ' that reg 10.7(7) is invalid but limits its submissions to that contention. Pfizer relies upon the submissions presented by the applicant in Lundbeck as reflected in his Honour's reasons but does not repeat them or otherwise explain why reg 10.7(7) is invalid. 5 It is accepted by all parties that, for the purposes of this appeal, I will follow the Lundbeck decision that reg 10.7(7) is valid, prior to any determination to the contrary by the Full Court. Section 70(1) of the Act provides that the patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subss (2), (3) and (4) are satisfied. The parties accept that those requirements have been satisfied. 7 Section 70(3) provides that, as a condition for extension, goods containing at least one of the claimed pharmaceutical substances must be included in the Australian Register of Therapeutic Goods ('the ARTG') and the period beginning on the date of the patent and ending on ' the first regulatory approval date ' for the substance must be at least 5 years. Section 77 provides for the calculation of the term of extension by reference to the period beginning on the date of the Patent and ending on the earliest ' first regulatory approval date ' as defined in s 70, reduced by 5 years. The substances were first entered in the ARTG as "listed goods" for export only. They were later entered in the ARTG as "registered goods", that being the date of approval to market the substances in Australia. The dates by reference to which the extended terms of the patents were calculated pursuant to s 77 of the Act were those on which the goods had been included in the ARTG as "registered goods", the later date. When the Commissioner appreciated this, she decided that the extension of term should be calculated by reference to the earlier date, the date of entry in the ARTG as listed goods for export only. 10 The issue is whether, in the context of the Act, ' the first inclusion in [the ARTG]' is the date of listing for export only or the date of registration enabling Pfizer to market the substances in Australia. Pfizer contends that the relevant date is that of registration, not of any listing in the ARTG. At the time of commencement of the current Pt 3 of Ch 6 of the Act in January 1999, s 17(3) of the TG Act provided that the ARTG contains two parts, one relating to goods to be known as registered goods and the other relating to goods to be known as listed goods. By Item 46 of the Therapeutic Goods Amendment (Medical Devices) Act 2002 (Cth) ('the TG Amending Act'), despite the repeal of s 17, goods that were ' included in [the ARTG]' prior to the TG Amending Act are taken to be included in the ARTG after its commencement. The distinction between listed goods and registered goods continues to apply in the TG Act, which now contains three parts --- listed goods, registered goods and medical devices included in the ARTG under Ch 4 (s 9A of the TG Act, inserted by the TG Amending Act). The parties do not consider the difference between the old s 17 and the new s 9A to be material. 13 The Therapeutic Goods Regulations 1990 (Cth) ('the TG Regulations') provide for therapeutic goods of a certain kind to be included in the part of the ARTG for registered goods and therapeutic goods of a certain kind to be included in the part of the ARTG for listed goods (reg 10). The former encompasses goods which must be registered before they can be marketed in Australia while the latter encompasses goods manufactured in Australia for export only (Sch 4, Pt 1 of the TG Regulations). Section 17(4) provided and s 9A(4) of the TG Act provides that the regulations may prescribe the ways in which goods may be transferred from one part of the ARTG to the other part of the ARTG. Regulation 10B of the TG Regulations provides for such transfer. 14 It is apparent that, in the TG Act, "inclusion in the ARTG" relevantly refers to the inclusion of listed goods or registered goods. One permits export of goods, such goods being included in that part of the ARTG known as listed goods ('Listed Goods'). The other permits marketing in Australia of goods, such goods being included in that part of the ARTG known as registered goods ('Registered Goods'). 16 A patentee has a choice as to which regulatory approval to obtain to enable it to exploit the patented pharmaceutical substance. Subject to the requirements of the TG Act, inclusion in the ARTG as Listed Goods or inclusion in the ARTG as Registered Goods are each available to a patentee. 17 An export only listing of a pharmaceutical substance as Listed Goods does not permit marketing in Australia. Pfizer accepts that it does not only permit a product to be exported overseas but also permits manufacture in Australia for export. 18 The right to exploit an invention is not limited to the sale of a patented substance in Australia. For example, to manufacture a patented substance in Australia for sale in another country is to exploit an invention within the meaning of the Act (Sch 1 of the Act). Spirit was joined as a respondent to this proceeding on 1 March 2006 ( Pfizer Corp v Commissioner of Patents (2006) 67 IPR 646). 20 Spirit seeks to adduce evidence of Dr Walters, a person experienced in matters relating to the ARTG, to establish the regulatory requirements of Listed Goods and the extent to which a patentee with an export only listing can exploit a patent. The evidence is said to answer Pfizer's contention that there is no requirement to lodge extensive data in support of an application for inclusion in the ARTG as Listed Goods, which is a requirement for goods to be Registered Goods. Spirit also wishes to respond to any suggestion that an export only listing does not allow exploitation of the patent which compensates for regulatory and product development delays. Such evidence was tendered by Pfizer before the Commissioner and was referred to in the decision. Pfizer now contends that the issue is one of statutory construction to which this evidence is not relevant. 21 Pfizer submits that all parties now accept that there can be different inclusions in the ARTG. Pfizer accepts that it is necessary to provide data in support of an application for Listed Goods and that an export only listing enables the patentee to exploit the invention, albeit on a less than "fully effective" basis. The point that Pfizer wishes to make is that the provision of data for Registered Goods is more onerous and extensive. This itself is said to result in regulatory delay before there can be marketing in Australia and full exploitation of the patent. 22 Pfizer relies on the distinction between the evaluation of Registered Goods and Listed Goods in ss 25 and 26 of the TG Act and stresses that it is not necessary to provide data of efficacy for an application for Listed Goods. Section 25 of the TG Act sets out the matters relevant to the evaluation of Registered Goods, which include a positive requirement that those goods are evaluated for quality, safety and efficacy (s 25(1)(d)). Section 26, which deals with matters relevant to Listed Goods, makes no express reference to efficacy and is couched in negative terms, in the sense that the Secretary is ' not to refuse ' to list goods unless satisfied of certain matters (s 26(1)(c) to (n)). 23 This distinction alone does not establish the extent to which the provision of data for Registered Goods is more onerous and extensive in practice. For example, it is a prerequisite for Listed Goods that any requirements imposed by the Secretary under s 31 in relation to the goods are complied with (s 26(1)(b)). This may include requirements imposed by the Secretary to provide information or documents relating to, among other things, safety, quality and efficacy (ss 31(2)(f) and (h) of the TG Act; regs 16AA(a) and (b) of the TG Regulations). 24 Spirit tendered a sample application form for Listed Goods. Pfizer initially objected to the relevance of the form, but later submitted that the Court need only look at the face of it to see that the required data for Registered Goods are more onerous. Pfizer submits that ' for registration you send a pantechnicon full of paper to the Authority and they assess the material '. No evidence was adduced by Pfizer to support that submission. 25 Dr Walters was formerly Chief Scientist of the Pharmaceutical Chemistry Evaluation Section of the Drug Safety and Evaluation Branch of the Therapeutic Goods Administration ('TGA'). Although she did not review applications for Listed Goods, as part of her duties it was necessary for her to review and keep up to date with TGA policies, including policies in respect of applications for Listed Goods in comparison with the requirements for Registered Goods. 26 To the extent that Pfizer has submitted that it is a more onerous and extensive process to apply for Registered Goods, Dr Walters' evidence on that issue is relevant. Dr Walters' evidence is that the data that an applicant would need to hold in order to obtain an export only listing would be substantially the same quality, toxicological and clinical data as would be required for submission to the TGA in an application for Registered Goods. This contradicts Pfizer's submission. 27 Dr Walters' evidence is otherwise not relevant to the matters in issue. 28 I do not consider the extent to which the provision of data for Registered Goods is more onerous than Listed Goods to be determinative of the substantive issue in dispute, which is the construction of s 70 and 77 of the Act. Section 70(3)(a) also uses the expression ' included in [the ARTG]'. This is distinct from the references to ' first approval ' (s 70(5)(b)), ' market the substance, or a product containing the substance, in Australia ' (s 70(6)(a)) and ' import into Australia, for general marketing ' (s 70(6)(b)). 30 Section 70(5)(a) also recognises that there may be more than one inclusion, which is consistent with the structure of the ARTG, where entries can be made in the parts for Listed Goods and Registered Goods. 31 I consider the meaning of the expression in s 70(5)(a), on its face, to be clear and unambiguous. The reference to "first inclusion in the ARTG" means what it says: the first entry in a part of the ARTG. 32 When the reference to "first inclusion in the ARTG" is informed by an understanding of the nature of the ARTG, the first inclusion means the entry, first in time, in a part of the ARTG. In the present case that is the first entry as Listed Goods. 33 Pfizer, however, contends that this is not the correct construction because of a ' unifying notion ' of the "first regulatory approval date" which means that, because it is the date of the ' first approval ' in s 70(5)(b), it must also be the date that enables marketing in Australia, the first inclusion as a Registered Good in the ARTG, in s 70(5)(a). This recognises that the patent may cover more than one pharmaceutical substance and provides that the term of the extension is based on the earliest of the approval dates that apply to the patent. 35 Where there has been no "pre-TGA marketing approval", that date is ' the date of commencement of the first inclusion in [the ARTG]' (s 70(5)(a) of the Act). If "pre-TGA marketing approval" was given, that date is the date of the ' first approval ' (s 70(5)(b) of the Act). • If "pre-TGA marketing approval" was given, the first regulatory approval date (s 70(5)(b)) is the date of that approval. • The first regulatory approval date where there has been no pre-TGA marketing approval should be consistent with the meaning where there has been pre-TGA marketing approval. • Accordingly, where no pre-TGA marketing approval was given and the first regulatory approval date is determined by the date of commencement of the first inclusion in the ARTG, the inclusion must be an entry for the purpose of enabling marketing in Australia. That inclusion is the inclusion as Registered Goods, not as Listed Goods. • Such a construction is necessary for conformity with the purpose of the Act and applies for the purposes of s 70 and s 77 of the Act. • Section 77 provides a formula for calculating the term of the extension by reference to the period beginning on the date of the patent and ending on the "earliest first regulatory approval date" in relation to the relevant pharmaceutical substance. This embodies an assumption that both types of regulatory approval date are approvals for marketing in Australia. • Resort should be had to the history of the provision for extensions of term and extrinsic material with respect to Pt 3 of Ch 6 of the Act, and particularly s 70, in order to clarify the meaning of "first regulatory approval date". Pfizer contends that "pre-TGA marketing approval" is a shorthand reference to approval for marketing in Australia prior to the commencement of the TG Act. It was the TG Act that established the ARTG in 1991 and the distinction between Listed Goods and Registered Goods. 40 In addition, the TG Act makes provision for the Secretary to grant approvals for the importation into Australia, or the supply in Australia, of specified therapeutic goods in certain circumstances and before the substance is included as Registered Goods in the ARTG (s 19A). That is, the definition recognises approval to import or supply in Australia outside entry in the ARTG. This is not approval prior to the commencement of the TG Act but allows the Secretary to make specific provision for certain goods. 41 Where the date of approval to market in Australia is the relevant date, that is specified. Where specific consideration was given to the date where pre-TGA approval was and was not given, provision was made for two different approaches. That is consistent with the application of two differently determined dates. If the intention were to define "first regulatory approval date" as the date of approval to market in Australia or the date of entry in the ARTG as Registered Goods, it would have been easy to have done so. It was not. There is no "unifying notion" that changes the meaning of "first inclusion in the ARTG" in s 70(5)(a). A condition for an extension was that the patentee had requested the issue of a marketing approval certificate in respect of the pharmaceutical substance (s 70(1)(b)). Where such a request was made to the Secretary to the Department of Community Services and Health and the Secretary approved the marketing of that substance, or a product containing that substance, in Australia, the Secretary gave a marketing approval certificate to the patentee in respect of that substance (s 72 of the Act as enacted). A period of four years extension (s 75(2)) was available from the standard term of 16 years from the date of the patent (s 67). 43 Those provisions were repealed by the Patents (World Trade Organization Amendments) Act 1994 (Cth). It would seem, from the second reading speech to the Patents (World Trade Organization Amendments) Bill 1994 (Cth), that the provisions were repealed with the intention that they would be ' subsumed' by an accompanying amendment to increase the term of all standard patents from 16 to 20 years (Australia, House of Representatives, Debates (1994) Vol HR 197 at 2189). Despite repealing the pharmaceutical patent extension provisions, the speaker observed that the government was still committed to ' an effective 15-year term ' for pharmaceutical patents. The Report makes reference to ' extending the patent term to "restore" time lost in gaining marketing approval ' and ' the period during which [patentees] can exploit their statutory monopoly ', the latter defined by the Report as 'the effective patent life ' (at 440). The then Government's ' preferred approach ' was stated to be a commitment to extending the term of the patent to up to 25 years, ' depending on when the new drug was authorised for marketing in Australia ' (at 442). Reference is then made to ' the day on which registration of the new drug in [the ARTG] commenced '. The Report refers to ' effective patent life ' running from ' the date of Australian marketing approval ' (at 443). 45 Thus, the view expressed in the Report was that 15 years protection would be provided ' from the date of marketing approval in Australia ' (at 444). The approach was said to be more in line with that of the European Union ('EU'), which was described as providing for 15 years effective patent life in the country of first approval anywhere in the EU, with a lesser period of protection in other EU countries. The new extension of term scheme is said to be in recognition of the long development times and regulatory requirements that ' significantly erode the time available under patent to exploit the invention ' (emphasis added). 48 The Revised Explanatory Memorandum ('EM') to the Bill that became the IP Amendment Act refers to the Report and the Response. The EM states that an extension of up to five years will be available for a standard patent relating to a pharmaceutical substance that is the subject of ' first inclusion on [the ARTG]' (at 2). Further, the EM refers to the ' exceptionally long development time and regulatory requirements involved in developing and commercialising a new drug ', with the aim of the Bill being to provide an ' "effective patent life" or period after marketing approval is obtained, during which companies are earning a return on their investment ' (at 3). The implementation of that objective is to provide an extension of term by reference to the ' first registration as a therapeutic good on [the TG Act]' of the substance. There is also reference to the time and work before which the product can ' enter the market ' (at 3). 49 Much discussion in the Report and the EM concerns comparison with international competitors and allowance of spring-boarding. In that context, the EM considers the fact that spring-boarding at any time after an extension is granted would not reduce the period during which the originator company 'retains an exclusive right to sell its product on the Australian market ' (at 8). This was said to be similar to the scheme in the United States, described as a maximum effective patent period of 14 years from marketing approval. For pharmaceutical substances that had not received marketing approval, or approval to be imported into Australia for general marketing, prior to being included in the Australian Register of Therapeutic Goods the first regulatory approval date is the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods. For pharmaceutical substances that had already received marketing approval, or approval to import into Australia for general marketing, prior to inclusion in the Australian Register of Therapeutic Goods the first regulatory approval date is the date of the first such approval. It notes that ' the development of a new drug is a long process ' and '[t] he objective of this part of the bill is to provide an "effective patent life" '. The speaker then states that an extension will be available for a patent relating to a pharmaceutical substance ' that is the subject of first inclusion on [the ARTG]' (at 1376). 53 Pfizer's submission is that a purposive approach to statutory construction should be adopted (s 15AA of the Acts Interpretation Act 1901 (Cth)). In so doing, Pfizer submits that the extrinsic materials evince a clear legislative policy of granting the patentee at least 15 years of ' unfettered exploitation rights ' commencing on the date of approval enabling marketing in Australia. Such a policy is said to be apparent from the totality of the extrinsic materials and their use of the words ' marketing approval ', ' marketing in Australia ', ' right to sell...on the Australian market' and ' first registration as a therapeutic good' . 54 Spirit's primary submission, in contrast to Pfizer, is that the words of the Act are clear and the Court should not give any consideration to the extrinsic materials. As a fallback position, however, Spirit also submits that the extrinsic materials support a legislative intention that "first inclusion in the ARTG" means marketing approval in Australia or listing for export, whichever comes first. 55 The Commissioner, in contrast to Spirit, accepts that the Court is entitled to have regard to the extrinsic materials in order to identify the mischief intended to be remedied by the Act. However, she adopts a similar position to Spirit in respect of the legislative intention said to be apparent from the extrinsic materials. 56 Section 15AB of the Acts Interpretation Act and the common law each permit the Court to consider extrinsic materials in certain circumstances. 58 The words ' first inclusion in [the ARTG]' themselves are neither ambiguous nor obscure (see [ 31 ] above). This is acknowledged by Pfizer's submission that uncertainty arises ' not so much from the terms of s 70(5) itself but from the nature of the ARTG '. Accordingly, s 15AB(1)(b)(i) has no application ( Newcastle City Council v GIO General Limited [1997] HCA 53 ; (1997) 191 CLR 85 at 112). Use of the extrinsic materials to confirm the ordinary meaning of the words does not assist Pfizer (s 15AB(1)(a)). Indeed, Pfizer did not rely on the extrinsic materials for this purpose. 59 Section 15AB(1)(b)(ii) is also not applicable. The ordinary meaning conveyed by the words ' first inclusion in [the ARTG]', taking into account their context and the purpose or object underlying the Act, does not lead to a ' manifestly absurd ' or ' unreasonable ' result ([ 65 ] below). For this reason, it submits that it is appropriate to consider the extrinsic materials at the outset to ascertain and give effect to the purpose of the Act, or ' the mischief which the statute was intended to cure ' ( Newcastle City Council at 99, 112-3). 61 While no particular theory or rule of statutory interpretation obviates the need for close attention to the text and structure of the provision in question ( Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58 ; (2005) 221 ALR 448 at [30] ), the extrinsic materials are part of the context of the Act and relevant in interpreting the meaning of ' first inclusion in [the ARTG]'. 62 In Newcastle City Council , the relevant Law Reform Commission Report on insurance contracts made the legislative objective plain (at 102). In the present case, it is difficult to detect any clear legislative purpose or intention with respect to the relevant entry in the ARTG. Although Pfizer points to the use of the words ' marketing in Australia ', ' the Australian market ' and ' first registration as a therapeutic good ', the extrinsic materials also refer to the time available to ' exploit ' the invention, the period during which patentees can ' earn a return ' and ' first inclusion in [the ARTG]'. To the extent that the policy of the IP Amendment Act is discussed, the discussion is equivocal as to whether the intention was to grant an extension from the date of an approval enabling marketing in Australia rather than the date of approval for a more limited form of exploitation such as manufacture for export. 63 The extrinsic materials, for whatever reason, do not give any clear indication of how the IP Amendment Act took its final form. That makes it difficult, if not impossible, to fix upon the references to ' marketing approval in Australia ' and ' bend ' the language of the Act to meet that purpose ( Stevens at [34]). 64 What is clear from the Response, which is given effect in the IP Amendment Act, is that the extension of term scheme was introduced in recognition of the need to compensate for the time before which a patentee of a pharmaceutical substance can exploit the invention. 65 Pfizer's submission that the relevant approval must be one which allows marketing in Australia in order to give effect to the policy of the IP Amendment Act ignores the fact that inclusion in the ARTG as Listed Goods permits the patentee to exploit the patent. This may not extend to marketing in Australia but it does enable a commercial return to the patentee. The consequence that this is less than full exploitation of the product in Australia is not contrary to the policy of the Act or the purpose of an extension to extend the "effective life" of the patent. The patentee's decision to obtain an early export only listing and thereby a shorter extended term is its choice and may have sound commercial reasons. This seems to apply equally whether pharmaceutical products are subject to export listing or registration because, while the former may not require the same level of regulatory testing and scrutiny in Australia, the development costs will be the same and generally foreign regulatory requirements will need to be met. It is also the case that manufacturing or importing a product for export constitutes exploitation of the patent and would be expected to generate a financial return for the patentee once export listing is achieved. Consequently, the policy benefit of providing an additional "effective term" in which a return on the patented invention is achieved would appear to apply from the first regulatory approval date regardless of whether that is an export listing or registration. Therefore, I do not think it can be said that an interpretation of "inclusion" that encompasses export and other listings on the ARTG is a construction that clearly would not promote the purpose or object of the legislation or leads to a result that is manifestly absurd or is unreasonable. Rather, a construction that would calculate the term of an extension from a subsequent regulatory approval date rather than the first would appear to be inconsistent with the policy of providing an extension of term of only up to 5 years. To the contrary, the extrinsic materials tend to confirm the clear, ordinary meaning of "first inclusion in the ARTG". 69 The Commonwealth filed a motion on 16 November 2005 seeking to intervene in relation to the stay order. The Commonwealth submits that, unless Pfizer can establish that no person could potentially suffer damage by the stay in rectification of the Patents Register, an undertaking as to damages should be required before a stay is granted. The undertaking is only sought in respect of one of the Pfizer patents, Australian Patent No 540769 in respect of the product NORVASC. Such potential damage would include, but not be limited to, damage to generic pharmaceutical companies which may wish to market NORVASC and damage to the Commonwealth in respect of the costs of the Pharmaceutical Benefits Scheme. 70 Pfizer's concern is that, if the entry in the Patents Register is amended and Pfizer succeeds on any appeal, the Commissioner would have no power to re-amend the Register. Pfizer's concern arises because of potential problems once the Patents Register is rectified by amending the date of expiry of the patents to the earlier date. This was the subject of consideration by the Full Court in Woolworths Limited v BP plc [2006] FCAFC 52 ; (2006) 150 FCR 134 (' Woolworths No 1 ') and Woolworths Limited v BP plc [2006] FCAFC 132 ( 'Woolworths No 2 ') in the context of the Trade Marks Act 1995 (Cth). Sundberg and Bennett JJ in Woolworths No 1 at [52] and the Full Court in Woolworths No 2 at [149] were of the view that the Court has power to order the Register of Trade Marks to be rectified on appeal. No detailed submissions have been made as to the application of the Woolworths decisions in the context of the Act. Pfizer has not informed the Court whether it still seeks the stay order. 71 An undertaking as to damages in support of a stay is required when it is necessary to protect against a perceived risk of loss ( Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at [8]; Atlantis Corporation Pty Ltd v Schindler [1997] FCA 455). Pfizer submits that the matters raised by the Commonwealth, such as a generic manufacturer who relies on the Patents Register and declines to take steps to be ready to enter the market in April 2007, are speculative and not sufficient reason to require the undertaking. 72 Pfizer points to the presence of Spirit as a generic manufacturer fully aware of the proceedings. Pfizer also emphasises that these proceedings are public and the decision of the Commissioner and of this Court are publicly available. Pfizer offers to cause a notice to be published in the Official Journal to the effect that the Commissioner has determined that the Patent Register ought to be amended to vary the expiry date of the NORVASC patent to 14 April 2007 as a condition of the stay. Pfizer also suggests a limited form of undertaking, limited to the NORVASC patent, to generic manufacturers and the timing of any damage suffered. 73 No submissions have been made by the Commonwealth or Spirit in response to Pfizer's written submissions on the undertaking, filed after the conclusion of the hearing. 74 In the circumstances, I will hear further from the parties on the application for the stay and the undertaking. Where that inclusion precedes registration that permits marketing in Australia and no "pre-TGA marketing approval" was given, it is the "first inclusion in the ARTG" and the "first regulatory approval date" for the purposes of calculating the period of extension pursuant to s 77 of the Act. 76 The application, being an appeal against the decision of the Commissioner, should be dismissed. The applicants should pay the costs of the Commissioner. Spirit informed the Court on 20 December 2005 that, as a condition of its joinder to this proceeding, it would not seek costs. I will hear from the parties as to Pfizer's application for the stay, the costs of that application and any undertaking as to damages. | date for calculation of extension of term of patents relating to pharmaceutical substances "first inclusion in the australian register of therapeutic goods" not limited to regulatory approval to market pharmaceutical substance in australia correct date if no "pre-tga marketing approval" granted is first entry in the australian register of therapeutic goods, including an entry as listed goods for export only extrinsic materials relevant to context and legislative history materials equivocal on whether "first inclusion" means registration or listing legislative objective that patentee should have "effective patent life" to exploit patent "first inclusion in the australian register of therapeutic goods" "first regulatory approval date" "pre-tga marketing approval" patents statutory construction words and phrases |
Victor Halfpenny died on 25 August 1994. Russell is still alive, although he is now 77 years of age. Russell Halfpenny is married to Helen Mae Halfpenny ( Helen ). Victor Halfpenny was married to Dorothy Doreen Halfpenny ( Doreen ). Jennifer Joy Halfpenny ( Jennifer ) and John-Brett Halfpenny ( John ) are the children of Victor and Doreen. For many years up to about March 1991, each of Russell and Victor, through corporate entities associated with each of them, owned equal portions of the issued capital of Premier Dairies Pty Ltd ( Premier ), the first defendant. The issued capital of Premier has, at all relevant times, been divided into ordinary shares and preference shares. The preference shares in Premier are the only class of shares which carry any entitlement to vote. At all relevant times up to about late June 1995, other families had interests in Premier. In late June 1995, the last of those other families sold out of Premier. Springs Delight Investments Pty Limited ( Springs Delight ), the first plaintiff, and VJ Halfpenny Grazing Co Pty Ltd, the second plaintiff, are companies which are now controlled by Doreen, Jennifer and John. Frith Common Pty Limited ( Frith Common ), the second defendant, and RJ Halfpenny Investments Pty Ltd, the third defendant, are companies controlled by Russell and his family. In March 1991, certain transactions involving alterations to the share capital of Premier took place. The effect of those transactions, amongst other things, was to create inequality as between Russell's family and Victor's family in the number of shares held by their respective family interests. Each side of the family held, via its corporate entities, the same number of ordinary shares in Premier, but, from March 1991, Frith Common held one more preference share than Springs Delight held (737 to 736 preference shares as at March 1991). Since Victor's death, Doreen and her children have not always seen eye-to-eye with Russell and his family. In recent years, significant differences of opinion have arisen between the two families as to the management and control of Premier and also as to the management and control of a corporation in which Premier has a significant investment, ACN 000 691 396 Pty Limited, formerly known as Perfection Dairies Pty Ltd ( Perfection ). Perfection was, until 2008, an incorporated joint venture vehicle through which the Halfpennys (both branches) and another group of dairy farmers, the Peels, conducted dairy farming activities. In 2008, that corporation sold its entire undertaking to Dairy Farmers Limited. That transaction has spawned another proceeding in this Court (NSD 209 of 2009). According to the case which the plaintiffs will seek to make in the present proceeding, Russell has exercised an increasing degree of control over the affairs of Premier since the late 1990s. He has, so it is said, utilised the extra voting share held by Frith Common to overpower Doreen and her children in conducting the business and affairs of Premier and has also usurped the position of Chairman of Directors and Chairman of General Meetings in order to control the conduct of such meetings. It is alleged that he has purported wrongfully to exercise a casting vote at such meetings. At this stage, of course, these assertions are no more than contentions being advanced by the plaintiffs and have not yet been subjected to any forensic testing in any hearing or made the subject of any findings by the Court. In early 2008, Perfection sold its trade marks, business and assets to Dairy Farmers Limited for $34,364,000. As I mentioned in [8] above, Perfection is part owned by Premier and part owned by another dairy family, the Peel brothers. Premier appears to be represented on the Board of Directors of Perfection by Russell and Helen. Doreen and her children complain that Russell and Helen have not kept their side of the Halfpenny family informed as to the sale of the Perfection business and assets and have concealed important facts and matters from Doreen and her children in respect of that sale. These proceedings were commenced on 28 May 2009. The relief originally sought by the plaintiffs was an order that Premier be wound up, either under s 232 of the Corporations Act 2001 (Cth) ( the Corporations Act ) (oppressive conduct of affairs) or under s 461(1)(e) ---(g) and s 461(1)(k) (oppressive conduct and/or the just and equitable ground). The proceedings remained under the management of a Registrar until 30 October 2009 when the matter was first listed before me for directions. On that occasion, I was informed that the plaintiffs wished to challenge the retainer of David John Perkins, who is the solicitor on the record for Premier in this proceeding and in proceeding NSD 209 of 2009. I was also informed that the plaintiffs wished to amend their Statement of Claim as well as file Interlocutory Process seeking interlocutory relief. On 30 October 2009, I directed the plaintiffs to serve and lodge with my Associate by 10 November 2009 the final form of pleading to be relied upon by them in these proceedings and also directed that they file, by the same date, any interlocutory process in which they seek interlocutory orders together with all affidavits in support of that process. On 10 November 2009, the plaintiffs filed Interlocutory Process. In that Process, they seek a number of orders. They seek leave to amend their Statement of Claim; they seek to challenge the retainer of Mr Perkins both in this proceeding and in proceeding NSD 209 of 2009; they seek to restrain Premier, Russell and Russell's family from progressing the Perfection proceedings; and they seek the appointment of a provisional liquidator to Premier. On 25 November 2009, I fixed the plaintiffs' Interlocutory Process for hearing on 11 December 2009. When the matter was called on for hearing on 11 December 2009, I was informed that the only claim made by the plaintiffs in their Interlocutory Process which could be dealt with by the Court on that occasion was the plaintiffs' application for leave to amend their Statement of Claim. I was told that the parties were still in the process of filing and serving their evidence in respect of the other claims made by the plaintiffs in their Interlocutory Process and were not in a position to progress those claims on 11 December 2009. Accordingly, I heard the plaintiffs' Application for Leave to Amend their Statement of Claim. These Reasons for Judgment determine that claim and that claim only. The remaining claims made in the plaintiffs' Interlocutory Process have been adjourned for future consideration. It was five pages in length comprising 44 paragraphs. The proposed Amended Statement of Claim ( the amended pleading ) is 145 pages in length comprising 198 paragraphs and a number of schedules. The amended pleading is a catalogue of facts, matters and circumstances concerning the affairs of Premier, the Halfpennys and Perfection over some 40 years. It is not possible for me, at this stage, in the absence of considerable argument, to determine whether it is either necessary or desirable that the plaintiffs' case be pleaded in such a lengthy and complex fashion. The defendants do not oppose the plaintiffs having leave to amend in accordance with the amended pleading, subject to several specific complaints being addressed by the plaintiffs. They do not resist the filing and service of the amended pleading in its entirety but rather confine their criticisms to four or five specific matters. They have done so against a background of having raised various matters in correspondence and by way of requests for particulars. In this way, the parties have managed to narrow the scope of their dispute concerning the amended pleading. During the course of argument, the disputes between the parties were further narrowed thus enabling these Reasons for Judgment to be briefer than they might otherwise have been. Against the background which I have set out above, I will now turn to deal with the specific criticisms made by the defendants of the amended pleading. The list set out in par 3 is then developed in later parts of the amended pleading. Halfpenny. They should be removed. The plaintiffs have agreed to delete these words. In par 4 of the amended pleading, the plaintiffs list future actions on the part of Russell and his family which should not occur in the conduct of Premier's affairs. The defendants submit that the plaintiffs ought to be compelled to plead with precision in respect of each identified ground for the winding up order which they seek all facts, matters and circumstances listed in par 3 which are relied upon in support of each such ground. During argument, it seemed to me that the defendants' submissions were sound. Ultimately, Counsel for the plaintiffs agreed that the pleading required amendment in order to deal with this particular complaint The plaintiffs will therefore be obliged to specify, in respect of each statutory ground relied upon in pars 6---10 of the amended pleading, which facts, matters and circumstances listed in par 3 relate to each such ground. The expression " some or all " should be deleted from par 3 and par 4 of the amended pleading. The defendants complain that the paragraphs are embarrassing because they require them to plead to a range of matters which are utterly irrelevant to the essential claims made by the plaintiffs in the proceedings. I do not agree with this submission. The plaintiffs are entitled to point to the way in which Russell and Helen have participated in the affairs of Perfection with a view to relying upon their conduct in that context as supporting the claims for relief which they make in the present proceeding. I do not think that there is any difficulty with pars 42---61 of the amended pleading and they should be allowed to stand. Further, Counsel explained the basis of the contentions captured in these paragraphs during the course of argument. It seems that the plaintiffs wish to contend that Russell and Victor made an agreement or, perhaps, something slightly less well formed than an agreement, whereby equality between the two sides of the family was to be entrenched in the affairs of Premier. The plaintiffs cannot and do not point to any particular conversation or conversations as constituting or evidencing an express agreement but rather contend that the Court ultimately will find that there was an agreement or common assumption which is to be implied from certain facts, matters and circumstances relied upon by the plaintiffs. The defendants submit that the plaintiffs have failed to address the case which they seek to propound in a way which satisfactorily meets the rules of pleading. They argue that the amended pleading is vague and ambiguous when dealing with the basis for and the terms of the alleged agreement or common assumption. In broad terms, I think that the defendants' submissions in respect of these paragraphs are sound. In my view, the plaintiffs are required to specify with precision the facts, matters and circumstances relied upon by them as the material from which any alleged agreement is to be implied. Having identified those facts, matters and circumstances, the plaintiffs should also specify the substance of the arrangement or agreement which they contend should be implied from those facts, matters and circumstances. In other words, the plaintiffs should articulate the complexion or interpretation or, if more than one, the various interpretations, which they wish to place on the specified facts, matters and circumstances so that the Court and the defendants are not left to make up their own minds as to the way in which the material relied upon is ultimately to be deployed. I consider that it is legitimate for the plaintiffs to tease out of the specified facts, matters and circumstances conclusions which may be expressed in the alternative but the alternatives should be spelt out. Therefore, it seems to me that the plaintiffs ought to be required to specify the substance of the arrangement or arrangements which they contend ought to be implied from the facts, matters and circumstances relied upon and to do so in a comprehensive way. The pleading should contain a precise statement of all material facts, matters and circumstances relied upon (whether by way of pleading and/or particulars) and a clear articulation of all of the terms of the alleged arrangement said to arise from those facts, matters and circumstances including any alternatives. The defendants complain that the current pleading, even when read with the particulars provided, does not satisfy the criteria which I have described at [36]---[37] above. They submit that, as matters presently stand, there is a great deal of ambiguity in the plaintiffs' articulation of the substance of the arrangement said to arise from the material relied upon. The plaintiffs emphasise the difficulties which they face, given the nature of the case which they wish to mount, the long period of time with which the case is concerned and the fact that Victor is not available to provide instructions and to give evidence. These matters do present difficulties for the plaintiffs but cannot be relied upon by them to avoid addressing the legitimate concerns raised by the defendants. The plaintiffs must recast pars 75---82 in order to satisfy the criteria which I have described at [36]---[37] above. The plaintiffs submit that the matter set out in this paragraph of the amended pleading is simply a material fact and does not carry with it any implication of any underlying agreement. If that is so, then the defendants' complaint falls away. During the course of argument, Senior Counsel for the second to fourth defendants, conceded that Russell and Helen received directors' fees from Perfection over several years and that they did not account to Premier for any part of those fees. Senior Counsel submitted that there was no obligation on the part of Russell and Helen to account for these directors' fees and that the mere fact that they were arguably nominees of Premier on the Board of Perfection did not provide a sufficient basis in law for the alleged obligations to disclose and account. In their capacity as Directors of Perfection, Russell and Helen must discharge all of the duties imposed on them as directors of that corporation. A nominee director may owe duties both to his or her appointor and to the corporation to which he or she is appointed as nominee director and, on occasion, may find himself or herself in a position of conflict. The plaintiffs seek to use the allegations made in pars 191---196 of the amended pleading as a further ground upon which Premier ought to be wound up. They do not claim relief directly against Russell or Helen as a result of the claims made in these paragraphs. I doubt that there is a general principle to the effect that a nominee director must disclose to his or her appointor the receipt of directors' fees from the corporation to which he or she is appointed and, in the absence of some specific arrangement, to account to his or her appointor for those directors' fees. It seems to me that, in the absence of something more (such as an agreement or arrangement of some kind governing the basis upon which Russell and Helen would act as Directors of Perfection), there is probably not a sufficient basis in the allegations made in these paragraphs to amount to a ground justifying the winding up of Premier. However, given that there seems to be no dispute about the facts---that is to say, there is no dispute that directors' fees were paid to Russell and Helen over several years---and given the relative ease with which the amount of those fees can be established, the significance of the matter can be more carefully looked at when all of the evidence is in. With some reluctance, I propose to allow these paragraphs to stand. As a matter of fairness, if the plaintiffs wish to press these paragraphs, Helen should be joined as a party defendant and I direct that she be joined in the event that these paragraphs are pressed. I will make orders accordingly. Both groups of parties have had some success in respect of the Application determined by these Reasons for Judgment. However, I think that the defendants have had slightly the better of the argument, principally because they have succeeded in the most substantial of their complaints, namely that which related to pars 76---82 of the amended pleading. I think that the appropriate costs order is an order that the costs of the plaintiffs' Application for Leave to Amend the Statement of Claim determined by these Reasons for Judgment be the defendants' costs in the proceeding. I will make a costs order in those terms. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. | leave to amend the plaintiffs' statement of claim leave granted practice and procedure |
The Settlement Sum, as described in the Further Terms of Settlement, be distributed in accordance with the Further Terms of Settlement. Sue Youngsook Lee is removed from the list of Group Members as defined in the Further Amended Statement of Claim and Further Amended Application. Pursuant to s 33ZB(a) of the Federal Court Act the Court declares that the persons affected and bound by these orders are the applicants, the respondent, and the group members who are defined in the Further Amended Statement of Claim. All costs orders made to date in the proceeding are hereby vacated. There will be no order as to costs of the proceedings. The Applicants file an affidavit upon the receipt of the Settlement Sum in accordance with the Terms of Settlement and Further Terms of Settlement. Upon the filing of that affidavit, the Further Amended Application filed on 22 February 2008 be dismissed. In the principal proceeding, the application is brought by the applicants as a representative party on behalf of 102 group members although some of those group members represent more than one individual or corporation. By the Further Amended Application and the Further Amended Statement of Claim, the applicants claim relief said to arise out of conduct on the part of the respondent involving negligence; negligent misstatement; contraventions of ss 912A , 945A , 1012A and 1041H of the Corporations Act 2001 (Cth) (the " Corporations Act "); contraventions of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (the "ASIC Act"); and contraventions of s 851 of the Financial Services Reform Act 2001 (Cth), in connection with the investment by the group members as clients of the respondent, in four financial products issued by Westpoint Corporation Pty Ltd or entities related to that corporation. The financial products were promissory notes described as Market Street Mezzanine Finance Promissory Notes, Ann Street Mezzanine Finance Promissory Notes, Bayshore Mezzanine Finance Promissory Notes and York Street Mezzanine Finance Promissory Notes. The claims have been the subject of a mediation between the applicants and the respondents sponsored by the Australian Securities and Investments Commission. That mediation resulted in the parties entering into the Terms of Settlement document of 19 June 2009 and Further Terms of Settlement. Under the Terms of Settlement document of 19 June 2009 the parties agree to distribute a settlement fund of $5,976,426.00 in full satisfaction of the claims of the group members which would provide for a return of 62.5 cents in the dollar in respect of each claimant's investment. Ms Sue Youngsook Lee was inadvertently included within the claim group. She was not an investor in any of the above Westpoint products. By order, she was removed from the class of group members. The group members now consist of 101 group members. Total claims constitute $9,512,281.27. Consistent with the Further Terms of Settlement, having regard to the removal of Ms Lee's claim, an amount of $5,945,176.00 will be distributed to the group members. The rateable distribution of 62.5 cents will not alter. The applicants now seek the Court's approval pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (the "Act") of the Terms of Settlement represented by the two Settlement Agreements. In considering that question, I have considered all of the affidavit material relied upon by the applicants in support of the sanction. I also considered the principles identified by Jacobson J in Taylor v Telstra Corporation Ltd [2007] FCA 2008 at [56] to [66]; the observations of Goldberg J in Williams v FAI Homes Security Pty Ltd (No. 4) (2001) 180 ALR 459; Darwalla Milling Co Pty Ltd v F Hoffmann-Laroche Ltd (No. 2) (2007) 236 ALR 322 per Jessup J; and Vernon v Village Life Ltd [2009] FCA 516. The nine factor test described by Goldberg J in Williams v FAI Homes Security Pty Ltd (No. 4) as "helpful in the Australian jurisdiction" derives from a nine factor test adopted by the United States Court of Appeals for the third circuit in Re General Motors Corp Pick-Up Truck Fuel Tank Products Liability Litigation 55 F 3d 768 at 785. There is some debate in the authorities about the emphasis to be given to the nine factor test in applying the essential test the Court must address. However, the essential question is whether the settlement is fair and reasonable having regard to the claims made by the group members who will be bound by the settlement in the context of the facts pleaded; the prospects of success in the principal proceeding; the likelihood of group members obtaining judgment for an amount significantly in excess of the settlement distribution; the likely duration and cost of proceedings; and the weaknesses, substantial or procedural, in the case advanced by the group members and whether the settlement sum falls within a realistic range of likely outcomes. The Court will also have regard to the terms of any advice received by group members from counsel as well as any expert advice in relation to the issues raised by the proceeding. The Court will not second-guess the advice of the applicants' advisers. The Court takes the advice into account in determining whether the settlement is fair and reasonable, that is to say, whether the agreed settlement falls within the range of fair and reasonable likely outcomes, taking everything into account. In that context, I have had the benefit of reading a joint opinion by Mr Graham Gibson QC, Mr Tom Sullivan SC and Ms Lisa Nichols on behalf of the applicants which examines thoroughly the merits of each of the causes of action advanced in the principal proceeding. Having regard to the material read in support of the application and the joint advice which, by reason of its confidentiality, has remained sealed, I am satisfied that the settlement is a fair and reasonable settlement of the claims made by the group members who will be bound by the settlement. Mr Bain QC appeared on behalf of the respondent and supports the proposed orders under s 33V(1) of the Act. Accordingly, I have made orders in terms of a draft initialled by me subject to typographical corrections by the applicants. The solicitors for the applicants will submit a revised corrected document to the Court to be issued reflecting the final form of the orders. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for approval of a settlement of a proceeding brought by the applicants in a representative capacity on behalf of 101 group members, under s 33v(1) of the federal court of australia act 1976 consideration of the principles to be applied in approving a proposed settlement corporations |
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