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There are ten documents in respect of which the claim is made. 3 It is evident from the table that the claims are based on s 119 of the Act, which deals with disclosure of confidential documents and communications which are prepared for the dominant purpose of providing a client with professional legal services relating to legal proceedings. In determining the question of privilege, the Court is required to evaluate the dominant purpose of each relevant document or communication. The Property was sold for an amount of $800,000 and settled on 3 December 2004. On 12 November 2004, ORIX Australia Corporation Limited ("ORIX") placed a caveat over the Property. The caveat was purportedly lodged pursuant to a clause in ORIX's standard terms and conditions for Commercial Hire Purchase Agreements. ORIX entered into six Commercial Hire Purchase Agreements with Queensland Construction Equipment Pty Limited ("QCE"). Raymond McCormick, as a previous director of QCE, entered into personal guarantees and indemnities with ORIX ("the Agreements"). The Agreements were introduced to ORIX by Moody Kiddell ("MPK"). MPK prepared each application and submitted them to ORIX. Upon acceptance by ORIX, MPK prepared the Agreements for execution by QCE, Gweneth McCormick and Raymond McCormick. The First Respondent as Trustee has conducted investigations including the issuing of section 77A and 77C notices and compiled evidence with respect to commencing proceedings against ORIX to recover the payment received by ORIX. The First Respondent as Trustee has sought legal advice from Douros Lawyers and counsel with respect to commencing proceedings against ORIX to recover the payment received by ORIX. Following these investigations and the receipt of legal advice, the First Respondent has formed the view that the $411,624.00 recovered by ORIX is a voidable preference in the bankrupt estates as there was no caveatable interest, and therefore ORIX received money by way of an unfair preference. No other information is given as to the provenance or nature of the documents. As can be seen, the table simply gives a description of each document and a description of the nature of the privilege as claimed in a generic sense. This evidence is not very satisfactory and I have relied on my inspection of the documents as the main basis for ruling on privilege. 6 In relation to Document 9, which is the Affidavit of Raymond Alexander McCormick of 1 December 2005, the description given is that it was prepared by lawyers regarding anticipated proceedings concerning a preference payment in which Mr Crouch is a party. 7 The objection raised to this claim is that Mr McCormick has filed a number of documents in the various proceedings and this affidavit, so far as the applicant is aware, has not in fact been filed and may be no more than an affidavit deposing as to the circumstances in which he became bankrupt or the state of his assets and liabilities. Therefore, it is submitted, the affidavit is not privileged. 8 On its face, the document is an affidavit which appears to have been prepared for the dominant purpose of legal proceedings in order to provide an evidentiary foundation for the provision of professional legal representation and submissions. 9 It is not necessary, in order to enliven the entitlement to privilege, that the document is filed in court. Having regard to its date and contents, I am satisfied that to require production would result in the disclosure of a confidential communication or document prepared for the dominant purpose of providing professional services in an anticipated proceeding. This document is privileged. 10 Documents 10-12 are draft affidavits of Raymond Alexander McCormick and Documents 13-14 are draft affidavits of the other bankrupt, Gweneth Aileen McCormick. In my view, the reasoning in relation to Document 9 similarly applies to these draft affidavits and therefore they are privileged from production. 11 Legal professional privilege is confined to professional communications made on a confidential basis for legal advice and services. The concept of legal privilege is founded on the special significance that the Court attaches to the informed resolution of disputes in the court system and the application of the law to those disputes. In consequence, the communications which arise from that professional relationship are given special significance: see, for instance, Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52 at 128 for a discussion of the rationale underlying the privilege. In essence, the purpose of legal privilege is to facilitate the giving of advice in the conduct of adversarial litigation to ensure that there is open communication between clients and legal advisers. 12 I consider that Documents 10-14 inclusive are privileged for the above reasons. 13 Document 15 is an affidavit by a son of the bankrupt whose only involvement in the bankruptcy of his parents was that he filed an initial debtor's petition in the estate of his father, which was subsequently set aside. I consider the same principles apply to this document as to the preceding documents. 14 Document 16 is a print-out of an email with a number of handwritten notes on it. There is no description as to its origin or purpose, although there is a reference in the email to an anticipated Statement of Claim. However, I do not consider there is sufficient connection between this letter and the giving of legal advice or the conduct of legal proceedings such as to warrant a conclusion that the dominant purpose of this communication was to obtain professional legal services. Therefore, I do not think this document is privileged. 15 Document 17 is a letter from Ebsworth & Ebsworth to Mr Crouch dated 19 July 2005. The letter concerns anticipated proceedings against Orix regarding a preference payment. In my view, it comes within the protection of s 119 of the Act. It refers to legal advice and discusses evidence in prospective proceedings. Therefore, it is privileged. 16 Document 18 is a letter from Crouch Insolvency to Douros Lawyers enclosing a response to a s 77A notice which notes particular points of interest in respect of that response. It is agreed between the parties that this document is privileged on the basis that it is a communication between solicitor and client. 17 Document 19 is a letter from Ebsworth & Ebsworth to Mr Crouch dated 9 May 2005 providing files which relate to legal proceedings. The letter also comments on the significance of these documents. I do not consider that the documents which are enclosed with that letter are subject to privilege. However, in my view, the covering letter itself is covered by the privilege. The fact that a document is privileged does not mean that all annexures or enclosures with that document are within the privilege merely by reason of being associated with privileged correspondence. The position is different, of course, if those documents themselves are the subject of legal advice, if they embody legal advice, or if they can be categorised as being for the purpose of the provision of legal services. This is not the case here. 18 For the above reasons, I am satisfied that, with the exception of Document 16 as discussed earlier, the documents in the table are privileged and need not be made available. In addition, it is apparent from my inspection that Documents 1-8 are also privileged from production. 19 I do not consider it is appropriate to make any order for costs in relation to this application on the privilege question, other than that the costs of the application are to be costs in the cause. 20 I therefore order that Document 16 be made available and that the costs of this application abide the outcome of the proceedings. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | legal professional privilege dominant purpose of the relevant document or communication whether an unfiled affidavit and subsequent drafts are covered by the privilege whether documents enclosed with a privileged letter are covered by the privilege. privilege |
2 The appellant is a citizen of the Peoples Republic of China ("the PRC"). He first entered Australia on 17 August 1996. On 28 February 1997, the appellant lodged an application for a protection visa claiming to have a well-founded fear of persecution following his alleged support and involvement with the Chinese Democracy Party. 3 In refusing the appellant's visa application on 19 August 1997, the delegate did not accept on the available evidence that the appellant was of any significant interest to the PRC authorities and did not face persecution upon return to his country ("the Decision"). In drawing this conclusion, the delegate noted the relative ease with which the appellant had exited and re-entered the PRC on at least two previous occasions prior to him entering Australia. 4 Notification of the Decision was sent by post to the appellant's home address. It was returned unclaimed several days later. The appellant had, in fact, nominated his post office box as the appropriate contact point for all correspondence. As a result, the appellant was not notified of the Decision. 5 On 23 August 2005, the appellant informed the respondent of his new address for correspondence. On 14 September 2005, the respondent sent a letter to the appellant's new address notifying him of the Decision. 6 An application to show cause why remedy should not be granted pursuant to s 476 of the Migration Act 1958 (Cth) ("the Migration Act ") was lodged in the Federal Magistrates' Court on 22 September 2006. The respondent filed a notice of objection to competency alleging that the appellant had not identified a decision which was reviewable under s 476 of the Migration Act . The Federal Magistrate dismissed the appellant's application with costs on 24 May 2007. First, the Decision was and remains a valid decision. Secondly, notification of the Decision in September 2005 did not constitute a separate decision and complied with ss 494B and 494C of the Migration Act . Thirdly, the Federal Magistrates' Court did not have jurisdiction in relation to the Decision. The first matter requires identification of the provisions of the Migration Act in force on 19 August 1997 when the Decision was made. The third matter requires consideration of s 476 of the Migration Act in force on 22 September 2006. At that time, the relevant provisions of the Migration Act were contained in Reprint no. 7 consolidated to 23 April 1997. There were two amendments to that Act in the period between the reprint and the Decision: Migration Legislation Amendment Act (No. 3) 1997 , No. 92 of 1997 and Environment, Sport and Territories Legislation Amendment Act 1997 , No. 118 of 1997 cl 48 of Schedule 1 . Neither of the amendments is relevant. At that time, the Migration Act provided that when the Minister granted or refused to grant a visa, he or she was to notify the applicant of the decision in the prescribed way: s 66(1). Significantly, s 66(4) went on to provide that " [f]ailure to give notification of a decision [did] not affect the validity of the decision. " The Decision was and remains a valid decision. 11 That outcome is not altogether harsh. Upon being notified of the Decision in September 2005, the appellant had a period of 28 days within which to seek a review of the Decision: s 412. He did not do so. 12 Moreover, notification of the Decision cannot be treated as a separate 'decision' from the Decision for the purposes of s 476 of the Migration Act : Chung v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 442. Sections 494B and 494C were inserted into the Migration Act by Schedule 3 to the Migration Legislation Amendment (Electronic Transactions and Methods of Notification) Act 2001 (Cth). They took effect on 10 August 2001 and, as a matter of statutory construction, applied to the notification of the Decision by the Minister in 2005: Pearce DC and Geddes RS, Statutory Interpretation in Australia, 5 th ed, para [7.23]. 14 The appellant was notified of the Decision some 8 years after the Decision was made. The appellant does not dispute he received notification in September 2005. Counsel for the appellant contended that the notification regime in the Migration Act is strict and peremptory and that the Minister failed to comply with ss 494B and 494C . He concedes the argument is technical. The Minister contends that the notification complied with ss 494B and 494C and referred the Court to the decision of Allsop J in Zhan v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 327 at [49] . I adopt the reasoning of Allsop J in Zhan at [47]-[49]. In my view, the Federal Magistrate was correct to conclude that there was notification of the decision in 2005. The letter enclosing the decision was sent within three days of its date in the manner prescribed by ss 494B(4). The fact that it enclosed the Decision made some years earlier is unfortunate but does not render the notification invalid. As noted earlier, upon being notified of the Decision in September 2005, the appellant had a period of 28 days within which to seek a review of the Decision: s 412. He did not do so. 15 Finally, the Decision was and is a 'primary decision' within the meaning of that term in Division 2 of Part 8 of the Migration Act . Accordingly, the Federal Magistrates' Court had no jurisdiction in relation to the Decision: s 476 of the Migration Act . 16 The appeal should be dismissed on this ground alone. The Federal Magistrates' Court had no jurisdiction in relation to the Decision: s 476 of the Migration Act . 19 Even if the Court did have jurisdiction, it would have been appropriate to refuse relief having regard to the delay of one year and the availability of other suitable remedies which had been available to the appellant but not utilised. It is inappropriate for the Court to pre-empt a decision of the Tribunal as to whether it has jurisdiction. That is a question for the Tribunal: see Chung at [20]. | appeal from decision of federal magistrate where delay in actual notification of decision consideration and application of ss 494b and 494c of the migration act 1958 (cth) migration |
By an order made on 13 December 2001 (the 2001 Order), on the application of the Australian Securities and Investments Commission (ASIC), this Court ordered that the scheme be wound up under s 601EE of the Corporations Act 2001 (Cth) and that Mr Barry Kenneth Hamilton be appointed Liquidator. 3 The Solicitors' Trust (the Trust) is a body corporate under Div 2 Pt 9 of the Legal Profession Act 1993 (Tas). Its function is to administer and manage the Solicitors' Guarantee Fund established under that Act. The Fund provides compensation for persons who have suffered loss as a result of defaults by legal practitioners, as well as providing for legal aid and other public purposes. 4 With operation from 28 June 2002, the Legal Profession Act 1993 was amended to deal specifically with the remuneration and costs of liquidators appointed under the Corporations Act to solicitors' unregistered managed investment schemes. 5 Following that amendment, and with the consent of ASIC, the Liquidator and the Trust, the 2001 Order was varied on 20 August 2002 (the 2002 Order) to include reference to s 108(2)(a)(iii). These variations were as follows. 7 On 29 August 2007 provision was made for the Liquidator to provide to the Trust details of claims in relation to legal fees incurred. The order also provided a procedure for review by the Court of the District Registrar's review. 8 By the Legal Profession Act 2007 (Tas), with operation from 9 April 2008, the Tasmanian Parliament removed the obligation on the Trust to apply funds of the Guarantee Fund for the remuneration and costs of a liquidator of an unregistered managed investment scheme operated by a law practice. 9 The Trust has now brought an interlocutory application. Its primary submission is that, as a result of the changes made by the Legal Profession Act 2007 , it no longer has any obligation to apply the Fund towards the costs and remuneration of the Liquidator. It says the Orders of the Court should be varied to reflect that position. 10 The Trust's application is opposed by the Liquidator. ASIC neither opposes nor consents. The Attorney-General for the State of Tasmania intervening supports the Trust's case. Did the Trust's obligation to apply the Fund towards the Liquidator's remuneration and costs derive from the 2001 Order as varied, or from the Legal Profession Act 1993 , or from both? 2. If such obligation derived in whole or in part from the Order, was s 657 of the Legal Profession Act 2007 invalid as being inconsistent with a law of the Commonwealth, namely s 601EE of the Corporations Act , within the meaning of s 109 of the Constitution ? 3. 13 Section 601EE(2) would not confer power on the Court to make an order creating substantive obligations. ... In Joye v Beach Petroleum NL (1996) 67 FCR 275 at 287, 290, the Full Court of the Federal Court approved the statement of McPherson SPJ in Re Crust 'N' Crumb Bakers (Wholesale) Pty Ltd [1992] 2 Qd.R. It follows, in my view, that where a statute makes reference, without more, to the "winding up" of an entity, it is referring to the application of a procedure containing these essential characteristics. It follows that s 601EE(2) must be read as empowering a court to make such orders as it considers appropriate in order to apply such a procedure to an unregistered managed investment scheme. It may also be accepted that the terms of the section allow for further orders to be made as needed so long as they are required for the "due conduct and completion of the winding up". The necessary corollary is that an order that could not reasonably be seen as advancing this procedure would not be authorised by s 601EE(2). 14 In Re GDK Financial Solutions Pty Ltd; Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (2006) 236 ALR 699 at [43], Finkelstein J pointed out that the section does not confer substantive obligations. ...I do not accept that the power conferred by s 601EE(2) is without restriction. In particular, I do not accept that the section permits the court to impose an otherwise nonexistent obligation on a person to provide information to a receiver appointed to wind up a managed investment scheme. It is a well established principle of statutory construction that, in the absence of clearly expressed language to the contrary, courts will presume that legislation is intended to leave individual rights intact. 15 Section 601EE(2) does not confer on this Court the power to impose a legally enforceable obligation to pay the remuneration and costs of a liquidator on persons who previously bore no such obligation. Once that truism is accepted, the form of the 2002 variation to the 2001 Order is perfectly understandable. After the Tasmanian Parliament had enacted s 108(2)(a)(iii) of the Legal Profession Act 1993 , it would have been confusing and misleading to leave the 2001 Order in its existing form. Viewed objectively in the light of the surrounding circumstances, the purpose of the variation was to make the Order show what the source of the Liquidator's remuneration was now to be, given the recent enactment of s 108(2)(a)(iii). 16 Subsequent variations to the 2001 Order in 2007 and 2008 do not affect this conclusion. The variation in 2007 simply provided procedures for detailing expenses which consisted of legal fees. It also provided a further avenue for review by the Court, additional to those contained in par 2(c)(i) and (ii) of the 2001 Order (which provided, in general terms, for ASIC, Piggott Wood & Baker, any investor in the scheme, or the Liquidator to apply to the Court for directions). The 2007 provision, par 2(c)(iii), for the Court's review is specifically directed to the District Registrar's review of the Liquidator's claim for costs and remuneration. 17 I agree with senior counsel for the Liquidator that par 2(c)(iii)(C), providing for payment of the amount approved by the District Registrar within seven days of approval, is not confined to the situation where the Trust has sought Court review. It applies to any amount approved by the District Registrar. The inference to be drawn is that in return for the right to a Court review as detailed in (A) and (B) the Trust has agreed to pay all amounts approved by the District Registrar within seven days, whether they are to be reviewed by the Court or not. The parties have adopted the philosophy of the Income Tax Act: pay now, dispute later. However, none of this suggests that the power to require payment by the Trust is founded in the Court's order. 20 For the reasons already stated, s 601EE(2) was not, and could not have been, a source of power of the 2002 Order insofar as it provided for the payment of the Liquidator's costs and remuneration by the Trust out of the Fund. That source was s 108(2)(a)(iii) of the Legal Profession Act 1993 , an Act of the Tasmanian Parliament dealing with the obligations of the Trust, an entity established under Tasmanian law. Section 109 has no application because no Commonwealth law is relevantly in a condition of possible inconsistency with a State law. Should the 2001 Order be further varied? 22 It is therefore not necessary to consider whether, if the Tasmanian legislation were invalid, the Court should nevertheless give effect to the policy as stated by the Minister; see Tasmania, House of Representatives, Debates (2007) Part 2, pp 46-47, 55. 23 I note that is not suggested that the amendment to the legislation affected the rights of the Liquidator in respect of claims for costs and remuneration incurred prior to the legislative amendment. The Liquidator's costs and remuneration will no longer be payable by the Guarantee Fund. Paragraph 2 of the order of 20 August 2002 be varied by deleting the words "from the Guarantee Fund pursuant to section 108(2)(a)(iii) of the Legal Profession Act 1993 ". 3. The parties file and serve submissions as to costs within fourteen days. | orders for payment of liquidator's remuneration and costs in winding up of unregistered managed investment scheme order varied to specifically provide for reimbursement by solicitors' guarantee fund reflecting obligation introduced in tasmanian legislation relevant tasmanian legislation repealed and replaced removing obligation on solicitors' guarantee fund whether source of obligation on fund arose under order or tasmanian legislation whether tasmanian legislation inconsistent with corporations act corporations |
2 Mr Lang has a long history of back problems dating back to at least 1968. His medical history is complicated and, at times, his account and the reports of his treating doctors appear to be inconsistent. For this reason, it is necessary to set out this history in some detail. 3 It seems that in 1968, prior to commencing work for the Commonwealth Government, Mr Lang hurt his back. In October 1970, Mr Lang commenced working for the Commonwealth Department of Primary Industry. His job involved locating and lifting storage boxes and sorting through the files stored in those boxes. At times these boxes were stored on a high shelf. Generally a ladder was not available and Mr Lang, while lifting a box, would stand on a chair and step from that chair to another, which he had placed on top of a table. Mr Lang now claims that in mid-1981 he fell from the chair on top of the table and landed on the chair on the floor. Mr Lang was in pain shortly after the fall; he took a day off work but ultimately returned to the work until September 1981. 4 On 17 November 1981, Mr Lang filled out a "Notice by employee of injury/disease/loss of or damage to property". Mr Lang indicated that the place of injury was "shifting forms in back [or bulk] store" and described his injury as "aggravation of an accident on 6/11/68". He lodged a claim for compensation for this injury on the same day and described how the injury occurred in the same way. Mr Lang described the nature of the aggravated injury as "3-4 thoracic discs". 6 In August 1982, Dr Colin Andrews reviewed Mr Lang's medical condition at the request of Mr Lang's then solicitors. In his report Dr Andrews recounted Mr Lang's history and noted that he did not claim that a specific injury was sustained in the course of his employment. On 1 June 1984, prior to the Commonwealth's acceptance of liability for Mr Lang's claimed injury, another of Mr Lang's doctors, Dr Alastair Robson, responded to several questions posed by the Commonwealth Medical Officer about Mr Lang's claimed condition. Dr Robson's conclusions were expressed broadly, did not attribute any conditions solely to Mr Lang's employment with the Commonwealth and did not mention any condition or injury caused by a fall in 1981. The said David Lang sustained personal injury arising out of or in the course of his employment in mid July 1981 namely , aggravation of a pre-existing condition of pain in mid thoracic region . In the 1990s, Mr Lang's spine was operated on several times; some of these operations were paid for by Comcare as compensation for his injury. 9 In 2004 Comcare reviewed Mr Lang's claim and, for that purpose, referred him to a consultant surgeon, Dr Griffith, for examination. Largely on the basis of Dr Griffith's report of 18 October 2004, Comcare concluded, in November 2004, that Mr Lang's "current conditions are not related to either the alleged injury sustained in July 1981 or having arisen out of or in the course of [Mr Lang's] Commonwealth employment. " Consequently Comcare determined that Mr Lang was not presently entitled to compensation. This determination was affirmed by Comcare in a reconsideration dated 16 June 2005. Mr Lang appealed to the Administrative Appeals Tribunal. 10 Mr Lang's initial claim was determined in accordance with the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (the 1971 Act). That Act has been superseded by the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) which commenced on 24 June 1988 and which governs the present application. Section 124 of the SRC Act provides that a person is only entitled to compensation under the Act for an injury sustained prior to its commencement if the person would have been entitled to compensation under the relevant preceding Act, in this case the 1971 Act. It found that Mr Lang suffered from conditions which caused pain in the thoracic region of his spine prior to his alleged fall in 1981. The clinical notes of Mr Lang's general practitioners in the relevant period, Dr Reeve and Dr Herath, supported this finding. 12 The Tribunal also referred to a report of Dr Andrews, Consultant Neurologist, in August 1982 which indicated that any aggravation of Mr Lang's condition due to his work for the Commonwealth would have only lasted a short period of time (a few months) and to a report of Dr Kitchin that Mr Lang's complaint, in March 1983, was of thoracic degenerative disease. 13 The Tribunal noted that Dr Chandran, a neurosurgeon to whom Mr Lang was referred in 2000, referred to neck pain in his report but did not mention pain in the thoracic area. In contrast, Dr Speldewinde, who examined Mr Lang in March 2002, referred to Mr Lang's distress as a result of an aggravation of pain in his thoracic spine. Mr Lang's claim to Comcare for treatment of this aggravation was supported by Dr Herath and ultimately paid by Comcare. 14 The report of Dr Griffith, on which Comcare had relied (see [9] above), was central to the Tribunal's decision. He concluded "[n]o employment related aggravation (in the absence of demonstrable structural injury) should be considered as [not] having resolved. the aggravation suffered in 1981)? The Tribunal also relied upon the reports of Dr Andrews and Dr Kitchen described above, which indicated that any aggravation caused by lifting boxes would have been temporary and that Mr Lang had a pre-existing thoracic spine condition. In his submission the Tribunal ought to have investigated whether this surgery was necessitated by the injury for which he had been granted compensation and whether the symptoms he experienced in 2004 were caused by that surgery. It would appear, however that this issue was not raised before the Tribunal. Counsel for Mr Lang submitted that as he appeared before the Tribunal without legal assistance, and in view of the inquisitorial nature of Tribunal proceedings, the Tribunal was obliged to inquire into matters which arose on the evidence before it even if they were not directly raised. 21 Certainly, the Tribunal did not refer to this expanded definition of 'injury' in its reasons and there is nothing in the Tribunal's reasons to suggest that it considered Mr Lang's operations were relevant to its assessment of Comcare's liability. On the contrary the Tribunal's analysis of the evidence is consistent with a contrary conclusion. The Tribunal referred to these operations only in the course of a broad summary of the medical evidence before it, although it noted that some of the operations were apparently paid for by Comcare presumably as compensation for the compensable injury. Dr Griffith's report, which was relied upon by the Tribunal in other respects, noted that Mr Lang's "condition in the cervical spine is a product of post-surgical degenerative changes". 22 For the expanded definition of 'injury' contained in s 4(3) of the Act to apply, there must be three elements: the first is an initial, compensable, injury; the second is treatment for that injury; the third is further injury caused by that treatment. In Mr Lang's case there was no evidence to suggest that the surgery performed on Mr Lang was treatment for his compensable injury. In 1984 Comcare had determined that Mr Lang's injury was an aggravation of a pre-existing condition in the thoracic region of his spine. The relevant surgery was performed on Mr Lang's cervical and lumbar spine yet there had been no determination in respect of any injury to these areas of Mr Lang's spine. 23 The Tribunal accepted the evidence of Dr Griffiths, who concluded that there was no compensable injury lasting longer than perhaps a few months from the date of the claim in 1981. Therefore, the Tribunal implicitly accepted that as at the date of Mr Lang's surgery in the 1990s, the surgery could not have been treatment for his compensable injury. The surgery has been successful, and the fusions remain sound insofar as the three level fusion of the cervical spine, and single level fusion of the lumbosacral level are concerned. The mere fact that Comcare paid for Mr Lang's surgery cannot be treated as an admission that the surgery was designed to treat the compensable injury. It is equally consistent with a mistake on Comcare's part. I cannot accept Mr Lang's submission that the Tribunal erred in law by failing to consider whether his current symptoms were caused by the surgery. This ground of appeal must be rejected. The Tribunal referred to the decision in Commonwealth of Australia v Borg [1991] FCA 710 ; (1994) 20 AAR 299 at 370, where Jenkinson J said that a decision to cancel compensation should not be made unless the decision maker "was persuaded that one of the entitling circumstances had on or before" the date of the decision "ceased to exist". According to Mr Lang, however, the Tribunal failed to do this. 26 Counsel for Mr Lang referred to Comcare v Nichols (1999) FCA 209 in which Heerey J applied Phillips v The Commonwealth of Australia [1964] HCA 22 ; (1964) 110 CLR 347 in the context of the SRC Act . Such a case would be where the Commissioner has purported to terminate an employee's right to compensation under an antecedently existing determination by reason of a material change of circumstances. 28 Despite this, however, it does not appear that in substance the Tribunal adopted a lesser standard than that mentioned in Borg . The Tribunal expressly accepted Dr Griffith's evidence that "in the absence of structural injury (of which there is no evidence) it is reasonable to expect that the aggravation would have resolved long before 29 November 2004. " This finding, in conjunction with the reports of Dr Andrews and Dr Kitchin clearly formed the basis for the Tribunal's decision, rather than any paucity of evidence adduced by Mr Lang. Whilst the Tribunal ostensibly applied a 'balance of probabilities' standard, in light of the principle in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272, its finding in substance was that Comcare had discharged its evidentiary onus. 29 Similarly, it is readily apparent from the Tribunal's conclusion and the manner in which it framed the issues for determination on the appeal (see [16] above) that the Tribunal considered Mr Lang's circumstances to have changed. The Tribunal accepted Dr Griffith's evidence that the compensable injury, namely 'aggravation of pre-existing condition of pain in the mid-thoracic region', was resolved by November 2004 and accordingly Mr Lang was no longer incapacitated by it and did not require treatment. Accordingly, this ground of appeal must also be rejected. During the course of the hearing it became clear that this point was the focus of Mr Lang's submissions, notwithstanding that it was not directly pleaded in his original notice of appeal. I granted Mr Lang leave to file an amended notice of appeal incorporating this ground of appeal (and remedying certain other defects). Both parties were permitted to adduce further evidence and to provide additional written and oral submissions on this issue. 31 Dr Talbot assessed Mr Lang on 17 May 2005. In recounting Mr Lang's medical history, Dr Talbot referred to two incidents mentioned by Mr Lang. First, in 1973 or 1974 Mr Lang was carrying reams of paper up some stairs when he slipped and twisted his back. Second, in July 1981 Mr Lang fell from a table on which he was standing onto a chair beside the table. It seems clear that the second incident is the fall referred to in the Tribunal's reasons and described above at [3]. Dr Talbot stated that he was asked "whether Mr Lang presently suffers from the aggravation of his mid-thoracic region sustained in 1981". I consider that the aggravating injury occurred in July 1981 in the event described when he was climbing on chairs and a desk and he fell. " Dr Talbot answered "[t]he aggravation has not resolved. " Clearly Dr Talbot's evidence is at odds with Dr Griffiths' evidence, which was that in the absence of structural injury, any aggravation to Mr Lang's thoracic pain caused by a fall in 1981 would have resolved "within three months" of the fall. As mentioned at [9] and [14] --- [17] above, the Tribunal accepted Dr Griffith's evidence. 33 Prima facie, Dr Talbot's report goes to the heart of the issue before the Tribunal, namely, whether Mr Lang was, as at the time of Comcare's decision in 2004, still entitled to compensation for the injury accepted by Comcare in 1984. It seems clear however, and the Comcare accepts this, that the Tribunal did not consider Dr Talbot's report in making its decision. 34 Comcare accepts that Dr Talbot's report was before the Tribunal but says that the report was based on injuries allegedly sustained in the early 1970s and 1981, that the Tribunal did not have jurisdiction to consider injuries arising out of these falls and that therefore the report was irrelevant to the Tribunal's decision. It submits that the Tribunal's jurisdiction is limited to a reconsideration of Comcare's determination and therefore, by ss 60 and 62 of the SRC Act the Tribunal was only entitled to consider Mr Lang's entitlement to compensation for the injury notified and for which liability had been accepted. Neither Mr Lang's notice of injury nor his claim for compensation mentioned a fall in 1981 and indeed did not mention any specific incidents as a cause of his injury. Comcare categorised Mr Lang's claim as a 'nature and conditions' claim, that is, the injury notified occurred as a result of the general nature and conditions of Mr Lang's employment. 35 Comcare referred to the notification requirements of the 1971 Act which included notification of the place, date and time at which the injury occurred and the circumstances in which it occurred. It submitted that these requirements were not met in respect of any injury caused by a fall in 1981 and that no such claim was separately made. Accordingly, Comcare submitted that, as a matter of law, the Tribunal could not have considered the injuries caused by the falls and therefore Dr Talbot's report, which was based solely on these falls, was irrelevant. 36 Comcare's explanation for the Tribunal's failure to refer to Dr Talbot's report (even if only in the context of formally excluding it from consideration) was that the Tribunal had expressly excluded Mr Lang's falls in 1973/4 and in 1981 from its consideration at a directions hearing conducted prior to the Tribunal hearing. As noted above, I adjourned the hearing of this matter for a period of time to allow the parties to obtain further evidence as to what occurred at this directions hearing and to prepare submissions in relation to this further material. 37 The material submitted by the parties pursuant to this leave was equivocal. The Tribunal's record of proceedings stated: "T can review decision made in 11/04 that 1971 benefits won't be altered. T will only review 'cease effects' --- whether the accepted condition no longer makes A incapacitated for work'. This record does not resolve the central issue, namely whether the 'accepted condition' referred to included any aggravation that may have been caused by the 1981 fall. It appears from the transcript of the Tribunal hearing that at a number of points counsel for Comcare or the Tribunal member referred to the two falls and to Comcare's contention that the Tribunal was not able to take them into account. Counsel for Mr Lang noted that the Tribunal's record of the directions hearing did not specifically mention the Tribunal's jurisdiction or Dr Talbot's report. 38 It is difficult to reconcile Comcare's account of the outcome of the directions hearing with the written reasons of the Tribunal in Mr Lang's case. These reasons refer at some length (relatively speaking) to Mr Lang's claimed fall. The Tribunal's account of Mr Lang's medical history, including his account of his fall, is prefaced with the words 'Unless otherwise stated the following findings of fact are based on the evidence of Mr Lang. We are satisfied of the facts found on the balance of probabilities. ' If Comcare is correct in submitting that the fall was excluded from the Tribunal's consideration at a directions hearing, then there would be no reason for the Tribunal to outline the circumstances of Mr Lang's fall in this manner. The only reference in the Tribunal's decision to what Comcare claims is the relevant injury is in a short extract from Mr Lang's notice of injury. Further, the Tribunal noted that "Mr Lang has given evidence as to an incident in 1977 involving his falling on stairs at work. This evidence is not relevant to the issues we have to decide. " This comment appears to relate to Mr Lang's claimed fall in 1973/4 however, one would expect that if the Tribunal had expressly excluded both falls from its consideration at the directions hearing, then it would note that the evidence in respect of both was irrelevant, rather than specifying the earlier fall alone. 39 Comcare provided affidavit evidence from Michael La Vista, the solicitor acting for Comcare at the relevant time. Mr La Vista annexed a file note he had made at the directions hearing prior to the Tribunal hearing. The note records that the issue of jurisdiction with respect to the 1974 and 1981 falls was discussed at the directions hearing and that Mr Lang referred to these falls as a 'discrete' injury. The file note further records that the Senior Member indicated that the "reviewable decision" is the only decision that the Tribunal could review and that Comcare submitted that because there was no notice of the falls, the Tribunal did not have jurisdiction to consider them. Clearly, the issue of jurisdiction was discussed. However, it appears from this file note that the Tribunal was emphasising that only the injury for which liability had been accepted could be reviewed. Mr Lang does not dispute this however such a conclusion does not meet his contention that these falls may have been part of the cause of the injury for which liability was accepted. Comcare's reconsideration in turn was limited to the terms of its original determination. Section 60 of the Act provides that a determination means a determination, decision or requirement made under various listed sections, relevantly including ss 16 and s 134. Although Comcare's determination was made under these sections, as explained above at [10] it was necessary for the Tribunal to consider Mr Lang's rights under the 1971 Act. 43 Section 54 of the 1971 Act provides that no compensation is payable under the Act unless a claim in writing for the compensation was served, as prescribed, on the Commissioner within the relevant time. This provision is a procedural pre-requisite to an entitlement to compensation under the Act: see Ward v Military Rehabilitation and Compensation Commission [2007] FCA 7 at [25] in relation to a similar provision under the 1930 Act. 44 Comcare submitted that the 1981 fall had not been notified or claimed by Mr Lang and accordingly that liability for that injury had not been accepted by Comcare in 1984. Accordingly, the fall could not have been the subject of Comcare's determination in 2004 and therefore could not be relevant to the Tribunal's review. I accept that the Tribunal's enquiry was limited to a consideration of whether Mr Lang was, as at the date of the Tribunal's decision, entitled to compensation for the injury as claimed however it does not follow from this that any damage to Mr Lang's back that may have been caused by the 1981 fall was necessarily outside of this enquiry. 45 In support of its submission that 'the injury must be the injury as identified by the notice and claim', Comcare relied on Telstra Corporation Ltd v Hannaford [2006] FCAFC 87 and Frosch v Comcare [2004] FCA 1642. In Frosch at [8] , Whitlam J commented, with respect to similar requirements in s 53 of the SRC Act: 'the essential information to be imparted under s 53 will be the nature of an injury or ailment and its connection with the employment. ' I do not take issue with these comments but in my view they do not support Comcare's case. 46 Mr Lang's notice of injury and compensation claim adequately disclose the nature of his claimed injury though they may be sparse on the circumstances giving rise to that injury. It is not necessary for me to speculate as to the reason for this as it is not directly relevant to the issue that I must decide. Secondly, the term "injury" is not used in the Act in the sense of "workplace accident". The definition of injury is expressed in terms of the resultant effect of an incident or ailment upon the employee's body. Thirdly, the term "injury" is not used in a global sense to describe the general condition of the employee following an incident. Although his description was somewhat incoherent in my view, it is sufficient to meet the test outlined in Frosch. Mr Lang's notice indicated the nature of his injury and its connection to his employment, and is consistent with the concept of injury to which the High Court referred. 48 Comcare's determination in 1984 that accepted liability for Mr Lang's injury made no mention of the circumstances in which the injury was incurred, save to say that it was in the course of Mr Lang's employment. Comcare described the injury as 'aggravation of a pre-existing condition of pain in mid thoracic region'. This is the same condition/symptom discussed in Dr Talbot's report. Comcare's liability was not restricted to a 'nature and conditions' claim made by Mr Lang. 49 Counsel for Comcare argued that the mere fact that Mr Lang's fall in 1981 coincided with the date of his claim does not mean that Mr Lang's compensable injury included injuries sustained in the fall. This, of course, is correct, however Mr Lang claims (with some support from the expert medical evidence) that this fall contributed to the injury that was notified and accepted as a compensable injury and that this injury is a continuing cause of incapacity. 50 Both Dr Griffith and Dr Talbot referred at some length to Mr Lang's account of his fall. Furthermore, Dr Talbot's report specifically noted that this fall was the cause of the aggravation to Mr Lang's thoracic disc injury. The Tribunal's decision relied upon the report of Dr Griffiths, who noted that "the exacerbation in 1981 may well have been post-traumatic having regard to the fall which he described as occurring on 1 st July 1981. " Comcare's written submissions conceded that Dr Griffiths "did not specifically address the role of the "nature and conditions" claim but appears to have had regard to it". The Tribunal's only two medical experts as at 2004 both acknowledged that the fall in 1981 could have contributed to Mr Lang's compensable injury; their disagreement was about the period within which the effects of any such aggravation could be expected to resolve. The Tribunal was required to address this disagreement although, of course, it was open to the Tribunal to find that the 1981 fall never occurred or that it preferred Dr Griffith's account as to its probable effect. 51 Comcare submits that, at the directions hearing prior to the final hearing of this matter, the Tribunal expressly excluded the 1981 fall from its consideration and therefore neither it nor Dr Talbot's report was any longer a relevant consideration. As noted above, I do not accept on the evidence before me that the Tribunal had so ordered. 52 In circumstances where the Tribunal's record does not clearly state that the issue was excluded, there is no transcript of the Tribunal hearing, both sides agree that Mr Lang was unrepresented and there were no written reasons issued, I am prepared to give Mr Lang the benefit of the doubt that the Tribunal did not expressly exclude the 1981 fall from its consideration. Even if I am wrong, however, my conclusion as to the merits of the present appeal from the Tribunal's decision would not be affected because of the Tribunal's obligation to give reasons. The Tribunal is entitled to accept or reject the respective pieces of evidence before it, or to accord certain pieces of evidence different weight. It is under no obligation to refer to all of the evidence before it, particularly where, as here, neither party made submissions on it. It would have been open for the Tribunal to reject Dr Talbot's evidence or simply to prefer the evidence of Dr Griffiths. The Tribunal is, however, obliged by s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) to include in its reasons findings on all material questions of fact. As noted in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 331 per Gleeson CJ and at 345-6 per McHugh, Gummow and Hayne JJ, with respect to a similar requirement found in s 430 of the Migration Act 1958 (Cth), this is not an obligation to make a finding on every question of fact that is regarded as objectively material by a court conducting judicial review of the Tribunal's decision. 54 Even if the Tribunal excluded consideration of the 1981 fall at the directions hearing it still had an obligation to give reasons for rejecting evidence that was plainly central to Mr Lang's claim and crucial to a medical report that supported that claim. Mr Lang was entitled to seek review of that decision. 55 If Comcare's submission about the directions hearing is incorrect, then plainly the Tribunal was required to indicate why it was that it preferred Dr Griffith's evidence. Given that the Tribunal had before it two medical reports that came to diametrically opposed conclusions it was obliged to explain why it either excluded one from its consideration or, if it considered both reports, why it preferred that of Dr Griffith. Its failure do so makes it impossible to understand the Tribunal's reasoning processes, and is itself an error of law; Telepacific Pty Limited v Commissioner of Taxation (2005) 218 ALR 85 at [54]. 56 For this reason Mr Lang's application must be allowed and the matter referred to the Tribunal for reconsideration according to law. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. | judicial review commonwealth employee compensation claim cancellation of compensation whether tribunal failed to take into account a relevant consideration whether tribunal failed to give written reasons as required by s 43 of the administrative appeals tribunal act where notification of injury did not include the specific circumstances in which the injury allegedly occurred where tribunal purportedly excluded consideration of incident at a directions hearing prior to the final hearing definition of 'injury' in safety, rehabilitation and compensation act onus of proof in proceedings concerning cancellation of benefits administrative law |
The first order sought in the application is an order that a bankruptcy notice served on the applicant by the respondent on 10 April 2008 be set aside, or, in the alternative, an order that the time for compliance with the bankruptcy notice be extended pursuant to s 41 of the Bankruptcy Act 1966 (Cth) ("the Act"). The second order sought in the application is an order that, pursuant to the powers conferred by s 30 of the Act, the Court "examine the judgment entered against the applicant to determine whether it should be binding on the applicant". The bankruptcy notice issued by the respondent claims that the applicant owes him the sum of $71,654.83 by reason of a final judgment entered by the Supreme Court of New South Wales. On 16 October 2007, the Supreme Court of New South Wales entered a judgment in favour of the respondent against the applicant in the sum of $60,000, together with interest, calculated at the rate of 2 per cent per annum from 21 November 1999 in the sum of $8,728.80. The amount of interest claimed in the bankruptcy notice is $11,654.83. The respondent's action which resulted in the judgment was a claim against the applicant and her husband for damages for defamation. An appeal by the applicant and her husband against the judgments entered against them was dismissed by the Court of Appeal of New South Wales: Goyan v Motyka [2008] Aust Torts Reports p81-939. The applicant's husband is Mr Michael Goyan. He was also served with a bankruptcy notice, wherein the respondent claimed that he was indebted to the respondent in the sum of $71,654.83. As I have said, he also was sued for defamation by the respondent in the same action in the Supreme Court of New South Wales. Mr Goyan issued an application against the respondent in the Federal Magistrates Court of Australia on 29 April 2008, seeking the same orders as are sought by the applicant in this proceeding. The proceedings by the applicant and her husband have been dealt with together and, for the most part, the same documents have been filed in each proceeding. As will be seen, on the day listed for the hearing of the applications, the applicant's husband consented to an order that his application be dismissed. On 20 May 2008, the applicant and her husband filed an outline of argument. It is the Applicants' case that notwithstanding that Judgment was entered against Michael Goyan and Maria Goyan following a trial held in the Supreme Court of New South Wales in the Action brought by Woldodymyr [sic] Motyka for defamation, the case was seriously mis-handled by the Counsel and solicitor who had been retained by them. The actions of the Counsel and solicitor involved firstly failing to fully plead the available defences which should have been pleaded to support the Applicants' defence in the action, and secondly by failing to call either Michael and Maria Goyan or any witness on their behalf to give evidence to support the Defence. In doing so the Applicants were not able to prove their defences as it was essential that their evidence be given to the court. The Applicants have given instructions that they will promptly take that action and will thereafter prosecute the action with due vigour. The proceeds of their action would then be available to satisfy the judgment against them. The judgment creditor will not be unduly disadvantaged as he is protected by interest on the judgment until payment. On 2 June 2008, a federal magistrate made a series of orders designed to progress the respective applications of the applicant and her husband to a hearing. He ordered that time for compliance with the bankruptcy notices be extended to, and including, 9 July 2008 or until further order. On 9 July 2008, the applicant's application and that of her husband came on for hearing in the Federal Magistrates Court. At this point, the applicant and her husband were represented by Proud and Company, and Dr J Walsh of counsel. The within proceedings are hereby transferred to the Adelaide Registry of the Federal Court of Australia. The federal magistrate made the order set out in paragraph 1 above. On 19 July 2008, the respondent filed an outline of argument. The applicant's application and that of her husband came on for mention before a judge of this Court on 29 July 2008. Prior to that date, the respondent had issued a notice of motion, seeking an order that the application "be set for hearing forthwith". On 29 July 2008, Mr Proud of Proud and Company sought leave from a judge of this Court to cease acting for the applicant and her husband. He indicated that the applicant and her husband still wished to pursue an application for a jury hearing. Mr Proud was given leave to cease acting. On 20 August 2008, the applicant's application and that of her husband again came on for mention before a judge of this Court. Mr Proud appeared and indicated that he was still appearing for the applicant and her husband and that he had written instructions from them that they did not wish to pursue a jury hearing. The judge made a series of orders with a view to the respective applications of the applicant and her husband being heard. One such order was that the parties file a statement of facts, issues and contentions. The applicant and her husband filed such a statement on 9 October 2008. It appears from that document that the thrust of their case was that they were not adequately represented in the defamation action which resulted in judgments against the applicant in favour of the respondent. The applicant and her husband were asking this Court to inquire into the judgments and to go behind them. On 18 November 2008, a firm of solicitors called Stokes Legal filed a notice that they were now acting as the solicitors for the applicant and her husband. The applicant's application and that of her husband were listed for hearing before me on 21 November 2008. On that day, I was told by the solicitor acting for the applicant and her husband that settlement discussions had taken place the previous day and that those discussions had culminated in what the parties believed was a settlement of the matter. I was told that it had then emerged there was some misunderstanding between the parties about the settlement and that a settlement may not have been achieved. The applicant's application and that of her husband could not proceed because counsel instructed by Stokes Legal, Mr P King, had returned to Sydney. I adjourned the hearing for a period of two weeks. On 5 December 2008, Mr A Harris QC appeared for the applicant and her husband. Mr Harris had been recently instructed by Stokes Legal. I've sought instructions and I have sought production of the documents in which those statements are said to repose for the purpose of coming to assess an assessment of whether or not it can be said that they comprise a claim or a cross claim in the nature of entitling Mr and Mrs Goyan to damages against Dr Motyka in an amount greater than the amount currently for the bankruptcy notices, being relevant to consideration of section 40 , subsection (1)(g) of the Bankruptcy Act . I'm simply not in the position, your Honour, to either advise them whether or not that is a matter which is proper to put before the court and run, but on its face there appears to be allegations of dishonesty and insanity which would, on any view, sound in substantial damages if they were the subject of a successful suit. The hearing of the application be adjourned to Friday, 16 January 2009 at 10:15am and is to continue on Monday, 19 January 2009 if necessary. The applicant is to file and serve any further affidavits and an outline of argument on or before 4pm on Monday, 22 December 2008. The respondent is to file and serve any affidavits in response and an outline of argument on or before 4pm on Monday, 12 January 2009. There be liberty to apply. It is submitted that there is sufficient material before the Court to establish the existence of a prima facie case by Mr and Mrs Goyan in defamation against Dr Motyka. They are genuine claims which have not been acted upon despite Mr and Mrs Goyan having legal representation when they themselves were defendants. Instead of asking the Court to go behind the judgments in the defamation action, the applicant and her husband were contending that they had a counter-claim, set-off or cross demand within s 40(1)(g) of the Act. For reasons which need not be set out, the hearing of the applications did not proceed on 16 January 2009 and the hearing was adjourned to 13 February 2009. On 13 February 2009, Mr Harris appeared on instructions from Mr Whittaker, a solicitor employed by Stokes Legal, who was also in Court. The applicant and her husband were in Court. Stokes Legal sought and was granted leave to cease acting for the applicant. On behalf of the applicant's husband, they consented to an order that his application dated 29 April 2008 be dismissed. The applicant made submissions in support of her application and I heard from the respondent. I reserved my decision on the applicant's application. So far as they were relevant, the applicant's submissions were, for the most part, directed to the contention that this Court should go behind the judgment in the defamation action. On 20 February 2009, the applicant issued a notice of motion, seeking leave to reopen her case in order to tender a bundle of documents. I heard that application on 23 March 2009. The respondent have leave to obtain a copy of the bundle of documents marked for identification as 'MFI A14'. 2. The decision on the applicant's application to reopen her case be reserved. Giles JA agreed with Tobias JA, as did Handley AJA, although Handley AJA added some brief additional comments. At a hearing in 2002 pursuant to s 7A of the Defamation Act 1974 (the Act), a jury determined that a number of letters had been published by one or other and, in one case, both of the Goyans, which conveyed imputations defamatory of each of Dr Motyka and Mrs Ostrowskyj. Relevantly, the only defence that was seriously pressed at the hearing before the primary judge was that of common law qualified privilege and, with somewhat less enthusiasm, unlikelihood of harm (s 13 of the Act). Those defences were rejected. His Honour also found that Mrs Goyan's publication of the material complained of was actuated by malice. They also assert that the quantum of damages awarded to each of the respondents was excessive. Its charter was to promote Ukrainian studies as an academic discipline at a tertiary level. It was, therefore neither a social, community nor cultural organisation. Dr Motyka was one of the original directors of the USFA and served as its chairman from 1990 to 2002. He and his wife moved to Newcastle in about 1979 when he took up an academic position in Accounting at the University of Newcastle. He holds the degree of Doctor of Philosophy in Commerce. Mrs Motyka is a registered medical practitioner. Mr Goyan was a member of the USFA from 1971 and served on its Board in 1987-1988 and 1991. In about 1985 she moved to Newcastle and in 1987 helped found the Ukrainian Women's Association, Newcastle and Hunter Region, which she has headed since its inception. Between 1998 and 2001 she was the head of the National Executive of the UWA in Australia. However, she was removed from that office and expelled from the UWA some six or seven years before the publication of the matters complained of in this case. Mrs Nakazny was originally named as a defendant in the statement of claim but the proceedings against her were abandoned after she died. Mr Goyan and other USFA members in Adelaide believed they had formed the South Australian "branch" of that organisation. They organised themselves accordingly, conducted annual general meetings of the 'branch' and elected representatives to act as their chairman, treasurer and so forth. At the times relevant to the litigation, Mr Goyan was serving as the elected chairman of the 'branch'. They considered that the Board should keep control of all of the funds raised in the name of the USFA by its members, wherever they resided. According to the constitution of the USFA, so they claimed, representatives of the organisation could only be appointed by the Board or at the annual general meeting. The Board therefore asserted that so-called elections held with respect to the South Australian 'branch' were invalid. The Board further deemed that the South Australian representatives had no power to access the USFA's account with the Credit Co-operative except with Board approval, which had not been given. Dr Motyka denied that there was a local account capable of being operated by members of the USFA in South Australia. Mr Goyan believed there to be two accounts, and claimed he was seeking access to only one of them. Mr Goyan was at that meeting and took this reference to relate to him although he was not referred to by name. He also complained at the meeting of difficulties with, and inadequate accounting by, the Board. On 25 February 1999 Mr Goyan wrote a letter in English to the Board of the USFA (the 25 February letter) in which he purported to set the record straight regarding the accounts and in which he repeatedly referred to Dr Motyka as a liar. The letter informed Mr Goyan that he had breached the constitution of the USFA in a number of respects, including illegitimately representing himself to be the head of the USFA's South Australian 'branch' and illegally attempting to change the signatories to the USFA's account with the Credit Co-operative. The letter further alleged that Mr Goyan had been distributing letters, some on USFA letterhead, which made untrue allegations against the Board and its members and which injured the good name and reputation of the USFA. Finally, the letter requested that Mr Goyan appear before the Board in Sydney at its next meeting on 17 April 1999 and contained an offer to pay for his return journey from Adelaide so that he could do so. In that letter he accused Dr Motyka of being high handed and intimidating and implied that he was attempting to alienate all the members of the USFA in order that he might have access to the organisation's funds for himself. The letters were distributed to Dr Motyka and his family and other members of the Ukrainian Studies Foundation of Australia ("USFA") and the Ukrainian Women's Association of South Australia and to other members of the Ukrainian community. There were many letters but only a limited number were complained of by the respondents. Mr Goyan published a book in 2000 in which he reproduced many of the letters (in a mix of Ukrainian and English). The translated title of the book was " A Good Name is One's Greatest Wealth " and its cover bore the logo of the USFA. Tobias JA then set out the publications which had been found by the jury to have conveyed defamatory imputations. They were as follows: A letter dated 17 November 1999 from the applicant and addressed to "Dear Reader", which produced a letter dated 15 November 1999 that the applicant had received from Mrs Nakazny (see [9] of Tobias JA's reasons above). The letter from Mrs Nakazny was apparently written in response to a letter Mrs Goyan had sent to the Board of the USFA. A letter the applicant wrote to Mrs Nakazny on 21 November 1999. A letter the applicant wrote to Mrs Rosa Stenanyszyn on 28 January 2000. A letter the applicant and her husband co-signed and addressed openly to the Ukrainian community on 28 August 2000. The book containing letters dated 25 February 1999 and 12 April 1999. Tobias JA then referred to the primary judge's consideration of the oral evidence of the witnesses called before him, including the respondent. The primary judge noted that neither the applicant nor her husband gave evidence or called any witnesses. As the letters concerned the affairs and conduct of two leaders of the Ukrainian community in Australia, that constituted a sufficient relationship to give rise to the necessary element of reciprocity of interest. He then turned to consider whether the primary judge had erred in finding that the applicant was actuated by malice. He concluded that the primary judge had not erred. Tobias JA then dealt with the complaint that the damages awarded were excessive. He rejected that contention. The appeal of the applicant and her husband was dismissed with costs. I will briefly summarise the contents of those affidavits. Mr Goyan swore an affidavit on 29 April 2008. This affidavit details the background to the dispute with the respondent and asserts that in publishing the material the subject of the defamation action the applicant was responding to serious allegations made against her and her husband by the respondent. Mr Goyan claims that he and the applicant were not properly represented by their counsel in the defamation action. Mr George Mencinsky swore an affidavit on 10 September 2008. He gives a general account of the dispute and the defamation action. He criticises the applicant's counsel in that action. There is nothing to suggest that any of the material referred to by Mr Mencinsky was not available at the time of the defamation action. Mr Whittaker swore an affidavit on 4 December 2008 annexing an affidavit of Mr Yuri Mencinsky. This refers to certain statements allegedly made by the respondent in 1998 which were said to be defamatory of the applicant and her husband. It is asserted that the statements were conveyed to the solicitors and counsel acting for the applicant in the defamation proceeding. Mr Mencinsky states that he ascertained that counsel for the applicant in the defamation action did not wish to call the applicant as a witness. Mr Whittaker swore an affidavit on 5 December 2008. This affidavit was sworn in support of an application for an adjournment of the hearing. Mr Whittaker swore an affidavit on 22 December 2008. Mr Whittaker exhibits to his affidavit a bulletin of the Ukrainian Studies Foundation in Australia ("USFA"), "Volume 15, July-September 2002" and translations into English of certain passages therein. Mr Sergei Gunko swore an affidavit on 14 January 2009. He is the person who provided the translation of the bulletin article. Mr Goyan swore an affidavit on 15 January 2009. In that affidavit, he identifies a number of publications by the respondent, including the following: A letter from the respondent to a newspaper "Vilna Dumka" or "Free Thought" dated 7 December 1998. A radio broadcast on SBS radio in January 1999. A statement by a Ukrainian priest in January 2001 about what the respondent had told him about the applicant's husband. Mr Goyan states in his affidavit that he was not aware until January 2009 that publication in South Australia could give rise to a cause of action in defamation in South Australia which could be prosecuted in South Australia. Mr Peter Kravchenko swore an affidavit on 22 September 2008. He sets out allegedly defamatory statements of and concerning the applicant and her husband made by the respondent at the annual general meeting of the Ukrainian Studies Foundation in Australia in January 1999. As I have said, after the hearing on 13 February 2009, the applicant issued a notice of motion seeking to reopen her case so that she could tender further documents. I heard submissions on that application and then reserved my decision. I refuse leave to reopen and I will not receive in evidence the further documents (MFI A11, MFI A12, MFI A13 and MFI A14). The documents are irrelevant to any issue before me. The respondent tendered eight affidavits on the hearing before me. I will briefly summarise the contents of those affidavits. Mr Claudius Bilinsky is a solicitor who practises in a firm of solicitors in Sydney. He is the respondent's solicitor in New South Wales. He swore an affidavit on 20 May 2008. Mr Bilinsky gives a history of the defamation action in New South Wales. Mr Lionel Kramer is a solicitor who practises under the supervision of Mr Bilinsky. He swore an affidavit on 29 May 2008. It is unnecessary for me to summarise the contents of the affidavit. Ms Mardi Conduit is a solicitor who practises in a firm of solicitors in Adelaide. She is the respondent's solicitor in South Australia. Ms Conduit swore an affidavit on 22 July 2008. For present purposes, it is unnecessary to summarise its contents. Ms Conduit swore an affidavit on 20 October 2008, to which she attached an affidavit of Mr Bilinsky which, at that stage, had not been sworn in accordance with the rules of this Court. That defect was remedied on 17 November 2008. Mr Bilinsky exhibits transcript of the trial in the defamation action showing (so it was said) that many of the allegations now raised by the applicant were in fact put to the respondent in the defamation action. Ms Conduit swore an affidavit on 5 December 2008. It is unnecessary to summarise the contents of this affidavit. Ms Conduit swore an affidavit on 15 January 2009. Ms Conduit deposes to the fact that the respondent ceased to be a director and chairman of the USFA on 20 February 2002. She deposes to other matters which it is not necessary to summarise. Ms Conduit swore an affidavit on 3 February 2009. She exhibited to her affidavit a court record of the defamation action and organisational details of the USFA. The power to set aside a bankruptcy notice is contained in s 30(1) of the Act and, as Gummow J said, sitting as a judge of this Court in Olivieri v Stafford (1989) 24 FCR 413 (" Olivieri ") at 430, the express power in s 41 to extend the time for compliance with the requirements of such a notice has been said to carry with it the power to set aside the notice itself (see Re Sterling; Ex parte Esanda Ltd [1980] FCA 61 ; (1980) 44 FLR 125 ; 30 ALR 77). First, the bankruptcy notice should be set aside or time for compliance with the requirements of it should be extended because there are sufficient reasons to "go behind" the judgment against her in the defamation action. Secondly, the bankruptcy notice should be set aside or time for compliance with the requirements of it should be extended because she has a counter-claim, set-off or cross demand which meets the requirements of s 40(1)(g) of the Act. That power may be exercised on an application to set aside a bankruptcy notice ( Olivieri at 429 per Gummow J). The power may result in the Court determining that there is, in truth, no consideration for the judgment debt and, although the Court has no power to set aside the judgment of another Court, it may decide to set aside the bankruptcy notice. The Court's power to inquire into or examine a judgment may involve two steps. First, the Court may ask itself whether there are grounds to inquire into the judgment. Secondly, assuming the answer to the first question is yes, the Court may inquire into the judgment. In certain circumstances, it may be more appropriate for the Court to extend the time for compliance with the requirements of a bankruptcy notice, while an application to set aside the judgment is determined by the Court which entered the judgment, rather than inquiring into the judgment itself. The power to inquire into or examine a judgment is part of the power to set aside a bankruptcy notice and is not the aspect of ordering inquiries under s 30(2) of the Act. The power to inquire into a judgment arises not only in cases where the judgment reflects a pre-existing debt or liquidated claim, but also in cases where the judgment follows from the determination of an unliquidated claim and the judgment itself creates the debt: In re Newman; Ex parte Brooke (1876) 3 Ch D 494 ; Wenkart v Abignano [1999] FCA 354 at [23] . Plainly, a claim for damages for defamation falls into the latter category. There is a good deal of law on the circumstances in which the Court will inquire into, or examine, a judgment. The circumstances will vary according to the circumstances in which the judgment came to be entered. A Court will be far more inclined to inquire into and examine a judgment entered by default or consent, than it will in the case of a judgment entered after a contested trial on the merits followed by an appeal or perhaps even an unsuccessful application to set aside the judgment to the Court which entered it. Those are in effect the two ends of the spectrum. It has been said that, in the former case, a bona fide allegation that there was no pre-existing debt will be sufficient for the Court to inquire into or examine the judgment (see Corney v Brien [1951] HCA 31 ; (1951) 84 CLR 343 (" Corney v Brien ") at 357-358 per Fullagar J). It has been said that, in the latter case, the Court will not inquire into or examine a judgment unless there is evidence of fraud, collusion or a miscarriage of justice: Petrie v Redmond (1942) 13 ABC 44 at 48-49 per Latham CJ (with whom Rich and McTiernan JJ agreed); Corney v Brien at 356-357 per Fullagar J. The principles must be applied in a flexible fashion, having regard to the myriad of circumstances which may arise (see the discussion by J L Goldring in "Going Behind a Judgment" (1973) 47 ALJ 377). The bankruptcy notice served on the applicant is based on a final judgment of the Supreme Court of New South Wales. The final judgment was regularly entered and it was entered after a trial at which the applicant was represented by a firm of solicitors and counsel. An appeal to the Court of Appeal of New South Wales was dismissed. The material put before the Court by the applicant was voluminous. It is highly critical of the respondent. However, the applicant's contention is that her legal advisers in the defamation action were negligent. She contends that she and her husband should have given evidence at the trial. However, there is nothing before me to indicate how, had they given evidence, that would have affected the result. She contends that there were other defences to the respondent's claim which should have been raised, but were not raised due to the negligence of her legal advisers. Again, there is nothing before me to identify other defences which should have been raised or how, had they been raised, that would have affected the result. The applicant has not made an application to the Supreme Court of New South Wales to set aside the final judgment. There is nothing before me to suggest that such an application, if made, would have any prospects of success. In my opinion, there is no reason to make any orders, either setting aside the bankruptcy notice or extending the time for compliance with it, by reason of the circumstances surrounding the final judgment of the Supreme Court of New South Wales. In fairness to the applicant, it is appropriate that I consider the submissions in support of this contention . I turn to consider the publications identified as the first and second publications. The newspaper is one that circulates in the Ukrainian community. The respondent's letter deals with an advertisement which appeared in the newspaper and which the respondent asserted was false and misleading. The letter refers to the applicant's husband, but it does not refer to the applicant. On the face of it, the letter does not refer to the applicant and cannot be defamatory of her. Furthermore, no facts which might identify her as a subject of the letter were identified. For this reason, the applicant has not shown a prima facie case or a case with a reasonable probability of success in relation to the first publication. The debtor clearly must satisfy the Court that there exists in him a counter-claim, set-off or cross demand. 'Cross demand' is the word relied upon here. The appellant cannot satisfy the Court that a cross demand exists by showing no more than that she propounds one and states how she suggests that she can make it out. In Re Duncan ; Ex parte Modlin Street J. said that the debtor need not satisfy the Court that there are reasonable grounds for believing that he will establish his cross action, but only that he has a bona fide claim which he is fairly entitled to litigate. This perhaps is expressed too favourably to the debtor. In Re A Debtor Roxburgh J. said: 'But not every demand will suffice. A demand made in bad faith would not be good enough. The debtor must satisfy the Court that he has a genuine demand. ... But in my opinion a demand must be more than bona fide: the Court must be satisfied that it has a reasonable probability of success'. Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand. I will identify these arguments. In the case of two of these alternative arguments, they are alternative reasons for the conclusion that the applicant does not have a cross demand within the provisions of the Act with respect to the first publication. First, the respondent submitted that the applicant does not "have" a cross demand at the present time. It is accepted by the applicant that the limitation period under the Limitation of Actions Act 1936 (SA) (" Limitation of Actions Act ") has expired and did so in December 2004 (that is, after six years). The applicant relies on her ability to seek an extension of time under s 48 of the Limitation of Actions Act . The respondent contends that the effect of the Limitation of Actions Act is to exclude liability or bar a right of action and, in those circumstances, the applicant does not have a cross demand even though she may apply for an extension of time under s 48. I do not propose to decide this point. I do not need to decide the point and I have not had the benefit of submissions on both sides of the issue. Secondly, the respondent submitted that, in any event, the applicant had little prospect of obtaining an extension of time under s 48 of the Limitation of Actions Act . I was taken through the provisions of s 48 and the relevant factors. There is a good deal to be said in support of the respondent's submission, but, in the circumstances, I do not propose to express a final view on the submission. Thirdly, the respondent submitted that there was no evidence that, even if there was a cross demand, it was for an amount equal to or exceeding the amount of the judgment which the respondent obtained in his favour. I think that this submission is correct. There is no evidence from which I could assess, even on a prima facie basis, the impact of the first publication. Fourthly, the respondent submitted that the applicant has not shown that the cross demand was not one which she could have set up in the defamation action. The respondent began his defamation action in the Supreme Court of New South Wales on 1 May 2000. The applicant filed an affidavit in the action in June 2000 and her defence in November 2000. At that time, the limitation period in New South Wales was six years under the Limitation Act 1969 (NSW). It was changed on 17 February 2003 by the Defamation Amendment Act 2002 No 136 (NSW) (see [75] below). No reason was identified as to why the cross demand could not have been set up in the defamation action. Even if it is appropriate to attribute to the applicant the statement of the applicant's husband that he was not advised that he could bring a cross demand, such a reason is not sufficient to show that the cross demand could not have been set up in the defamation action. But that does not suffice to make the claim one which the debtor could not have set up in the Commonwealth proceedings. That is not a question to be determined by reference to practicalities; it is a question to be answered by reference to legal considerations: Re Brink; Ex parte Commercial Banking Co of Sydney Ltd [1980] FCA 78 ; (1980) 44 FLR 135 ; Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (1993) 46 FCR 183 ; Walton v National Mutual Life Association of Australasia Ltd [1994] FCA 1114 ; (1994) 49 FCR 406 at 408; Re Scott; Ex parte Scott v Beneficial Finance Corporation Ltd [1994] FCA 1379 ; (1994) 53 FCR 324 ; Re Martinovic (unreported, Federal Court, Kiefel J, 23 June 1995). Thus the mere fact that there was an excuse as to why the cross-claim was not brought will not avail a debtor seeking to come within s 41(7) of the Act, if a cross-claim could legally have been brought. I am not satisfied that a cross demand in relation to the first publication could not have been set up in the defamation action. In Volume 15, July-September 2002, there was an article which referred to the applicant in defamatory terms. On the evidence, I am not satisfied that the applicant has shown a prima facie case or a case with a reasonable probability of success in relation to the second publication. That follows from the fact that it is not established that he played any part in the publication. The four alternative arguments identified in relation to the first publication apply in the same way in relation to the second publication. As far as the fourth submission is concerned, there is no reason why a cross demand based on the second publication could not have been set up in the defamation action. I accept the respondent's contention that, even if one proceeds on the assumption that the one year period of limitation (with the possibility of an extension for a period of three years running from the date of publication) introduced by the Defamation Amendment Act 2002 No 136 (NSW) applied, the applicant had between at least September 2002 and September 2003 to bring a cross demand in relation to the second publication in the defamation action. The second order made by the Federal Magistrates Court on 9 July 2008 is discharged. I will hear the parties as to costs and other orders. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | bankruptcy notice application to set aside notice notice claims respondent owes applicant sum by reason of final judgment of other court whether notice should be set aside or time for compliance with requirements of it should be extended because sufficient reasons to "go behind" judgment where applicant contends that legal advisers in earlier proceeding were negligent because applicant and husband did not give evidence at trial and because certain defences were not raised where applicant has not applied to other court to set aside final judgment bankruptcy |
2 On 8 August 2007 Cowdroy J made orders under O 15A, r 12: Carey v Carey [2007] FCA 1482. In making those orders, Cowdroy J recounted that the Applicants are the executors of the estate of Grace Dorothy Carey, a retired medical practitioner, and that the Respondent is the brother of the Applicants and a beneficiary of that estate. The Court is satisfied that there is reasonable cause to believe that the respondent has or is likely to have information relative to the foreign owned assets in accordance with O 15A r 6 of the Rules and that it is in the interests of the administration of justice that the applicants be given the opportunity of obtaining such information. 3 The Respondent resides in the Netherlands. 4 Since that date there has been a series of revisions to the orders as first made. 5 On 2 October 2007 the Applicants filed a Notice of Motion seeking a further variation of the orders, as did the Respondent on 8 November 2007. On 9 November 2007, both Notices of Motion were set down for hearing on 4 December 2007. That date was vacated on 29 November 2007 and the Notices of Motion were again set down for hearing on 10 and 11 March 2008. One of the orders made on 29 November 2007 was that the Respondent was to " attend in person on the adjourned hearing date so as to be able to be cross examined ". Affidavits , it should be noted, had previously been filed by the Respondent upon which reliance was to be placed. A further application to vary the orders previously made was rejected on 6 December 2007: Carey v Carey [2007] FCA 2045. 6 On at least one prior occasion a hearing date has been vacated, with the consent of the Applicants, to accommodate the personal circumstances of the Respondent and, in particular, his wife. 7 Both of the present Notices of Motion are set down for hearing on 1 and 2 May 2008. 8 A further Motion has since been filed on 9 April 2008. That Motion , filed on behalf of the Respondent, seeks a variety of orders including an order that the preservation order as previously made by Cowdroy J (and later varied) be discharged unless the Applicants file and serve proceedings seeking the recovery of assets within 28 days. 9 Of immediate concern, however, is a further order seeking to vacate the order requiring that the Respondent attend in person for cross-examination. It is this issue which must be resolved as quickly as possible. If the Respondent is to attend in person, albeit pursuant to an order previously made and long outstanding, it is nevertheless appropriate to have that issue resolved expeditiously. 10 In respect of the hearing on 1 and 2 May 2008, Counsel for the Respondent has previously confirmed that Affidavits filed thus far by the Respondent will be relied upon. No question thus arises as to the Court itself requiring a party to attend " for examination ". An " Addendum ", however, has since been filed on behalf of the Respondent on 15 April 2008. The effect of that " Addendum ", if properly understood, is that the Respondent now wishes to reserve his position and give such evidence " by way of reply only to the matters the Applicants seek to agitate ". He also contends that " justice will only be served if the Respondent's evidence is limited to evidence in chief, unless the Respondent submits by consent to cross-examination ". Notwithstanding that " Addendum ", Counsel for the Respondent has this morning confirmed that he will seek to " tender " the Respondent's Affidavits previously filed, albeit for the limited purpose of establishing " compliance " with previous orders. 11 It was not understood to be disputed by Counsel for the Respondent that, if he were to rely upon the Affidavits of his client for whatever purpose, he should normally make available the deponent for cross-examination. 12 Accordingly, the principal relief which the Respondent seeks today is a variation of the order that he attend in person; he seeks a variation which would permit cross-examination by means of a video link. The first of these reasons, it is considered, should be given less weight than the remaining two. Whether or not such a condition had previously been imposed may need to be revisited in the light of changed circumstances. The prevailing consideration is not whether such a condition was previously considered appropriate but rather a consideration of whether or not there are legitimate areas which should be pursued in cross-examination and whether that cross-examination can only effectively be pursued with a witness physically present in Court. 13 Counsel for the Respondent accepts that there may, in an appropriate case, be cross-examination of deponents of affidavits filed and read in proceedings commenced under O 15A. So much may presently be accepted. An application under O 15A does not exclude the availability of other interlocutory procedures of the Court nor exclude the normal rule that a " party may require the attendance for cross-examination of a person making an affidavit ": Federal Court Rules 1979 (Cth), O 14, r 9. Whether the notice should be confined clearly depends upon the issues that are said to arise and in respect of which the production of documents is sought. An applicant who seeks to use a notice to produce, in effect, to gain production of the very documents which are the subject of the pre-action discovery will not have given the notice to produce in good faith, but rather, will have acted in a way that is an abuse of process. Otherwise, in principle at least, the notice to produce procedure may be exercised by both parties if otherwise relevant to issues in dispute. However, I would emphasise that it clearly is not contemplated that a pre-action discovery proceeding become a full-blown factual contest between the parties. The judge hearing the application will, no doubt, confine cross-examination and examine the subject matter of any notice to produce to ensure this does not become the case. 14 Contestable issues of fact may just as likely arise in applications under O 15A as they may in other proceedings. And they may be resolved in the same manner, with the Court always conscious of the need to ensure that the process itself does not become a " full-blown " hearing or an abuse of process. There is no reason why the ordinary interlocutory procedures should not be available to assist in the resolution of those contestable issues of fact, subject to the overriding consideration that the invocation of those procedures does not amount to an abuse of the process of the Court: Kimberley Mineral Holdings Ltd (In Liq) v McEwan (1980) 1 NSWLR 210. Thus, at least prima facie, it would be an abuse of process for an applicant for preliminary discovery to seek to compel the production of documents by notice to produce, when the production of those documents is sought under O 15A r 6. But it does not follow, for example, that a subpoena sought to be issued by an applicant for preliminary discovery against a third party would necessarily be an abuse, depending upon the scope and purpose of the subpoena. Even short of an abuse of process, considerable caution should be exercised before exposing any witness to the inconvenience of travelling from overseas to Australia unless it is considered necessary in the interests of the administration of justice. 15 The variety of orders as sought by the Respondent in the most recent Motion desirably should have been resolved at the one time. The Respondent in an Outline of Submissions filed on 28 March 2008 thus contends that the order as first made under O 15A -- and as subsequently varied -- has served its purpose and that " Order 15A is now exhausted" . As I have indicated, O15A is not a substitute for general discovery. The object is to disclose what is sufficient to permit the applicants to establish whether the elements of a cause of action are made out and to plead sufficient particulars to support a claim. Even though the Respondent has previously filed Affidavits , it is simply submitted that there should be no cross-examination because the object and purpose of O 15A in the present proceedings has been fulfilled. 16 That there is a limit to the power conferred by O 15A may readily be accepted. A question which will have to be resolved is to determine whether that limit has now been reached. But that is a matter which can be resolved at the hearing on 1 May 2008. That is a course which was not opposed this morning by Counsel for the Respondent. 17 It is inappropriate to require Senior Counsel for the Applicants to detail in advance the precise questions or even the detailed subject-matter of those areas of factual dispute which will be the focus of any cross-examination. To do so may of itself frustrate the effectiveness of any cross-examination. But it is appropriate to oblige any counsel requiring a deponent who normally resides overseas to attend in person, to satisfy the Court that there is a legitimate reason for requiring him to do so. Some of the documents upon which the Respondent is to be cross-examined have previously been seen by him; others, however, have apparently not been seen by him. 18 Those are areas of cross-examination which, it is considered, can be further pursued in an application under O 15A. But it must further be recognised that the point of time at which the Applicants must be required to file an application and statement of claim and thereafter invoke the general rules for discovery conferred by O 15A must be very imminent. Whether such an order should be made, as is sought by the Respondent, will be further considered at the hearing on 1 and 2 May 2008. Rule 6 is a rule " designed to amplify the court's power to penetrate obscurities and uncertainties in the interests of justice ": cf Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 at 733 per Burchett J. It is a rule which should be " beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case ": St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 at [26] , [2004] FCA 1360 ; 211 ALR 147 at 153 per Hely J. 19 For present purposes it is sufficient to be satisfied that the powers conferred by O 15A, r 6 may not have been " exhausted ". Had the view been formed that those powers had been " exhausted ", or even most probably " exhausted ", a different conclusion may well have been warranted as to whether there was any power to now require the Respondent to be made available for cross-examination or, at the very least, how any discretion should be exercised. Had that view been formed, it may have been more desirable to have resolved that question prior to resolving any question as to cross-examination. Without finally resolving that question, it is considered that there most probably remains outstanding a basis upon which the Applicants can still contend that they have a " reasonable cause to believe that [the Respondent] has or is likely to have or has had or is likely to have had possession " of further documents " relating to the question whether [the Applicants have a] right to obtain the relief and that inspection of the document [s] ... would assist in making the decision ": Order 15A, r 6(c). The rule does not " mandate mere rummaging through another's affairs ", but an applicant " will not necessarily be denied preliminary discovery because he or she already has available evidence establishing a prima facie case for the granting of relief ": Airservices Australia v Transfield Pty Ltd [1999] FCA 886 at [5] , [1999] FCA 886 ; 92 FCR 200 at 203 per Finn J (appeal dismissed: Hooper v Kirella Pty Ltd [1999] FCA 1584 , 96 FCR 1). 20 To now deny the Applicants the opportunity to cross-examine, it is considered, would be to prematurely bring to an end the power conferred by O 15A, r 6. The former issue is an issue which again may properly be resolved at the outset of the hearing on 1 May 2008. It is a submission which has been repeatedly advanced by the Applicants, although it is noted that the then solicitor for the Respondent on 28 November 2007 asked of the Applicants to " identify exactly in what way there has been non-compliance ". The Applicants did not respond. It is a submission which may have to be resolved before any cross-examination on this matter should be permitted. The Respondent maintains that there has been compliance. 22 If cross-examination were to be permitted, it would be an abuse of process for the Applicants to pursue a course of cross-examination directed solely to establishing a contempt. It would, however, be a legitimate course for the Applicants to pursue a course which sought to establish the existence of further " document [s] relating to the question whether the applicant has the right to obtain the relief " within the meaning of O 15A, r 6(c). Where the line may be drawn between questions directed to compliance with previous orders as to the disclosure of " document [s]" and questions directed to eliciting the location of further " document [s]" will depend upon the precise questions which may be put to the Respondent and cannot be determined in advance. 23 This area of cross-examination, if permitted, will present its own difficulties. It may be that objections are taken on the grounds of privilege or even self-incrimination. Any such claims will have to be resolved if and when those claims are made. 24 If there was a real prospect or likelihood that such objections would be taken in respect to the greater part of any cross-examination, there may have been less reason for requiring the Respondent to attend in person in Australia for the purpose of repeatedly invoking any such privilege as he considered appropriate. But it is considered that there are sufficient other areas of cross-examination which would in all likelihood not invoke such a response. And Senior Counsel for the Applicants provided an assurance that there were such areas of cross-examination as would in his assessment not invoke a claim for privilege. 25 The remaining question is whether such cross-examination should be conducted using a video link. To some extent there may be a difference of practice as between the Federal Court of Australia and the Supreme Court of New South Wales. The Federal Court has, perhaps, more readily embraced the technology (cf Tetra Pak Marketing Pty Ltd v Musachi Pty Ltd [2000] FCA 1261) than the Supreme Court of New South Wales ( Australian Medical Imaging Pty Ltd v Marconi Medical Systems Australia Pty Ltd [2001] NSWSC 651 at [25] ---[26] per Palmer J, 53 NSWLR 1). 26 Whether there is any such difference in practice need not be pursued. It is considered in the present proceedings that an effective cross-examination of the Respondent can only be conducted if he is present in Australia. In reaching that conclusion, consideration has been given to seeking to accommodate both the personal and professional inconvenience that such a requirement imposes upon the Respondent and his family. That is a matter that has been taken into account when vacating previous hearing dates. But it is considered that the time has now come when the hearing of the Motions should proceed and that the Respondent should attend. Although Senior Counsel for the Applicants did not oppose a variation of the May 2008 dates to accommodate either the professional or personal convenience of the Respondent, it is not considered that any sufficient basis has today been exposed which would warrant those dates being vacated. 27 Insofar as the " Addendum " as filed on 15 April 2008 is concerned, nothing in that " Addendum " leads to any different conclusion. Affidavits have been previously filed by the Respondent in the Application under O 15A and he should be available for cross-examination in the manner indicated. Such evidence or further evidence as he may wish to give is a matter for him; but the submission that it is a matter for him to either consent or not consent to cross-examination if he decides to give evidence or to rely upon Affidavits previously filed is a submission which should be rejected. 28 It should finally be observed that the repeated changes in the legal representatives appearing for the Respondent have necessarily had the consequence that there has been a lack of consistency as to the manner in which various issues are to be resolved. Had a more coherent approach been adopted by the Respondent from the outset, it may have been that such fundamental questions as to the jurisdiction of the Court to entertain the Application as filed in August 2007, and questions as to whether the powers conferred by O 15A had been exhausted at that point of time when Affidavits had been filed by the Respondent, may have been resolved at an earlier point of time. The present question as to cross-examination may not have arisen. But the time has now long passed to revisit what may have happened had the Respondent -- or his variety of legal representatives -- taken a different course. That Order 4 as sought in the Notice of Motion as filed on 9 April 2008, namely an order that " the order made on 29 November 2007 requiring Ian Carey to attend at Court on (a date altered to) 1 and 2 May [2008] be discharged ", be dismissed. 2. The remainder of the said Notice of Motion be stood over for hearing on 1 and 2 May 2008. 3. Costs reserved. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | federal court rules 1979 (cth) o 15a rr 6, 12 application for preliminary discovery further cross-examination practice and procedure |
The application relates to Qantas's conduct in arriving at and giving effect to a collusive understanding in respect of an element in the price for the carriage of international air cargo between early 2000 and February 2006 (the relevant period). The Commission and Qantas are agreed on the orders that the Court is invited to make, including the level of pecuniary penalty - $20 million. The Commission and Qantas have provided the Court with a Statement of Agreed Facts and Admissions (see s 191 of the Evidence Act 1996 (Cth)), and Joint Submissions. A single document entitled "Joint Submissions, Statement of Agreed Facts and Admissions pursuant to s 191 of the Evidence Act 1995 " was annexed to an affidavit (I will refer separately in these reasons to the "Joint Submissions" and "Statement of Agreed Facts" that comprised that document). It should not have been. Apart from any other reason why it should not have been, being part of an affidavit, it could not be inspected without the leave of the Court or a Judge: see O 46 r 6(3)(a) of the Federal Court Rules . The rule applies even in respect of an affidavit that has been read, in whole or in part, on a hearing. Apparently the document was annexed to the affidavit due to an oversight. There was no opposition to my making an order at the beginning of the hearing that leave was granted to any person to inspect the affidavit. The price to which I referred at [1] above was charged by many international air cargo carriers. Their understanding, which was implemented globally, was that a fuel surcharge would be imposed on most international carriage of cargo by air (the Fuel Surcharge Understanding). For the purpose of this proceeding only, Qantas has admitted that its conduct contravened s 45 of the Act. The Commission and Qantas acknowledge that it is for the Court to be satisfied that Qantas did contravene s 45 and to determine the amount of any pecuniary penalty and the nature of other relief to be ordered. On 11 December 2008 I made orders, substantially in the form agreed by the parties. These are my reasons for doing so. During the relevant period, Qantas: 9.1 carried on business in Australia and elsewhere as a carrier by air of both passengers and cargo; 9.2 was approximately the 11th largest airline in the world in terms of revenue passenger kilometres; 9.3 had between approximately 31,000 --- 38,000 staff and operated in between 36 - 40 countries; 9.4 was a publicly listed company incorporated in Australia and a trading corporation within the meaning of section 4 of the Act. 10. As at 30 June 2007, Qantas had total assets of $19.6 billion. It reported, for that year, total revenues of $15.2 billion and total profits before tax of $1.032 billion. Qantas' revenues from the carriage of air cargo for the year to 30 June 2007 were $902 million. Its total half year profit before tax to 31 December 2007 was $905 million. 11. In the financial years ending June 2002 to June 2006, the following table sets out the gross revenue of Qantas from its freight division (Qantas Freight) from the global carriage of airfreight, and carriage of airfreight to and from Australia. Global revenue from airfreight ($ million) Airfreight revenue from routes from Australia ($ million) Airfreight revenue from routes to Australia ($ million) 2002 512.75 134.93 249.71 2003 524.54 135.94 262.07 2004 486.33 131.54 241.51 2005 683.38 132.27 331.91 2006 783.20 127.24 370.44 12. The difference is explained by the fact that some of the surcharge was imposed on international cargo carriage that was not from or to Australia. The total that is relevant for present purposes is the lesser figure of $175.42 million. ] 13. During the financial years ending June 2002 to June 2006 Qantas Freight carried approximately 24% of all air cargo to and from Australia, based on weight. Relevant Staff 14. The Commission accepts that Qantas' knowledge of the Fuel Surcharge Understanding was limited to the staff within Qantas Freight. [Paragraphs 15 to 18 of the Statement of Agreed Facts identify two senior members of staff within Qantas Freight, Peter Frampton (Frampton) and John Cooper (Cooper), who, with Clive Finemore another Qantas Freight officer referred to at para 38 of the Statement of Agreed Facts below (Finemore), , arrived at and/or gave effect to the Fuel Surcharge Understanding. Those paragraphs also identify the respective positions held by them over time, and their lines of reporting. ] Description of the Market 19. International air cargo is carried both on passenger aircraft, using available belly space capacity, and on dedicated air freighters. Air cargo services are provided "one way" from origin to destination, either directly or using an indirect route via one or more midpoints. Most carriers provide air cargo services on a network-wide basis. Through interline and other arrangements with other carriers they also offer air cargo services to or from airports which their own aircraft do not serve directly. The networks of carriers extensively overlap such that there are various carriers operating to and from any international airport. 20. Carriers issue a document known as an air waybill for the carriage of air cargo. The air waybill sets out ... any surcharges including the fuel surcharge. 21. Airlines predominantly provide international air cargo services to freight forwarders although individual shippers also acquire their services. Freight forwarders generally organise the integrated transport of goods on behalf of a range of shippers. In doing so, they purchase air cargo services from carriers. ... The cost of air cargo services is passed on to a shipper by their freight forwarder and is ultimately borne by the end user of the goods, be it the shipper or their customers. 22. For the purpose of these proceedings, the Commission and Qantas consider that the appropriate market when considering the arriving at and implementation of the Fuel Surcharge Understanding is, and has been at all material times, a worldwide market for air cargo services, hereinafter referred to as the Air Cargo Market. The Air Cargo Market includes, but is not limited to, the carriage of cargo by air to and from Australia. Qantas considers that the conduct may also be considered by reference to a number of narrower markets, including a market or markets in Australia. The parties agree in any case that, given the conduct admitted in these proceedings, the Court need not determine the precise market definition or its boundaries. 23. International air cargo carriers are, and at all material times have been, actual or potential competitors in the supply of international air cargo services in the Air Cargo Market. Further, at all material times, there have always been at least two airlines, including Qantas, that were parties to the Fuel Surcharge Understanding and which were in competition in any relevant market in Australia. 1996/97: Resolution 116ss 24. The Fuel Surcharge Understanding ... had its origins in events which commenced in the second half of 1996 when the price of aviation fuel rose substantially. 25. On or about 25 October 1996, Lufthansa announced that with effect from 1 November 1996 it would levy across its entire route network what it termed a "fuel surcharge" of USD0.10, or the equivalent in local currency, per kilogram of air cargo carried (the 1996 Surcharge). Lufthansa stated that the 1996 Surcharge would be dropped when the price of fuel returned to the level of July 1996. 26. On or about 1 November 1996, Lufthansa commenced to levy the 1996 Surcharge. 27. On or shortly after 1 November 1996, a number of other airlines, including [seventeen airlines including Qantas are mentioned], commenced to levy the 1996 Surcharge either across their entire networks or on particular routes. In the case of Qantas, the direction to do so throughout its global network was given by Frampton on 1 November 1996. 28. Qantas had contact with other airlines regarding the implementation of the 1996 Surcharge. In particular, on 3 November 1996, Frampton travelled from Sydney to Rome for business meetings and then to Paris on 4 November 1996. While in Paris, Frampton had his secretary fax to him the contact numbers for a number of Qantas' principal freight competitors on key international routes, including Singapore Airlines, United Airlines, Korean Air, Northwest and Cathay Pacific. Subsequently, Frampton wrote to Qantas Freight managers throughout the world informing them that he understood that eight specified airlines, including some whose contact details had been requested, would be imposing a fuel surcharge. 29. During November 1996 certain shippers, freight forwarders and their representative organisations complained directly to a number of airlines as well as to certain local competition regulators in Europe regarding the introduction of the 1996 Surcharge. 30. On 14 --- 16 January 1997, there was a Special Composite Meeting of Cargo Tariff Coordinating Conferences of the International Air Transport Association (IATA) in Geneva, Switzerland. IATA is an airline industry body, the members of which include international air carriers. It convenes airline forums for members on industry issues. Qantas was in 1997 and remains a member of IATA, but it did not send a representative to the meeting in Geneva. 31. 31.2 The members believed there was a "need to build an enabling facility into the package so that more expeditious and orderly industry action could be taken in the event of future fuel crises". 31.3 The terms of the resolution were formulated in the course of the discussion. 31.4 Lufthansa raised a number of concerns in relation to the resolution and in order to alleviate some of these concerns, the IATA Director, Legal Department was invited to give his opinion. Without any immunity, [regulatory] authorities regard with great suspicion any situation where competitors charge the same rate. In the event that there is any evidence whatsoever that competitors have had an opportunity to communicate in any way, and charge the same rate, there is a very strong assumption that they do so having colluded. Until the particular approval is granted for any rate agreed at this conference, that situation would apply. In other words, in my opinion, any airline which moves to charge the rate which is agreed at this conference before any government approval, and therefore antitrust immunity, is obtained, would face a very strong evidential presumption that the rate being charged had been agreed between competitors and without antitrust immunity. The question is one of evidence. Swissair later withdrew its negative vote but Lufthansa maintained its negative vote due to the implications Resolution 116ss would have on Lufthansa's own established fuel surcharge. In the course of the meeting, IATA advised airlines that Resolution 116ss could not be put into effect until it was declared effective, which would only occur after it received approval from relevant regulatory authorities, including the United States Department of Transport (US DoT). 33. At its 3 March 1997 Cargo Committee meeting in Long Beach, California, IATA formally advised participants, including Frampton, the head of Qantas Freight, that it had received correspondence on 22 January 1997 from the European Commission regarding a complaint by the European Air Shippers' Council. The complaint alleged that IATA and its members had unlawfully consulted, agreed and imposed non-negotiable fuel surcharges on shippers in November 1996. 34. On 10 April 1997, Lufthansa removed the 1996 Surcharge with effect from 15 April 1997 as fuel prices had returned to the level of July 1996. Qantas Freight discontinued its 1996 Surcharge during May 1997. 35. Shortly following the removal of the 1996 Surcharge Lufthansa requested the recirculation of Resolution 116ss to IATA members, with certain amendments. Resolution 116ss was passed by mail vote in August 1997, with a reminder that the effective date for Resolution 116ss would be declared when all known necessary government approvals were received. 36. Attachment "A" to Resolution 116ss set out the methods of charging and documenting the fuel surcharge, .... Attachment "A" also expressed the surcharge as amounts "not more than" the specified amounts. 38. On 4 --- 8 May 1998, there was a Special Composite Meeting of Cargo Tariff Coordinating Conferences of IATA in Geneva, Switzerland. The meeting was chaired by ... Finemore, Manager, Freight Planning & Pricing. Finemore was Qantas Freight's representative at IATA. The US DoT had advised that they would not accept filing of this Resolution for approval unless accompanied by economic justification based on current prices which the US carriers were unable to provide. ... The Chairman clarified that until such time as economic justification was provided to the US DoT, and that authority approved the Resolution, it would not be declared effective. Between August 1997 (when Resolution 116ss was passed) and November 1999, the fuel price index calculated in accordance with Resolution 116ss (the IATA Fuel Price Index) remained below 130, being the trigger point for the first level of fuel surcharge under Resolution 116ss. Because the IATA Fuel Price Index remained below 130, IATA did not take steps to complete the required filing formalities with relevant governments, including the US DoT, for approval of Resolution 116ss. IATA nevertheless continued to publish the IATA Fuel Price Index to airlines and included Resolution 116ss in a rule book prepared by it, known as The Air Cargo Tariff (TACT) Rule Book, as TACT Rule 4.8. This practice continued until April 2000. On 29 December 1999 (prior to any IATA application to the US DoT for approval of Resolution 116ss and therefore prior to it becoming effective or having any immunised status), Lufthansa announced the introduction of a fuel surcharge following Resolution 116ss, to which it made explicit reference in its public announcement. The surcharge was 0.10 euros, or the equivalent in local currency, on its entire worldwide network with effect from 1 February 2000. If this index, based on the fuel price in June 1996 as 100 per cent, rises above a ceiling of 130 per cent, IATA advises cargo airlines of the possibility of counteracting rising fuel costs with a surcharge. The index, according to information from IATA, has currently reached a level of 136 per cent. Lufthansa Cargo will remove the fuel surcharge as soon as the IATA index falls below 110 per cent for two weeks running. Following the Lufthansa announcement, in late 1999 and early 2000 (still without Resolution 116ss becoming effective or having any immunised status), a number of other airlines announced the introduction of fuel surcharges across some or all of their global networks, with effect from in or about February 2000 and March 2000. These airlines included [fourteen airlines including Qantas are mentioned]. Some of these airlines (such as Cathay Pacific, Qantas and Air New Zealand) also explicitly referred to the IATA Fuel Price Index in their public announcements, expressly giving effect to Resolution 116ss. ... 42. Prior to Qantas Freight announcing the imposition of a similar fuel surcharge, Qantas Freight's Regional Manager, Europe wrote to Cooper and Frampton on 3 January 2000 advising that most airlines (...) were imposing the same fuel surcharge ex-Europe and seeking instructions to do the same. If there is enough momentum out there, and we are not seen as the catalyst then the additional revenue that can be obtained would certainly make the effort worthwhile. I would suggest where we need Govt approval, we may wish to simply adjust the market rates accordingly, but must ensure we get each Home Carrier to be the leader, in their market. In Aust we would move only after we ensure support from the "major" carriers in our market place, after ensuring we give them support in their's (sic). On 5 January 2000, Cooper asked all Qantas Freight regional managers by e-mail for information on what each "home carrier" was doing in their home ports about fuel surcharges. To the extent they had not already done so, within 24 hours the regional freight managers for Europe, the UK and Ireland and the USA reported back to Cooper after consulting with their counterparts at other airlines, including the relevant "home carriers". 44. Following receipt of this information, Cooper reported to Frampton on 6 January 2000 that all home carriers were "leading the way" in Europe and the USA and Qantas Freight should follow. On the same day, the Qantas Freight regional managers for Europe and the USA were directed by Cooper, with Frampton's knowledge, to implement similar surcharges from 1 February 2000. Announcements to this effect were made to customers on 7 January 2000 for Europe and by at least 10 January 2000 for the USA. In relation to Asia and Australia, Cooper directed the relevant regional managers to "wait and see" what other carriers would be doing and in the UK he directed the regional manager to raise freight rates as British Airways would not be going with a surcharge. 45. The Qantas Freight decision to implement or refrain from implementing fuel surcharges in accordance with Resolution 116ss was taken at Qantas Freight head office by Frampton and Cooper. When making these decisions, Frampton and Cooper had access to direct or indirect information from the regional managers regarding the intended or actual conduct of other airlines throughout their respective networks. ... 46. As detailed in paragraphs 89 and 90 below, airlines recognised that there were certain circumstances that made it difficult to impose a fuel surcharge, or a fuel surcharge in the full amount of the fuel surcharge, in a particular location. As set out in those paragraphs, these circumstances often gave rise to communications between airlines in order to implement the surcharge in the particular location to the extent possible. ... 47. On 7 January 2000 Finemore sent an e-mail to all Qantas Freight regional managers, copied to Frampton and Cooper, which explained how the fuel surcharge was to be recorded in Qantas Freight's accounting systems. Finemore was responsible for Qantas Freight's compliance with IATA rules and procedures and was aware that Resolution 116ss was not effective and did not have any immunised status. Please also be aware of the following. The information in TACT Rule 4.8 is taken from an IATA resolution adopted a few years ago. However, the resolution has not yet received Govt. approvals so it has no "legal" status. It is fine to use the provisions as a guideline, but there is no immunity from various antitrust laws for any carrier implementing the surcharge on an "industry basis". Please take care to ensure that if/when you do announce and implement a surcharge you do so as QF acting unilaterally, not as part of an industry approach. Notwithstanding Finemore's advice, on 24 January 2000 the Qantas Freight regional manager for Australasia sent a letter to Australian and New Zealand customers announcing the introduction of a fuel surcharge. This letter also made explicit reference to Resolution 116ss, though US DoT approval had not yet been sought by IATA. The surcharge is directly related to fuel prices. IATA has been monitoring fuel prices and reporting on their fluctuations as compared to those in effect in June 1996, when the price of fuel was US$0.535c per US gallon. A fuel price index was created and the price of US$0.535c was marked at 100 on the Index. This procedure is described in TACT Rule 4.8, and you will note that should the Index rise above 130 for two consecutive weeks, airlines may implement a fuel surcharge and should the Index fall below 110 for two consecutive weeks, the surcharge should be removed. The attachment shows two graphs, one being the price of fuel since July last year and the other being the Index. As you can see, during the third week of November, the Index went above the 130 mark. After the third consecutive week, many carriers started to announce the fuel surcharge in various markets. ... 50. On 28 January 2000 (after many airlines had announced the introduction of fuel surcharges following Resolution 116ss), IATA made a formal request to the US DoT to approve Resolution 116ss. 51. On 14 March 2000, the US DoT rejected Resolution 116ss. ... 52. Following the rejection of Resolution 116ss by the US DoT, IATA announced inter alia at its 4 April 2000 Cargo Committee meeting in Vancouver that it would no longer publish the IATA Fuel Price Index. That meeting was attended by Frampton of Qantas Freight and representatives of other international airlines including [sixteen airlines are listed]. Resolution 116ss, which provided for an automatic rate increase mechanism triggered by a rise in an industry fuel price index, had recently been refused approval by the DoT. As a result of this disapproval, IATA's legal advisers had recommended that the publication of the index should be suspended. Members, however, felt that it was an extremely useful industry tool and requested that IATA Legal look into the matter further. Qantas was informed in August 2006 by Frampton that he left the meeting feeling there was a clear understanding among the airlines. Accordingly, no purpose would be served by its continued circulation of this index and practice of doing so is being discontinued. Our legal advisors' strong view is that IATA Members could be exposed to serious antitrust liability if we were to continue to publish the Index or to approach PLATTS or any other entity with a request to provide the Index, or if it was suggested to one or more carriers that they approach PLATTS in this regard. While it is recognised we cannot prevent carriers from doing so on their own initiative, we have to affirmatively advise against taking any such action, for the reasons stated below. The Index has now become tainted by the DoT order finding Resolution 116ss, to which the Index was linked, to be adverse to the public interest and in violation of the law. If the carriers were to co-ordinate pricing by reference to the Index, whether pursuant to this disapproved Resolution or simply through de facto parallel pricing actions, that could be regarded as an illegal conspiracy in violation of applicable Competition laws, whether the Index is published by IATA, PLATTS, or indeed, simply calculated by each of the carriers independently. Against that background, IATA has no choice but to discontinue all activity associated with the disapproved Resolution, including calculation and dissemination of the Fuel Price Index, and it has done so. Because any further pricing actions linked to the now tainted Index could expose the carriers engaging in such pricing actions to serious antitrust liability, we must advise that carriers not engage in any pricing actions tied to the Index. As there is no further legitimate or lawful use to be made of the Index, we also recommend that carriers refrain from approaching any third party requesting them to calculate and publish the Index. While we acknowledge the desire of many Members to have the Fuel Index published, we do believe the foregoing reflects a correct analysis of the situation. For the reasons expressed, the position being taken is designed to protect both Members and IATA from serious legal liability risk. This message is being sent to all the members of the Cargo Tariff Steering Group. A similar message is being sent to the Cargo Tariff Coordinating Conference. If anyone wishes to pursue this matter further they are advised to contact their Legal Department. This correspondence was sent to the heads of cargo operations (members of the IATA Cargo Committee) at over 60 airlines, along with their tariff co-ordinators (members of the Cargo Tariff Coordinating Conference). Many of those airlines lobbied IATA through the Cargo Committee and IATA Legal to change this view. As a result of this distribution, all IATA carriers would have received the notice and thereby had brought to their attention the risks associated with the continued use of the IATA Fuel Price Index. Notwithstanding IATA's correspondence, either before or almost immediately following the cessation of the publication of the IATA Fuel Price Index, Lufthansa commenced publishing its own fuel price index on its website which mirrored the IATA Fuel Price Index (the Lufthansa Fuel Price Index). Lufthansa also commenced publishing a methodology (the Lufthansa Initial Methodology) which stated that the surcharge of 0.10 euros (or the equivalent in local currency) would be imposed when the Lufthansa Fuel Price Index exceeded 130 for two consecutive weeks, and would be removed when the fuel price index fell below 110 for two consecutive weeks. The Lufthansa Initial Methodology was otherwise the same as the methodology of Resolution 116ss. 58. Lufthansa later added a further level to its methodology, .... 59. During 2000 Qantas Freight also circulated its own version of an index which mirrored the Lufthansa Initial Methodology to its customers in Australia. 60. On 1 September 2000, the Lufthansa Fuel Price Index exceeded the 170 trigger point for two consecutive weeks. On 6 September 2000, an IATA Cargo Committee meeting was held in Vienna. It was attended by Frampton of Qantas Freight and representatives of other international airlines including [fifteen other airlines are mentioned]. 61. Upon his return to Australia in mid September 2000, Frampton directed Cooper to instruct the Qantas Freight regional managers to publicly announce that Qantas would be increasing (or introducing) the fuel surcharge across its global network from the middle of October 2000. In so doing, Cooper provided the Qantas Freight regional managers with an updated copy of the Lufthansa Fuel Price Index that indicated the 170 trigger point had been exceeded. Frampton told Cooper that "other airlines would be going with the surcharge" when directing him to implement it. 62. On 20 September 2000 Finemore sent an e-mail to all Qantas Freight regional managers, copied to Cooper, which explained the application of the latest fuel surcharge to TACT-rated shipments. Those of you working in such environments will be aware of such regulations, and I would suggest you follow the example of the national carrier, especially if there is a requirement for any new surcharge to be filed with the government. In other countries, especially the "deregulated" countries, such as the USA, EEC etc. the application of any surcharge should be a purely commercial decision. It is important that it be seen in this way, and cannot be interpreted as QF being part of any local "understanding" or agreement'. In or about late September 2000, Lufthansa announced that it would increase its fuel surcharge to 0.17 euros or the equivalent in local currency with effect from 1 November 2000. Other airlines, including [seventeen airlines including Qantas are listed] also announced an increase in or the introduction of the fuel surcharge at about this time. ... Surcharges were imposed on freight shipped to and from Australia. 64. A few airlines, rather than simply applying the Lufthansa Initial Methodology, formulated their own methodologies. However, in each case the methodology led to substantially the same outcome as the Lufthansa Initial Methodology. 65. The airlines which imposed fuel surcharges in accordance with the methodology of Resolution 116ss, and replicated the Lufthansa Initial Methodology, all did so notwithstanding being informed of its disallowance by the US DoT and of the clear advice from IATA that such conduct could "be regarded as an illegal conspiracy in violation of applicable competition laws". 2000: Fuel Surcharge Understanding 67. More than 70 airlines imposed a fuel surcharge in 2000. 67.2 the parties to the Fuel Surcharge Understanding, including Qantas, agreed to each impose a fuel surcharge on the carriage of air cargo across their global networks pursuant to Resolution 116ss and the subsequent equivalent Lufthansa Initial Methodology (or other methodology to substantially the same effect), except where local conditions prevented the imposition, or full imposition, of a fuel surcharge from a particular port or in a particular geographic area. The Fuel Surcharge Understanding included agreement as to the features identified in paragraph 65 . 69. In order to facilitate and coordinate the imposition of the Fuel Surcharge Understanding, airlines adopted a practice, which had existed since at least 2000, whereby whenever a trigger point on the Lufthansa Fuel Price Index was close to being reached, airlines would consult with each other to give and receive assurances as to the timing of the changes, to ensure implementation at the next level up or down was coordinated. The purpose of these exchanges was to confirm that the relevant airlines were adhering to the Fuel Surcharge Understanding and to co-ordinate implementation. 69.2 Another means by which this was done was by airlines with lower shares of the cargo carried from a particular port or region informing the competitor or competitors with the highest share in that port or region that they would follow that competitor or competitors and enquiring as to the timing and confirming the next level of proposed surcharge changes. Upon being so informed, the airlines with lower shares would announce and make their own changes to fuel surcharges accordingly. This practice was known as "following the home carrier" or the "home carrier rule". Over time the home carrier would not need to be informed on each occasion that its competitors would follow but would simply advise them of its intentions or make a public announcement on the understanding that they would continue to follow. This second means was particularly significant in a port or geographic region where there was some departure from the global application of surcharges in accordance with the relevant methodology. 69.3 Information regarding the approach of carriers' "head offices" to fuel surcharge adjustments was also freely exchanged during regular airline meetings in various countries in which Qantas Freight representatives participated. These included the Singapore BAR Cargo Sub-Committee, the Hong Kong BAR Cargo Sub-Committee and the ACRB in Indonesia. This information allowed a carrier's "head office" to make network decisions regarding the fuel surcharge with prior knowledge of the actions of its competitors in the named ports (Singapore, Hong Kong or Indonesia) and in other parts of those competitors' networks. Qantas Freight was part of the practice (which was also adopted by other carriers) outlined in paragraph 69 . Frampton and Cooper directed that surcharges would be imposed by Qantas Freight in a particular port or region where a significant competitor or "home carrier" indicated an interest in imposing, or an intention to impose, fuel surcharges. This was generally, but not always, done by Cooper informing port and regional managers of Qantas Freight's intention to do so. Qantas Freight executives, including Frampton, Cooper and port and regional managers, also communicated to Qantas' competitors (including home carriers) Qantas' interest in imposing or following, or its intention to impose or follow, particular surcharges. 71. ... 72. By late 2001, the price of aviation fuel had fallen. In December 2001, airlines which had imposed a fuel surcharge announced the withdrawal of that surcharge with effect from December 2001 or January 2002. On 17 December 2001 Qantas Freight announced that it would withdraw its fuel surcharge globally from 1 January 2002. 73. The withdrawal of the fuel surcharge in December 2001 was preceded by a number of contacts between airlines at head office and local levels in some ports or geographic areas. In Hong Kong, for example, air cargo staff from various airlines, including a Qantas Freight representative, attended an interline business lunch and agreed that they would not initiate a cancellation of the fuel surcharge, even if it fell below the relevant trigger point, until the Hong Kong Civil Aviation Department required them to do so. On 23 January 2002 Lufthansa announced a new fuel surcharge methodology with smaller increments at more frequent intervals. The new methodology (the Lufthansa Methodology) was as follows: Level Fuel Surcharge Imposition --- index Removal --- index 1 0.05 euro / kg 115 100 2 0.10 euro / kg 135 120 3 0.15 euro / kg 165 145 4 0.20 euro / kg 190 170 75. The Lufthansa Methodology carried over from Resolution 116s and from the Lufthansa Initial Methodology the calculation of fuel surcharges on actual per kilogram freight weight and the two week period for an index threshold to trigger a fuel surcharge increase or decrease and was in other respects (other than trigger points) the same as Resolution 116ss and the Lufthansa Initial Methodology. The index, and the calculation of the index, remained unchanged from the IATA Fuel Price Index. The fuel surcharge was imposed in euros or the equivalent in local currency. 76. From January 2002 many other airlines imposed fuel surcharges in accordance with the Lufthansa Methodology. Other airlines, including British Airways and Air France, adopted their own fuel surcharge methodologies which led to substantially the same outcome as application of the Lufthansa Methodology. British Airways published its own methodology on or around 15 March 2002. 77. In this Statement of Agreed Facts, a reference to the "Surcharge Methodology" is a reference to the Lufthansa Methodology, or to a methodology which led to substantially the same outcome as application of the Lufthansa Methodology. 78. Commencing in or about April 2002, airlines including at least [fourteen airlines including Qantas are listed] imposed fuel surcharges in accordance with the Surcharge Methodology. The imposition was across their global networks, including into and out of Australia, except where local conditions prevented the imposition, or full imposition, of a fuel surcharge from a particular port or in a particular geographic area. 79. ... 80. At various times after January 2002, Lufthansa added additional levels to its methodology as the fuel index approached the highest level on the existing methodology (Additional Levels). [A table records the Lufthansa Methodology, incorporating the Additional Levels. ] 81. As Lufthansa added the Additional Levels, the airlines utilising their own methodologies likewise added equivalent levels to their methodologies and thus extended the Surcharge Methodology to include the Additional Levels. 82. As Additional Levels were added, the participants in the Fuel Surcharge Understanding, including the airlines referred to in paragraph 78 , continued to impose fuel surcharges in accordance with the Surcharge Methodology incorporating the Additional Levels, and thus extended the understanding to include each of the Additional Levels by continuing to give effect to the Fuel Surcharge Understanding with the Additional Levels. 83. During the relevant period fuel surcharges or, in some cases, equivalent adjustments in rates, were implemented by airlines, including at least Qantas and the other airlines referred to in paragraphs 78 and 79 , pursuant to the Fuel Surcharge Understanding in countries and regions including: Australia, New Zealand, Europe and the UK, South Africa, Hong Kong, the Americas, Singapore, Thailand, Japan and Indonesia. By engaging in the conduct set out in paragraphs 74 to 83 , Qantas and the other airlines imposing the Fuel Surcharges extended and modified the Fuel Surcharge Understanding so that it was an understanding to impose fuel surcharges in accordance with the Surcharge Methodology on the carriage of air cargo, except where local conditions prevented the imposition, or full imposition, of a fuel surcharge from a particular port or in a particular geographic area. Qantas Freight engaged in activity, with the knowledge of Frampton and Cooper, to confirm and promote the ongoing operation of the Fuel Surcharge Understanding and to ensure it was given effect. Through the relevant period Qantas Freight regional and port managers, following the practices established in 2000 and outlined in paragraphs 69 and 70 , communicated with employees in the freight divisions of other airlines, as needed or at the direction of Cooper, to give and receive assurances that a relevant fuel surcharge increase or decrease in accordance with the Surcharge Methodology would be imposed. The purpose and effect of these communications was to confirm that competitors were intending to impose fuel surcharges in the same amount at around the same time, in accordance with the Surcharge Methodology. 87. After the departure of Frampton and Cooper in 2003, the Qantas Freight regional and port managers continued to give and receive assurances and exchange pricing intentions with competitors. 88. Qantas Freight regional and port managers communicated with competitors and gave effect to the Fuel Surcharge Understanding by exchanging information about Qantas Freight's fuel surcharge intentions, and receiving information about its competitors' fuel surcharge intentions, including as set out in the following sub-paragraphs. [Ten instances are set out in sub-paras 88.1-88.10. ] 89. Consistently with the Fuel Surcharge Understanding, there were exceptions to the imposition by Qantas Freight of fuel surcharges in accordance with the Surcharge Methodology in cases where local conditions prevented the imposition of a surcharge (or the full and/or immediate imposition of that surcharge) from a particular port or in a particular geographic area, though in almost all cases there were bilateral and multilateral contacts between airlines to confirm or propose an alternative approach. This occurred in New Zealand in certain instances. During the relevant period [between early 2000 and February 2006], and pursuant to the Fuel Surcharge Understanding, Qantas Freight imposed surcharges in accordance with the Surcharge Methodology without variation on routes from Europe to other destinations (including Australia), and from the United States to other destinations (including Australia). This included altering the surcharge levied, in accordance with the Surcharge Methodology, on over 20 occasions. 92. An exception to implementation in accordance with the methodology occurred on 13 March 2000 when Qantas Freight announced an adjustment in its fuel surcharge from the United States from US$0.10 to US$0.15 that would be effective from 16 April 2000. This adjustment was said to be based on the IATA Fuel Price Index reaching the 140 trigger point, though there was no such trigger point within the IATA Fuel Price Index. 93. At or around the same time, Qantas' major freight competitors on the routes between Los Angeles and Australasia, namely Air New Zealand and Polar Air Cargo, also announced the same adjustment to their fuel surcharge levels ex the USA. When the next IATA Fuel Price Index trigger point was reached, these airlines realigned the amount of the surcharge with the IATA Fuel Price Index. 94. On other routes, including routes from Australia, Qantas Freight imposed surcharges in accordance with the Surcharge Methodology, except where local conditions prevented it. Implementation of changes in the fuel surcharge generally lagged behind an index threshold being reached by approximately 2 -3 weeks to give airlines time to notify customers of the new charges. Qantas admits that s 45A of the Act applied and that, as a result, the conduct occurred in contravention of s 45(2) of the Act. The conduct ceased in February 2006, when allegations concerning the Fuel Surcharge Understanding were publicised following "raids" undertaken by regulatory bodies in the United States and Europe. A penalty can only be imposed for a contravention that occurred within six years prior to commencement of the proceedings on 28 October 2008: see s 77(2) of the Act. That period began on 28 October 2002. The Commission states that it regards the present contraventions as extremely serious, because they derived from an understanding between multinational carriers which are some of the largest airlines in the world. Qantas rightly accepts that its conduct, constituting as it does contraventions of per se provisions of the Act, namely s 45(2) read with s 45A, is "extremely serious". Such contraventions must be seen as the most serious of the non-criminal contraventions of the Act, given that Parliament has deemed such conduct to lessen competition substantially. The Act's prohibitions against price fixing have been the subject of numerous proceedings brought by the Commission. Some of those proceedings have resulted in multi-million dollar penalties, which have been extensively and widely publicised. The principal object of imposing a penalty under s 76 is deterrence, both specific and general: Trade Practices Commission v Stihl Chainsaws (Aust) Pty Ltd (1978) ATPR 40-091 at 17,896; TPC v CSR at 52,152; NW Frozen Foods , above, at 292-294. First, it means that penalties for collusive price fixing will need to be substantial and significant. This is, of course, reflected in the size of the maximum penalty upon corporations of $10 million. However, it also follows logically from the principle. Collusive price fixing, particularly between tenderers is difficult to detect. Public enforcement often only occurs with "a tip from an affected party or an insider" (see Marshall & Meurer, "Bidder Collusion and Antitrust Law: Refining the Analysis of Price Fixing to Account for the Special Features of Auction Markets" (2004) 72 AntiTrust Law Journal 83 at 101). Given these difficulties and the potential for large profits from such practices there is a chance that those in the market place might be prepared to factor the risk of a low penalty into its pricing structure as a 'business cost'. That would be inimical to the statutory purpose of ensuring that the practices do not occur. The penalty must be sufficiently high that a business, acting rationally and in its own best interest, will not be prepared to treat the risk of such a penalty as a business cost. In Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) [2005] FCA 265 ; (2005) 215 ALR 301 at [39] , Goldberg J concluded that the level of penalty must be sufficiently high that the party penalised will realise the seriousness of its conduct and will not be inclined to repeat it. His Honour noted that obviously the sum required to achieve that object would be the larger where the company has vast resources. A high level of penalty is also required for general deterrence of price fixing conduct affecting Australia by other large multinational corporate groups. The risk of detection is often low and the potential gain to the contraveners, and damage to the community, large. Therefore the penalty needs to be correspondingly high. Mobil Oil was not a Part IV case. The Minister for Industry, Tourism & Resources sought, among other relief, an order that the respondent (Mobil) pay to the Commonwealth a pecuniary penalty by reason of its contravention of s 10 of the Petroleum Retailing Marketing Sites Act 1980 (Cth). The primary judge was Gyles J. • Second, the sixth proposition from NW Frozen Foods (see [26] above) does not mean that the Court must commence its reasoning with the level of penalty proposed and limit itself to considering whether that penalty is within the permissible range: the Court may, instead, address the question independently at the outset. • Third, there was no suggestion in NW Frozen Foods that the admissions or statement of agreed facts had been "tailored or modified to reflect the difficulties faced by the [Commission] in proving its case" (at [55]). • Fourth, the regulator should always explain to the Court the process of reasoning said to justify a discounted penalty (the Court referred to Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd (2002) ATPR 41-851 at [56]). The conduct subject to penalty was engaged in by Qantas' freight division throughout the world. The understanding was to implement the Fuel Surcharge Understanding as widely and as fully as possible but, in some locations in giving effect to the Fuel Surcharge Understanding, the amount of the fuel surcharge varied according to what the participants thought was profitably achievable, and in some locations no surcharge was maintainable. 132. Within Qantas Freight, its involvement in the conduct was not particularly clandestine. It did not however disclose the conduct to Qantas' most senior management or Board. Qantas Freight representatives throughout the world sought or gave pricing intentions or assurances at the direction of Frampton or Cooper but for many of them it was seen as a normal part of business. They would openly report their discussions back to Cooper. The conduct simply continued after Frampton and Cooper left. 133. In many jurisdictions prior to the investigations of this conduct, the local representatives did not consider their discussions particularly secret. In some locations, such as Hong Kong and Japan where local regulators had to approve price increases, Qantas Freight representatives would meet with competitors to jointly propose a surcharge and would minute their meetings and agreement. 134. The conduct ceased in February 2006, when allegations concerning the understanding were publicised following "raids" undertaken by regulatory bodies in the United States and Europe. The cartel could have been defeated at any time in most localities by any major carrier in that locality declining to impose the surcharge. The cartel could have been defeated to and from Australia had Qantas declined to participate. The revenue generated by Qantas as a result of the fuel surcharges to and from Australia during the relevant period was approximately $170 million. Qantas Freight carried 24% of the cargo carried to and from Australia. This however does not demonstrate the actual loss to shippers or their customers because, absent the Fuel Surcharge Understanding, some price increases would have occurred to cover the increased costs of fuel, which did increase over the relevant period. It may have also been that some carriers would have been forced to exit certain routes, allowing the remainder to impose other increases with less constraint. These competitive outcomes cannot be known. It is the case that each of the parties to the Fuel Surcharge Understanding had different arrangements for the acquisition of fuel and acquired it in different places: many, such as Qantas, also had hedging arrangements. The Fuel Surcharge Understanding did not accordingly reflect any of the parties' actual costs. Further, a surcharge increase could stay in place even after the price increase that triggered it had gone: different trigger steps were used in the Surcharge Methodology when it was reducing from when it was increasing. 136. Neither the Commission nor Qantas are aware as to what proportion of the surcharge was ultimately borne by any particular consumer or business in Australia. As a general rule, the ultimate consumer will bear most if not all of the transport cost, in the price paid for the cargo: others in the supply chain, such as a wholesaler or retailer will absorb some part of the cost some part of the time. These others involve persons both in Australia or overseas. They will be more likely to absorb the loss if the goods comprising the cargo have been sold prior to the transport cost increase but may also have to do so if their competitors do not have the same costs. Nevertheless it may be assumed that the cost of surcharges on cargo comprising imported goods would be largely borne by Australians whereas the same costs on cargo comprising exported goods would be largely borne by overseas buyers. 137. Businesses in Australia importing cargo on which a surcharge was paid, even if they passed it on totally to their customers, would also be negatively impacted if they competed with domestic goods, but again the effect on any particular consumer or business cannot be known or quantified. As noted in paragraphs 9 to 13 above, Qantas has assets of nearly $20 billion and during the relevant period was the 11th largest airline in the world in terms of revenue passenger kilometres. Over the relevant period Qantas carried approximately 24% of the air freight to and from Australia and its nearest competitor carried about 14%. Its total profits before tax for the year ended 30 June 2007 was $1.032 billion. It derived revenue of $902 million from the carriage of air freight for the same financial year. Many of Qantas' principal competitors are of a similar or even larger size although none is as large in the Australian segment of the Air Cargo Market. Qantas' contravening conduct for which penalties can be imposed extended over a four year period from 2002 to 2006 inclusive. Qantas does not know, and does not have access to any reliable information to allow it to assess, its share of the Air Cargo Market. 141. In the segment to and from Australia, Qantas holds about 24%. Its nearest rival holds about 14% and there are at least ten significant competitors which are major international carriers and which have market shares to and from Australia of between about 2% and 10%. Qantas clearly has the largest market share in the Australian segment but is and was unable to act without being constrained by its competitors. Whilst the volatility of jet fuel prices certainly sparked the conduct, and some price adjustment would have been implemented by participants unilaterally to reflect this, the fuel surcharge timing and amount did not reflect the actual changes in costs of the competing airlines or the degree to which general price rises accounted for movements in fuel costs. The conduct substantially reduced competition for the carriage of air cargo. The parties were aware that the US Department of Transport had comprehensively rejected the conduct as anticompetitive. The conduct required the participation of all major carriers in each port or region to be successful. Qantas Freight's participation in the Fuel Surcharge Understanding was arranged by Frampton and Cooper and implemented by regional managers of Qantas Freight in offices around the world. It was not known to the Qantas Board or its most senior managers. Whilst the most senior person in its air cargo operation was involved, there was, since 1996, a level of more senior executives between him and the Chief Executive Officer. Qantas nevertheless accepts that Frampton, the head of Qantas Freight, a division generating over $500 million revenue a year, is properly classified as a senior executive of Qantas. Qantas did have a program of trade practices compliance in place during the period of the contravening conduct. That program proved to be inadequate in identifying, preventing or even limiting the extent of the conduct. Persons responsible for monitoring and preventing such conduct only became aware of it after raids of their competitors' premises overseas were conducted by regulatory agencies. 145. Qantas has recognised the inadequacy of its compliance program. It has substantially upgraded the program and its new program is presently being implemented throughout the world. Qantas has fully co-operated with the Commission's investigations since Qantas contacted the Commission in mid 2006. Qantas promptly provided the Commission with critical information about collusive understandings, including frank and detailed admissions of its own participation in those understandings as it became aware of them and insofar as it was able. Qantas did so aware that immunity was not available to it in relation to its fuel surcharge conduct and knowing that it was highly likely to face very substantial penalties. 147. To this end Qantas interviewed, and made available for interview by the Commission, over 35 of its staff and former staff and voluntarily searched for and produced documents from its operations throughout the world relevant to its and other airlines involvement in the contraventions. It brought to Australia at its own expense all staff willing to be interviewed by the Commission even though those staff could not have been compelled under section 155 of the Act. The Commission has not needed to serve any section 155 notices on Qantas. 148. Qantas' efforts have made available to the Commission information and documents identifying the involvement of other participants which have not been produced or made available as yet by these persons. Qantas has consistently demonstrated a commitment from its Board and Chief Executive Officer to identify and report to the Commission the extent of its involvement in the contraventions and to ensure the breaches are not repeated. Qantas has demonstrated genuine contrition for its involvement in these contraventions. 149. Whilst Qantas was not able to secure the co-operation of some of its former staff (less than 5) in all countries, the Commission is satisfied it has used its best endeavours to do so. Qantas has offered to the Commission, and undertakes to the Court, to continue to provide this very high level of assistance with the investigation, and possible prosecution, of cases against other participants. 150. Qantas through its solicitors and in-house counsel willingly participated in a series of discussions with the Commission to bring an agreed resolution of the matter before the Court. As a result of those discussions Qantas and the Commission have reached agreement as to the appropriate penalty to be suggested to the Court. Qantas has also assisted the Commission in the preparation of the relevant settlement documents including the admissions. 151. As already mentioned, Qantas has reviewed and upgraded its current trade practices compliance program. 152. The Commission fully accepts that Qantas is entitled to very substantial credit for having admitted contravening the Act, indeed actively self reporting, assisting the Commission in its investigations, upgrading its compliance program and agreeing with the Commission on the appropriate penalty to put to the Court (see Trade Practices Commission v TNT Australia Pty Ltd (1995) ATPR |P41-375 41---375). Qantas' co-operation with the Commission has saved the Commission and the Court (and ultimately the community) the cost and burden of litigating an extremely lengthy and expensive case. 153. The number of possible participants, the fact that numerous witnesses and documents are not within the jurisdiction, the need for translations and the sheer scope and duration of the conduct would make this likely to be the largest and most expensive investigation ever conducted by the Commission. 154. It is obviously of benefit to the Commission's investigations that respondents are encouraged to co-operate in appropriate cases. In these circumstances the parties submit Qantas is entitled to a very substantial discount on the penalty that otherwise would have been appropriate, which, given the regularity of the contravening conduct over the four year period and the maximum applicable penalty per contravention of $10 million, could have been very much higher. This discount should reflect not only its extraordinary levels of assistance in locating witnesses and material to make appropriate admissions as soon as possible but also in using its best endeavours to assist in the investigation and possible prosecution of other participants. 155. Considering Qantas' outstanding cooperation in relation to its own case and as against other parties, the Commission has accepted a very substantial reduction in agreeing on an appropriate penalty to recommend to the Court. The Court has not previously found contraventions against Qantas in relation to the Act. The Commission notes that Qantas has already paid a penalty in the United States of US$61 million in respect of its conduct. Qantas expects to pay a very substantial penalty in Europe at the conclusion of EU investigations. The penalty in the United States was very substantially discounted as a result of Qantas' co-operation with authorities there. Qantas expects similar considerations to be applied by European authorities where Qantas has also co-operated with enquiries and made appropriate admissions. The Commission and Qantas submit that, when all the factors and circumstances referred to above are taken fully into account, a pecuniary penalty of $20 million is appropriate, in that the parties consider that the suggested amount falls within the range that the Court, unaided by the parties' agreement, would have considered appropriate. In the present case, the relevant market is a worldwide market for air cargo services, including, but not limited to, the carriage of cargo by air to and from Australia (see [8](22) above). In these circumstances, the primary territorial and jurisdictional limit is that found in s 5. Section 5 provides, relevantly, that Part IV of the Act extends to engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia. Qantas is incorporated in Australia. Section 45(3) provides, relevantly, that for the purposes of ss 45 and 45A "competition" means competition in any market in which a party to the contract, arrangement or understanding in question supplies or acquires goods or services. Section 4E provides, relevantly, that "market" means a market in Australia. Although the notion of a "market in Australia" in s 4E has been referred to in two cases ( Riverstone Computer Services Pty Ltd v IBM Global Financing Australia Ltd [2002] FCA 1608 at [21] per Hill J and Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd (2008) ATPR 42-256 at [19] per Tracey J), the concept has not been the subject of extensive judicial consideration. In Riverstone , Hill J rejected the proposition that in order to be a "market in Australia" a market must be wholly within Australia. His Honour said (at [21]) that the fact that a market was global did not signify that there could not be a market in Australia for the same products. As the Commission points out, a contrary view would considerably reduce the efficacy and utility of the competition law provisions of the Act, especially in the modern telecommunications era. The definition of "market in Australia" in s 4E excludes, however, a market that is wholly outside Australia. Part of the present global and international air cargo market necessarily falls within the territorial boundaries of Australia. The Fuel Surcharge Understanding necessarily affected the prices exacted from persons, including persons in Australia, in respect of the international transport of cargo by air. In my view, the jurisdictional threshold in s 5 of the Act is satisfied. Section 45(2) of the Act prohibits the making of a contract, arrangement or understanding containing a provision, or giving effect to a provision, which has the purpose of likely effect of substantially lessening competition in, relevantly, the worldwide market for air cargo services. Section 45A deems arrangements with the purpose or effect of fixing the prices of services supplied in that market to be arrangements with the purpose or effect of substantially lessening competition in that market. Since the Fuel Surcharge Understanding had the purpose and effect of substantially lessening competition in the worldwide market for air cargo services (including by virtue of the operation of s 45A), giving effect to it anywhere in the world contravened s 45(2)(b) of the Act. Nonetheless, the Commission submits, and I accept, that over and above the jurisdictional connection required by s 5 of the Act, the degree of connection to Australia is relevant to the quantum of penalty. Section 2 of the Act states that the object of that Act is to enhance the welfare of Australians through the promotion of competition. Achievement of that objective is not inconsistent with preventing contraventions by Australian entities that injure non-Australians, but it is appropriate to focus primarily upon the effects of a contravention in Australia: cf the reference to "loss or damage" in s 76. Surcharges imposed on flights to and from Australia would be likely to have the most direct connection with loss or damage suffered by businesses or consumers in Australia. The parties have directed the Court's attention chiefly to the surcharges on routes to and from Australia totalling $175.42 million (see [8](12) above) but they accept that worldwide revenue from surcharges ($255.20 million --- see [8](12) above) is also relevant. They submit that it is appropriate to take into account orders made in other jurisdictions in respect of the same or similar conduct, including penalties or fines paid or likely to be paid. The fines imposed in the United States of America (USA) on Qantas have addressed flights to and from all parts of the world from and to the USA. Accordingly, those fines encompass contravening surcharges on flights from the USA to Australia and from Australia to the USA. Between 2001 and 2006, of the carriage of freight sold by Qantas in the USA, over 90% represented freight carried by Qantas to destinations in Australia. The fines imposed in the USA also encompassed contravening conduct in certain countries as a result of which surcharges were imposed on flights both to the USA and Australia (as well as to other countries). I accept, having regard to the global nature of the market in question, that it is appropriate for the Court to take into account the sanctions already imposed or yet to be imposed on Qantas elsewhere, including the penalty of $61 million imposed on it in the USA and the threatened penalty arising from the investigations of European authorities (see [28](157) above). It is plausible that a high proportion of Qantas's global fuel surcharge revenue of $255.20 million and of its fuel surcharge revenue of $175.42 million on routes to and from Australia, would have been imposed by Qantas, even absent the Fuel Surcharge Understanding. It is inconceivable that airlines would simply have borne and not passed on the increases in their fuel costs. The fuel price index moves in response to the average price of fuel in various markets, but the surcharge did not necessarily directly correlate to any particular airline's actual fuel costs. The reason is that each airline had different arrangements for the acquisition of fuel which it purchased in different places. Moreover, Qantas had fuel hedging arrangements. Finally, given that the fuel surcharge was imposed regardless of the length of the flight or aircraft type (different kinds of aircraft have different fuel efficiencies) an airline having mostly short routes would probably do better out of a given surcharge than an airline with mostly long routes. In order for a surcharge to reflect the cost of fuel, it would, at the very least, have to be calculated as a function of weight, distance and aircraft type, but in fact the fuel surcharge was not calculated in that way. Furthermore, a surcharge increase was not imposed or removed immediately as the fuel price increased or decreased. Again, different trigger steps were used for increases and decreases. The position is further complicated by the fact that the cost to the airlines of the fuel price increases was not borne exclusively by international freight transport. Passenger flights carry cargo as well as passengers. During the relevant period, Qantas's internal accounting did not allocate any fuel costs to the freight division. Most airlines imposed passenger fuel surcharges, as Qantas did, from May 2004. The question whether, and if so to what extent, Qantas was better off than it would have been in the absence of the Fuel Surcharge Understanding raises imponderables. The parties to the Fuel Surcharge Understanding must, however, have understood that a surcharge imposed was more likely to "stick" and not be bid away by market forces. Moreover, the Fuel Surcharge Understanding saved each airline the very cost of itself calculating the responses it should make from time to time to fuel price increases. It is impossible, however, to demonstrate either the gain to Qantas or the loss to shippers or their customers arising from the Fuel Surcharge Understanding. I sought submissions on the issue of parity, as between the circumstances of the two cases. The relationship between the amount of penalty and the amount of surcharge imposed on flights to and from Australia during the relevant period seemed to be quite different as between the two cases. On the other hand, the proposed penalty of $5 million for British Airways represents approximately 0.8% of the global fuel surcharge revenue of that airline during the relevant period and 39% of its fuel surcharge revenue on routes to and from Australia during that period (allowing for conversion of currency between Great British Pounds and Australian Dollars). It was the disparity between the proposed penalties as percentages of the surcharges imposed on routes to and from Australia (11% and 39%) that caused me particular concern. The Commission submits, and I accept, that the surcharges relevant to be considered are not only those imposed on flights to and from Australia. The Air Cargo Market was global and was in part located in Australia. British Airways' global fuel surcharge revenue was some 45 times that on its routes to and from Australia alone. It was, on the other hand, only some 1.3 times the global fuel surcharge revenue of Qantas. The Commission points out that the benefit derived by an airline from particular surcharges depends in part on its costs. If one airline recovers $170 million in surcharges but suffers fuel cost increases of $250 million, while another recovers $10 million in surcharges but suffers fuel cost increases of only $4 million (because, for example, its fuel costs were hedged effectively), the second airline may be seen to have received a greater benefit (depending on the cost to it of its hedging). As ever, the critical question of the profit derived from the Fuel Surcharge Understanding depends on what the airline would have charged in its absence. The Commission also points out that fuel surcharges were only one component in prices charged for international carriage of cargo. Other components might be reduced while, in purported adherence to the Fuel Surcharge Understanding, the fuel surcharge was imposed. (The Commission does not intend to convey, and does not contend that there was in fact an agreement or an attempt to reach an agreement relating to total rates or base rates. ) Surcharge revenue alone was therefore not an accurate indication of an airline's overall position. Finally, as noted in the British Airways Reasons for Judgment (at [8] and [27]), British Airways admits that it gave effect to the Fuel Surcharge Understanding the subject of that case (which was an understanding between British Airways and Lufthansa Cargo Aktiengesellschaft alone) only where it applied the full surcharge in accordance with the Surcharge Methodology in that case. Qantas, in contrast, does not take any such point and admits that surcharges imposed at even less than the full amount of the increase suggested by the Surcharge Methodology were imposed in accordance with the Fuel Surcharge Understanding. In its submissions, the Commission gives examples demonstrating the fallacy involved in expecting the outworking of the Fuel Surcharge Understanding in the Qantas case to be consistent with the outworking of the Fuel Surcharge Understanding involved in the British Airways case. I accept that it would not be appropriate to seize on the superficial lack of parity as a reason for not imposing the penalty proposed by the parties. It notes that, particularly in cases involving conduct over a lengthy period, the extent of that benefit will be impossible to determine. The Commission referred to observations made by Goldberg J in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 4) [2006] FCA 21 ; (2006) ATPR 42-101 at [56] - [57] and by me in Australian Competition and Consumer Commission v Roche Vitamins Australia Pty Ltd (2001) ATPR 41-809 at [42]. The Commission notes that the parties to the present contraventions were multi-billion dollar, multinational enterprises operating throughout the world, for whom Australia was not the focus of the contravening arrangements but merely one of many places directly affected by the conduct. The question is, according to the submission, what would be an appropriate base penalty to be an effective deterrent for companies of that magnitude from engaging in contravening conduct affecting Australia in the future. The Commission considered an appropriate base penalty for all contraveners to be $7 million, but would have fixed on a much higher "base amount" if the contraveners were not also facing substantial penalties elsewhere. For those companies which reported their involvement to the Commission well before the Commission was able to prove it, the Commission gave a standard discount of approximately 30% leading to a reduction in the base penalty in their cases to approximately $5 million. This is reflected in the fact that the maximum penalty for merely making a contravening arrangement, or even attempting to do so, is the same as the maximum penalty for giving effect to it. Making an arrangement without giving effect to it could not confer a benefit. As another illustration, the Commission refers to non-compete agreements in which one party might derive no direct benefit in a particular market or market segment because it has merely agreed to stay out of that market or segment. For airlines with a 2% or less share of the Australian segment of the Air Cargo Market, the Commission proposed no uplift or increase in the base penalty. The Commission did not propose to discriminate between those with 2% or less, but accepted that all would have been likely to derive a relatively minor benefit in the Australian segment, which would probably be less than the base penalty. Over the relevant period, Qantas carried approximately 24% of all air cargo to and from Australia based on weight, well above the 2% level. Some 69% of Qantas's fuel surcharges were obtained on flights to and from Australia. Qantas's penalty in Australia must reflect the fact that Qantas's activities had the most significant connection with Australia and that Australia is therefore the primary jurisdiction in which those activities should be penalised. The figure reached by the Commission, prior to any discount, was $40 million. In the light of the original and further submissions made by the Commission outlined above I think that this figure of $40 million lies within the range of penalties that I would have imposed, leaving to one side the question of discount (see below). Qantas "self-reported" and made admissions of contravening conduct at times when contravention could not have been proved against them. An additional 20% discount was available to be recommended in respect of assistance in the case against others. Qantas should receive the full additional 20% in the Commission's view. It provided the Commission with access to overseas witnesses. As the case against Qantas proceeded on admissions, the value of the witnesses to the Commission is in its cases against other airlines. The Commission states that to date Qantas has provided 37 witnesses to the Commission. The Commission assures the Court that the information obtained from those witnesses would not have been obtained in the absence of Qantas's cooperation. The base discount of 30% reflects the saving in time and costs to the Commission and therefore to the community. I accept that this consideration is of great importance in the present case in view of the fact that the Fuel Surcharge Understanding was entered into overseas and that witnesses and documentary evidence lies largely outside Australia. The Commission has informed the Court that the fact that many witnesses are not in Australia and are therefore not compellable, has posed a difficulty for the Commission in dealing with other airlines, some of which have failed or refused to comply with notices given to them by the Commission under s 155 of the Act, in a timely manner or at all. As well, the Commission points out that the limitation period is running against the Commission. The Commission has provided to the Court a further submission which, on its application, I have ordered to be kept confidential by being kept in a sealed envelope not to be opened except by order of a Judge. That submission provides considerable detail of Qantas's (and British Airways') cooperation in relation to the Commission's intended institution of proceedings against other airlines. I accept that Qantas's cooperation has been of great benefit and importance to the Commission in the respect mentioned. In my view, a 50% discount cannot be characterised as inappropriate. Left to myself, in the light of both the supplementary open submission and the confidential submission provided by the Commission, I would have allowed a very substantial discount of that general order. Section 80(1) of the Act empowers the Court to grant an injunction either permanent or to expire after a limited period of time, as the Court determines to be appropriate. The appropriateness of injunctions of limited duration under s 80 has been considered in several recent cases. In Australian Competition and Consumer Commission v George Weston Foods Ltd [2004] FCA 1093 ; (2004) 210 ALR 486 ( George Weston Foods ) at [30], Gyles J expressed a reservation concerning the time limit of three years proposed by both parties in that case. His Honour found it difficult to see the reason for the time limit in relation to a properly framed injunction, bearing in mind that under s 80(3) of the Act the Court has power to rescind or vary an injunction granted under s 80(1). Gyles J had occasion to consider the question again in Australian Competition and Consumer Commission v Liquorland (Aust) Pty Ltd (2005) ATPR 42-070 where, again, a time limit of three years was proposed. His Honour (at [71]) repeated the reservation he had voiced in George Weston Foods but granted an injunction limited to three years on the basis that in the circumstances it was not necessary to subject Liquorland (Aust) Pty Ltd to the threat of contempt of court for any longer period. In forming that view, his Honour referred to the existence of a compliance programme, a change in New South Wales licensing laws, and the sharp shock that had been administered to the company by the proceeding. Finally, in Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union (2007) ATPR 42-192 , his Honour had to consider a proposed four year time limit. More particularly, it sets a period during which the party restrained will have a very powerful incentive to ensure that there is no further contravening conduct. By the end of that period it is to be hoped that the procedures and, perhaps, the culture of the organisation will be such that further contravention is unlikely. It seems to me that the undertakings which have been obtained in relation to compliance programs are appropriate for that purpose. In Australian Competition and Consumer Commission v IPM Operation & Maintenance Loy Yang Pty Ltd (2006) 157 FCR 162 ( IPM ), the Commission sought a final injunction against the respondent Union. Young J unequivocally rejected (at [233]) a final injunction as "plainly inappropriate" and would "not contemplate an injunction that operates indefinitely" in a case where the relevant conduct had come to an end. His Honour observed that in such a case, any injunction should be for only a limited period of time, and noted that this course was commonly taken in the authorities. For her part, Stone J, in Australian Competition and Consumer Commission v Signature Security Group Pty Ltd (2003) ATPR 41-942 , incorporated a two year time limit in the injunction that she granted, even though, as in IPM , the Commission sought a permanent injunction. Her Honour regarded the purpose of the injunction in the case before her as being not to restrain apprehended repetition but to deter the contravening party from repeating the contravention. That deterrence is effected by attaching to the repetition of the contravention the range of sanctions available for contempt of court ... The remedy is flexible and may be applied in service of a variety of functions to support the policy of the Act. In imposing the two year time limit, Stone J noted that the respondent had instituted appropriate measures to prevent a recurrence of its contravening conduct, and that if it had not done so she might have granted a permanent injunction, leaving it to the respondent to apply under s 80(3) for its termination. An example is a threat of repetition. In the present case, there is no evidence of a threatened repetition of the contravention or a threat of any other contravention of the Act by Qantas. The purpose of injunctive relief here is therefore not to ensure that a threatened course of action does not occur. Rather, the purpose is, like that of imposition of the pecuniary penalty, that of deterrence --- specific deterrence of Qantas and indirectly, general deterrence. As requested by the parties, I also ordered Qantas to pay the Commission a contribution towards its costs of this proceeding in an agreed sum of $200,000. | contravention of pt iv of trade practices act 1974 (cth), s 45(2) arriving at and giving effect to understanding having purpose or likely effect of substantially lessening competition understanding between respondent (qantas) and other international airlines as to surcharge to be imposed on international carriage of freight in consequence of increases in price of fuel fuel surcharge understanding agreed statement of facts and joint submissions penalty of $20 million and injunction for three years sought by both parties consideration of relevant factors and of role of court relevant considerations appropriateness of injunction of limited duration. held : pecuniary penalty and injunction in terms as agreed. trade practices |
The Commission does not oppose the making of the orders. 2 The background facts are these. 3 On 21 December 2001, the ACCC commenced proceedings against Dataline and six other respondents alleging contraventions of the Trade Practices Act 1974 (Cth) in proceeding QUD277/2001. 4 Dataline contested the proceeding and filed a joint defence with four other respondents on 3 May 2002 and was legally represented. On 25 September 2003, Kiefel J ordered that Dataline's defence be struck out unless certain documents were provided to the ACCC. The ACCC contended that Dataline had failed to comply with the order and, as a result, Dataline's defence was struck out. The ACCC filed a notice of motion on 28 November 2003 seeking a declaration that Dataline's defence was struck out. The hearing of the motion was adjourned to enable 'without prejudice' settlement discussions to take place. On 11 October 2004, the ACCC filed an amended notice of motion also seeking a declaration that Dataline's defence was struck out and judgment against Dataline under Order 35A, r 3(2)(c) of the Federal Court Rules . 5 That motion was heard by Kiefel J on 1 and 9 December 2004. Kiefel J delivered judgment on 3 March 2005 declaring Dataline's defence struck out and found that the ACCC was entitled to judgment under the Rules. On 26 August 2005, the ACCC sought to re-list the matter for final orders to be made. 6 On 9 September 2005, the Supreme Court of New South Wales made orders for the winding up of Dataline and the appointment of a liquidator. At that point, the ACCC's proceedings were still on foot. Although the liquidator was aware of the ACCC's proceedings, the liquidator did not give notice to the ACCC of any intention to deregister Dataline. 7 On 16 February 2006, Kiefel J heard argument as to the form of final orders to be made in the proceeding and reserved judgment. 8 On 30 March 2006, Dataline's liquidator wrote to ASIC requesting deregistration of the company under s 601AB(2)(c) of the Corporations Act . Dataline was deregistered by ASIC on 23 July 2006. The ACCC was not informed by the liquidator of the deregistration. 9 On 3 November 2006, Kiefel J gave judgment regarding the final orders in the ACCC's proceeding. Also on 3 November 2006 the court granted leave to proceed against Dataline pursuant to s 471B of the Corporations Act . Dataline's liquidator was given notice of that application by the ACCC and the liquidator did not seek to oppose the granting of leave. On or about 24 November 2006, the ACCC's solicitors became aware that Dataline had been deregistered. On 24 November 2006, the ACCC filed a notice of appeal from the orders made by Kiefel J on 3 November 2006 (Appeal QUD458/2006) and served a copy of the notice of appeal on Dataline's previous liquidator. The notice of appeal seeks an order that notwithstanding Dataline's administration and liquidation, Dataline pay a pecuniary penalty to the Commonwealth under s 76 of the Trade Practices Act 1974 (Cth). 10 On 2 January 2007, the ACCC's solicitors received a letter dated 19 December 2006 from Dataline's previous liquidator asserting that it was inappropriate for Dataline to be a party to any appeal. On 12 January 2007, the ACCC's solicitors wrote to Dataline's previous liquidator responding to the letter of 19 December 2006 and requested administrative reinstatement of Dataline's registration. That letter was returned to sender and on 19 January 2007 the ACCC's solicitors sent a facsimile to Dataline's previous liquidator attaching an index of the appeal papers and a list of documents proposed to be included in the Appeal Book. The ACCC's solicitors have received no response to that facsimile. 11 On 27 April 2007, the ACCC filed its application for the reinstatement order supported by the affidavit of David Brian Starkoff filed 23 April 2007 which deposes to the matters recited in the above chronology. On the hearing of the application I gave leave to read and file the further affidavit of David Starkoff sworn 8 May 2007. 12 The applicant says that Dataline is a party to the appeal to be heard by the Full Court next week. An issue in the appeal is whether a pecuniary penalty under s 76 of the Trade Practices Act should be imposed on Dataline in relation to its contraventions of s 48 of the Trade Practice Act . Section 601AH(2) of the Corporations Act empowers the court to reinstate the registration of a deregistered company on the application of 'a person aggrieved' by the deregistration and in circumstances where the court is satisfied that 'it is just to do so'. Having regard to the statutory role of the ACCC, it is a person aggrieved with standing to make an application for reinstatement ( Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 174 ALR 688 at 692-693 [24] --- [26]; 34 ACSR 232; 19 ACLC 341; [2000] NSWSC 316 per Austin J (' ACCC v ASIC) . The conclusion reached by his Honour in that case is consistent with the recent observations of Heerey J in Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd (No. It is not like a commercial corporation which will decide (quite properly) whether or not to commence litigation solely in terms of what will be to the benefit of its own interests. The ACCC exists to give practical effect to the objective as stated in s 2 [Trade Practices Act] to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection. Litigation to enforce the Act is part of the ACCC's raison d'être. Having regard to the 'important responsibility' of the ACCC in the enforcement of Part IV to be exercised in the public interest and the severity of the penalties imposed by Parliament in respect of contraventions of Part IV , Austin J was satisfied that the deregistered entity ought to be joined in the proceeding and thus exercised the power under s 601AH(2). 14 In this application, the ACCC does not seek reinstatement in order to commence litigation or join Dataline as a party. It seeks reinstatement to progress the resolution of issues on the appeal. The applicant says that Dataline is a necessary respondent to the appeal and the public interest is served by reinstating Dataline so as to enable the Full Court to determine, if appropriate having regard to the issues in the appeal, questions going to the scope of a pecuniary penalty that might be awarded against Dataline in the circumstances of the case. Thus, it is said the court ought to be satisfied that it is just to make the reinstatement order as the public has an interest in any consideration by the Full Court, if thought appropriate, of the assessment of any pecuniary penalty as a means of informing the public of the factors influencing (and the amount of) the imposition of a pecuniary penalty in a given case. Counsel for the ACCC made submissions that having regard to the insolvent status of Dataline, Kiefel J took the view in the primary proceeding that there was no utility in making any order for a pecuniary penalty. The question of whether a penalty ought to have been made and if so on what footing and to what extent is one of the questions alive in the appeal. In the appeal, the ACCC seeks an order for a pecuniary penalty against Dataline and also in respect of another respondent in the proceedings in liquidation. 15 In addition, in the proceedings before Kiefel J, the ACCC sought to retrieve and retain hard disk drives held in the Registry of the Federal Court as a result of an anton pillar order made in the proceedings in January 2002. Kiefel J observed that it was not obvious to her Honour why the ACCC sought the material to which the liquidator of Dataline would be entitled at the conclusion of the proceedings. In the result, Kiefel J refused to make the orders sought by the ACCC. 16 The Federal Court continues to retain the disk drives referred to in the anton pillar orders which are the property of Dataline and ought, upon conclusion of the proceedings, be returned to Dataline's liquidator. Accordingly, in order to resolve the transfer of that material, it is necessary to reinstate the company. 17 The applicant further says that reinstatement is just as the ACCC sought to secure the consent of Dataline's former liquidator to administrative reinstatement of Dataline by ASIC pursuant to s 601AH(1) and Dataline's former liquidator refused to do so. 18 I am satisfied that the ACCC has standing as a person aggrieved to bring the application and that it is just to exercise the power to reinstate Dataline. Accordingly, I propose to make the orders reflected in paragraphs 1 and 2 of the application by the ACCC filed on 27 April 2007. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for reinstatement reinstatement sought for the purposes of a pending appeal in a proceeding to which the deregistered entity was a party consideration of the standing of the accc in an application pursuant to s 601ah(2) of the corporations act 2001 (cth) and whether, in the circumstances, reinstatement is just. corporations |
The decision which the applicant wishes to impugn is a decision by the Tribunal that it did not have jurisdiction to determine an application which he had lodged with the Tribunal. The Tribunal's decision was given orally in the course of a telephone hearing on 16 November 2007. The application for an extension of time was filed in this Court on 22 January 2008. It was accompanied by an affidavit which the applicant had sworn on 11 January 2008 and a notice of appeal, also dated 11 January 2008. These documents were mailed from Pakistan where the applicant is presently resident. 2 The Court does not have before it the Tribunal's file. In particular it does not have the appeal notice that was lodged with the Tribunal or a transcript of the Tribunal's oral reasons for determining that it lacked jurisdiction to entertain the appeal. The Minister's solicitor was, however, able to provide a copy of a "hearing report" which indicates that the Tribunal found that the applicant was not entitled to make the application because of the provisions of s 52A(2) of the Australian Citizenship Act 1948 (Cth) ("the Act"). 3 It appears, from an affidavit sworn by a solicitor acting for the Minister, that the decision which the applicant desired the Tribunal to review was a decision of a delegate of the Minister to refuse to grant the applicant Australian citizenship. The application was made to the Australian High Commission in Islamabad on 30 April 2007 and rejected by letter dated 28 June 2007. The application was rejected because it was, at relevant times, a requirement that applicants for the grant of Australian citizenship be permanent residents of Australia: see s 13(1)(a) of the Act. The solicitor's affidavit deposes, on the basis of departmental records, that the applicant is not and has never been a permanent resident of Australia. 4 The records disclose that the applicant first came to Australia on a tourist visa in 2000. Shortly after arrival his in Australia the applicant sought a protection visa. On 15 June 2001 a delegate of the Minister refused to grant the protection visa and this decision was affirmed by the Refugee Review Tribunal in a decision handed down on 11 April 2003. A bridging visa, held by the applicant, expired on 22 May 2003. Despite this the applicant remained in Australia without a valid visa until 8 September 2006. He was then located by Immigration officers and was granted further bridging visas pending his voluntary departure from Australia on 2 October 2006. 5 The only explanation for the applicant's failure to make a timely application to this Court is to be found in the affidavit sworn on 11 January 2008. All that is said is that "I am an external/outsider and the correspondence almost take ample time to reach me. " By this I understand the applicant to be suggesting that he did not receive formal advice from the Tribunal of its decision and of his (possible) right to seek review of the decision in this Court for some long time after 16 November 2007. The applicant does not state when he received the Tribunal's notification. I paid my taxes regularly to the Govt during my stay. Therefore kindly grant me visa for Australia. I assure you sir that I will abide by all the rules in true spirits. However my detailed reply is also attached on separate sheets for your kind consideration please. 7 Many of these claims of a close and active association with Australia are reiterated in written submissions filed in support of the present application. In those submissions the applicant asserts that he has been jobless since his return to Pakistan and that he wishes the Court to grant him permission to return to Australia and once here regain employment. 8 In the course of a telephone hearing this morning the applicant confirmed that he has never been a permanent resident of Australia. He said that he had been misled about his status and his entitlement to remain in Australia by a migration agent. Otherwise he relied on the written material which had been filed in the Court. 9 By s 13(1)(a) of the Act it was a requirement for the grant of a certificate of Australian citizenship that an applicant was "a permanent resident". The applicant's application for citizenship was rejected because he did not satisfy this requirement. By s 52A of the Act it was provided that applications could be made to the Tribunal for review of decisions made under s 13 of the Act. Although the hearing report records a decision that the Tribunal had "no jurisdiction" I understand this to mean that there was no valid application before the Tribunal because the applicant had no entitlement to make the application. The Tribunal was plainly correct to so hold. 10 In circumstances such as the present the Court would ordinarily be disposed to grant an enlargement of time within which an appeal against the Tribunal's decision might be lodged. The applicant acted promptly once he received notice of the Tribunal's decision and no prejudice to the Minister was suggested. Any appeal against the Tribunal's decision would, however, be bound to fail. That being so the proper exercise of the Court's discretion requires that the application be dismissed. It will be so ordered. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | application for an extension of time to file and serve a notice of appeal where administrative appeal tribunal held it did not have jurisdiction to determine application where s 52a(2) of the australian citizenship act 1948 (cth) required an applicant for australian citizen to be a permanent resident of australia where the appellant had never been a permanent resident of australia application dismissed. migration |
Section 39 of the AAT Act requires that the Tribunal apply notions of procedural fairness: see Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 per Mason J; O'Sullivan v Repatriation Commission [2003] FCA 387 ; (2003) 128 FCR 590 at [45] ; and Repatriation Commission v Farley-Smith (2007) 45 AAR 474 at [54]. Obviously, the requirements of procedural fairness will depend upon the particular circumstances of each case. More specifically, s 39 provides that the Tribunal must ensure that every party before it is given a reasonable opportunity to present his or her case. If such a statutory duty is not complied with there is an error of law. Other issues in these appeals have been raised, but it is apparent that if the Tribunal had breached s 39 of the AAT Act, each matter would need to be remitted to the Tribunal for re-hearing. In each amended notice of appeal the primary relief sought by the applicant is that the matter be remitted to the Tribunal to be re-heard, or alternatively, in lieu of that direction, the applicant's objection to the respondent's assessments for the years ended 30 June 2000, 2001 and 2002 be allowed. The Applicant's mother was the beneficial owner of the property and beneficially entitled to the Rent. The Applicant was not beneficially entitled to the rent for the purposes of s.6-5 of the [Income Tax Assessment Act 1997 (Cth)] . At the conclusion of oral submissions, on 25 August 2009, I announced this view to the parties, indicating I would make orders reflecting this view upon the publication of my reasons. As is apparent, each amended notice of appeal proceeds on the basis that the Court should make findings of fact in the event a remittal is not ordered. This eventuality has not occurred, as I propose to remit the matter to the Tribunal. However, I should indicate that on no view could this Court make the findings of fact referred to in the amended notices of appeal even if the questions of law raised by the applicant were properly to be characterised as questions of law for the purposes of s 44 of the AAT. This is for the reason that, as was pressed by the applicant in the submissions on s 39 of the AAT Act, there is a requirement to consider all the evidence as a whole, and then 'on balance' come to a decision. Even if I was persuaded that an error of law as argued by the applicant had occurred, I would have remitted the matter to the Tribunal to be reheard. The Tribunal itself did not explicitly come to conclusions as to the credit of or the objective probability of versions of events given by any particular witness. It would be inappropriate for this Court to embark upon this task where, in my view, the applicant has not been given the opportunity to present an important witness's evidence, and where factual findings will undoubtedly influence the ultimate decision as to the applicant's objection to the respondent's assessment. I turn then to the principal issue for determination, the operation of s 39 of the AAT Act. The question of whether s 39 has been breached arises out of the process of the Tribunal in using a particular interpreter for one of the important and material witnesses of the applicant. It was submitted by the applicant that the interpreter was not properly qualified to perform the role, that there were inherent problems in the process that involved an interpreter who was not present in the hearing room, and who admitted that she could only 'sort of' speak Hokkien, the language required for the task of interpretation. It was submitted that the process was made further unfair because the applicant (as known by the Tribunal) was not present at the time the translation was taking place, and so could not detect the faulty interpretation taking place. The objective facts do not seem to be in contention: It is also apparent from undisputed evidence before the Court that there were a number of problems with the translation of Ms Yu-Lin's evidence --- a mixing of Hokkien and Mandarin, failures to actually interpret, and certain omissions and distortions. Whilst it may not matter whether certain specific concepts (such as the difference between a mortgage and loan) were properly translated, I find on the undisputed evidence the translator was not competent to undertake and did not undertake the task required in relation to a material witness sought to be relied upon by the applicant. In my view, the evidence of Ms Yu-Lin was effectively precluded from being properly presented because of the inadequacy of the translator. I am satisfied that the interpretation was so inadequate that it prevented the applicant from putting before the Tribunal the evidence she desired to rely upon, and that the evidence was significant to the applicant's case: see, eg Tobasi v Minister for Immigration and Multicultural Affairs [2002] FCA 1050 ; (2002) 122 FCR 322 ; Perera v Minister for Immigration and Multicultural Affairs [1999] FCA 507 ; (1999) 92 FCR 6 ; and SZGWN v Minister for Immigration and Citizenship [2008] FCA 238 per Gilmour J. Whilst I accept that perfect interpretation is never possible, there must be translation which provides an effective communication between the parties: see, Gaio v The Queen [1960] HCA 70 ; (1960) 104 CLR 419 at 433 and WACO v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 171 ; (2003) 131 FCR 511 at [66] . This did not occur in this case. The Tribunal did know of the matters set out in [11] above. However, the Tribunal could not possibly know the extent of the inadequacies of any translation. Further, whether or not the evidence of Ms Yu-Lin corresponded with the proposed witness statement or failed to contradict other evidence from other witnesses is not to the point. The process undertaken by the Tribunal was to receive the oral evidence through the translator. It was this evidence that was important or significant, as was potentially the way in which such evidence was given by Ms Yu-Lin. I appreciate that a solicitor represented the applicant at the Tribunal. This in itself does not absolve the Tribunal from carrying out the mandate set forth in s 39 of the AAT Act: see, eg, Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 54 FLR 334 , 342-43 per Bowen CJ and Sullivan v Department of Transport (1978) 20 ALR 323 , at 326 per Smithers J, and at 342 per Deane J. For instance, a failure of a tribunal to adjourn a matter could constitute a failure to allow a party to present his or her case even if an adjournment was not requested: see Deane J at 342 and Priddle v Fisher & Sons (1968) 1 WLR 1478. On the other hand, I accept that in circumstances where a party is represented there is some onus upon a party to be proactive: see, eg, Schiffer v Pattison [2001] FCA 1094 and Farley-Smith 45 AAR 474 at [54]. However, the solicitor representing the applicant in the circumstances of this case could hardly have been expected to know of the extent of the inadequacy of the translator when the applicant herself was not present to advise him. In an important respect, namely the inadequacy of the translation itself, the solicitor had no basis upon which to be proactive. As the respondent properly submitted, the Tribunal is not obliged to undertake the 'impossible task' of ensuring that a party takes best advantage of the opportunity to which he or she is entitled: see Sullivan 20 ALR 323 at 343 per Deane J. However, this is not the task suggested here --- there is nothing impossible in the Tribunal giving the applicant a reasonable opportunity to present the evidence by the employment of an adequate interpreter. The reasonable opportunity is the opportunity to obtain an adequate interpreter, which did not occur here. The respondent submitted that to the extent that the Tribunal's decision depended on the assessment of the evidence of the applicant's witnesses, there is no evidence to suggest that the Tribunal was unable to make a proper assessment of that evidence, including the sincerity and reliability of the witnesses ( NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77 ; (2005) 228 CLR 470 at 475). For the reasons indicated above, I reject that submission even if it raises a relevant consideration for my current determination. In light of the inadequacy of the translation, the Tribunal simply could not properly assess the evidence of Ms Yu-Lin and undertake the weighing exercise it was required to engage in. I wish to make one further observation as to the evidence before the Tribunal and the approach taken by the Tribunal. On 25 November 2006 an enduring power of attorney was executed by the mother of Ms Eao, Ms Pao Yu Yu-Lin (Ms Yu-Lin), appointing Ms Eao as her attorney. On 15 March 2007 Ms Eao executed a Deed of Acknowledgment of Trust both as trustee and as attorney for the beneficiary, Ms Yu-Lin, reciting that the property had been purchased on 6 June 1996 as trustee for the beneficiary. On 5 April 2007, the property was transferred into the name of Ms Yu-Lin alleging her entitlements pursuant to that trust. The transfer of land was executed by Ms Eao as attorney for Ms Yu-Lin. Ms Eao acknowledged that, prior to March 2007, no document existed which recorded her as holding the property in trust, whereas a document such as the option agreement warranted that she was the sole owner with no other person having any interest or rights in the property. She said that she had relied on professional advice from those who were aware that the legal owner was her mother. Ms Yu-Lin provided evidence confirming her daughter's evidence that the property had been purchased in the daughter's name but that she was the true owner. Ms Yu-Lin said that the $505,000 was not a loan but funds for the purchase of the property. She maintained that she was happy to invest in Australia but would not want to benefit one daughter to the detriment of her two other children. She said that she trusted her daughter and was aware of the mortgage as security for loans to other companies, the failure to pay full rent as a result of financial difficulties and the option to sell to Messrs Hughes and Doolan. She said that she had borrowed a part of the $505,000 remitted to Australia. The primary issue before the Tribunal is whether the rental income derived from the property in the three years ended 30 June 2002 represented assessable income of Ms Eao or Ms Yu-Lin. The only evidence of the property being beneficially owned during this period was the oral evidence of the mother, the daughter, the son, the daughter's de facto partner and his business partner . The only documentary contemporaneous evidence was a telegraphic transfer order, transferring $505,000 from Ms Yu-Lin to the account of Ms Eao. All prior documentation was to the contrary. While the majority of the rent was paid into an account in the name of Ms Yu-Lin, Ms Eao was the signatory on this account and there is no evidence of the subsequent disposition of the funds credited to that account. I would only ever invest any money if it would be for the benefit of my children jointly and then only after my passing. On balance, I am satisfied that the applicant has not discharged the required onus of proof that she was not the beneficial owner of the property during the relevant period and that the amended assessments were excessive . It is unnecessary for the Tribunal to make a finding as to whether the $505,000 was a loan or gift to Ms Eao. It is appropriate to note that the actual source of the funds was not clearly demonstrated. It is accepted that it is possible the funds were by way of loan with the rental payments in lieu of interest and the subsequent transfer of the property to Ms Yu-Lin in 2007 being consideration for repayment of the principal. However, the full circumstances are something known only to the family. The Court cannot ascertain to what extent the important evidence of Ms Yu-Lin as translated had any impact on the balancing process, one way or another. In view of the failures of the translation process, the Tribunal could not make any proper assessment of the evidence, even allowing for the fact that the Tribunal was aware of the flaws in the process it had adopted. I mention one final matter. It was suggested that Mr Athanasiou, the solicitor representing the applicant before the Tribunal, should have been called before me on behalf of the applicant to give evidence as to the denial of the reasonable opportunity to present the applicant's case. Whilst I do not accept that the failure to call Mr Athanasiou would have been a matter which I would have taken into account in supporting the respondent's position, the evidence before me indicates a justifiable reason and sufficient explanation for the applicant not seeking to adduce evidence from Mr Athanasiou. In any event, on the material before me I have come to the clear view that the applicant was not given a reasonable opportunity to present her case in view of the inadequacies of the translation and the circumstances surrounding the giving of evidence of Ms Yu-Lin. The appeal be allowed. The decision of the Administrative Appeals Tribunal of Australia, Taxation Appeals Division, constituted by Senior Member Mr B.H. Pascoe given on 10 September 2008 be set aside. The matter be remitted to a differently constituted Administrative Appeals Tribunal of Australia, Taxation Appeals Division, for determination according to law. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | procedural fairness whether inadequate interpretation by translator whether applicant effectively prevented from giving evidence because of inadequate interpretation of key witness whether presence of legal representation before the tribunal cured inadequate interpretation by providing opportunity to be heard breach of s 39 administrative appeals tribunal act 1975 appeal allowed administrative law |
Lundbeck applied for the Patent on 13 June 1989. The application was a Convention application and was said in the application to be based on application No 8814057 for a patent made in the United Kingdom on 14 June 1988 (the UK Escitalopram Patent --- see [79] below). The title of the invention in the Patent is: "(+)-Enantiomer of citalopram and process for the preparation thereof". Citalopram is a molecule patented by Lundbeck which is used for the treatment of depression. Citalopram is a chiral molecule, a racemic mixture (or racemate) comprising in equal measure two enantiomers. Enantiomers are non-superimposable mirror images of each other. They are designated "(+)" or "(---)" based on a particular physical property referred to below, and "R" or "S" based on their three-dimensional structure. The correlation between the (+) or (---) and the R or S designations can only be determined, however, through experimentation. In the case of citalopram, experimentation subsequent to the priority date has shown that the (+)-enantiomer is in fact the S-enantiomer. It is commonly referred to as "S-citalopram", and has the International Nonproprietary Name "escitalopram". The Patent discloses processes for obtaining escitalopram, and data showing that (+)-citalopram is therapeutically more active than citalopram itself, and more than 100 fold more active than (-)-citalopram. The 20 year term of the Patent was due to expire on 13 June 2009. The term has, however, been extended as discussed at [28] ff below. Citalopram is an invention claimed in Australian patent No 509,445 (the Australian Citalopram Patent) dated 5 January 1977, the term of which was sixteen years commencing on that date. The Australian Citalopram Patent was, in turn, said in the application to be based on the application No 1486/76 for a patent filed in Great Britain on 14 January 1976 (the UK Citalopram Patent). The title of the invention in the Australian Citalopram Patent is "phthalanes", a class of compounds that includes citalopram. In various ways, the proceedings before the Court raise issues concerning the relationship between citalopram and escitalopram. Broadly, the issues can be separated into those that relate to patentability (raised in the proceedings brought by Alphapharm Pty Ltd (Alphapharm) and Arrow Pharmaceuticals Pty Ltd (Arrow) for revocation of the Patent), infringement (a cross-claim in Alphapharm's revocation proceeding) and regulatory aspects (all four proceedings). In proceeding NSD 1120 of 2005 ("the Revocation Proceeding"), Alphapharm seeks a declaration that all six claims are invalid, and an order pursuant to s 138(3) of the Patents Act 1990 (Cth) (the Act) revoking them all, or, in the alternative, an order pursuant to s 192 of the Act that the Register be rectified to remove an extension of the term of the Patent from the Register of Patents (the Register). (+)-1-(3-dimethylaminopropyl)-1-(4'-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile and non-toxic acid addition salts thereof. The pamoic acid salt of (+)-1-(3-dimethylaminopropyl)-1-(4'-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile. A pharmaceutical composition in unit dosage form comprising as an active ingredient, a compound as defined in claim 1, together with a pharmaceutically accepta[ble] carrier or excipient. A pharmaceutical composition in unit dosage form comprising, as an active ingredient, the compound of claim 2, together with a pharmaceutically acceptable carrier or excipient. A pharmaceutical composition in unit dosage form, according to claim 3 or 4, wherein the active ingredient is present in an amount from 0.1 to 100 milligram per unit dose, together with a pharmaceutically acceptable carrier or excipient. Claim 6 is a method claim. According to Alphapharm's further amended particulars of invalidity filed in Court on the hearing: At the hearing, senior counsel for Alphapharm indicated that Alphapharm was content to proceed on the basis of a priority date of 14 June 1988. I proceed on the basis of that priority date of 14 June 1988. I will discuss the case that Alphapharm seeks to make in respect of these grounds of invalidity in due course. Under the TG Act, a pharmaceutical substance may not be marketed in Australia unless it is, or is contained within, a therapeutic good that is registered on the Australian Register of Therapeutic Goods (ARTG). Alphapharm's application for rectification of the Register raises the same issues as are raised in the Lundbeck Appeal (Extension of Term) Proceeding (discussed at [45] ff below). An appropriate starting point for an understanding of Alphapharm's alternative claim for rectification of the Register is the Act's provisions relating to the extension of the terms of patents in Pt 3 of Ch 6 of the Act. Section 67 of the Act provides that the term of a standard patent is 20 years from the date of the patent. Section 65 provides, relevantly, that the date of a patent is the date of filing of the complete specification, being 13 June 1989 in the present case. Part 3 (ss 70---79A) of the Act is headed "EXTENSION OF TERM OF STANDARD PATENTS RELATING TO PHARMACEUTICAL SUBSTANCES". (3) The Commissioner must refuse to accept the application if the Commissioner is not satisfied that the requirements of sections 70 and 71 are satisfied in relation to the application. The Minister or other person may not oppose the grant of the extension on any other ground. (2) If the grant of an extension of the term of a standard patent is opposed, the Commissioner must decide the case in accordance with the regulations. (3) The Commissioner must give the applicant and the opponent a reasonable opportunity to be heard before deciding a case. (4) The applicant, and any opponent, may appeal to the Federal Court against a decision of the Commissioner under this section. (2) If the Commissioner grants an extension, the Commissioner must notify the applicant in writing of the grant and publish a notice of the grant in the Official Journal . (2) However, the term of the extension cannot be longer than 5 years. One is that it may be unreasonable to expect a patentee to derive a sufficient return from a pharmaceutical patent within 20 years because of the necessity, under the TG Act, of first having the relevant goods listed on the ARTG, and of the time that it may take to obtain that listing. Another assumption, however, is that the patentee should not be permitted to "sit on its hands" once the patent has been issued and once the relevant goods have been listed on the ARTG. Two timing aspects of the provisions are noteworthy. Section 71(2) relevantly requires an application for an extension to be made within six months after the date of the "first inclusion" in the ARTG of "goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3)". This provision reflects a view that, ordinarily, ARTG registration should mark the beginning of exploitation. If there is some difficulty in the patentee's exploiting its patent promptly following ARTG registration, it is expected to bring this to light and to apply for an extension without delay. The second timing aspect is found in ss 70(3)(b) and 77. These provisions reflect a policy that extensions are intended for circumstances in which the patentee has not been in a position to exploit the invention adequately. Thus, if the period beginning on the date of the patent and ending on the first regulatory approval date does not exceed five years, the period of the extension is zero, because, after all, the patentee will still have had the benefit of at least 15 years' exploitation of the patent. On the other hand, if the first regulatory approval date occurs say 15 years into the term of the patent, the period remaining available for exploitation of the patent is only some five years, and the period of the extension for which s 77 provides would be some ten years if s 77(1) stood alone. However, subs (2) reduces this period to five years because it provides for a maximum extension of five years in all cases. Since 3 January 1998, Lundbeck Australia Pty Ltd (Lundbeck Australia), a subsidiary of Lundbeck, has marketed an anti-depressant medicine in Australia under the trade mark "CIPRAMIL" (Cipramil). Cipramil was included in the ARTG on 9 December 1997, as citalopram hydrobromide, an acid addition salt of citalopram. Since 1 October 2003, Lundbeck Australia has marketed an anti-depressant medicine in Australia under the trade mark "LEXAPRO" (Lexapro). Lexapro was included in the ARTG on 16 September 2003 as escitalopram oxalate. It will be recalled that the (+)-enantiomer of citalopram, which experimentation shows is S-citalopram or escitalopram, is the subject of the Patent. I turn now to the extension of the term of the Patent. Lundbeck applied for the extension on 22 December 2003. The Commissioner of Patents (Commissioner) granted the extension on 27 May 2004. The extension granted was from and including 14 June 2009 to 13 June 2014. Particulars of the extension granted were entered on the Register. The date of Lundbeck's filing of its application for the extension, 22 December 2003, was well within six months of the inclusion of Lexapro in the ARTG on 16 September 2003. However, Alphapharm's contention is that the relevant first inclusion in the ARTG was the inclusion of Cipramil in the ARTG on 9 December 1997. If Alphapharm is correct, Lundbeck had only until 9 June 1998 to apply for an extension and the application it made on 22 December 2003 was well out of time, and it was not open to the Commissioner to grant an extension. (I note that Alphapharm's amended statement of claim uses the date 20 November 1997. However, the trial seemed to have proceeded on the basis that the 9 December 1997 date is correct. ) The question raised is whether, for the purpose of the statutory provisions mentioned, the pharmaceutical substance, the (+)-enantiomer of citalopram, was "contained in" the pharmaceutical good, Cipramil. This question is related to other issues in the case, such as the issue of novelty (was the (+)-enantiomer the subject of the Patent not novel by reason of the earlier Australian Citalopram Patent? ) and the issues in the TGA (Protected Information) Proceeding discussed at [36] ff below. Alphapharm pleads in para 7 of its amended statement of claim that Cipramil "contains" a substance which is a mixture of the (+)-enantiomer of citalopram and the (---)-enantiomer of citalopram. In its further amended defence, Lundbeck replies that S-citalopram and R-citalopram are the appropriate descriptors of (+)-citalopram and (-)-citalopram when in a racemic mixture, but otherwise it denies the allegations in the paragraph. Thus, Lundbeck denies that Cipramil "contains" (+)-citalopram. The period from the date of the Patent (13 June 1989) to 9 December 1997, when Cipramil was included in the ARTG, is 8 years, 5 months and 26 days. The period from the date of the Patent (13 June 1989) to 16 September 2003, when Lexapro was included in the ARTG, is 14 years, 3 months and 3 days. Accordingly, whichever of the competing contentions as to the "first regulatory approval date" is correct, Lundbeck's application for the extension of term satisfied s 70(3)(b) of the Act, because each of the periods was a period of "at least five years". If the correct first regulatory approval date is 9 December 1997, s 77(1) makes the term of the extension 8 years, 5 months and 26 days minus five years, which is 3 years, 5 months and 26 days. This period, added on to the original 20 year term of the Patent expiring on 13 June 2009, would extend the term of the Patent to 9 December 2012. The Commissioner contends that the Register should reflect this period if Alphapharm's contention as to the first regulatory approval date is correct (see the Lundbeck Appeal (Extension of Term) Proceeding discussed at [45] ff below). If, on the other hand, the correct first regulatory approval date is 16 September 2003, s 77(1) would make the term of the extension 14 years, 3 months and 3 days minus 5 years, which is 9 years, 3 months and 3 days. But s 77(2) provides that the term of an extension cannot be longer than five years, and so the term of the extension would be reduced to five years. This extension of five years, added on to the 20 year term of the Patent expiring on 13 June 2009, would extend that term to 13 June 2014. This was the extension, particulars of which the Commissioner entered in the Register, that Lundbeck supports (again see the Lundbeck Appeal (Extension of Term) Proceeding discussed at [45] ff below). A claim was made that certain particulars of the alleged infringement were confidential, but any difficulty on the hearing in this respect was overcome by the co-operation and common sense of the parties (which was a characteristic of the hearing throughout). The alleged infringement is of product claims 1, 3, and 5 and of method claim 6(b). In particular, the Lundbecks rely on Alphapharm's threat to manufacture and sell goods containing (+)-citalopram in Australia if Alphapharm obtains the necessary regulatory approvals and listings. The Lundbecks also rely on steps already taken by Alphapharm in connection with its application to the Therapeutic Goods Administration (TGA) to that end. In pleading that the Secretary threatens and intends to use the Information in evaluating other therapeutic goods for inclusion in the ARTG, Lundbeck Australia is referring to the fact that in the Revocation Proceeding, Alphapharm alleges that if marketing approval is granted, it wishes to manufacture and sell in Australia goods containing (+)-citalopram, and that goods cannot be marketed in Australia unless they are first registered on the ARTG. Lundbeck Australia complains that it will suffer loss and damage if the Information is not treated by the Secretary as protected, and is used by the Secretary in the evaluation of the therapeutic goods of Alphapharm for registration on the ARTG. In support, it also refers to the fact that by s 25A(4) of the TG Act, Lundbeck Australia is precluded from recovering any of that loss or damage from the Secretary. In the course of the proceeding, I ordered that Alphapharm be added as second respondent. The Secretary and Alphapharm have filed defences. In substance, they put in issue Lundbeck Australia's allegation that the Information constitutes "protected information" within s 25A(2). The defences are not identical. One defence raised by both the Secretary and Alphapharm is that the Information was not protected information as defined in s 25A(2) of the TG Act because para (c) of that subsection was not satisfied because, when the application to register Lexapro was lodged, other therapeutic goods containing the same active component that the Information was about (escitalopram), were already included in the ARTG. Of course, the other therapeutic goods to which the Secretary and Alphapharm are referring are Cipramil (citalopram hydrobromide), an acid addition salt of the racemate citalopram. In the alternative, Arrow seeks an order that the Register be rectified by removing all record of the extension of the Patent and of the period of the extension, and recording, instead, that the term of the Patent will expire on 13 June 2009, or in the alternative, 9 December 2012. Arrow also complains that claims 2 to 5 of the Patent are not entitled to a priority date earlier than 13 June 1989, being the date of the filing of the application on which the Patent was granted. It asserts that those claims are not fairly based on the alleged priority document, namely, the UK Escitalopram Patent. (However, like Alphapharm, Arrow was content to proceed on the basis of a priority date of 14 June 1988 - see [12] above. ) Arrow asserts that the alleged invention, so far as claimed in claims 1 to 6 of the Patent, is not a patentable invention because it is: not an "invention" or, further or alternatively, not a "manner of manufacture" within s 6 of the Statute of Monopolies (s 18(1)(a) of the Act); not novel (s 18(1)(b)(i) of the Act); obvious (s 18(1)(b)(ii) of the Act); and not useful (s 18(1)(c) of the Act). Accordingly, Arrow seeks revocation of the Patent under s 138(3) of the Act and removal of the particulars of the Patent from the Register. In relation to the alternative application for rectification of the Register, like Alphapharm, Arrow alleges that the first regulatory approval date was 9 December 1997, because that was the date when Cipramil was first included in the ARTG, and Cipramil contains citalopram which is a racemic mixture of (+)-citalopram and (-)-citalopram. Accordingly, like Alphapharm, Arrow complains that it was a misrepresentation for Lundbeck to represent to the Commissioner, as it did when it applied for and obtained the extension, that 16 September 2003 was the relevant first regulatory approval date. Given the overlap of Arrow Proceeding with the Revocation Proceeding, I find it convenient in these reasons, generally speaking, to refer only to Alphapharm when addressing various issues. However, it should be understood that my reasoning applies equally to Arrow's submissions on the same issues. This proceeding is an appeal by Lundbeck from part of a decision of the Commissioner, by her delegate, Dr SD Barker, issued on 19 May 2006. That decision was a decision to direct that the entry in the Register in respect of the Patent be amended by alteration of the expiry of the extension on the ground that the extended term was not calculated from the "first regulatory approval date" referred to in s 77 of the Act, with the consequence that reg 10.7(7) of the Patents Regulations 1991 (Cth) (the Regulations) required the Commissioner to amend the Register by bringing forward the expiry of the Patent. (In H Lundbeck A/S v Commissioner of Patents [2006] FCA 163 , I held that reg 10.7(7) was intra vires s 228 of the Act. Bennett J followed me in Pfizer Corporation v Commissioner of Patents (No 2) (2006) 69 IPR 525 , and on appeal from her Honour, the Full Court agreed with us: see Pfizer Corporation v Commissioner of Patents [2006] FCAFC 190 ; (2006) 155 FCR 578. An application by Pfizer Corporation for special leave to appeal to the High Court was refused: see [2007] HCA Trans 93. ) As noted earlier, on 27 May 2004 the Commissioner granted the extension. No opposition was entered to the grant of it in the time provided by the Regulations. However, Alphapharm later wrote to the Commissioner asserting that the Commissioner had been misled by Lundbeck as to the true first regulatory approval date. On 13 July 2005, the Acting Deputy Commissioner of Patents copied Lundbeck into correspondence stating that the Commissioner considered that she was obliged to amend the entry in the Register of the expiry of the term of the Patent from 13 June 2014 to 9 December 2012 under reg 10.7(7) of the Regulations. This was on the footing that the correct first regulatory approval date was 9 December 1997, the date of the registration of Cipramil in the ARTG. The Commissioner's letter requested Lundbeck either to provide reasons why the Commissioner should not make the amendment or to accede to the amendment. Lundbeck did not accede to the amendment and there was a hearing before Dr Barker at which Lundbeck and Alphapharm made submissions. This led to the decision of 19 May 2006 from which Lundbeck now appeals, as it is entitled to do under s 154 of the Act and reg 10.7(9) of the Regulations. Dr Barker decided that the decision of Wilcox J in Merck & Co Inc v Arrow Pharmaceuticals Ltd [2003] FCA 1344 ; (2003) 59 IPR 226 ( Merck ) governed the issue before him. As Dr Barker understood the position, Merck produced the result that it did not matter that escitalopram was a new chemical entity having properties different from those of the racemate, citalopram, or that the registration of citalopram under its brand name Cipramil on the ARTG did not give the right to market escitalopram except as part of the racemate. All that mattered was that Cipramil did in fact "contain" escitalopram, or put another way, that escitalopram was present (to some extent) in Cipramil, and that Cipramil was included in the ARTG. It was also immaterial, according to Dr Barker, that escitalopram was not responsible for all of the activity of Cipramil. Dr Barker concluded that since citalopram hydrobromide, marketed under the brand name Cipramil and containing escitalopram, was first registered on the ARTG on 9 December 1997, the Commissioner was required by reg 10.7(7) to amend the relevant entry in the Register to reflect the correct extension of the term of the Patent as expiring on 9 December 2012 (see [32] above). Lundbeck complains that the Dr Barker erred in finding that the first regulatory approval date was the date on which Cipramil was registered on the ARTG, and that Dr Barker ought to have found that it was the date on which Lexapro was so registered (see [33] above). Which legislative régime applies? The Revocation Proceeding (including the cross-claim for infringement) falls to be decided under the Act. However, the application for the Patent was filed on 13 June 1989 under the Patents Act 1952 (Cth) (the 1952 Act). The application for the Patent was advertised and accepted on 7 May 1992. That was well after the commencement of the Act (being the first day after the end of the period of 6 months beginning on 30 October 1990). The Patent was therefore granted under the Act on an application lodged under the 1952 Act. In these circumstances, s 234(2) of the Act is applicable. In any case where a relevant ground of invalidity under the 1952 Act is narrower than the corresponding ground under the Act, the patentee has the benefit of the narrower ground and is not to be worse off than if the 1952 Act had continued to operate: NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [1993] FCA 404 ; (1993) 44 FCR 239 at 250 ff per Lockhart J, with whom Northrop J agreed and with whom Burchett J agreed on this point; ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc (2000) 106 FCR 214 ( Lubrizol ) at [22]---[24]; Aktiebolaget Hässle v Alphapharm Pty Ltd [2000] FCA 1303 ; (2000) 51 IPR 375 at [8] ---[10]. Two of the experts, Professor Martin Banwell called by Alphapharm, and Professor Stephen G Davies called by Lundbeck, conferred and produced a joint report (the Joint Report) in which they responded to six issues that had been formulated by the legal representatives of Alphapharm and Lundbeck. In response to each issue, they stated matters on which they were agreed, and, where they disagreed, their respective positions. The legal representatives of Alphapharm and Lundbeck played no part in the Professors' conference or in their formulation of their responses to the six questions. The Joint Report of Professors Banwell and Davies was admitted in part as Exhibit A9 and, as to the remainder, as Exhibit A10. Professors Banwell and Davies were sworn in in immediate succession, and in addition to being cross-examined in the conventional manner, they had the opportunity, in a "concurrent evidence" session, to elaborate on their positions and to respond to questions asked by me, as well as to questions asked by each other. Both Professors Banwell and Davies are highly qualified in the area of organic chemistry. I discuss their qualifications and experience further at Section E [207] ff. The following outline is based on the affidavit evidence of Professors Banwell and Davies and on the text, Morrison and Boyd, Organic Chemistry , published by Allyn and Bacon ( Morrison and Boyd ), to which they referred. At the priority date of 14 June 1988, the 5 th edition of this text, published in 1987, was a standard text for students and organic chemists. It would be tedious for every phrase or sentence that I quote to be placed within quotation marks and for distinctions to be made between quotation and paraphrase. I acknowledge, however, my quotation from, and otherwise my reliance on, paras 16 to 56 of Professor Banwell's affidavit sworn 11 August 2006, Annexure 1 to Professor Davies's affidavit sworn 4 April 2007, and Chapters 1 and 4 of Morrison and Boyd . Atoms are the building blocks of all matter. They are composed of three types of particles: protons , which carry a positive (+1) charge; neutrons , which carry no charge; and electrons , which carry a negative (---1) charge. Protons and neutrons are held together by very strong forces and constitute the "nucleus" of an atom. Electrons orbit the nucleus at different levels. The chemical elements , such as carbon, hydrogen and oxygen, are particular types of atoms. Each element has a unique number of protons, which, if the element is uncharged, is equal to its number of electrons. Some elements have a more stable number of electrons than other elements. Stability is achieved by filling orbitals known as electron shells . The first electron shell requires two electrons. The second and third each require eight electrons. The greatest stability is reached when the outermost electron shell for the particular element is full. Elements interact with each other in order to achieve a stable number of electrons either by gaining, losing or sharing electrons. Molecules are combinations of atoms. They are described by molecular formulae which utilise chemical symbols for each element followed by numeric subscripts for the number of atoms of that element in the molecule. For example, a molecule of water is shown as H 2 O to signify that the molecule comprises two atoms of hydrogen (H) and one of oxygen (O). Citalopram comprises the elements hydrogen, oxygen, carbon (C), fluorine (F) and nitrogen (N). In complicated molecules, groups of atoms with a specific function are called functional groups . An example in this case is the hydroxyl group (OH). Atoms are held together in molecules by electron sharing, in a process called covalent bonding. A covalent bond refers to the sharing of two electrons between two atoms, so that both electrons fall within the outer shell of each atom. Most elements need to share a certain number of electrons to be stable. For example, in order to achieve stability, hydrogen, which has one electron and needs to fill the first electron shell (which has a capacity of two electrons), forms one covalent bond; carbon, which has six electrons and needs to fill both the first electron shell and the second electron shell (which has a capacity of eight electrons), forms four covalent bonds; and chlorine (Cl), which has seventeen electrons and needs to fill the first, second and third electron shells, forms one covalent bond. When an atom of hydrogen reacts with an atom of chlorine, they share one electron with each other to make a covalent bond. Once this happens, both atoms have a stable number of electrons and a molecule of hydrogen chloride is the result. Pictorially, a hydrogen chloride molecule (HCl) is represented by a line joining the two atoms to indicate a covalent bond (H---Cl). Stereochemistry is the study of the three-dimensional structure of molecules. A molecular formula generally conveys little about how the constituent atoms are physically arranged with respect to each other. Structural formulae have been developed to convey two-dimensional (2D) and, where appropriate, three-dimensional (3D) arrangements of atoms within a given molecule. Diagram I below shows several ways of representing the molecule methane. Within that diagram, Drawing 1 is the molecular formula. Drawing 2 is a 2D structural formula that shows the connectivity of the atoms, but not their orientation in space. Drawing 3 is a projection drawing showing the 3D spatial arrangement of the atoms. The solid wedge indicates that the hydrogen atom at the lower right is coming directly out of the plane of the paper, whereas the broken or hashed wedge shows that the hydrogen atom to the right lies behind the plane of the paper. Straight lines show bonds in the plane of the paper. Structural isomers differ in the way in which the atoms are connected together. In the case of stereoisomers , the atoms are connected in the same way, but the atoms are arranged differently in space. Stereoisomers behave similarly in many chemical reactions. However, in some chemical reactions they behave quite differently. This is particularly the case when stereoisomers interact with molecules within living organisms, such as enzymes within the human central nervous system. There are two types of stereoisomers: enantiomers and diastereomers. Enantiomers are non-superimposable mirror images of each other, much like a person's left hand and right hand. Diastereomers are not mirror images of each other and have different physical and chemical properties. Objects that have a non-superimposable mirror image, such as human hands, are chiral . A chiral molecule can exist in two isomeric forms, each of which is the mirror image of the other, that it to say, is not superimposable on the other. An achiral molecule lacks that feature: its isomeric forms are superimposable on one another. In organic chemistry, a molecule that contains a carbon atom bonded to four different atoms or functional groups is chiral. For example, the molecule bromochlorofluoromethane is chiral because it has bromine (Br), chlorine, fluorine and hydrogen atoms attached to the central carbon atom. In Diagram II below, Drawing 4 shows the 2D structure of bromochlorofluoromethane and Drawings 5 and 6 show the 3D structures of the two enantiomers. The 2D structural formula would represent either a single enantiomer or, if the molecule was part of a mixture, the two enantiomers in either equal or unequal parts. It is also common ground that if that chemist was also given some background to the origin of the molecule or mixture, the chemist would be able to determine which of those situations applied. This is because of what was known about how enantiomers are produced. Generally speaking, chiral molecules exist in nature only as one enantiomer. However, when chiral molecules are synthesised in a laboratory, there is a 50% probability that either enantiomer will be produced, so the two enantiomers are produced in equal parts. The resultant mixture is known as a racemate or racemic mixture . It may be a solid, liquid or gas. To obtain an unequal mixture of the enantiomers, or a single enantiomer, some specific step must be taken in the synthesis ( enantio-selective synthesis ). There are two conventions for describing enantiomers. The first depends on the physical property of the rotation of plane-polarised light ( optical activity ). Enantiomers rotate plane-polarised light in opposite directions. Enantiomers are designated (+) (dextrorotatory) or (-) (levorotatory) on the basis of whether, in solution, they rotate plane-polarised light clockwise (to the right) or anti-clockwise (to the left), respectively. Because enantiomers rotate plane-polarised light in opposite directions to equal extents, a racemate has no net rotation of plane-polarised light. It is optically inactive. The second way of describing enantiomers is an abstract theoretical description (as distinct from requiring physical testing) and provides an absolute configuration . Enantiomers are designated R or S on the basis of the direction of rotation when the molecule is abstractly positioned according to certain standard rules (the Cahn Ingold Prelog (CIP) rules). The rules are based on the atomic number (number of protons) of each atom or functional group connected to the chiral centre. First, each atom or functional group is labelled 1 to 4, with 1 indicating the highest atomic number and 4 indicating the lowest atomic number. Second, the molecule is visualised so that the atom or group labelled 1 (and so having the lowest atomic number) is directed into the page. Third, a curved arrow is drawn from the 1 position to the 2 position and then to the 3 position, and from the 3 position to the 4 position. If the arrow points clockwise, the configuration is designated R (Latin: rectus , right); if it points anticlockwise, the configuration is designated S (Latin: sinister , left). Diagram III below shows the two enantiomers of bromochlorofluoromethane, reoriented so that the atom with the lowest atomic number (H) is facing away from the page. The enantiomers are designated R and S based on the descending priority of the other three elements. For example, each of the lines surrounding the N (nitrogen) on the right side of the structure represents a bond to a carbon atom, which is itself bonded to two or three hydrogen atoms. The hydrogen atoms never appear in such formulae. Because each carbon atom must have four covalent bonds, bonds to hydrogen atoms are inferred if a junction has less than four bonds emanating from it. The hexagon 'rings' contain carbon atoms at each junction. Double bonds between carbon atoms are indicated by double lines and single bonds by single lines. The carbon atoms at each junction are also bonded either to another carbon atom (indicated by a bond ending in a junction), a fluorine atom (indicated by --- F) or a hydrogen (not represented by symbol). It is not in dispute that, based on the principles referred to above, including the CIP rules, a chemist could, at the priority date, identify from the formula in Diagram IV: four different chemical groups attached to a common carbon (the carbon being, by definition, a centre of chirality); and the R and S enantiomers of the compound. There is no fixed relationship between the R and S dichotomy and the (+) and (-) dichotomy. It is only as a result of testing with plane-polarised light that one can know which of the R and S enantiomers is the (+)-enantiomer and which is the (-)-enantiomer. Its basis is thought to be a disruption of normal neural transmission. Serotonin (5-HT) is a neurotransmitter which allows messages to be transmitted between nerves. By the priority date of the Patent, it was understood that neurotransmission by, relevantly, serotonin was comparatively deficient in MDD sufferers. It was thought that if the reuptake of 5-HT by nerve cells could be inhibited, there would be more free 5-HT in the synapses between the nerve cells, and that this additional 5-HT would improve neurotransmission and therefore give relief from MDD. Citalopram and escitalopram is a selective serotonin reuptake inhibitor (SSRIs). The term "selective" implies the avoidance of undesirable side effects. Citalopram and escitalopram are compounds that selectively block only the uptake of 5-HT. In 1988, there were no SSRIs on the market, although some had been launched previously and withdrawn due to toxicity, while others were being developed. Fluoxetine (sold under the brand name "Prozac"), paroxetine (sold under the brand name "Seroxat"), and citalopram were early SSRIs. Fluoxetine and citalopram were racemates and paroxetine was a single enantiomer. Citalopram was considered to be the most selective of these SSRIs. Since 1988, other SSRIs have been introduced, including escitalopram. They fall into three groups: the patents for the racemic mixture citalopram having both the (+) and (-) enantiomers in equal portions (the Citalopram Patents); the patents for the intermediate diol (the Diol Patents); and the patents for the (+)-enantiomer of citalopram, which is in fact the S-enantiomer or escitalopram (the Escitalopram Patents). The Australian Citalopram Patent, being Australian patent No 509,445 dated 5 January 1977, for an invention entitled "phthalanes" of a given general chemical formula, and based on the Convention application for the UK Citalopram Patent. The US Citalopram Patent, being United States patent No 4,136,193 dated 23 January 1979, for the same invention and based on the application for the UK Citalopram Patent. The Australian Diol Patent, being Australian patent No 574819 dated 2 August 1985 for a "novel intermediate and method for its preparation" and based on the application for the UK Diol Patent. The US Diol Patent, being United States patent No 4,650,884 dated 17 March 1987 for the same invention and based on the application for the UK Diol Patent (the US Diol Patent). The EU Escitalopram Patent, being European patent No 0 347 066, based on the application for the UK Escitalopram Patent being for "New enantiomers and their isolation". (The validity of the EU Escitalopram Patent has been the subject of three decisions: The Australian Escitalopram Patent, being Australian patent No 623144 dated 9 June 1989 (application filed on 13 June 1989), based on the application for the UK Escitalopram Patent, being for "(+) Enantiomer of Citalopram and process for the preparation thereof" --- the Patent. The US Escitalopram Patent, being United States patent No 4,943,590 dated 24 July 1990, based on the application for the UK Escitalopram Patent, being for "pharmaceutically useful (+)-1-(3-dimethylaminopropyl)-1-(4'-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile and non-toxic acid addition salts thereof". The US Re-issued Escitalopram Patent, being United States patent No 34,712 dated 30 August 1994 (a re-issue of the US Escitalopram Patent) based on the application for the UK Escitalopram Patent and being for "pharmaceutically useful (+)-1-(3-dimethylaminopropyl)-1-(4'-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile and non-toxic acid addition salts thereof". (The validity of this US Re-issued Escitalopram Patent was the subject of a decision of the United States District Court for the District of Delaware given on 13 July 2006 in Forest Laboratories Inc v Ivax Pharmaceuticals Inc 438 F Supp 2d 479 (2006) and of the decision on appeal from that decision, given on 5 September 2007 by the United States Court of Appeals for the Federal Circuit in Forest Laboratories Inc v Ivax Pharmaceuticals Inc 501 F 3d 1263 (2007). I set out the claims of the Patent at [10] above. The specification states that the invention includes pharmaceutically acceptable salts of the enantiomers of compound I (being a compound of the formula I set out above), and gives examples of such pharmaceutically acceptable organic salts and inorganic salts. The specification states that the invention is also concerned with the method to resolve the racemate of I into the individual isomers. In this context, "the individual isomers" means the individual enantiomers. According to the specification, citalopram, the racemate, was disclosed in the US Citalopram Patent. The US Citalopram Patent is the US equivalent of the Australian Citalopram Patent, on which Alphapharm relies as an anticipation of the Patent. Both the US Citalopram Patent and the Australian Citalopram Patent were based on the UK Citalopram Patent (see [79] above). The specification states that citalopram has proved to be an efficient antidepressant compound in man, and has been shown pharmacologically to be a very selective inhibitor of 5-HT reuptake. The specification states that previous attempts to crystallise diastereomeric salts of citalopram enantiomers have failed. This calls for some explanation. A conventional approach to the resolution of a racemate is to attempt to react it with a chiral organic acid (resolving agent) prepared as a single enantiomer. The theory is that the two enantiomers of the racemate will form two different diastereomeric salts with the single enantiomer of the acid. Diastereomers were discussed at [68] above. Diastereomers can have different physical and chemical properties. One of the properties which may differ between the diastereomeric salts is the propensity to crystallise, and it is possible by means of this difference to isolate one of the diastereomeric salts. As Dr Bøgesø of Lundbeck explained in his affidavit: "....if suitable conditions can be found to exploit [the propensity to crystallise], it is possible to crystallize out of solution only one of the diastereomeric salts...the isolated salt may then be recrystallized and then transformed into the free base which again may be transformed to a salt and crystallized, thereby isolating a single pure enantiomer of the originally racemic material". This technique is called fractional crystallisation. There are two prerequisites for success in using fractional crystallisation. First, it is necessary that crystals be obtained, and this is not assured. Second, it is necessary that the diastereomers have different degrees of solubility for preferential crystallisation of one enantiomer to occur. As will be noted below, Dr Bøgesø gave evidence that his attempts to separate the enantiomers of citalopram in this way had been unsuccessful, principally because he could not obtain crystallisation, and on the one occasion when he did obtain it (with (+)-camphorsulfonic acid), separation was not obtained. The specification states, however, that "[s]urprisingly, it has now proven possible to resolve the intermediate 4-(4-dimethylamino)-1-(4'-fluorophenyl)-1-(hydroxy-1-butyl)-3-hydroxymethyl) benzonitrile, II, into its enantiomers and finally in a stereoselective way to convert these enantiomers to the corresponding citalopram enantiomers. " The process just described (and described in more detail below) was referred to as "Reaction Scheme II" before me. Reaction Scheme II thus consists of a resolution of this diol into its own enantiomers and then, in a stereoselective way, a conversion of those enantiomers to the enantiomers of citalopram. The intermediate racemic diol (II) was disclosed in, for example, the US Diol Patent. The US Diol Patent is the equivalent of the Australian Diol Patent, and both the US and the Australian Diol Patents were based on the UK Diol Patent (see [79] above). A "Reaction Scheme I" (described in more detail below) is also referred to in the specification. Reaction Scheme I reads: "Likewise, monoesters of II formed by optically active carboxylic acids could be separated into the corresponding diastereomers and subsequently converted directly into citalopram enantiomers in a stereoselective ringclosure reaction". The "optically active carboxylic acid" that featured in the case was "Mosher's Reagent" or "Mosher's acid chloride". The "intermediate" or "precursor" diol was the essence of both Reaction Schemes I and II. The reference to "stereoselective" in both Reaction Schemes signifies the importance of stereoselectivity in the step from the enantiomer of the diol (in Reaction Scheme II) or monoesters of the diol (in Reaction Scheme I) to the enantiomer of citalopram. The ringclosure reaction had to be, in general terms, one that enabled optical activity to be retained, and racemisation (or "re-racemisation") to be avoided. According to the specification it was shown, surprisingly, that almost the entire 5-HT uptake inhibition resided in the (+)-enantiomer of citalopram. It includes at the top left a benzonitrile ring. Attached to the right of this ring is hydroxyl methyl (CH 2 OH), which is a primary alcohol (the carbon in the alcohol being bonded to one other carbon). Below that is a further alcohol comprised of the hydroxyl group (OH) and the carbon (C), which is a tertiary alcohol (the carbon being bonded to three other carbons). The bottom ring is a flourophenyl ring. The difficulty has resided in the point at which ring closure is to occur. The challenge is to maintain stereoselectivity, that is to say, to avoid racemisation. The first step is to react compound II (the diol) with an enantiomerically pure acid derivative in either its (+) or (-) form. The agent shown in Reaction Scheme I is in fact Mosher's acid chloride. The diastereoisomers are subsequently separated by means of high pressure liquid chromatography (HPLC). (I discuss HPLC in more detail at Section E [302] ff. For now, it suffices to say that HPLC, like fractional crystallisation referred to above, is a method that can be used to obtain the individual enantiomers from a racemate. ) What one gets following separation by HPLC is a pure diastereometric form of Mosher's ester. The "H", which can be seen in the primary alcohol group (CH 2 OH) does not appear in the Mosher's ester, and the chloride (Cl) which appears in the Mosher's acid chloride also does not appear in the Mosher's ester. The hydrochloric acid (HCl) that leaves is referred to as the "liberated HCl". Finally, the purified diastereoisomers referred to in the preceding paragraph are each treated with a strong base in an inert organic solvent, such as toluene, to yield the separated positive (+) or negative (-) enantiomers of citalopram (as the case may be). The (+)-enantiomer and (---)-enantiomer of citalopram ultimately obtained appear at the foot of the diagram. In each case the letter O (oxygen) indicates the point at which ring closure takes place. The ring closure is preferably performed at a relatively low temperature, minus 20 o C to room temperature. If the reaction between the Mosher's ester and the strong base takes place at too warm a temperature, ring closure becomes fast and spontaneous, and a racemate, rather than the pure enantiomers, can form. The problem with Reaction Scheme I was that Mosher's acid chloride was very expensive. Once those concerned worked out what was happening with the Mosher's acid chloride, they progressed to Reaction Scheme II, to which I now turn. The (+)-enantiomer or the (---)-enantiomer has already been obtained by the beginning of the diagram. They have been obtained by reacting the racemic diol with an optically active acid (examples given in the specification include the respective enantiomers of tartaric acid and di-(p-toloyl)tartaric acid). The first step shown in the diagram is the addition of an acid chloride (in this case methanesulfonyl) to the enantiomer of the diol, and, simultaneously, a base (in this case triethylamine) in an inert organic solvent at 0 o C. The final product, depicted at the foot of the diagram, is the pure enantiomer (either the (-) or (+) enantiomer) of citalopram. If the starting product was the (+)-enantiomer of the diol, the end product is (---)-citalopram. If with the starting product was the (---)-enantiomer, the end product is (+)-citalopram. The point at which ring closure takes place is indicated in the formula at the foot of the diagram by O (oxygen). The square brackets in the diagram indicate that the product within them is an intermediate product. It is a labile ester and is not stable. It is formed during the course of the reaction. The process from the addition of the acid chloride to the pure form of the enantiomer of citalopram being a continuous one. The specification gives examples of the implementation of Reaction Scheme I (Example 1 at p 6) and Reaction Scheme II (Example 2 at pp 7-8). Example 3 is not relevant. At pp 9-12 of the specification is an account of the inhibition of 3 H-serotonin uptake in rat brain synaptosomes, including a table of the pharmacological test results. I need not set them out or discuss them in detail. As a 5-HT re-uptake inhibitor, (+)-citalopram is shown to be a little more effective than citalopram itself and more than 100 times more effective than (-)-citalopram. At p 12 of the specification there is discussion of dosage forms, and at pp 12-13, a discussion of the preparation of tablets, and of a solution for injection. The Patent ends with the claims at pp 16-17 which were set out at [10] above. As will be recalled, claims 1 to 5 are product claims. Claim 6 is a claim of the two methods of obtaining (+)-citalopram, which have referred to earlier as Reaction Scheme I (Claim 6(a)) and Reaction Scheme II (Claim 6(b)). As previously noted, Lundbeck's cross claim of infringement rests on claim 6(b) --- Reaction Scheme II. Alphapharm has no interest in the pamoic acid salts of claims 2 and 4. It may be, however, that those two claims stand or fall with claim 1. It is common ground that if Alphapharm's construction argument should succeed, claims 1, 3 and 5 would be invalid. Alphapharm's attack based on lack of novelty is closely related to the question of the proper construction of the Patent. I will discuss below the extensive submissions that were addressed to the construction issue, but I will state at once my conclusion. The symbol (+)- in claim 1 (and in claim 2) indicates the particular enantiomer that is distinguished by the feature of rotating plane-polarised light to the right (under standard conditions --- see Section G below). The property of rotating plane-polarised light to the right (clockwise) or to the left (anticlockwise) which distinguishes one enantiomer from the other and each from the racemate, is able to be detected only when that enantiomer is present other than as a part of the racemate. This is because when in a racemic mixture, the polarisation of light by each enantiomer is "cancelled out" by the other enantiomer, and there is thus no net polarisation of light. The skilled addressee in 1988 would have understood claim 1 to refer specifically to (+)-citalopram. In the absence of a context permitting otherwise, the skilled addressee would not have understood the claim to the invention of (+)-citalopram to refer to that compound merely as part of the unresolved racemate. Rather, the skilled addressee would have understood the claim to the invention of (+)-citalopram to refer to that compound as something that had an existence independent of that of the racemate. The only context that I take into account in arriving at this conclusion is that it was part of common general knowledge: It is not that the (+)-citalopram compound does not exist when it is part of the 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. Analogies are usually imperfect and are often only alternative ways of posing the problem to be solved. Nonetheless, the following two analogies are, I think, illuminating. First, take a reference to "blue" or to "yellow". It is understood to signify something different from "green". Yet green is said to consist of blue and yellow. Again, take a reference to a "black stick figure in a black square frame". That description is not met by the same square entirely black. Yet when the black stick figure is one of a sufficient number of (say 1,000) different black stick figures all drawn within the same frame, the resulting solid black square can be said to contain the initial black stick figure, although we can no longer see it. So, the unqualified reference to the (+)-enantiomer of citalopram in claim 1 refers to something different from that enantiomer as an indistinguishable part of the unresolved racemate. My construction, independently arrived at, accords with that of District Judge Keeley in Ortho-McNeil Pharmaceutical Inc v Mylan Laboratories Inc 348 F Supp 2d 713. Her Honour had to construe a claim of "An S(---)-pyridobenzoxazine compound represented by [a certain formula]". Instead, an inventor may use anything that a person skilled in the relevant art would understand to limit the claim. In this case, the term "S(---)" clearly and plainly limits the claim language to the levorotatory enantiomer. Those skilled in the art clearly understand the term "S(---)" to affirmatively denote only the levorotatory enantiomer of a racemic compound, and not the racemic compound itself. Her Honour's observations apply mutatis mutandis to the present case. While my construction would leave unanswered the question how much "impurity" would prevent a compound from meeting the formula in claim 1 (see below), it does establish that when the compound is present only as 50% of a racemate, it does not meet the description in claim 1. The construction outlined above is also supported by the body of the specification and a certain convention in the way in which chemists understand references to compounds, both discussed below, but does not depend on those two additional considerations. I rely on them as alternative bases for my construction if I am wrong in thinking that claim 1 is unambiguous. I need not refer to more than the following: The construction of a specification is a question of law and belongs to the Court: Hill v Evans (1862) 1A IPR 1 ( Hill v Evans ) at 3; The Court must construe the specification as it would be understood by the notional skilled addressee as at the relevant date: Hill v Evans at 3-4; Décor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 ( Décor ) at 400; Flexible Steel Lacing Co v Beltreco Ltd [2000] FCA 890 ; (2000) 49 IPR 331 ( Flexible Steel Lacing ) at [81]; Evidence from a skilled addressee in the field of the invention as to how he or she would have understood the specification at the relevant date is relevant evidence for the purposes of s 55(1) of the Evidence Act 1995 (Cth) (Evidence Act): EI Dupont De Nemours & Co v Imperial Chemicals Industries plc [2002] FCA 230 ; (2002) 54 IPR 304 at 320-322; Flexible Steel Lacing at [81]; Clorox Australia Pty Ltd v International Consolidated Business Pty Ltd (2006) 68 IPR 254 at [21]; Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980 ; (2000) 177 ALR 231 at [49] ; The claims must be construed in the context of the specification as a whole, and the rest of the specification may explain the background to the claims, assist in ascertaining the meaning of technical terms, or aid in the resolving of ambiguities in the construction of the claims: Clorox at [16]; Sachtler GmbH & Co KG v RE Miller Pty Ltd [2005] FCA 788 ; (2005) 65 IPR 605 ( Sachtler ) at [42]; A patent specification must be given a purposive rather than a purely literal construction, and must be construed in a practical commonsense manner avoiding a too technical or narrow construction in favour of a construction under which the invention will work, as against one according to which it may not work: Nesbit Evans Group Australia Pty Ltd v Impro Ltd (1997) 39 IPR 56; Pfizer Overseas Pharmaceuticals v Ely Lilly & Co [2005] FCAFC 224 ; (2005) 225 ALR 416 ( Pfizer v Eli Lilly ) at [249]-[250]; The hypothetical addressee of the patent is the non-inventive person skilled in the art before the priority date, and the words used in the specification and the claims are to be given the meanings that that skilled addressee would give them, both in the light of his or her own general knowledge and what is disclosed in the body of the specification: Clorox at [20]; Décor at 391; PhotoCure ASA v Queen's University at Kingston [2005] FCA 344 ; (2005) 216 ALR 41 at [170] . (b) If so, what level of purity does it denote and why? The questions predicate the issue whether the reference in claim 1 to the (+)-enantiomer includes a reference to that enantiomer in the racemic mixture. Professors Banwell and Davies agreed that (+)-1-(3-dimethylaminopropyl)-1-(4'-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile denotes a specific single enantiomeric form of the compound and not the racemate. Professor Banwell stated that "purity is irrelevant as it is a claim in a patent". Professor Davies, on the other hand, stated that with no other information, the reference in claim 1 denotes material of at least 95% enantiomeric purity (see below). If so, where in the standard literature (as at 1988) can that convention be found? This convention is not specifically stated in the literature but was in 1988 and indeed [is] today the standard benchmark arising from the limits of the techniques used to establish purity. This convention is generally practised throughout the chemical literature including in the publications of both MGB [Professor Banwell] and SGD [Professor Davies]. I understand the question and the Professors' common answer to extend to compounds, such as that in claim 1, "where no purity is given", that is, where no explicit reference to purity is made. A possible alternative interpretation is that question and answer refer only to the situation where the compound is described as "pure" but no numerical specification as to the level of purity is given. In that case, the question and answer would not be relevant to claim 1. I reject this alternative. The Professors had claim 1 before them and must be taken to have expressed their agreement (above) and disagreement (see below) by reference to it. In any event, the Joint Report was overtaken to some extent by the oral evidence referred to below. Asked, whether claim 1 of the Patent referred to at least 95% enantiomerically pure S-citalopram (question 5(d) of their Joint Report), the two Professors disagreed. Professor Banwell answered "No", again explaining that purity is irrelevant because the claim is a claim in a patent. Professor Davies answered "Yes", adding that a chemist will automatically apply the convention wherever a compound's name occurs. The disagreement between the two Professors was elaborated upon in their affidavits. By enantiomerically pure I mean at least 95% pure. I say at least 95% because the established convention among medicinal chemists is that when the absolute purity of a "pure" compound is not specified, it is understood to mean "at least 95% pure". This is because the standard method for measuring purity (including optical purity) (NMR) can only reliably detect impurities if they are present at a level of 5% or greater. I believe that any medicinal chemist reading the claim would have this understanding of this claim, both now and in 1988. In my view, Claim 1 refers to the single (+) enantiomer in the form of the free base or the salt. In this context purity is not a relevant concept. You either have the (+) enantiomer, or you do not have the (+) enantiomer. Professor Banwell would be entitled to give evidence, if his experience qualified him to do so, that the formulae of chemical compounds are in fact understood differently by chemists according to whether they appear in patents or in other documents, but that was not his evidence. I think that Professor Banwell meant that while he agreed that formulae of single compounds in the open literature (such as journal articles) are understood as importing the concept of 95% purity, he reserved his position as to patents, no doubt because his experience did not enable him to say whether chemists would apply the 95% purity convention to their reading of patents. Professor Davies said that he had "no knowledge or experience" of a convention according to which chemists read patents differently from the open literature, and Professor Banwell gave no evidence of the existence of such a convention. While it is not necessary for me to resolve this difference in view of my conclusion expressed at [116], [125] above, I see no reason why an exception is to be made in the case of patents. If chemists understand a formula for a single compound when it appears in the open literature to have a certain meaning, why would they not read the same formula in a patent in the same way, at least in the absence of an indication to the contrary in the specification? Since there is no evidence that they would not, I infer that they would. Senior counsel for Alphapharm suggested that in his affidavit (see [132] above), Professor Davies was saying that the 95% purity criterion applies only when some such qualifier as "pure" or "individual" appears. Senior counsel for Alphapharm submitted that Professor Davies departed from that more limited proposition to the more general one that an unqualified reference to the formula of a single compound imports the 95% purity qualification. Professor Davies was cross-examined at some length on this matter. He agreed with senior counsel for Alphapharm that if, in the open literature, there was an express reference to the "pure" or "individual" enantiomer, the skilled reader would take the reference to be a 95+% pure enantiomer. Senior counsel for Alphapharm drew Professor Davies's attention to the fact that claim 1 did not say "individual" or "pure". Professor Davies's response was two-fold. First, he pointed out that the specification elsewhere used the words "pure" and "individual" in the present context. In fact it does, as appears in some of the extracts referred to at [141] below. Second, Professor Davies stated that in any event, even without any express reference to "individual" or "pure", a 95+% level of purity is understood. So when you're stating a single --- a compound with a descriptor like "+" in this case, then you expect it to be that enantiomer of 95% or above. Otherwise that would tell me in the description. If it is "(+)-citalopram" in a chemical catalogue, I would expect it to be 95% or more. Otherwise, the person selling it to me would make it clear to me that it was not so pure. There was in evidence a commercial catalogue of chemicals available for purchase, and Alphapharm pointed to specifications of purity levels in it, nearly all of them being higher than 95%. Alphapharm's suggestion seems to be that Professor Davies's evidence related to a hypothetical situation because a level of purity is always specified. However, this one catalogue does not establish Alphapharm's proposition. If anything, I think the catalogue supports Professor Davies's evidence, because it at least suggests that chemists expect a very high level of purity, far higher than 50%. I accept Professor Davies's evidence that in the absence of the specification of a level of purity, the convention of "at least 95%" applies. I also accept that the convention is applicable to the formula stated in claim 1. Notwithstanding the force of this submission, I think that if claim 1 is ambiguous (as indicated earlier, I do not think it is), the specification as a whole teaches that claim 1 refers to the independently existing (+)-enantiomer, and not to merely the (+)-enantiomer when a part of unresolved (±)-citalopram. The invention in that case was entitled in the complete specification "Drainage Cell" and was stated to relate to "the provision of adequate drainage by artificial means" and to have particular application in the area of landscape gardening". However, the claims simply described a rigid cell structure. A Full Court of this Court held that the claims were unambiguous and were simply in respect of the rigid structure without any limitation by reference to the purpose of "drainage". In my view, the facts in Atlantis are distinguishable. There was no question in Atlantis of whether the object was claimed an object in its own right. Alphapharm draws attention to the fact that both Professors Banwell and Davies said that from the formula for the racemic mixture (citalopram) they could deduce the formulae for the (+)-enantiomer and the (-)-enantiomer. I do not think this fact to be persuasive as to how claim 1 is properly to be construed. Alphapharm draws attention to the Patent's title as it existed prior to amendment and to the terms of overseas Escitalopram Patents. Prior to amendment, the title of the Patent was "New enantiomers and their isolation" (it will be recalled that the amended title is "(+) enantiomer of citalopram and process for the preparation thereof"). Section 116 of the Act provides that "[t]he Commissioner or a court may, in interpreting a complete specification as amended, refer to the specification without amendment". Alphapharm does not refer to aspects of the pre-amendment complete specification other than the title, or to evidence of the circumstances surrounding the amendment. I do not find claim 1 to be so uncertain or ambiguous in its meaning that I gain assistance from the pre-amendment title. A compound selected from substantially pure (+)-1-(3-Dimethylaminopropyl)-1-(4'-fluorophenyl)-1,3-dihydroisobenzofuran-5-carbonitrile and non-toxic acid addition salts thereof. Alphapharm submits that if any degree of purity is to be implied, it should be the 99.6% optical purity or the 99.9% optical purity that are referred to in example 1 in the specification. However, those measures of optical purity are addressed to something different and do not indicate that persons skilled in the art would understand claim 1 to be referring to a compound of either of those degrees of purity. I do likewise. In their respective openings, senior counsel for Alphapharm and counsel for Arrow abandoned the attack on claim 6(b) on the ground of lack of novelty. That ground remains relevant only to the product claims. The definition of "prior art base" now includes documents publicly available outside the patent area (see subpara 18(1)(b)(i) of the Act and the definition of "prior art base" in Schedule 1 of the Act), whereas that notion in the 1952 Act was limited by reference to being novel in Australia (para 100(1)(g) of the 1952 Act). It follows (see [55] above) that Alphapharm must prove that the invention was "not novel in Australia", that it to say, not novel by reference to disclosures in Australia. Alphapharm submits: "The submissions of Lundbeck misapplied the doctrine of enabling disclosure, even assuming it applies in Australia". Alphapharm submits, however, that the applicability of the doctrine need not be decided because there is no dispute that the Australian Citalopram Patent "enabled" the racemate, that is, the positive enantiomer, but only with the negative enantiomer in equal proportions. Clearly, the issue of the proper construction of claim 1 discussed above directly arises. 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 Oxidising Co Ltd v Carr & Co Ltd (1908) 25 RPC 428 at 457, line 34, approved in BTH Co Ltd v Metropolitan Vickers Electrical Co Ltd (1928) 45 RPC 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. In my opinion, it is clear that the earlier disclosure must be "enabling": see for example, Hill v Evans at 8 ("the antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive, understand and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful"); Flour Oxidising Co Ltd v Carr & Co Ltd (1908) 25 RPC 428 at 457 per Parker J ("clear and unmistakable directions so to use [the earlier apparatus]"); Acme Bedstead Co Ltd v Newlands Bros Ltd [1937] HCA 63 ; (1937) 58 CLR 689 at 707 per Dixon J; Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23 ; (1977) 180 CLR 236 at 260-262 per Stephen and Mason JJ; Nicaro Holdings Pty Ltd v Marlin Engineering Co (1990) 91 ALR 513 at 531-532 per Gummow J (the supposed anticipation must not require of the skilled but non-inventive addressee "the exercise of any inventive ingenuity and the taking of any inventive step"); Bristol-Myers Squibb Co v FH Faulding & Co Ltd [2000] FCA 316 ; (2000) 97 FCR 524 at [67] per Black CJ and Lehane J ("must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention"); Imperial Chemical Industries Pty Ltd v Commissioner of Patents [2004] FCA 1658 ; (2005) 213 ALR 399 at [61] ff per Crennan J; Pfizer v Eli Lilly at [313]-[324] per French and Lindgren JJ. What does "enabling disclosure" mean in the context of a product claim? 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. 149 077 and US Patent No. 4,602,035 as denying novelty to method claim 6(b), but, as mentioned above, ultimately they did not press that argument. The challenge to the product claims is based on two prior art documents: A publication of Dr Donald F Smith, "The Stereoselectivity of Serotonin Uptake in Brain Tissue and Blood Platelets: The Topography of the Serotonin Uptake Area", Neuroscience and Biobehavioural Reviews , vol 10 pp 37-46 (1986), which was said to have become publicly available in Australia on or about 8 October 1986; Publication of Australian Citalopram Patent in Australia on or about 13 July 1978. The paper reviews studies of numerous stereoisomers, and gives structural drawings of the compounds cited in it. Although effects of the individual enantiomers of citalopram have never been studied, the model predicts that the ( R )-enantiomer (XXX) is far more potent than the ( S )-enantiomer as 5-HT uptake inhibitor ... Thus, the present model can be tested by determining whether these predictions are correct. The Smith article suggests that the R-enantiomer rather than the S-enantiomer can be expected to be the more potent of the two. Dr Smith's prediction was wrong and points away from the invention. It is common ground that in the case of citalopram, the R-enantiomer is the (---)-enantiomer, and it is the S-enantiomer that is the (+)-enantiomer. The Patent relates to the (+)-enantiomer. An article that teaches away from an invented product cannot be said to have pointed the skilled but non-inventive addressee to that product: cf Pfizer v Eli Lilly at [314], [323]. The addressee would have to conduct further experiments, conduct research and gain further information to hit upon the present invention. The Smith article would be a distraction. Alphapharm puts its case on novelty in relation to the Australian Citalopram Patent in two ways. First, it says that a person who follows the teaching of that patent will make the racemic mixture, and that that mixture contains the (+)-enantiomer which is the subject of the Patent. Second, it submits that the citalopram formula itself discloses the (+)-enantiomer of citalopram, because those skilled in the art recognise instantly (and would have recognised in 1988) that the citalopram molecule has a chiral centre, that is, a carbon atom with four bonds each connecting to a different atom or group, which means that it will exist in two enantiomeric forms which are mirror images of each other. I will deal with these two submissions in turn. The Australian Citalopram Patent did not refer to "enantiomers". 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. This appears to be the first time an Australian patent relating to a single enantiomer has been challenged on the ground of obviousness (the obviousness ground was abandoned in Ranbaxy Australia Pty Ltd v Warner-Lambert Company LLC (No 2) [2006] FCA 1787 ; (2006) 71 IPR 46 ( Ranbaxy ) as noted by Young J at [15]). The history of the emergence of obviousness or lack of inventive step as a distinct ground of invalidity has been recently traced by the High Court in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 ; (2007) 235 ALR 202 ( Lockwood v Doric (No 2) ) at [38]---[49], and by a Full Court of this Court in Ajinomoto Co Inc v NutraSweet Australia Pty Ltd [2008] FCAFC 34 at [63] ---[91]. I need not discuss that history. As noted at [55] above, the Patent can be revoked under the Act only on a ground of invalidity that would have been available under the 1952 Act. Obviousness was treated differently under the 1952 Act from the way in which it is treated under the Act. This position is now effectively codified in ss 7(2) and 18(1)(b) of the Act, provided s 7(3) is put to one side. In Minnesota v Beiersdorf at 292-295 and in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 ; (2002) 212 CLR 411 ( Astra ) at [57] it was held in relation to s 100(1)(e) of the 1952 Act that publications are not to be taken into account unless their content was part of common general knowledge at the priority date. Accordingly, the issue is not whether it was obvious to conduct a literature search of a particular kind with a view to acquiring information, but whether the information that would have been obtained from the search had already entered the body of common general knowledge: Minnesota v Beiersdorf at 295; Astra at [45]. No question arises in this case regarding the results of a routine literature search. The High Court also held in Astra (at [50]---[53]) that obviousness was to be determined by asking whether a hypothetical non-inventive skilled addressee, equipped with the common general knowledge as at the priority date, would have taken steps towards the invention "as a matter of routine" in the expectation that they might well produce the invention or some other useful result (endorsing statements in Wellcome Foundation Ltd v V.R. Laboratories (Aust) Pty Ltd [1981] HCA 12 ; (1981) 148 CLR 262 ( Wellcome ) at 286 and Olin Mathieson Chemical Corporation v Biorex Laboratories Limited [1970] RPC 157 ( Olin ) at 187-188). The High Court has therefore insisted on the two elements: (1) being led as a matter of routine to the desired result; and (2) having a reasonable expectation of achieving that result. In so holding, the High Court rejected a less demanding "worth a try" or "obvious to try" test. Astra therefore stands for the rejection of a line of United Kingdom authority to the effect that "all of the courses of action which present themselves without the exercise of invention are obvious": Pharmacia Corporation v Merck & Co Inc [2002] RPC 775 at 818 (see Astra at [54] per Gleeson CJ, Gaudron, Gummow and Hayne JJ). Their Honours explained that "[t]he tracing of a course of action which was complex and detailed, as well as laborious, with a good deal of trial and error, with dead ends and the retracing of steps [a description taken from the judgment of the trial Judge] [was] not the taking of routine steps to which the hypothetical formulator [would be] taken as a matter of course" (at [58]; also per Callinan J at [185]). I am aware of the observations made by the English Court of Appeal in relation to the High Court's judgment in Astra in Angiotech Pharmaceuticals v Conor [2007] EWCA Civ 5 ; [2007] RPC 20 at [39] ---[45] which were quoted by Kitchin J in Generics v Lundbeck at [73]. Those observations are of no relevance to my task. Astra also stands as authority for the following propositions: In Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd (2004) 61 IPR 442 ( Gambro ), Allsop J pointed out (at [353]) that it is wrong to divide up the inventive process into conception and practical implementation: it is the whole that must be considered and it suffices that there is only one inventive step involved (see also National Research Development Corporation v Commissioner of Patents [1959] HCA 67 ; (1959) 102 CLR 252 at 262). Evidence of the patentee's own lack of success in earlier attempts is probative of the inventive nature of a successful solution to a problem ( Wellcome at 287); the question of what weight is to be given to that evidence will depend on all the circumstances including the patentee's qualifications and experience in the field of the invention. Inventions that reveal an "unfelt want or need" are as likely or sometimes more likely to involve an inventive step as those that fulfil a "long-felt want" ( Wellcome at 287; Astra at [38]). Alphapharm criticises Lundbeck for failing to make that distinction. In the case of the method claim, the question of obviousness assumes as the starting point the goal of obtaining the (+)-enantiomer. In relation to the product claims, on the other hand, the question is whether that goal was itself an obvious one to pursue. Common general knowledge of methods available to resolve racemates may, however, be relevant to the obviousness of the product claims. It is relevant to the question whether it was obvious to want to obtain (+)-citalopram to ask whether it was part of common general knowledge that there were or were not available straightforward, inexpensive methods of doing so that were expected to succeed. Thus, while I agree with Alphapharm that the criterion of inventive step is conceptually different in the contexts of the product and method claims, the obviousness or non-obviousness of the method claimed is potentially of relevance to that of the product claims. In terms, the question "was the (+)-enantiomer of citalopram obvious? " conveys little meaning without an assumed background. Part of that background is that the question is being asked in connection with a contention that the (+)-enantiomer, being one of two enantiomers of a patented racemate, was not itself a patentable invention at the priority date. The obviousness question to be asked in relation to the product claims is whether it was obvious to the hypothetical skilled non-inventive addressee or team to "want to have" the (+)-enantiomer of citalopram as a drug for the treatment of depression. Was the aim of obtaining (+)-citalopram an "obvious goal" or "obvious desideratum"? Senior counsel for Alphapharm embraced the "obvious desideratum" terminology. However, he appeared to equate it with "mere conception". But merely to conceive of obtaining something is a measure far less demanding than that of "obvious to want to have" or "obvious to desire to obtain", which lies at the heart of "obvious goal" or "obvious desideratum". It was part of the common general knowledge that racemates consisted of (+) and (---) enantiomers in equal quantities and that the resolution of some racemates into their enantiomers had occurred. Therefore, the obtaining of the separate (+) and (---) enantiomers of citalopram was conceivable . The obviousness of the invention of (+)---citalopram requires more than this. It is not required, however, in order for Alphapharm to establish obviousness in relation to the product claims, that it establish that it was obvious to want to have the (+)-enantiomer specifically. To obtain the (+)-enantiomer is also to obtain the (---)-enantiomer. At the priority date it was not known where the therapeutic benefits of citalopram lay --- whether they lay in both enantiomers (and if so in what proportions) or only in one. Accordingly, when I speak of a desire to obtain the (+)-enantiomer, I mean a desire to obtain the (+) and (---) enantiomers. In the case of a particular product, secondary evidence such as evidence that there was or was not a long felt need for, and therefore motivation to obtain, the product, that the product has been attended by commercial success, and that there has been copying by others, such as competitors, may assume importance: see Lockwood v Doric (No 2) at [115] - [116]. The field of the invention is the "art" to which the invention claimed relates: Gambro at [349] and authorities there cited. Alphapharm describes the field of the invention as "the development of a potential new form of a drug, by a hypothetical entity in Australia, employing or consulting with a team of experts as discussed [later in its submissions]". Lundbeck, on the other hand, submits that the field is: "(+)-citalopram and its salts, compositions of (+)-citalopram and its salts, and methods of making (+)-citalopram". This description is, generally speaking, merely a summary description of the products and method the subject of the Patent, and is not, in my view, a description of the field of an invention. I would describe the field of the invention as the field in Australia of the development and operation of SSRIs for the treatment of depression. The concept of common general knowledge at the priority date must be proved by evidence, and the assumption made that the hypothetical person or team was possessed of that common general knowledge. The steps that must be taken in order to resolve the present issue must be taken at a level of abstraction. It would perhaps be surprising if the inventor or any particular expert witness called by a party challenging the validity of the patent conformed, as at the priority date, precisely and in all respects to the notional person skilled in the art and possessed as at that date the common general knowledge, no more and no less, than that established by the evidence. The need to exercise some caution in relation to acceptance of the evidence of the inventor was recently emphasised by Jacob LJ in his Lordship's dissenting judgment in Nichia Corporation v Argos Ltd [2007] Bus LR 1753 (CA). It is common ground that the relevant addressee would be a team that included or consisted of medicinal chemists. Medicinal chemists identify, design and synthesise drugs for therapeutic use. Some of their skills overlap with those of synthetic chemists and formulation chemists. The medicinal chemists would have tertiary qualifications up to a PhD in chemistry or significant practical experience. It is agreed that they would have been likely to consult with pharmacologists and psychiatrists, although it is not agreed whether or not pharmacologists and psychiatrists would also be members of the hypothetical team. The relevant addressee may be different for the different claims of the Patent. The Patent deals with a molecule and its salts (claims 1 and 2), pharmaceutically acceptable compositions of the molecule and its salts (claims 3, 4 and 5), and a method for producing the molecule (claim 6). Claims 1, 2 and 6 are clearly within the province of medicinal chemistry. The background knowledge and experience of pharmacologists and psychiatrists is also potentially indirectly relevant to those claims. Since claims 3, 4 and 5 relate to post-synthesis stages of drug development, pharmacologists and psychiatrists are more likely to be members of the team, or at least consultants to it, in respect of these claims. Chemists with skills in the formulation of pharmaceutically acceptable dosage form will also be involved. In their submissions, the parties did not distinguish between the various claims of the Patent for the purpose of identifying the hypothetical addressee or team. In my opinion, the relevant addressee for all claims is a team of experienced medicinal chemists, either possessing skills in formulation, or having access to advice from formulation chemists, and having access to advice from both pharmacologists and psychiatrists. ...the skilled addressee, in this case, will compromise a medicinal chemist (experienced in the design, synthesis and modification of chemical compounds for biological evaluation and in determining structure activity relationships for optimisation of desired biological activity) with a PhD in chemistry and a few years experience working in a laboratory of a pharmaceutical company, a person with a Bachelor's Degree and three to four years of similar experience, or a technician with ten to fifteen years of experience. The psychiatrist/clinician and pharmacologists are not involved, however, in the development of the invention per se and do not form part of the addressee "team". For convenience, in the following discussion I may refer to the relevant addressee as a medicinal chemist. However, in fact he or she would be a member of a team as described above, and would not be working in isolation. Lundbeck asserts that none of Alphapharm's witnesses fit the description of the skilled but non-inventive addressee. It submits that, as a result, Alphapharm has led no evidence as to what was common general knowledge in Australia at the priority date. Lundbeck attacks, in particular, the evidence of Professor Banwell who, at the priority date, was an academic chemist involved in synthesis of chemical compounds, and had never resolved a racemate into its enantiomers where that route of resolution had not previously been published. As will appear, I do not accept that Professor Banwell's evidence was entitled to no weight on this ground, although because of his comparative lack of relevant practical experience, I did not find his evidence as cogent as that of Professor Davies. No single witness conformed entirely to the hypothetical skilled but non-inventive addressee as at the priority date. Professor Montgomery Psychiatrist; former member of the Committee on Safety of Medicines UK and as such involved in assessing antidepressants for regulatory approval; also Chairman of Lundbeck's Global Advisory Board of Experts and as such recommended to Lundbeck that studies suggested worthwhile to investigate (+)-citalopram. (Dr Bøgesø and Mr Gundertofte of Lundbeck gave evidence of the facts relating to the development of (+)-citalopram within Lundbeck, not expert opinion evidence (see [243] ff below). In the following paragraphs, I give an account of their qualifications and experience. Professor Banwell is Professor (Level E2) of the Research School of Chemistry, Australian National University --- a position he has held since 2005. Since graduating from the University of Wellington in the 1970s and taking his PhD degree in 1979 from that University, he has held a number of teaching and research positions in Australia and overseas. He was appointed Professor in the Research School of Chemistry, Australian National University, in 1999. Professor Banwell is a Fellow of the Royal Australian Chemical Institute and a Fellow of the Australian Academy of Science. He is associated with the Organic Chemistry Division of the Royal Australian Chemical Institute, an organisation that covers many aspects of medicinal chemistry. He is a member of the Australian Research Council's College of Experts acting within the field of chemistry. He acted as a chemistry consultant for the former CSIRO Division of Molecular Science (Fine Chemicals Program) from 1995 to 2004. Currently he is a synthetic and medicinal chemistry consultant for Biota Holdings Pty Ltd, Cryptopharma Pty Ltd, and Progen Industries Pty Ltd. He states: "the roles which I have held have involved activities in both organic and medicinal chemistry". Professor Banwell has authored and co-authored approximately 200 publications and has been named as an inventor or co-inventor on six PCT-level patents. Professor Davies is Chairman of Chemistry at the University of Oxford and is the Waynflete Professor of Chemistry of that University. Professor Davies also graduated in the 1970s, taking his PhD degree in 1975 from the University of Oxford. In 1980, he received a DSc degree from the University of Paris. After completing his DSc degree, Professor Davies returned to Oxford as an academic. At that time he began acting as a consultant to several pharmaceutical companies on their research into, and development of, pharmaceutical compounds. Those consultancies gave him a detailed knowledge of much of the companies' ongoing research in the 1980s. In addition, companies funded studentships with him, which meant that he had frequent visits and interactions with the companies' scientists. Professor Davies's particular expertise was in stereochemistry. While he was consulted on the preparation of racemic diastereomers, he was not consulted on the preparation of single enantiomer compounds during the 1980s to any real extent. In his experience, there was little interest in industry at that time in the resolution of racemates. Professor Davies states that molecules that were first made as racemates tended to proceed as racemates through development, whereas molecules that were first made as individual enantiomers (those based on naturally occurring homochiral molecules) proceeded through development as single enantiomers. Professor Davies was the founder (in 1989), and is still Editor in Chief of Tetrahedron Asymmetry , which he describes as a leading journal that reports advances in knowledge of all aspects of stereochemistry in organic, inorganic, organometallic, physical and bioorganic chemistry. As Editor in Chief, Professor Davies has read nearly every submission to that Journal over the last 17 years --- some 600 to 700 papers a year. Over the period from 1974 to 2006, Professor Davies has authored or co-authored some 408 learned articles. Over the period 1984 to 1998, he received nine awards in recognition of his work. From 1986 to date, he has been a member of 13 chemistry related committees as well as editor or member of the editorial board of some seven learned journals. In 1992, along with others, Professor Davies founded Oxford Asymmetry Ltd, which became a division of Oxford Asymmetry International plc. In his affidavit, Professor Davies states that the mission of Oxford Asymmetry Ltd was "to provide pharmaceutical companies with homochiral compounds of interest on any desired scale, from small amounts as a first preparation for biological evaluation, to commercial quantities". Oxford Assymetry Ltd was engaged in the preparation of compounds with high enantiomeric purities and specialised in three principle methods for achieving this: using single enantiomer "chiral pool" starting materials; asymmetric synthesis; and chiral separations by various methods (resolutions). Professor Davies states that Oxford Asymmetry Ltd was one of the first companies in the world to specialise in producing synthetic homochiral compounds. He further states that, when his company was established, there was scepticism about the need for its services and he was told many times that the industry did not need to resolve racemic compounds on a regular basis. Nonetheless, according to Professor Davies, the industry changed dramatically in the 1990s and the company's workforce grew from three employees to 250 employees by the time the company was sold in 2000. Professor Davies agreed that the hypothetical team would include not only medicinal chemists experienced in the area who were working in industry, but also those working in a university or research institute who were frequently consulted by industry. There was evidence of the sharing of knowledge of chemists from industry and from academia at conferences. Professor Davies engaged in these activities. So did Professor Banwell, though not to the same extent. This is not to detract in any way from the qualifications, experience and eminence of Professor Banwell. It is only to say that his contact with the pharmaceutical industry has not been as frequent or sustained as has that of Professor Davies. As indicated above, Professor Davies had close and frequent contact with the industry at an earlier time than did Professor Banwell. Until his consultancies as a medicinal chemist with three pharmaceutical companies in recent times, Professor Banwell was exclusively in academia. On any question as to the interests, concerns and practices within the pharmaceutical industry in 1988, I regard Professor Davies as the more qualified. I have come to the conclusion that it is not possible to exclude in its entirety the evidence of any of the expert witnesses on the basis that the witness was not qualified to give evidence relevant to the issue of the knowledge, understandings and expectations of the hypothetical skilled but non-inventive addressee as at the priority date. However, this is far from saying that each of the expert witnesses' testimony was entitled to equal weight on all matters about which they testified. It forms 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, and it must be treated as being used by an individual as a general body of knowledge. The question is whether it is "generally accepted without question" or "generally regarded as a good basis for further action" by the bulk of those in the art: Minnesota Mining and Manufacturing Co v Tyco Electronics Pty Ltd [2002] FCAFC 315 ; (2002) 56 IPR 248 at [100] , quoting Blanco White TA, Patents for Inventions and the Protection of Industrial Design (5 th ed, Stephens, London, 1983) at [4-207]. Both sides agree that the common general knowledge included knowledge of: the chemistry of chiral molecules; the content of the Australian Citalopram Patent as the starting point of the inquiry; the available methods of resolving enantiomers; and the chemistry of nucelophilic substitution reactions and ring closure. There was some dispute over whether the common general knowledge in relation to (e) included knowledge that one enantiomer may in fact have antagonistic effect, with the result that the therapeutically active enantiomer, once it was isolated, would have greater beneficial effect than the racemate. Professor Day said that this was part of common general knowledge in 1988, but Professor Montgomery disagreed. The preponderance of the evidence is that the general understanding was that at the most, all of the therapeutic benefits of the racemate could reside in one enantiomer, and that the other enantiomer was mere "ballast". While some skilled addressees may have known of the possibility of antagonistic effect from the other enantiomer, I am not persuaded that this knowledge was part of common general knowledge in 1988. Dr Bøgesø said that by as early as 1980 "citalopram was in development, and it was known within Lundbeck, the scientific community and the industry generally, to be extremely selective in its activity". A letter dated 12 June 1988 from Dr Donald F Smith to Dr John Hyttel of Lundbeck stated that "...certainly citalopram is patented by Lundbeck. The whole world knows about that compound ..." [my emphasis]. All that matters is that it is common ground that the relevant addressee would have the Australian Citalopram Patent as the starting point. That addressee would know the structural formula of citalopram and would know that it was an effective anti-depressant drug. It is agreed that given the structural formula of citalopram, the skilled addressee would have recognised immediately that it was a chiral molecule. The synthesis taught by the Australian Citalopram Patent would produce a racemate composed in equal proportions of a (+)-enantiomer and a (---)-enantiomer. It is agreed that it was not known whether the pharmacological activity of the citalopram racemate lay in one enantiomer exclusively, in both enantiomers equally, or in both enantiomers in unequal proportions. Other possibilities are to be found in the expert evidence. Professor Day referred to seven possibilities in his affidavit and he expanded these to nine in the witness box (see [391] below). It is common ground that it was impossible to discern from the Australian Citalopram Patent or otherwise the precise effect that the individual enantiomers had: it was necessary to separate and test them. The common general knowledge at the priority date also included knowledge that: The chemistry background outlined in the paragraphs that follow formed part of the common general knowledge in 1988, and is relevant to the evidence relating to the issues to be discussed below. The outline builds on the discussion of General Chemical Background at [60]---[75] above, on the evidence of Professors Banwell and Davies, and on Morrison and Boyd . Carbon readily forms rings involving a number of carbon atoms connected together. Citalopram contains two six-carbon rings and one ring that contains four carbon atoms and an oxygen atom (the component known as dihydroisobenzofuran ). The formation of the dihydroisobenzofuran ring was one of the key issues in the evidence relating to the method claim. The method for making (+)-citalopram involves creating this ring in a stereoselective way, that is, in a way that does not produce a racemate. The method uses a precursor called a diol . A diol is a molecule that contains two hydroxyl (OH) groups. These two groups are also known as alcohols . The method requires those hydroxyl groups to be brought together and one oxygen atom to stay, while its partnering hydrogen atom and the other hydroxyl group are "cleaved off" as a water molecule. Lone pairs (the extra electrons in an atom's outer shell that are not involved in bonding) are important for interactions between molecules because they can be used to form new covalent bonds. In these proceedings, lone pairs were referred to as the "sticky handles" of a molecule. A molecule that has lone pairs or sticky handles is called a nucleophile. The lone pairs are attracted to the nuclei (in particular, the protons) of atoms in other molecules. The molecule citalopram is a nucleophile. In citalopram, atoms of oxygen (with its two lone pairs) and nitrogen (with its one lone pair) can function as sticky handles. Nucleophiles often form bonds with electrophiles . Electrophiles are deficient in electrons and carry a positive charge or partial positive charge. This may be because there is a large difference in the number of protons associated with two covalently bonded atoms (for example, in hydrogen chloride, hydrogen has one proton and chlorine has 17 protons) --- a phenomenon known as electronegativity . An important type of reaction of nucleophiles is the nucleophilic substitution reaction . This occurs when a nucleophile bonds with an electrophile and "kicks off" a group in the process. An atom with a lone pair (from the nucleophile) "attacks" the positively charged atom of the electrophile, substituting itself for the leaving group (the most electronegative atom attached to that positive atom). The leaving group acquires the lone pair. For our purposes, it is relevant to consider only electrophiles that contain carbon as the positively charged atom (due to it being bonded to a more electronegative atom or group of atoms). There are two main mechanisms by which nucleophilic substitution can occur. These are distinguished by the descriptors S N 1 (unimolecular nucleophilic substitution) and S N 2 (bimolecular nucleophilic substitution). In substance, the distinction depends on whether the substitution occurs in one step or two steps. Confusingly, the S N 1 reaction involves two steps: it is called "1" because the important rate-determining step involves only one molecule (the electrophile). The S N 2 reaction involves one step: it is called "2" because the important rate-determining step involves both the nucleophile and the electrophile simultaneously. The first step of the S N 1 reaction involves loss of the leaving group from the electrophile to give a positively charged intermediate molecule. Loss of an electron pair from a central carbon atom means that it has only three electron pairs around it. The most favourable structure for a molecule containing a carbon atom and three adjoining atoms is trigonal planar (flat). In the second step of the S N 1 reaction, the nucleophile attacks the intermediate flat molecule. Being flat, there is an equal probability that the nucleophile will attach to one side or the other of the intermediate. Therefore, if a single enantiomer of the electrophile is used, the S N 1 process always results in a racemate. Professor Davies said that a first year undergraduate would put aside the S N 1 reaction for this reason. In the case of the single step of the S N 2 reaction , bond-making and bond-breaking occur simultaneously. The nucleophile attacks the carbon atom at the same time as the leaving group leaves. Importantly, the nucleophile must attack the central carbon atom at or close to 180° from the leaving group. There is no flat intermediate. Therefore the electrophile maintains its original stereochemistry. If the electrophile is a single enantiomer, the S N 2 process will result in a single enantiomer. It was agreed that it would be necessary to proceed via an S N 2 reaction in order to resolve the diol precursor (a single enantiomer) stereospecifically. The rate of the S N 1 reactions depends on the rate of formation of the intermediate. For S N 2 reactions, the rate depends principally on molecular shape and orientation, because the attacking nucleophile and the leaving group need to line up correctly (at 180° or close to it) in order for a fruitful reaction to result. The position can be illustrated by a pen and its cap. It is only the 180° alignment that immediately allows the pen to enter its cap, although with some small difficulty and delay an angle close to 180° will also permit it to do so. If the angle of attack in an S N 2 reaction is not 180° but is close to it, the process will be slower. If the angle is not sufficiently close to 180°, the pathway will not work at all. Ring formation or closure involves bringing together chains of atoms. The ease of ring closure depends on the molecular shape of those chains. As described in the General Chemical Background at [60]---[75] above, the most favourable molecular shape involves maximum separation between electron pairs. In the case of a chain of carbon atoms, the most favourable shape involves the hydrogen atoms and adjacent carbon atoms being configured in what is known as a staggered conformation. If the electron pairs are near to each other, there is an eclipsed conformation, which is highly disfavoured due to bond-bond repulsion. Further, an S N 2 reaction is readily achievable, since the nucleophile can achieve a trajectory of close to 180° without introducing strain or significant eclipsing interactions. In an unsaturated system (one that contains a carbon-carbon double bond and therefore less hydrogen atoms), the two ends of the chain cannot approach so easily due to the rigid shape (trigonal planar) around the double bond. In order to obtain ring closure, it is more likely that one of the connecting atoms will have to eclipse the rest of the molecule, which is disfavoured. Further, because of the geometrical constraint of the double bond, a nucleophile in an S N 2 reaction can not approach from 180°: the angle of attack is, at best, 140°. In the case of citalopram the ring is unsaturated because it contains a carbon-carbon double bond. Professor Davies said that an unsaturated system would not readily close to a ring incorporating oxygen since it would involve significant eclipsing interactions, and a trajectory close to 180° is not readily achievable. He said that ring closure would be unexpected. Either the reaction would not take place, or it would be so slow that other reactions, such as polymerisation, would compete. Professor Banwell, on the other hand, said that by analogy with a fully saturated system, an unsaturated system would also achieve ring closure. Both experts agreed that trying the S N 2 ring closure on the racemic diol would have shown whether the ring formation was feasible, but would not have informed on the overall stereochemical outcome of the process. The Patent named Dr Bøgesø and a third employee of Lundbeck, Dr Jens Perregaard, as the inventors, and Lundbeck as the assignee of the invention. Dr Bøgesø and Mr Gundertofte gave evidence of the course of events that led to the obtaining of (+)-citalopram. Lundbeck did not call Dr Perregaard although it appears that he was available. The evidence of Dr Bøgesø and Mr Gundertofte is relevant to the issue of obviousness as it relates to both the product claims and the method claim. They were experienced medicinal chemists who desired to obtain the enantiomers of citalopram. I consider their testimony to be important on the issue of obviousness. Since then, he has published around 50 scientific papers in peer reviewed journals on medicinal chemistry, drug discovery, pharmacology and biology. He is the named inventor on some 26 patents including the Patent and the Australian Citalopram Patent. He is currently the Vice President for Lundbeck Research Denmark at Lundbeck. Dr Bøgesø has been involved in drug development of a number of different compounds targeting diseases of the central nervous system. It was in 1972 that he was one of the inventors of citalopram, and beginning in 1980, he led attempts by the medicinal chemistry group within Lundbeck to resolve it into its enantiomers. This was, however, only a part-time or intermittent activity concerning one of several research projects in which he was involved. He said he viewed it as an academic and personal project, rather than a commercial one, while acknowledging that it would provide pharmacological information of interest to Lundbeck. The "project" of preparing the individual enantiomers extended from 1980 to 1988 and was one of the most difficult pieces of research that Dr Bøgesø had ever been involved in. When he joined Lundbeck in 1971, he was assigned to make new chemical compounds as part of a number of projects to produce pharmaceuticals which were believed to be effective in treating disorders, such as depression. One such project involved compounds which personnel at Lundbeck thought might be effective as SSRIs. As part of that project, he and other members of his team synthesised approximately 60 new chemical entities, including citalopram, which was first made in August 1972. I (with my colleague A.S. Toft) am a co-inventor of citalopram. Citalopram was not in fact approved for sale on prescription until 1989, some seventeen years after first preparation. Over all, between 1965 and about 1988, there were 3945 new compounds synthesised, more than 60 of which were further developed in one way or another. Of these, 15 went to the clinical phase and by 1988, three of those were on the market and another four were in the late stages of development. Dr Bøgesø's Department's research was directed to identifying one or more lead compounds with some activity of interest in each project, after which the objective was to make new derivatives of that lead compound. As a general matter we did not prepare resolved enantiomers of such compounds. The principal reason for this was that resolutions were time consuming, difficult and sometimes impossible to achieve. The approach in Lundbeck and, I believe, in most companies, was to make and test as many new derivatives as possible, thereby elucidating structural/activity relationships. Dr Bøgesø states that by 1980, citalopram was in development, and that it was known within Lundbeck, within the scientific community and within the industry generally, that citalopram was extremely selective in its activity. However, as a co-inventor, I was interested in this from an academic and personal point of view, and it would have been useful for Lundbeck to have some data about the enantiomers. As I have indicated above, during my work on the indane project, I had gained experience with resolution techniques. Also, the indanes had two phenyl rings and an amine group which bore some resemblance to citalopram, so I decided to try a number of the same techniques that had been successful in the indane project, on citalopram. Dr Bøgesø states that the "classical method for attempting to resolve racemic amines was (and still is) to use fractional crystallisation (described at [87] above). This technique requires that crystalline salts be formed. Dr Bøgesø states that a problem he had already faced in the 1970s was that citalopram had proved to be an extremely difficult molecule from which to make crystalline salts. The only salts he and his team had managed to produce in crystalline form were the oxalate and hydrobromide salts. However, neither oxalic acid nor hydrobromic acid is chiral, so they would not permit resolution into enantiomers. Dr Bøgesø states: "This low propensity to form any crystalline salts was a major problem in my attempts to resolve citalopram". Dr Bøgesø attempted to resolve citalopram using various resolving agents. They were the (+) and (---) forms of five acids, of which he found that only the (+)-enantiomer of camphorsulfonic acid produced crystals with citalopram. However, he was unable to find conditions in which those crystals selectively precipitated as a single diastereomeric salt of citalopram. Dr Bøgesø used a range of techniques in order to try to promote crystallisation, although he did not record them all. He recounts his various attempts to resolve citalopram commencing in about June 1980. Exhibited to his affidavit are such records as he kept of his work. In December 1983, Dr Bøgesø attended a course on "Strategies for Optical Resolution" held in Stockholm, Sweden. The course was conducted by a leading expert on the resolution of racemates into their enantiomers, Professor A Collet. The course brought to Dr Bøgesø's attention a new resolving agent, bis naphthyl phosphoric acid, which had been invented as a resolving agent by Professor Collet. Dr Bøgesø synthesised some of that acid, but had no success in using it to resolve citalopram. Dr Bøgesø also continually reviewed the literature for successful resolutions that he might adapt to try with citalopram. By about 1984, it was clear to Dr Bøgesø that direct resolution of citalopram was extremely difficult and that he would have to consider other routes. He had not previously attempted to resolve citalopram by asymmetric synthesis using a precursor because it is not possible to "resolve" an intermediate if there is no chiral carbon present in the molecule. Dr Bøgesø explained that the chiral centre in the preparation of citalopram is introduced only very late in the synthetic process, at the stage where the dicarbinol base of citalopram (the diol) is produced. This, he explained, was the penultimate step in Lundbeck's production of citalopram. Dr Bøgesø and his colleagues considered but rejected the technique of resolving the diol. Their main reason was that they did not believe it would work because the next step, conversion to the final citalopram molecule, would involve chemistry on the chiral carbon which they thought would result in full or partial racemisation of the enantiomer. The remaining hydroxyl group would then attach to the central carbon, to close the furan ring, but could approach from either side. This would therefore result in racemisation, and we would be no further forward. First, the process Lundbeck was employing in the production of citalopram did not involve the isolation of the diol --- the diol "was merely a transient intermediate in the production process, and it was not easily isolated in pure form". Secondly, very few acids formed a crystalline salt with citalopram, and the experience at Lundbeck was that the diol behaved very similarly to citalopram so far as salt formation on the amine group was concerned. There was therefore no reason to believe that the diol would be any more likely to crystallise as diastereomeric salts than citalopram itself was, or that even if it did crystallise, it would selectively crystallise only one of the two enantiomers. Dr Bøgesø stated that the structure of the diol, with two hydroxy (OH) groups, potentially offered a further method of resolving the racemate, namely the creation of an ester on one of the hydroxy groups using an optically pure chiral acid chloride (to produce two diastereomeric esters), followed by resolution by conventional HPLC (or perhaps, fractional crystallisation). However, a third potential problem was that it might not be possible to create a mono-ester of the diol on only one of the hydroxy groups --- both groups on the diol were, in principle, susceptible to formation of an ester. If esterfication of both hydroxy groups occurred, the result would be a mixture of compounds. A fourth potential problem with the diol-ester strategy was the stability of any ester that formed (assuming it was possible to create a mono-ester). Any ester used had to be stable enough to enable separation of the diastereomers by chromatography or crystallisation, yet labile enough to be removed under conditions that would not induce racemisation. Even if these various problems were overcome, there would remain an ester from which it would be necessary to cleave the acid moiety off, without affecting any other part of the molecule. According to Dr Bøgesø, this could have posed its own problems. These various concerns were all factors which contributed to the view held by Dr Bøgesø and his colleagues that the diol route would be more problematic than attempting to resolve citalopram itself. Moreover, the diol route would not eliminate the major problem of racemisation upon the ring closure. In late 1983, Dr Bøgesø and his team embarked upon alternative ways to resolve citalopram. The first alternative was to attempt to produce derivatives of citalopram, resolve those derivatives and then convert them back into the single enantiomers of citalopram. The first derivative selected was desmethyl citalopram. Another was the N-benzyl derivative. However, Dr Bøgesø was unable to produce any crystals of the citalopram derivatives. In the mid 1980s, Dr Bøgesø discussed with his co-workers and technicians the possibility of using other potential resolving agents. Indeed, on a lighter note, he recalls offering a bottle of whiskey if they managed to produce a crystalline form of citalopram with a resolving agent --- he did not have to pay out on his offer. A further separation method of which Dr Bøgesø was generally aware, but of which he learned more from Professor A Collet at the "Strategies for Optical Resolution" course in Stockholm, was separation by means of HPLC (discussed in more detail at [302] ff below) . Dr Bøgesø explains HPLC in general, and chiral HPLC in particular. Chiral HPLC is used to separate chiral compounds into their individual enantiomers. In the 1980s, chiral HPLC was an emerging technology. Dr Bøgesø had read a few reports in the literature relating to the use of chiral HPLC to separate molecules, although they were all smaller than citalopram (up to roughly half its size). He was not aware of any compounds the size of citalopram having being separated by the use of this technique. Nonetheless, Dr Bøgesø suggested to his colleague, Klaus Gundertofte, a chemist who had been hired by Lundbeck in 1982 partly due to his experience with HPLC, that he explore the possibility. Mr Gundertofte attempted to do so but was not successful (see [287] ff below). Sometime between August 1985 and September 1986, Dr Bøgesø prepared a note of his experimental attempts to resolve citalopram. According to the annual report for 1987 of Lundbeck's Medicinal Chemistry Department, in the Spring of 1987 "the chemists were instructed by the citalopram project group to attempt once again to resolve citalopram" because Lundbeck often received "enquiries with regard to the pharmacology of the enantiomers". According to the report, separation tests were conducted using HPLC with an optically active carrier both at the Danish Pharmaceutical University and on Lundbeck's own equipment, but without success. Dr Bøgesø explained the steps that were taken between about August/September 1986 and late 1987/early 1988 that led to success. A "breakthrough" occurred in late 1987. I discussed the problem with Jens Perregaard. Our concerns remained that there was a low likelihood of success of resolving the diol, and we had no strategy to deal with the problem of racemisation. Nevertheless, we decided to try both the ester and salt strategies. I cannot recall how many reagents Jens Perregaard used in his attempts to make an ester with the diol, however, he was eventually successful using 2-methoxy-2-(trifluoromethyl)-phenylacetic acid chloride. I had never before used this reagent as it is a "shift reagent" for use in NMR analyses (ie an analytical tool), and I cannot recall why Jens Perregaard chose this particular reagent on this occasion. It turned out that this was a new method to convert the diol to the final citalopram molecule, while retaining the stereochemistry of the molecule. Using the basic ring closure mechanism we had developed starting from the observation by Jens Perregaard of the spontaneous ringclosure of an ester, we were able to convert this enantiomerically pure (---)diol, via an ester, to the pure (+)enantiomer of citalopram. The reaction was able to be performed at considerably larger scale than the original HPLC separation method. 98. This reaction is described in reaction scheme II in the escitalopram patent. The method was based on a derivation of the "dicarbinol base" that is an intermediate in the production. Optically active α-methoxy-α-trifluormethyl phenyl acetic acid chloride may, under mild reaction conditions, selectively 'over-esterize' the primary alcohol group in the dicarbinol base. By means of preparative HPLC fractioning, performed several times, a complete separation was achieved in the two diastereomer esters. Through treatment with a strong base (tert. BuOK) it was ring-closed stereoselectively to citalopram. Mr Gundertofte is a principal scientist in the Department of Computational Chemistry at Lundbeck. His thesis for his Masters degree (1981) concerned the use of specific reagents to synthesise heterocyclic compounds, and included the use of thin layer chromatography, liquid chromatography and both analytical and preparative HPLC. Mr Gundertofte explains that HPLC is a chemistry based tool for quantifying, analysing and preparing chemical compounds. I discuss HPLC in more detail at [302] ff below. In his Masters work, Mr Gundertofte used both analytical and preparative HPLC. Mr Gundertofte first used analytical HPLC in about 1977. He first used preparative HPLC, which was then a relatively new technique, when his university first obtained preparative HPLC equipment in about 1978. Upon completion of his Masters thesis in 1981, he was very experienced in the use of HPLC. Mr Gundertofte commenced work with Lundbeck in January 1982 as a medicinal chemist, and has been continuously employed by Lundbeck since then. For his first four or five years with the company, Mr Gundertofte devoted between 30% and 50% of his time to working with HPLC in connection with various projects in the Medicinal Chemistry Department. Over the years, Mr Gundertofte has given presentations and seminars, both within Lundbeck and externally, on the use of preparative HPLC in medicinal chemistry. Following one such presentation at the Danish Technical University, he was asked to prepare a paper. He did so and the paper was published in the journal Dansk Kemi ( Danish Chemistry ): "Preparative HPLC --- a valuable tool in pharmaceutico-chemical research" Dansk Kemi (1985) pp 49-53. The paper discussed the theoretical and practical considerations involved in using HPLC for preparative purposes in medicinal chemistry. The paper was published in February 1985, and Mr Gundertofte agreed that it would have been prepared in 1984. In or around 1987, Mr Gundertofte's colleague, Henrik Pedersen, began taking over responsibility for the preparative HPLC activity at Lundbeck. Mr Gundertofte ceased working with HPLC at around that time, although his technicians still undertook HPLC work for him until about 1988. On 1 March 1989, Mr Gundertofte was promoted to the position of Head of Computational Chemistry at Lundbeck. When Mr Gundertofte began working at Lundbeck in 1982, one of his first tasks was to set up a preparative HPLC laboratory. While Lundbeck regularly used analytical HPLC in 1982 to test the purity of compounds or reaction mixtures, it did not have any preparative HPLC equipment. Mr Gundertofte's responsibility included the selection, purchase and commissioning of such equipment. He sourced equipment throughout his first year at Lundbeck. Once the HPLC laboratory was established, Mr Gundertofte and his technicians were its primary users. Over the time of his involvement with the laboratory, he and they separated many hundreds of reaction mixtures at the request of other medicinal chemists at Lundbeck. In working with HPLC, one can manipulate a number of parameters in an attempt to improve the outcome of an experiment. The parameters include the choice of solvents, temperature, pressure, flow rate, pH and the stationary phase used. Over time, Mr Gundertofte was able to reduce the trial and error involved in determining these parameters, and became able to determine in a systematic rather than random way what adjustments to make to the parameters. He referred to his experience in his Dansk Kemi paper. While at Lundbeck, through his regular reading of journals, Mr Gundertofte became aware of the availability of chiral materials for use in HPLC mainly for the purpose of analysing chiral compounds. He explains that on standard (non-chiral) HPLC columns, enantiomers cannot be separated. The use of chiral HPLC columns, on the other hand, allows separation of racemic compounds. Chiral HPLC was a new area in the early 1980s and was not one that Mr Gundertofte or the other medicinal chemists he knew at Lundbeck and elsewhere, knew very much about. Soon after he joined Lundbeck, he learned that his colleagues in the Medicinal Chemistry Department had been trying, unsuccessfully, to separate citalopram into its enantiomers using classical fractional crystallisation techniques. At Departmental meetings attended by the research scientists in the Medicinal Chemistry Department, the associated difficulties were often discussed. At one meeting Mr Gundertofte raised the possibility of using chiral HPLC. Dr Bøgesø, who was then the senior research chemist in the group, asked him to go ahead and try that technique. On 17 November 1983, Mr Gundertofte attended a course in Stockholm entitled "Determination of Optical Isomers" conducted by the Swedish Pharmaceutical Association. The course concerned the use of analytical chiral HPLC techniques. The focus of the course was the use of chiral HPLC on an analytical scale in order to determine enantiomeric purity. The course did not specifically address either the separation of chiral compounds into separate enantiomers or the use of chiral HPLC on a preparative scale. Mr Gundertofte and some of his colleagues reviewed the literature for any references to the use of chiral HPLC for the separation of compounds with similar structural elements to citalopram, but did not find any. They therefore decided to try to resolve citalopram on any chiral column that was available. All of the columns tried were analytical columns, rather than preparative columns. The first chiral HPLC column Mr Gundertofte used was the DNBPG ("Pirkle") HPLC column. Professor William Pirkle of the University of Illinois developed the chiral stationary phase used in this kind of column. From Mr Gundertofte's review of the literature, it was the only chiral HPLC column that Mr Gundertofte knew to be commercially available. Some 40 separate runs were conducted on the column using different combinations of solvents, temperature, pressure and pH values, but without success. The second column Mr Gundertofte tried was the "Immobilised protein HPLC column". The manufacturer was Pharmacia in Sweden. This column was a prototype that was not commercially available, but Mr Gundertofte was able to access it through Lundbeck's collaboration with the manufacturer. Again some 40 experiments were conducted but without success. The third column Mr Gundertofte tried was the "Triacetate cellulose HPLC column". Again, this column was not commercially available. Mr Gundertofte obtained the chiral stationary phase material from Merck at Darmstadt, and "packed it" himself. Again, he unsuccessfully ran some 40 experiments. After the focus of Mr Gundertofte's work changed in 1987, his technicians and other colleagues unsuccessfully made a further attempt to separate citalopram into its enantiomers by using a "beta cyclodextrin chiral HPLC column". Finally, in about 1987 Mr Gundertofte sought help from Associate Professor Hansen of the Royal Danish School of Pharmacy (now called the Danish University of Pharmaceutical Sciences), Copenhagen. Professor Hansen was an expert in separation by chiral HPLC, and his university had a microcrystalline cellulose triacetate chiral HPLC column, to which Lundbeck did not have access as it was not commercially available. However, Professor Hansen was not able to resolve the compound on that column. Mr Gundertofte states that the choices of the chiral HPLC columns and column packing materials that he made were based solely on the columns and materials available. He said that he and his colleagues kept a close eye on the relevant literature at the time and that they used every type of chiral HPLC column that they could get their hands on. Mr Gundertofte ceased trying to separate citalopram into its enantiomers using chiral HPLC when he heard that his colleague, Jens Perregaard, had succeeded in doing so by chemical means using an intermediate diol. By that time, Mr Gundertofte had had more than ten years' experience in using HPLC techniques, including several years of experience in using chiral HPLC. In essence, Lundbeck submits that the addressee of ordinary skill would have predicted, at best, that escitalopram might be up to twice as effective as citalopram (convey the same benefit for half the dose), and would not have predicted, as it says proved to be the fact, that one enantiomer would or might be many times more effective than the racemate because the other enantiomer was antagonistically active. Lundbeck's key expert witness on the question of what the post-priority date clinical studies showed was Professor Montgomery. Alphapharm led evidence from Professor Day and Professor Mitchell, and senior counsel for Alphapharm cross-examined Professor Montgomery, in each case with a view to showing that the post-priority date clinical studies on which Professor Montgomery relied did not necessarily show the clinical superiority of escitalopram, at least to the extent claimed. Alphapharm's basic submission, however, was that Professor Montgomery's evidence of that kind was irrelevant to obviousness. I agree with Alphapharm for the reasons I give at Section N [741] ff below. Therefore expert evidence led by Alphapharm directed to countering that of Professor Montgomery as to what post-priority date studies proved, is likewise irrelevant. I will first outline their general nature. In the present context, it is, like fractional crystallisation, a technique for directly resolving a racemate itself into its enantiomers. HPLC is an enhanced version of liquid chromatography . In liquid chromatography, material such as silica (the stationary phase) is packed in a glass tube or column, and a solvent containing the product of interest (the mobile phase) is allowed to flow through the column according to gravity. Rather than relying on gravity, in HPLC pressure is applied to push the solvent through the column. The time taken for individual molecules within the mobile phase to move through the column depends on the interactions between them and the material in the stationary phase. Retention of any one molecule in that phase depends on its own specific chemical or physical properties. HPLC is either analytical , if the aim is merely to ascertain what molecules are present in a given mixture, or preparative , if the aim is to isolate a certain quantity of an end product. In working with HPLC, one can manipulate the number of parameters in an attempt to improve the outcome of an experiment. The parameters include the solvent to be used, temperature, pressure, flow rate, pH, and the stationary phase to be used. Enantiomers cannot be separated on standard HPLC columns, because their physical and chemical properties are identical (apart from their property of rotating plane-polarised light in opposite directions). The use of chiral HPLC columns, on the other hand, where the stationary phase comprises a chiral material, allows the resolution of racemates based upon the different three-dimensional interactions of the respective enantiomers with the chiral stationary phase. One option was to devise an entirely new synthetic route using single enantiomers of a chiral starting material and proceeding in a fashion designed to avoid destroying the chiral centre. Another option was to take a precursor chiral molecule in a known synthetic route, resolve that precursor into its component enantiomers and then perform the remaining synthetic steps on only one of the separated enantiomers of the precursor in a fashion designed not to upset the configuration of the chiral centre. At least this can be said: the technique was contrasted with the resolution of citalopram into its enantiomers by fractional crystallisation or chiral HPLC. The terminological confusion appears to have arisen because the expression, according to the description given by Professor Robertson in the preceding paragraph, may include a reference to an initial step of resolving a precursor into its enantiomers, before the "remaining synthetic steps" are performed. There are two important points to note about stereoselective synthesis for present purposes. First, an appropriate starting molecule must be chosen. That molecule, if racemic, must be capable of being resolved into single enantiomers. Second, it must be possible to perform synthetic steps to move from these enantiomers to the enantiomers of citalopram whilst retaining stereoselectivity, that is to say, avoiding re-racemisation. The starting molecule of most relevance to this case was the "precursor diol" (also referred to as the "intermediate diol"). The precursor diol was the penultimate step in the making of citalopram. The process comprising resolution of the precursor diol into its individual enantiomers, and then movement from those enantiomers to the individual enantiomers of citalopram (via stereoselective ringclosure) is Reaction Scheme II disclosed in claim 6(b) of the Patent. This process was referred to as the "diol route" or "precursor diol route". He explained that Alphapharm was therefore focussing on claim 6(b). The most contentious issue was whether the hypothetical team would have been led as a matter of routine with an expectation of success to try to obtain the individual enantiomers of citalopram by stereoselective synthesis of the precursor diol. This involves a number of questions: Was stereoselective synthesis a technique that was part of the common general knowledge in 1988? If so, would the ordinary skilled chemist have come up with the precursor diol as candidate starting material? If so, would the ordinary skilled chemist have, as a matter of routine with an expectation of success, tried to obtain the individual enantiomers of citalopram by means of the diol route? Another issue that arose was whether the hypothetical team would have been led as a matter of routine with an expectation of success to try to obtain the individual enantiomers of citalopram by use of chiral HPLC. It appeared to be common ground that if chiral HPLC had been an obvious and straightforward method of resolving citalopram itself, claim 6 of the Patent would not have involved an inventive step. This second issue also involves a number of questions: Was HPLC part of the common general knowledge in 1988? If so, would the ordinary skilled chemist have, as a matter of routine with an expectation of success, tried to obtain the individual enantiomers by means of chiral HPLC? Professor Davies was, I think, was in a better position to take into account, and he did better take into account, the position of the non-inventive skilled addressee in 1988 before the priority date. Professor Banwell was able to suggest courses of action that might be worthwhile to try, but he did not to point to instances of their success. A valid criticism that Lundbeck levels at Professor Banwell's testimony is that often when challenged, his response was that he thought that somewhere in the literature there was some support for pursuing a particular line that he was advocating. For example, in relation to catalytic enantio-selective synthesis (one method suggested by him for obtaining the individual enantiomers of citalopram), Professor Banwell was asked which syntheses he had in mind, and he replied "essentially nucleophilic additions of two ketones in the presence of chiral entities, for example". But when Professor Davies said he knew of no such processes that had succeeded in making a diaryl tertiary alcohol, Professor Banwell could only respond: "I think there are some examples, and there's enough literature out there to encourage one to pursue that possibility". Professor Banwell had not himself assayed the task. In cross-examination he said that he was not able "off the top of my head" to identify anywhere in the literature the manufacture of a tertiary alcohol where the ketone---starting material was sandwiched between two aromatic rings. When further pressed, he said that he had not scrutinised the literature to check whether a tertiary alcohol had ever been manufactured in those circumstances. He also agreed that he had not plotted out each step of the enantio-selective synthesis that was depicted by his retrospective analysis. Another aspect of Professor Banwell's testimony on the present issue that I sometimes found unsatisfactory was his frequent references to what a medicinal chemist would "consider". It was not clear that he was saying, or that his experience qualified him to say, what a medicinal chemist would actually have done as a matter of routine, which, in the present case, is the critical issue. It does not satisfy the Australian test of obviousness to be able to suggest courses of action that might be "worth a try" or "obvious to try". In order to give persuasive opinion evidence on that issue, an expert would have to possess a good grasp of the position "on the ground" in 1988, including knowledge of the risk/cost balance as it was perceived by those in the field. It appeared to me that often Professor Banwell was rationalising retrospectively from present day theoretical positions. Professor Davies, on the other hand, was able to test suggested courses of action by reference to experience in the real world, and the real world of 1988 in particular. In my assessment, Professor Davies demonstrated a greater appreciation of the need to concentrate attention on the position that existed in 1988, and of the need to avoid the contamination of hindsight. Professors Banwell and Davies were asked in relation to the obtaining of individual enantiomers from racemates in general , what methods or techniques were generally available and to what extent they were used as at 14 June 1988. They agreed: Asked whether the first technique chosen would be chiral HPLC in the case where the racemic mixture was an oil, the Professors disagreed. Professor Banwell said "Yes", while Professor Davies said "No". Professor Banwell explained that the use of chiral HPLC avoids any chemical steps including ones such as salt formation, which, in the case of citalopram, would risk causing racemisation. He said that even though only small amounts of the enantiomers might be expected, if these were crystalline the quantity could be amplified by using them as seeds for fractional crystallisation of the racemate. For his part, Professor Davies said that which method, if any, would work was not predictable. Chiral HPLC would not give useful amounts of single enantiomers, and amplification of very small amounts was not a reasonable expectation. Professor Davies thought that where applicable, diastereomeric salt formation was a reasonable technique to try first since the salt was likely to be a solid that might be amenable to fractional crystallisation. If racemisation was a problem on the conversion of the salt back to the free base, it would certainly also be a problem under the conditions in the stomach. Asked specifically about the various ways of obtaining the enantiomers of citalopram as at 14 June 1988, Professors Banwell and Davies were agreed that the approaches would include trying to resolve citalopram itself by an appropriate method. If this proved impossible, resolution of "one of several possible suitable precursors" would be attempted. They were agreed that a "suitable precursor" would be one giving a reasonable expectation of subsequent conversion to citalopram without racemisation. Professor Banwell thought the diol precursor the "obvious choice" as it had "two extra handles [a reference to the "sticky handles" --- see [231] above] in addition to the amine that should make its resolution easier and subsequent conversion to citalopram by an S N 2 pathway should be easy". Professor Davies, on the other hand, considered the diol precursor to not be the obvious choice because conversion to citalopram without racemisation would not be expected. He emphasised that resolution methods are not predictable and that only one "handle" is needed to make diastereoisomers, so that the presence of more than one handle is irrelevant. In any event, Professor Davies considered that the diol precursor effectively had only one extra handle since the tertiary alcohol was chemically unsuitable for forming diastereomers. The final question in the Joint Report relating to the method claim concerned ring formation (ring closure). Asked what mechanism and stereochemistry of ring formation was understood at 14 June 1988, Professors Banwell and Davies agreed that: basic mechanisms and stereochemical consequences of S N 1 and S N 2 reactions were well established and not in dispute; the trajectory of the nucleophile relative to that of the leaving group in an S N 2 reaction did not have to be strictly 180°, although deviations would slow down the reaction; and fully saturated systems readily close to five membered rings incorporating oxygen (tetrahydrofuran rings), since they can achieve a close to 180° trajectory without the introduction of strain or significant eclipsing interactions. The relevance of this is that the diol route involves ring closure in an unsaturated system. For his part, Professor Banwell thought that chemists would assume, by analogy with a fully saturated system readily closing to a saturated five membered tetrahydrofuran ring, that closure of an unsaturated system to a dihydrofuran (that is, the dihydroisobenzofuran of citalopram) would also be easy. Professor Davies, on the other hand, considered that chemists would not expect closure of an unsaturated system to a dihydrofuran to be easy, since it would involve significant eclipsing interactions and a trajectory close to 180° would not be readily achievable. Such interactions would be expected to prevent ring closure or to slow it down to such an extent that other reactions such as polymerisation would compete. Professor Davies referred to statements in the scientific literature to the effect that such ring closures are "difficult" and "slow". Both Professors agreed that trying the S N 2 ring closure on the racemic precursor diol would have shown whether the ring formation was feasible but would not have informed on the overall stereochemical outcome of the process. Professor Banwell conceded that it was necessary to make a correction to a statement made in one of his affidavits. He had there stated that a paper by Bigler et al (AJ Bigler, KP Bøgesø, A Toft and V Hansen, "Qualitative structure-activity relationship in a series of selective 5-HT uptake inhibitors", European Journal of Medicinal Chemistry --- Chimica Therapeutica (1977) vol 12 (3), pp 289-295) described the diol precursor to citalopram, but in the Joint Report he acknowledged that it did not do so and therefore did not teach that the enantiomers of the diol precursor were capable of existence or that they had already been prepared. For example, there was debate over whether ordinary chemists would have first considered resolution of the racemate directly (by, for example, fractional crystallisation or chiral HPLC) or whether they would have first considered using stereoselective synthesis. It will be recalled that Dr Bøgesø first attempted to resolve citalopram directly, but being unsuccessful, considered alternative routes. Dr Bøgesø considered attempting to obtain the individual enantiomers of citalopram using the precursor diol. He stated that he thought of that course "before 1984, 1983, 1982". I recounted earlier (at [259] ff) the reasons why he did not pursue it at that time. Instead he considered using HPLC and derivatives of citalopram, and did so. Professor Davies said that resolution of citalopram itself would have been an obvious starting point. It has a handle on it, to use Professor Banwell's terminology "handle", where you have an amine that could form diastereomeric salts. I think that would have been an obvious place to start. There's no need to do any further chemistry to get the citalopram enantiomers, other than release it from an amine ammonium salt, which is a very simple operation that, in my view, has little or no risk of causing racemisation. If you've managed to resolve them, you could easily find ways to release the citalopram molecules. So I start with that. It would then be a matter of choosing an appropriate starting material. However, Professor Davies stated that, when considering stereoselective synthesis, the precursor of first choice would not have been the diol. Professor Davies identified the various precursors that a skilled addressee in 1988 would have preferred to the diol and gave the reasoning processes that they would have engaged in. This would suggest that, like Professor Davies, Professor Banwell would have considered resolution of a precursor followed by conversion into the target compound only after attempts to resolve citalopram directly had failed. Unlike Professor Davies, Professor Banwell considered that the precursor diol was "an obvious" precursor to choose. In his affidavit, Professor Banwell said that Alphapharm's solicitors, Mallesons Stephen Jaques (Mallesons), provided him with a structural formula of an unidentified compound (in fact it was citalopram, although he was not told so) and that the first approach he articulated to obtain its enantiomers was to consider using the precursor diol molecule. Indeed, he drew the precursor diol molecule on a whiteboard in Mallesons' office, and that was prior to his seeing Formula II of the Patent specification. It should be noted that Professor Banwell's evidence in relation to the question posed to him by Mallesons in their office was not entirely clear. He said that after some discussion, he was asked whether there would be "a logical precursor to [the] molecule" and "whether there was a suitable precursor that might be available that might be amenable to resolution". This suggests that he was being asked to address himself specifically to precursors. Elsewhere, however, he suggested that the question put to him was simply how to obtain pure enantiomers of the molecule. Once he identified the diol in answer to the question posed to him (whatever it may have been), he was not given the opportunity to elaborate on it or to consider or suggest alternatives. Professor Banwell was cross-examined on a draft of his affidavit. He amended a draft that described the diol precursor molecule as "the first approach ... to consider" (in the context of discussing identification of suitable precursors), so that it was to read "a possible first approach ... to consider". He agreed that when considering precursors, "other first approaches" were also possible: he was not prepared to commit himself to the precursor diol as "the" first approach that would have been taken. I accept that the hypothetical addressee or team would first have tried as a matter of routine fractional crystallisation of the racemate. The evidence is that this would not have succeeded, and so they would have considered trying to obtain the enantiomers by other means. This was the evidence of Professor Davies. Professor Banwell seemed to support that approach at one stage, although ultimately I think he did not. I accept that the ordinary skilled team would have embarked on a research project. Such a project would have incorporated a number of strategies for resolving citalopram, including the use of a suitable precursor. It was not disputed by Professor Davies that, if resolution of citalopram itself did not succeed (it did not), the ordinary skilled chemist in 1988 would have thought about or considered resolution of the diol and obtaining the individual enantiomers of citalopram from the individual enantiomers of the diol. The more important question for present purposes is whether, having considered use of the precursor diol (whether after failing in their attempts to resolve citalopram directly or to obtain the enantiomers through other methods), the ordinary skilled addressee or team would have chosen the precursor diol as appropriate starting material and would have tried, as a matter of routine and with expectation of success, to obtain the individual enantiomers of citalopram by means of the diol route. Professor Davies's evidence is that they would have rejected use of the precursor diol because both its resolution and the ring closure stage would have posed difficulties. He added that such a student would then search to see if the precursor molecule had already been made and, if so, prepare or perhaps purchase some as a starting point for resolution. If the material had not been reported in the literature, he accepted that a method for its preparation and resolution would need to be devised. Professor Banwell conceded that in June 1988 it was not known that the enantiomers of the diol precursor of citalopram were capable of existence or that they had already been prepared. Professor Banwell thought that the extra "handles" of the precursor diol would allow for ease of resolution of the diol. He suggested that the "added functionality within the diol precursor ... allows for hydrogen bonding possibilities that might assist with crystallisation". However, when asked for any evidence he had that the making of "lots of hydrogen bonds" would make crystallisation easier, he could only reply "I think there's evidence out there that that is the case". Unlike Professor Banwell, Professor Davies did not accept that having more than one "handle" was an advantage. Professors Banwell and Davies were agreed that an S N 1 reaction would be followed by racemisation, complete or partial. Therefore, it was only if an S N 2 reaction took place that stereoselective ring closure would occur. Professor Davies rejected the view that in 1988 it could have been predicted with any confidence that the precursor diol route would have led to successful ring closure without racemisation. He considered that the ring closure of the diol intermediate without racemisation was very surprising. Analysis of the stereochemistry (the spatial arrangement of the atoms in a molecule) was one of the ways of predicting whether a stereoselective S N 2 reaction would occur. Professor Davies stated that the ordinary skilled chemist would not be able to tell that the ring closure in the precursor diol would undergo an S N 2 reaction pathway without undertaking experimental work. Professor Banwell, on the other hand, was of the view that an analysis of the stereochemistry of the precursor diol would have suggested that ring closure would occur by way of an S N 2 reaction. Professor Davies explained in detail why a chemist of ordinary skill in 1988 would not have predicted that an S N 2 reaction would be successful in leading to the obtaining of the individual enantiomers, both in his affidavits and in oral evidence. He said that analysis of the stereochemistry (that is, the spatial arrangement of the atoms) of the precursor diol would lead to a conclusion that it was unlikely that an S N 2 reaction would be successful, so that a chemist of ordinary skill would not have pursued the diol route. Professor Davies gave reasons why an S N 2 proposal would give rise to "very bad eclipsing interactions", which, it will be recalled, are the disfavoured conformation. He said that the conformation would not achieve anything approaching the 180° angle (cf the pen and pen cap analogy mentioned at [238] above) required for an S N 2 reaction. "Baldwin's Rules" (which took their name from Professor Sir Jack E Baldwin, Professor Davies's predecessor as Waynflete Professor of Chemistry at Oxford University) were used to predict the favouring or disfavouring of a ring closure, and were accepted to form part of common general knowledge at the priority date. Professor Davies was at pains to emphasise that those rules could not be relied on as predicting an S N 2 reaction. The reason, he explained, is that according to those rules, in order for the S N 2 reaction to occur, the terminal atoms must be able to achieve the required trajectories of 180° or near to that. There was some debate about the extent of deviation from the ideal 180° angle that could occur so that an S N 2 reaction might still proceed. While the favourable configuration can occur in a saturated system, the precursor diol is an unsaturated system. The debate between Professors Banwell and Davies over the present issue led to their agreeing to disagree. I think Professor Davies's cap-and-pen analogy is a very good one for teaching undergraduates about S N 2 reactions, but the reality, in my view, is that the cap of the pen has a much wider mouth and the diameter of the pen is narrower and, in that sense, there's quite a lot of play in terms of the precise trajectory that the pen can adopt, the thin pen can adopt, in entering the wide cap, would be my response to that. Professor Banwell stated that the introduction of substituents changes things dramatically, as would have been predicted by "anyone working in the area of ring closure or in any synthesis area". He said that the introduction of substituents, and the subsequent analysis of such a system, "would have encouraged one to pursue the S N 2 process". Professor Banwell did not consider that standard stereoelectronic considerations suggested that the reaction was highly disfavoured. In his analysis of such a system undergoing an S N 2 reaction, Professor Banwell called in aid an "MM2" analysis of the ring closure step. He had made his MM2 calculations on his laptop computer in Sydney on the Sunday afternoon before he testified, and produced them at the hearing. Professor Davies was confronted with them for the first time in the witness box. He gave his initial response to them then and elaborated on that initial response after he had had the opportunity to consider them further overnight. Professor Davies said that an MM2 calculation was not something done in 1988 by "people of ordinary skill" or "chemists who were making decisions". Rather, Professor Davies said that it was done only by "specialist departments in companies, if they had them". Ultimately, Professor Banwell accepted that the computer program he had used to undertake his MM2 calculations, called "Chem 3D", had not been created by 1988. He agreed that in 1988, the required calculations could have been performed only by the use of a digital VAX mainframe computer. He agreed that the average medicinal chemist would not have had direct access to such a computer, and would have needed to collaborate with others in order to have the calculations performed. While Professor Banwell insisted that collaborations took place in 1988, it is difficult to avoid the impression that his approach was contaminated by the "benefit of hindsight". It does not follow that because a calculation could be done comparatively easily by Professor Banwell on a laptop computer in a hotel room in 2007, it would have occurred to the hypothetical skilled but non-inventive chemist in 1988 to have the calculations performed through a collaboration. I do not accept that it would have been a matter of routine in 1988 for medicinal chemists to have performed Professor Banwell's MM2 calculation. In any event, the most Professor Banwell was able to say was that MM2 analysis and calculations would have "perhaps encouraged" confidence that the S N 2 reaction would occur. The areas of disagreement between Professors Banwell and Davies were explored extensively both in their session of concurrent testimony and in cross-examination. I need not discuss that evidence in any further detail. I am not persuaded that a chemist of ordinary skill in 1988 would have predicted that an S N 2 reaction would occur. The precursor diol comprises an unsaturated ring, and in these circumstances pathways alternative to ring closure would be predicted to be favoured. It was not obvious that closure of the ring by an S N 2 reaction would have been favoured. In this respect, the skilled addressee would have taken into account the fact that the system he or she was dealing with was unsaturated, not saturated. On the basis of the evidence of Professor Davies, I accept that successful ring closure and avoidance of racemisation would not have been expected as a matter of course and would have been, as it was in fact, a (more than) pleasant surprise. It will be recalled that Dr Bøgesø and his colleagues considered but rejected the procedure of resolving the diol, precisely because they feared that ring closure would not be achieved and that racemisation would occur. Dr Bøgesø also referred to other reasons why he and his colleagues did not initially pursue the diol route (see [259] ff above). I accept his evidence. Alphapharm relies on Professor Davies's agreement in the Joint Report that, as at 14 June 1988, analytical-type chiral HPLC was one method available for trying to obtain single enantiomers. This common ground does not advance matters far. The determinative question is, once again, whether actual use of chiral HPLC to obtain the individual enantiomers of citalopram was a matter of routine. I will address the evidence of each of the relevant witnesses in turn. Professor Day's research team had used HPLC to separate the enantiomers of ibuprofen. He had written about the use of HPLC with an optically active stationary phase ("Liquid Chromatographic Determination and Plasma Concentration Profile of Optical Isomers of Ibuprofen in Humans" [1984] J Pharm Sci vol 73 no 11, 1524-1544). In cross-examination, Professor Day confirmed that his team had acquired the enantiomers of ibuprofen from a commercial source, and that they administered both the racemate and the enantiomers to humans. After administering the racemate, they measured the individual enantiomers, which involved separation (so that they could be told apart). The work of separation was performed by Professor Day's team. They used an achiral analytical column (not a chiral HPLC column). Professor Day explained that it was not "a production line as part of the development of a product" but was "simply measuring and quantitating the amounts of these enantiomers following giving the racemate". He said that his team "derivatised the enantiomers with an optically active reagent and ... used a column to separate the individual enantiomers" I do not find Professor Day's evidence persuasive on the precise issue of whether HPLC would be likely to have been used as a matter of routine to separate the enantiomers of citalopram or those of a precursor of citalopram. Although an impressive witness, Professor Day: Professor Robertson also knew about HPLC. He said that the methods available in 1988 for resolving a racemate included chiral thin layer chromatography and chiral HPLC. He said, however, that both were evolving sciences and that the equipment available was limited, and in some cases in the developmental stage. As noted earlier, Mr Gundertofte was familiar with the chiral HPLC technique and used it at Lundbeck in the early 1980s. He gave an external presentations concerning HPLC, before publishing his article in Dansk Kemi in 1985. As previously recounted, his attempts to resolve citalopram by the use of chiral HPLC were unsuccessful. Professor Banwell was aware of the seminal contributions to HPLC techniques, prior to the priority date, of Professor W H Pirkle of the University of Illinois at Champaign-Urbana. Professor Pirkle introduced the first commercially available HPLC chiral stationary columns in the early 1980s. Professor Banwell said he recalled reading review articles in and around 1986 in the Journal of Chromatography , in which the use of chiral HPLC and the availability of chiral columns were discussed. Tertiary amines pose a problem for us and many of your compounds fall into this category. Moreover, if your aim is preparative resolution, then be aware that we do not have as many varieties of preparative columns as we have analytical columns. Most of your compounds do not have the proper combination of functional groups to allow them to be separated on our columns. We can try, of course, but expect limited success. In the concurrent testimony session, Professor Banwell adhered to the view he had expressed in the Joint Report that chiral HPLC was preferable to other techniques of obtaining the individual enantiomers, including fractional crystallisation, because it avoided the necessity of doing any chemistry, including salt formation. Professor Banwell acknowledged, however, certain difficulties associated with HPLC. They included, but were not limited to, the following: Another difficulty was acknowledged in the Joint Report. It will be recalled that it was agreed in that report that analytical type chiral HPLC, if successful, would yield only very miniscule amounts of the resolved enantiomers. That is a tenth of a gram of material, so it is a small amount of material. You take 5 micrograms of the racemic material. Then, if it is a perfect separation and you can collect absolutely everything of your separate enantiomers, you are only going to get 2.5 micrograms per run, and that is 0.0025mg every time you do it. So to collect 100mg, you have to do 40,000 runs. A typical time to do a run is about half an hour, and, on that basis, in order to get 100mg, it is going to take you more than two and a quarter years, assuming that you run the column 24 hours a day, seven days a week for that entire time ... So that is just to make 100mg. If you were prepared to take less, 10mg would still take you 83 days, and 1mg is going to take you 8.3 days, but at 24 hours a day for seven days a week. If you want to go on and do something else with these materials --- for instance, make crystalline derivatives of compounds that have never been made before --- then I would suggest you need 100mg. That would be the type of amount you are looking for. This is a completely impractical technique to go for that. Even at 10mg, 83 days sitting there doing nothing all that time is not a practical way to produce any material through this type of technique. From the evidence, it appears that the medicinal chemist would have known of analytical chiral HPLC, and would have known of the Pirkle columns that had become commercially available. He or she would have known, however, that even analytical chiral HPLC was the subject of continuing research and did not promise success in respect of any particular racemate. The hypothetical addressee or team would certainly not, in light of the difficulties of using HPLC, as a "matter of routine", have thought of preparative chiral HPLC as a means of resolving citalopram into its enantiomers. It was therefore not a technique that prevented the method of claim 6 from involving an inventive step. I am not satisfied that the hypothetical addressee or team would, as a matter of routine, have either (a) resorted to the precursor diol, or (b) used the technique of chiral HPLC to resolve either citalopram itself or any racemic precursor of it. While the evidence that was before Kitchin J in Generics v Lundbeck was clearly different from that which was before me, I assume that the evidence of the course of experimentation that was followed at Lundbeck was similar. Only if this failed might he then consider alternative methods such as using enantiomerically pure precursors. But here his anxiety would be that subsequent reaction steps might result in the production of an enantiomerically impure final product. As I shall explain, scientists at Lundbeck attempted to resolve citalopram by classical resolution techniques using diastereoisomers, by using new resolving agents, by attempting to resolve derivatives and by using techniques of asymmetric synthesis, all over the period 1980 to 1988. In addition, they attempted to resolve citalopram using analytical chiral HPLC from 1983 to 1987. None of these techniques were successful. The claimants accepted that citalopram is not easily resolved by making diastereoisomers. However, they submitted the skilled addressee would not regard failure in relation to this molecule as the end of road. I accept that this was so. But the work Lundbeck undertook illustrates that the road to which the claimants referred was long and uncertain. However, the "matter of routine" test can be applied to product claims. The question to be asked is whether it would have been a matter of routine for those skilled in the art to adopt the goal of obtaining the enantiomers of citalopram for use of one of them as a drug for the treatment of depression. In Astra , the High Court described (at [53]) the reformulation of the "Cripps question" by Graham J in Olin at 187-188. Their Honours stated that that approach should be accepted. Professors Banwell and Davies were asked: "What were the motivations (chemically and academically, but excluding regulatory) for obtaining the enantiomers of a known racemate? " The two Professors agreed that academic curiosity could provide such a motivation, "provided some purpose, such as proving a hypothesis, would be served by so doing" . They also agreed that "[n]othing [was] guaranteed in synthesis, including the ability to obtain single enantiomers of a racemate". The Joint Report recorded, however, a point of disagreement. Professor Davies said that citalopram would be expected to racemise under the acid conditions (pH3, 37 o C) of the stomach, and therefore there would be no real motivation to obtain the single enantiomers of citalopram. Professor Banwell agreed that "some leakage of the enantiomer stereochemistry towards the racemate" might be expected in the stomach, but considered that "the conditions described (884 Patent) for the acid catalysed ring closure of the diol precursor to citalopram (70% sulphuric acid, 80 o C, 3 hours) suggest complete racemisation [was] unlikely". (The reference to the "884 Patent" was a reference to the US Diol Patent. It was a "tricky" task, as Morrison and Boyd wrote, to obtain the enantiomers of a racemate. Research, time and cost promised to be involved, as Dr Bøgesø and Mr Gundertofte found. There was not at hand a straightforward, inexpensive method that would immediately give results. This background tells, thought not conclusively, against the suggestion that the ordinary skilled but non-inventive chemist would have seen as obviously desirable the obtaining of the enantiomers of citalopram. Furthermore, Lundbeck contends that in the specific case of citalopram, a highly selective SSRI drug with no evidence of toxicity, there was no specific motivation to obtain individual enantiomers. I will consider each of Alphapharm's suggested grounds of motivation in turn, before considering the general (lack of) interest in the pharmaceutical industry and the specific case of citalopram. Professor Day's nine possibilities were: both enantiomers may have nearly identical efficacy and toxicity; both enantiomers may have the same pharmacological effects but one may be more potent than the other; one enantiomer may possess virtually all of the pharmacological activity while the other is essentially inactive ("ballast"); one enantiomer may possess virtually all of the pharmacological activity while the other is essentially inactive, but that other may be toxic; both enantiomers may be pharmacologically active, but have qualitatively different therapeutic effects, for example both are agonists at different receptors, antagonists at different receptors, or agonists and antagonists at the same receptor; both enantiomers may be pharmacologically active but in a counter-active manner, for example one enantiomer might be binding to the receptor and the other might be binding to a different allosteric site, which affects the binding of the first receptor, potentially affecting the potency of the other enantiomer; the racemate may be superior to the single enantiomer; one enantiomer may be inactive but is converted into an active form in the body; and the disposition of the drug in the body may be stereoselective because when the drug is metabolised in the body, the enzymes themselves might be stereoselective. I also note the work of Professor E J Ariens of the Institute of Pharmacology and Toxicology, and Department of Clinical Pharmacy, University of Nijmegen, The Netherlands. Professor Ariens was writing in 1983 and 1984, urging that more attention be given to isolating enantiomers so that the supposedly inactive one might be discarded. His point was that one was not necessarily inactive and might in fact be contributing to side effects. In the summary at the start of his article "Stereochemistry, a Basis for Sophisticated Nonsense in Pharmacokinetics and Clinical Pharmacology " Eur J Clin Pharmacology (1984) vol 26, pp 663-668, Professor Ariens stated: "The therapeutically non-active isomer in a racemate should be regarded as an impurity (50% or more)". Professor Day emphasised that even once the effects of the individual enantiomers were determined, the decision whether to abandon a drug entirely (assuming it was not suitable in its racemic form) or to try to develop the single enantiomer was a complex matter for decision. While I accept that it was part of the common general knowledge that one enantiomer might possess all of the pharmacological activity of the racemate, as previously noted I am not persuaded that it was part of common general knowledge that obtaining the enantiomers might offer more than the same therapeutic effects for half the dosage. In any event, even if Professor Day's nine possibilities formed part of common general knowledge, they do not suggest that it was part of that common general knowledge that obtaining an individual enantiomer was an "obviously desirable result" as Alphapharm must establish. Professor Banwell stated in his affidavit that he recalled lecturing to undergraduate students prior to 14 June 1988, using the thalidomide case to exemplify the significant impact that chirality can have on the biological action of an organic molecule containing a single centre of chirality. He explained that thalidomide was a pharmaceutical drug, administered as a racemate, that had been prescribed for treating morning sickness in pregnant women. In the early 1960s the drug was reported to cause birth defects in babies, and as a result of the disaster stricter drug testing was introduced. Professor Banwell explained that it was later discovered that one enantiomer of the drug was safe while the other caused teratogenic effects (that is to say, damaged the embryo). As a consequence, Professor Banwell explained, the isolation of single enantiomers became an increasingly significant research focus around the world, and the possibility that different enantiomers might behave differently in the human body became an issue of major concern to drug developers. Professor Day said that thalidomide was used during the period from 1957 to 1961 and it was later discovered that one of its stereoisomers was safe while the other had the teratogenic effects. In his Dansk Kemi article published in February 1985, Mr Gundertofte stated that all teratogenicity was found in (S)-thalidomide. Professor Davies accepted that in a general sense, awareness of the thalidomide problem gave rise to an awareness of the significance of enantiomers that led to debate as to the need for regulation, although he said that resolution of thalidomide into its enantiomers would not have made any difference because it "still couldn't have been administered to humans because it racemises and you [would] have still seen the teratogenic effects". I accept that the thalidomide disaster stimulated interest on the part of pharmaceutical companies and regulators in the resolution of racemates and in the roles that the respective enantiomers had had in the adverse effects caused by that drug. However, I do not infer that in 1988 they felt impelled towards resolution of racemic drugs, or, in the case of the regulators, towards insisting upon resolution of them. At the priority date there was no regulatory requirement that a racemate be resolved into its enantiomers. In a Guideline published in February 1987, Guideline for Submitting Supporting Documentation in Drug Applications for the Manufacture of Drug Substances , the US Food and Drug Administration (FDA) stated that drug manufacturers would "ideally" undertake to obtain the various individual potential stereoisomers. However, manufacturers were not required to follow the guideline. Professor Day gave evidence that "the effect [of the Guideline] would be that [a pharmaceutical company] would [resolve the enantiomers of a racemate] unless [it was] a little bit lax in attending to [its] duty". He noted that, given the length of time taken to register a drug, it "would be a risky business not to take close note" of the suggestion, even though it was not mandatory to do so. Professor Banwell said that in 1988 he had heard that there was debate going on around the world as to whether regulators should require companies to produce the individual enantiomers. He said he "sensed [it] was impacting on companies [he] was collaborating with". It is difficult to know what to make of this evidence. First, it is at a level of generality. Second, it is not as though Professor Banwell was a consultant to any pharmaceutical company in or before 1988. From 1982 to 1986 he was a Lecturer in Chemistry at the University of Auckland in New Zealand, and in 1986 accepted appointment as Lecturer in Organic Chemistry at the University of Melbourne down to 1989 when he became a Senior Lecturer in Organic Chemistry at that University --- a post he held from 1989 to 1992. I have referred earlier to the limitations on Professor Banwell's experience in relation to the actualities of the pharmaceutical industry. No doubt he would have conversed with the chemists of any pharmaceutical company with which his university team collaborated, but this is a rather weak foundation for evidence of the present aspect of common general knowledge. Professor Davies was at pains to distinguish between the position in 1988 and that which developed in the early 1990s, after the first FDA regulations in relation to testing enantiomers came into force. He conceded that there were, by 1988, a few individuals who were suggesting that racemic drugs should be sold only as enantiomers, but he said that that was then a relatively recent and minority view. Rather, while it had been known for some years previously that the two enantiomers of a particular biologically active racemic compound could exhibit different levels of activity, this was not a concern as long as the racemate had been shown to be safe and efficacious in clinical trials in humans. There is a question whether the content of the US FDA Guideline had become part of common general knowledge by 14 June 1988. Even if it had, I am not satisfied that it would, by then, have provided a motivation of any significance for the resolution of a racemic drug such as citalopram, that appeared to be both very effective and non-toxic. In this context, Alphapharm described the strategy as "chiral switching". Alphapharm referred to: I do not think, however, it is proved that commercial and patent-related considerations gave rise in 1988 to a motivation among skilled non-inventive chemists to resolve racemates in general or citalopram in particular. Moreover, the relevance to obviousness of some of the considerations relied on by Alphapharm was not made clear. This is not to say that Lundbeck was unaware of any potential commercial and patent-related benefits associated with resolving racemates. In the annual report for 1988 of its Medicinal Chemistry Department, which reported success in obtaining the individual enantiomer by the use of the precursor diol, the statement was made: "Furthermore, our opportunities for extending the "lifetime" of citalopram were increased". My particular expertise was in all aspects of the control of stereochemistry. However, while I was consulted on (amongst other things) the preparation of racemic diastereomers, I was not consulted on the preparation of single enantiomer compounds during the 1980s to any real extent. In my experience there was little interest in industry at this time in the resolution of racemates. Molecules that were first made as racemates, tended to proceed as racemates through development, whereas molecules that were first made as individual enantiomers (those based on naturally occurring homochiral molecules) proceeded through development as the single enantiomer. The reason for this attitude was that the additional expense and difficulty of resolution of racemic materials meant this exercise was not worthwhile, as evidenced by the fact that in the 1980s the industry was selling many more synthetic pharmaceutical compounds as unresolved racemates rather than single enantiomers. This attitude began to change in the early 1990s, primarily because the US Food and Drug Administration (FDA) (and sometime later, the European regulatory authorities) were becoming interested in racemic drugs from a regulatory point of view, and it was apparent that regulatory guidelines and requirements concerning such drugs were likely to be introduced. In the early 1990s it was recognised in the industry that those requirements were likely to include the obligation to provide some data relating to the individual enantiomers of a racemic drug. As a result, I perceived that there would be an increasing need in the pharmaceutical industry for a centre of excellence in the area of the preparation of enantiomers. Along with others, I therefore founded Oxford Asymmetry Ltd in 1992, which became a division of Oxford Asymmetry International plc. The mission of Oxford Asymmetry Ltd was to provide pharmaceutical companies with homochiral compounds of interest on any desired scale, from small amounts as a first preparation for biological evaluation, to commercial quantities. The company was engaged in the preparation of compounds with high enantiomeric purities. We were specialists in three principle methods for achieving this: using single enantiomer "chiral pool" starting materials, asymmetric synthesis; and chiral separations by various methods (resolutions). Oxford Asymmetry Ltd was one of the first companies in the world to specialise in producing synthetic homochiral compounds. Around the time my company was started, I recall talking to many of my clients in the pharmaceutical industry about my company and its capabilities. I recollect that the majority of my clients were very sceptical about the need for such a service, and I was told on many occasions that the industry simply did not need to resolve racemic compounds on a regular basis. Nevertheless, that the industry changed quite dramatically in the 1990s is demonstrated by the fact that the company grew from 3 employees to 250 employees by the time it was sold in 2000. Even though it is no longer our core business, my present company, Vastox, is, even today, retained to assist pharmaceutical companies in preparing compounds with high enantiomeric purities. He points out that the literature, understandably, did not record such failures. Professor Davies addressed this question specifically. .... as a result of my frequent contact with chemists in pharmaceutical companies conducting research to find a better drug, my experience in 1988 was that such chemists preferred to search by chemically modifying lead compounds (or other compounds), for example, by adding or deleting substituents, changing existing substituents and moving substituents around the molecule, in search of the right combination to increase activity and reduce toxicity. In this way, their aim was to improve the activity of the compound by orders of magnitude. It is perfectly possible to have a two dimensional non-chiral (or achiral) molecule which is active on the same arrangement of sites as a three dimensional, chiral molecule, assuming one can position the relevant functional groups in the right place. In my experience, chemists at that time preferred to find such an achiral derivatised molecule, rather than trying to resolve a racemate. If a company did contemplate resolution, there were very few experts in the 1980's in resolution techniques that it could turn to (although there might have been individuals with some experience within some companies' chemistry departments). Expertise in this art at that time was generally passed by informal exchange of information and experience within pharmaceutical companies. Clearly, he was not saying that there had been no attempts to obtain enantiomers before the priority date: Lundbeck itself had been trying to do just that for some seven or eight years in the case of citalopram. In cross-examination, Professor Day agreed with a view expressed in a 1992 FDA document to the effect that whether enantiomers should be developed had been, at least up to that time, largely an academic question because commercial separation of enantiomers from racemates was so difficult and expensive. While accepting that there is no way of predicting the ease or success of resolution, Professor Banwell stated that "there are methods for resolution available at modest cost that would be worth trying". Professor Banwell's evidence went only so far as saying that the relevant addressee would explore the possibility of resolution, with an expectation that the two enantiomers might have differing behaviours in biological systems. He did not go so far as to say that the skilled addressee would be led directly to desire to obtain the enantiomers in the expectation that one would or might well be more effective than the racemate. Professor Montgomery said that citalopram itself was highly selective. Lundbeck submits that this shows that there was no reason to embark on a costly and lengthy project to produce the enantiomers. Professor Davies said that citalopram worked with no adverse side effects, and so there was no motivation to resolve it. ... the medicinal chemist would have weighed up the usefulness of the desired result, if it were obtainable. In the case of citalopram, I have been given copies of and have read the following paper: Hyttel J "Neurochemical Characterisation of a New Portent and Selective Serotonin Uptake Inhibitor: Lu 10-171", Psychopharmacology 51, 225-233 (1977). From this review paper, I understand that citalopram as a racemate was undergoing clinical trials, including trials assessing it against other SSRIs. Citalopram was performing well in these studies (Hyttel 1977). Importantly, citalopram had very high selectivity as a serotonin reuptake inhibitor, by comparison to its activity at other amine uptake proteins (transporters). Furthermore, citalopram had a good safety and tolerability profile. As mentioned above, different enantiomers of a molecule may have 100. comparable or quite different activities. Sometimes one enantiomer is responsible for the therapeutic activity and the other is responsible for the reported side effects. However, with citalopram, there were no particularly troublesome reported side effects. Furthermore, the paper demonstrates that all of the SSRIs reported on have activity which is comparable with one another. None of them seems therapeutically to be considerably better than any of the others. If there appears to be no toxicity or other undesirable activity with a molecule, separating the enantiomers may have provided no useful benefit. A possible scenario therefore is that the individual enantiomers would have very similar activity. The other alternative was that one enantiomer had all or most of the desired therapeutic activity and the other enantiomer was essentially inactive. In such a case, resolution of the enantiomers might provide scope for administering only half the dose of a single enantiomer than is required of the racemic mixture for a given therapeutic effect. Although it was perhaps not unheard of for one enantiomer to act as an antagonist and the other enantiomer to act as an agonist at a specific receptor, it was very unusual. The usual result would be to discover that one enantiomer was a bit less active than the other or had improved selectivity for the target protein. Weighing all of this up, I would have rated the inclination for a pharmaceutical company to expend any considerable resources continuing to try to resolve citalopram in 1988 as low. Beyond trying fractional crystallisation of diastereoisomeric salts and perhaps some chiral HPLC, as I have described above, I believe that a medicinal chemist would have directed that the available resources be directed towards projects with a greater prospect of a useful outcome. This is precisely what occurred in the project in which I was involved, as described above, concerning the synthesis of prostaglandins and Pl 3 kinase inhibitors. When we could not readily resolve a racemate, even one that looked promising, the decision was made to move forwards with the racemate rather than to continue to try to resolve it into its component enantiomers. As the evidence of Dr Bøgesø and Mr Gundertofte shows, Lundbeck devoted some resources to the venture. However, the project appears to have been pursued as a part-time and intermittent activity by Dr Bøgesø, and later by Mr Gundertofte. I do not accept that their motivation was just "an academic and personal point of view", to use Dr Bøgesø's words, but nor do I accept that they or Lundbeck felt pressingly motivated. I am not satisfied that there was any significant felt need or desire to obtain the enantiomers of citalopram, which was known already to be a drug that was very selective in its activity. Professor Davies's argument seems to be that in 1988, it would have been part of common general knowledge that separating out the enantiomers would be futile because the individual enantiomer, when administered to humans, would have been expected to re-racemise in the stomach. Any benefit of administering an individual enantiomer, as opposed to racemic citalopram, would have been lost. Professor Davies's concern was apparently not shared by the Lundbeck scientists, who pursued resolution over a period of some seven to eight years. I do not think that the present issue is in any way determinative. However, on this issue, I prefer the evidence of Professor Banwell. He thought that some leakage of the enantiomer stereochemistry towards the racemate might be expected in the stomach, but that complete racemisation was unlikely. The notion of a "patentable invention" is defined in s 18. One essential criterion is that the invention "is a manner of manufacture within the meaning of s 6 of the Statute of Monopolies " (para (a) of s 18(1)). Accordingly, provided "newness" is alleged, the expression "manner of new manufacture" can be regarded as synonymous with "manner of manufacture," that is to say, the words "and includes an alleged invention" enable newness as an objective fact to be eliminated from consideration. In determining whether what is claimed fits the description of a "manner of manufacture", one must confine one's attention to the face of the specification: Philips v Mirabella at 663-664; Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19 ; (1998) 194 CLR 171 (Ramset) at [38] ; CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168 ; (1994) 51 FCR 260 ( CCOM v Jiejing ) at 291). The notion of a manner of manufacture does not incorporate considerations of novelty or inventiveness which are dealt with independently and comprehensively in s 18(1)(b), s 7, and the definitions of "prior art base" and "prior art information" in Sch 1: see Ramset at [30]-[34] (dealing with s 100 of the 1952 Act). Alphapharm submits that in relation to the new manner of manufacture criterion, the case is one of a "mere desideratum" (the expression "a mere method or mere idea or mere desideratum" was used in Burroughs Corporation ( Perkins's Application ) [1974] RPC 147). Senior counsel for Alphapharm frankly conceded that, in a sense, Alphapharm's submission in this respect rose no higher than its case on obviousness. Indeed, he conceded that it was more confined than that case because the character of a manner of manufacture must appear on the face of the specification, and common general knowledge cannot be taken into account as it can in the context of obviousness. In Philips v Mirabella , the High Court held that s 18(1)(a) refers to "a process which is a proper subject matter of letters patent according to traditional principle" (at 667). That "traditional principle" has been described as "the body of case law that has accumulated governing what kinds of things can be the subject of valid patents": Bodkin C, Patent Law in Australia (Thomson Lawbook Co, 2008) at [2040]. I must ask myself, therefore, whether the Patent specification, lays claim to an invention falling within or outside "traditional principle". The known substance was Citalopram. The known use of Citalopram was as a 5-HT reuptake inhibitor. Most of the particulars relate to the product claims: only particular (vi) relates expressly to the method claim. Alphapharm relies on the fact that the Patent specification refers to the US Citalopram Patent and the US Diol Patent and so imports their contents. In substance, Alphapharm submits that in the light of the importation of the content of the US Citalopram Patent in particular, the Patent specification does not claim a manner of manufacture but claims as a desideratum the (+)-enantiomer that was indirectly disclosed in the various Citalopram Patents. The enantiomer (+)-citalopram is, however, a new compound with properties previously unknown. The Patent specification does not acknowledge, expressly or by implication, that the (+)-enantiomer is a compound with known properties. On the contrary, it claims that the (+)-enantiomer is an independently existing molecule that has unexpected and surprising properties that could not have been predicted from the properties that citalopram was known to have. It is useful, I suggest, again to consider the analogies given at Section C [121]-[123]. The imperfection of the analogies is demonstrated in the context of manner of manufacture, because the colours blue and yellow (and the black stick figure) already exist and their properties are already known. While a method for extracting blue or yellow from green (or the black stick figure from the solid black square) might be valid as a method claim, a product claim to the colour blue or the colour yellow (or the black stick figure) would fail the manner of manufacture test because it would be a claim to something that already had an independent existence and the properties of which were already known. The enantiomer (+)-citalopram is different. It had never been an independently existing molecule and, apart from the fact that, by reason of its definition, it rotated plane-polarised light to the right, its properties were unknown. For the above reasons, the product claims are claims of a manner of new manufacture. Claim 6, the method claim, does not fall outside the notion of a "manner of new manufacture" either and I do not understand Alphapharm to have addressed independent submissions to the contrary, notwithstanding particular (vi). The Patent should not be revoked on the ground that the invention claimed is not a patentable invention. Section 40(2) provides that a complete specification must, inter alia, describe the invention fully, including the best method known to the applicant of performing the invention (para (a)) and, where it relates to an application for a standard patent, end with a claim or claims defining the invention (para (b)). Alphapharm pressed two grounds of attack in relation to its contention that the specification did not comply with these requirements, both of which were dependent on the construction that the Court gave to claim 1: If I should find, as a matter of construction, that claim 1 and dependent claims are not for (+)-citalopram in its absolute configuration as S-citalopram, the claims in the specification do not define the alleged invention because (+)-citalopram could be either the S-citalopram enantiomer or the R-citalopram enantiomer, depending on the conditions (including the solvent used) to determine the direction in which the enantiomer rotates plane polarised light. If I should find that claim 1 and dependent claims are not for (+)-citalopram on a molecular level, the claims do not define the alleged invention because they could include any mixture of enantiomers in the absolute configurations of S-citalopram and R-citalopram in any proportion ranging from 51% to 100%. In the case of citalopram, the (+)-enantiomer is now known to be the S-enantiomer, that is to say, it is the S-enantiomer that causes plane-polarised light to rotate to the right (clockwise). Professor Davies said that the determination of rotation and of the extent of it is "measured at the sodium D-line" in a "standard solvent under standard conditions", and that there is a convention according to which a reference to the (+)-enantiomer assumes that form of measurement under those conditions. He said that in the literature, there can be found a very small percentage of specific rotations that are not quoted according to those criteria, and that there is normally a particular reason for a departure from them (such as, "because the compound solution is coloured and absorbs at the sodium D-line"). He thought that perhaps in 2% of cases, the measurement was not made at the sodium D-line and said that in those cases it is always specified at which different wavelength they were measured. In the present case, the specification identified the solvent as methanol. In answer to the question whether, under different conditions, the same enantiomer might rotate light differently, Professor Davies said that there are "very rare" examples in which the enantiomer rotates light differently according to the solvent used. There is no suggestion in the evidence that citalopram is such a "very rare" case. In my opinion, there is no substance in Alphapharm's first ground of attack. When the specification refers to the (+)-enantiomer of citalopram, it is referring to the enantiomer of citalopram that rotates plane-polarised light to the right when measured at the sodium D-line when methanol is the solvent used and standard conditions apply. In these circumstances, and in the light of what we now know, the reference to the (+)-enantiomer was in fact unmistakably a reference to the enantiomer that is the S-enantiomer, even though the claim did not and could not say so. This view is not displaced by the evidence of Professor Davies to which I referred to the general effect that in the case of some racemic mixtures (not citalopram) and perhaps in a non-standard solvent and measured against a wavelength other than the sodium D-line, the S-enantiomer may rotate plane-polarised light to the left. There is no substance either in the second ground of attack because I have held that the claims are specifically in respect of the (+)-enantiomer as an independent molecule, not to it merely as part of an unresolved racemate. " A comparison between the claims and the rest of the specification is called for. What is required is that there be a real and reasonably clear disclosure in the body of the specification, taken as a whole, of the invention that is claimed in the claims so that those who may wish to exploit the invention as claimed after the patent has expired will be enabled to do so: see, for example, Société Des Usines Chimiques Rhône-Poulenc v Commissioner of Patents [1958] HCA 27 ; (1958) 100 CLR 5 at 11 per Fullagar J; F Hoffman-La Roche & Co AG v Commissioner of Patents [1971] HCA 3 ; (1971) 123 CLR 529 at 539; CCOM v Jiejing at 281-282; Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 11 IPR 289 at 304; Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 ; (2004) 217 CLR 274 ( Lockwood v Doric ) at [69]. In Lockwood v Doric , it was held in relation to the fair basing requirement of s 40(3) that: Alphapharm contends that each of claims 3, 4, 5 and 6 of the Patent is not fairly based on matter described in the specification in so far as it claims, or is referable to, a pharmaceutical composition or a method of preparing one, where the pharmaceutical composition is other than for: This contention is referable to the statement at page 1 of the specification that the invention relates to the two novel enantiomers of the anti-depressant drug [citalopram] "and to the use of these enantiomers as anti-depressant compounds as well as to the possible use as geriatrics or in the cure of obesity or alcoholism". A pharmaceutical composition in unit dosage form comprising as an active ingredient, a compound as defined in claim 1, together with a pharmaceutically acceptable carrier or excipient. A pharmaceutical composition in unit dosage form comprising, as an active ingredient, the compound of claim 2, together with a pharmaceutically acceptable carrier or excipient. A pharmaceutical composition in unit dosage form, according to claim 3 or 4, wherein the active ingredient is present in an amount from 0.1 to 100 milligram per unit dose, together with a pharmaceutically acceptable carrier or excipient. The invention of this is disclosed at various points in the body of the specification, including: page 12, lines 1-6; page 12, lines 8-10; page 12, line 19 to page 13 line 30; and page 14, lines 1-4. None of those disclosures are limited by reference to the treatment of depression, geriatrics, obesity or alcoholism. Claim 5 claims (+)-citalopram and its pamoic acid salt in unit dosage form in a dose range from 0.1 to 100 mg. Disclosure of this occurs in the body of the specification, including at: page 12, lines 8-13; page 12, line 21 to page 13, line 30; and page 14, lines 30-33. Again, none of these disclosures are limited by reference to the treatment of depression, geriatrics, obesity or alcoholism. I do not think that the fact that it is stated on p 1 of the specification that the invention "relates to the two novel enantiomers of the anti-depressant drug [citalopram] and to the use of these enantiomers as anti-depressant compounds as well as the possible use as geriatrics or in the cure of obesity or alcoholism" signifies that the disclosure made in the text to follow is limited by reference to the four possible uses mentioned. Similarly, I do not think that the passage at page 14, lines 26-29 quoted above confines the disclosure. On a fair overall view of the specification, the disclosure is of the products claimed in claims 1-5 and the method of claim 6 for the preparation of the compound of claim 1. In my view the claims are fairly based on the disclosure made in the body of the specification. Alphapharm submits that claims 1 to 5 lack clarity in two respects: They do not identify the conditions in which the (+)-citalopram of claim 1 will rotate a plane of polarised light to the right, and although there is a convention about wavelength, there is no convention about the solvent to be used, and examples 1 and 2 in the Patent specification make it clear that the solvent needs to be specified; The claims fail to identify the level of purity required. In relation to the first of these grounds, I accept Professor Davies's testimony that there is a standard set of solvents and standard conditions and standard concentration (see [445] above). I find that there is no lack of clarity in the description of the product of claim 1. In relation to the second ground of attack, I have earlier accepted that the convention of 95% purity is applicable to the construction of claim 1 so that readers of claim 1 and its dependent claims 2 to 5 would understand that a (+)-enantiomer at least 95% pure was being referred to. The attack based on lack of clarity fails. Alphapharm relies on the testimony of Professor Montgomery who was asked what the highest therapeutically useful unit dose of escitalopram was. He said that it was 20 mg of escitalopram, but that in treating obsessive compulsive disorder (OCD) clinicians normally use above that level, and that unit dosages of 30 mg and 40 mg are often used in the treatment of resistant OCD. Professor Montgomery was also asked what would be the minimum useful dose. He said that 5 mg was found to be effective in the treatment of social anxiety disorder in a very large study, but that that amount was found to be ineffective in the treatment of generalised anxiety disorder. He said that there is a general notion that one should use lower doses in the case of the elderly, and that the 5 mg dose is used for the treatment of them. Alphapharm submits that this evidence demonstrates that the claimed range of 0.1 to 100 mg per unit dose includes quantities below the useful minimum of 5 mg and above the useful maximum of 40 mg. Accordingly, so Alphapharm's submission goes, claim 5 lacks utility because it claims quantities outside the "useful" range. I agree. Claim 5 cannot be saved by implying any minimum or maximum of the kind of which Professor Montgomery gave evidence. To do so would be inconsistent with the claim as framed and would amount to an amendment of it. In relation to claim 1, I have concluded earlier that that claim is limited to (+)-citalopram in its absolute configuration as S-citalopram. Accordingly as Alphapharm accepts, this takes away the basis of its second ground of attack for inutility. In my view, claim 5 fails for inutility and the Patent should be revoked so far as it relates to claim 5 on the ground that the invention, so far as claimed in claim 5, is not a patentable invention because it is not useful within the meaning of s 18(1)(c) of the Act. I will not repeat what I have said in those passages. It will be recalled that Cipramil (citalopram hydrobromide) was included in the ARTG on 9 December 1997, and that Lexapro (escitalopram oxalate) was included in the ARTG on 16 September 2003. As foreshadowed at [15] above, the same issues arise in relation to Alphapharm's and Arrow's applications under s 192 of the Act for rectification of the Register to remove particulars of the extension of the term, as arise in relation to the Lundbeck Appeal (Extension of Term) Proceeding. Alphapharm has pending an application before the TGA for the purpose of enabling it to market a therapeutic good containing escitalopram oxalate. Therefore, Lundbeck concedes that Alphapharm is a "person aggrieved" within the meaning of s 192 of the Act and so has standing under that section to apply for rectification of the Register. The position of Arrow is different. The particulars to para 15 of Arrow's statement of claim state that Arrow wishes to market a product in Australia containing (+)-citalopram. Affidavit evidence served by Arrow on the day prior to the commencement of the trial did not take matters much further. That evidence was to the effect that Arrow intends to market and sell in Australia a generic pharmaceutical product containing (+)-citalopram upon the expiry or earlier revocation of the Patent. Lundbeck does not concede that such an intention gives Arrow standing as a "person aggrieved" for the purposes of s 192. However, Lundbeck accepts that in the light of the fact that Alphapharm and Arrow have joined cause in relation to the granting of the extension and the entry of particulars in the Register, "the issue is somewhat moot". Alphapharm and Arrow submit that Cipramil is "goods that contain, or consist of, the [pharmaceutical] substance" within the meaning of s 70(5) of the Act, that is to say, that Cipramil is goods that contain or consist of (+)-citalopram or S-citalopram or escitalopram (they do not distinguish between the three) which, they say, is the pharmaceutical substance per se that was disclosed in the complete specification of the Patent and fell within its claims. Much of the argument at the heart of the present Section K and of the following Section L is semantic. The (+)-enantiomer of citalopram is a pharmaceutical substance of which Lexapro consists or which it contains. That enantiomer provides the therapeutic use of Lexapro (see the definitions of "pharmaceutical substance" and "therapeutic use" set out at [486] below). Lundbeck submits, however, that it is incorrect to say that the racemate citalopram, and therefore Cipramil, contains (+)-citalopram. Lundbeck's submissions in support of this position can be regarded as (1) its "one or more pharmaceutical substance per se " submission, and (2) its "contain" submission. Lundbeck submits that the references to "the substance" or "the pharmaceutical substances" in s 70(3), in the definition of "first regulatory approval date" in s 70(5), in s 71(2)(b) and in s 77(1)(a), all hark back to the expression "one or more pharmaceutical substances per se " in s 70(2)(a). In general terms, the submission is that the expression "one or more pharmaceutical substances per se " in s 70(2)(a) is a reference, in the circumstances of the present case, to nothing other than the separate enantiomer (+)-citalopram. It follows, according to the submission, that the registration of Cipramil did not amount to an inclusion in the ARTG of goods that contained or consisted of the pharmaceutical substance per se , (+)-citalopram. Cipramil, so Lundbeck contends, contains a different pharmaceutical substance per se , being the racemate citalopram. Lundbeck emphasises that s 70(2)(a) requires that the pharmaceutical substance per se be disclosed in the complete specification of the patent and be in substance within the scope of the claim or claims of that patent. It is the enantiomer (+)-citalopram that meets those requirements in the case of the Patent. Lundbeck's contention is that once it is accepted that s 70(2)(a) refers to the (+)-enantiomer only, it must be accepted that Cipramil did not contain that pharmaceutical substance. Boehringer is not entirely on point. The patent claims were for a container comprising an aerosol or spray composition for nasal administration. The composition comprised as its active ingredient a certain pharmaceutical substance. The primary Judge, Heerey J, held that s 70(2)(a) was not satisfied because the pharmaceutical substance itself ( per se ) was not disclosed in the complete specification and did not fall within the scope of a claim of the patent specification ( Boehringer Ingelheim International v Commissioner of Patents (2001) AIPC 91-670). His Honour examined the legislative history behind ss 70---79 and concluded that patents for new and inventive processes or new and inventive modes of treatment of old or known products are not the subject of s 70: it is only patents for new and inventive products that are. Accordingly, the expression per se showed that an extension of term is to be available only where the claim is for a pharmaceutical substance as such, not a substance forming part of a method or process. The Full Court in Boehringer agreed (at [37]). Their Honours noted (at [39]) that the Second Reading Speech relating to the Intellectual Property Laws Amendment Bill 1997 (Cth), which inserted the relevant sections into the Act, spoke of "development of a new drug" and of the research and testing required before a "product" could enter the market. Their Honours also noted (at [40]) that the Explanatory Memorandum relating to that Bill spoke of the expression "pharmaceutical substance per se " as being usually restricted to "new and inventive substances". They considered that the expression "fall within the scope of the claim or claims of that specification" in s 70(2)(a) means "[b]e included amongst the things claimed " (at [42]). The decision in Boehringer does not govern the present case because claims 1 to 5 are indisputably product claims, and the pharmaceutical substance per se in question is indisputably the (+)-enantiomer of citalopram. In my view, Lundbeck seeks to draw more from the expression " per se " than was necessary in Boehringer . In Boehringer , the Court was concerned only to distinguish between a pharmaceutical substance that is the subject of a product claim (which they held to be within s 70(2)(a)) and a substance that forms part of a method or process claim (which they held not to be within s 70(2)(a)). The Court was not concerned, as I am, with a competition between two arguable "first regulatory approval dates" and with the question whether the substance the subject of a product claim in a later patent was contained in goods previously included in the ARTG. In Prejay a Full Court of this Court followed Boehringer . All of the claims were method claims, not product claims. The Commissioner's delegate refused an application for an extension. The Full Court agreed with the delegate that a substance that is mentioned in the context of a method claim does not meet the requirement of s 70(2)(a) that the substance per se fall within the scope of a claim (at [23] --- [24] per Wilcox and Cooper JJ, [28] per Allsop J). In Pharmacia , Weinberg J accepted the distinction drawn in Boehringer , but held (at [99]) that claim 1 of the patent before him did state "a claim to a new and inventive substance, and not to a novel process or method". Weinberg J was also not concerned with rival first regulatory approval dates or with the associated questions that are before me. For its part, Alphapharm relies on Merck & Co Inc v Arrow Pharmaceuticals Ltd (2003) 59 IPR 226 ( Merck ). A patentee, Merck & Co Inc (Merck), appealed against the Commissioner's delegate's refusal of an extension. The appeal was undefended, the respondent having withdrawn from the proceeding. Wilcox J allowed the appeal. Sankyo Company Pty Ltd (Sankyo) had held a patent that claimed a compound of a particular formula, commonly referred to as Lovastatin. Lovastatin was entered on the ARTG. It was used for the control of cholesterol levels. Sankyo's patent expired on 19 February 2000, and no extension was sought in respect of it. Merck applied for a patent on 3 June 1980 with priority dates in 1979 and 1980. The patent was granted on the basis of the exclusion of certain claims which related to Lovastatin. Immediately after the expiration of Sankyo's patent, Merck applied to the TGA for listing on the ARTG of a product called "Mevacor". Listing occurred some four weeks later. After the listing, Merck applied for an extension of the term of its patent. Before the delegate, Merck argued for the extension on two bases: first, that the relevant pharmaceutical substance was Lovastatin, and, second, that it was lovastatin beta-hydroxy acid (LHA). In relation to the former ground, Merck faced the difficulty that the claims relating to Lovastatin had been excluded from the claims of the patent as granted. The delegate therefore held that Lovastatin was not a pharmaceutical substance per se that was disclosed in the complete specification of Merck's patent and fell within the scope of any claim of that specification. In relation to Merck's alternative argument concerning LHA, the delegate accepted that LHA was a pharmaceutical substance per se disclosed in the complete specification of Merck's patent and that LHA fell within the claims of that specification, and so satisfied s 70(2)(a) of the Act. The question that then arose was whether Lovastatin consisted of or contained LHA. The delegate concluded that Lovastatin did contain LHA, but only as an impurity, and that this did not satisfy s 70(3)(a). On appeal, Wilcox J disagreed, saying (at [25]) that Merck's LHA argument was "irrefutable", and that, if only on that ground, the delegate's decision must be reversed. His Honour stated (at [26]) that LHA was a pharmaceutical substance per se disclosed in the complete specification of the patent and falling within its claims, and that the undisputed evidence was that Mevacor contained LHA. Wilcox J considered that it was irrelevant whether or not LHA itself was included in the ARTG: that for s 70(3)(a) purposes it was enough that it was contained in some other good (Mevacor) that was included in the ARTG (at [27]). His Honour thought that it did not matter that LHA was present in Mevacor only in minute quantities (at [28]). Having regard to his conclusions supporting Merck's LHA argument, his Honour did not need to address its argument concerning Lovastatin, although he expressed the view that it seemed to him that the delegate had been right to reject that argument. In Merck , as in the other cases referred to above, the question before the Court did not concern a competition between two arguable first regulatory approval dates. However, Wilcox J's construction of "containing" in s 70(3) must be applicable to the word "contain" in s 70(5). If I were to follow Wilcox J, I would hold that Cipramil "contained" (+)-citalopram. Opposed to PER ACCIDENS [defined relevantly to mean "By virtue of some non-essential circumstance; contingently, indirectly"]": Oxford Dictionary of Foreign Words and Phrases (OUP, 1997). It is not every disclosure of every substance falling within the definition of "pharmaceutical substance" to which s 70(2)(a) refers. A non-essential or incidental disclosure of a pharmaceutical substance will not satisfy s 70(2)(a). The pharmaceutical substance must be of the essence of a disclosure made in the specification. This construction is consistent with the requirement that it fall within the scope of the claim or claims. The racemate, citalopram, is the pharmaceutical substance per se disclosed in the specification of the Australian Citalopram Patent, whereas the (+)-enantiomer of that racemate is the pharmaceutical substance per se disclosed in the specification of the Patent, in each case for the purpose of s 70(2)(a). Moreover, the inclusion in the ARTG of Cipramil on 9 December 1997 clearly signified the inclusion in the ARTG of goods that consisted of or contained the pharmaceutical substance citalopram, and the inclusion of Lexapro in the ARTG on 16 September 2003 clearly signified the inclusion in the ARTG of goods that consisted of or contained the pharmaceutical substance (+)-citalopram, in each case for the purpose of s 70(3)(a). The precise question before the Court, however, is whether Cipramil was goods that contained the pharmaceutical substance (+)-citalopram for the latter purpose. The "substance" or "pharmaceutical substances" referred to in ss 70(3)(a), 70(5), 71(2)(b) and 77(1)(a) refer to the "one or more pharmaceutical substances" referred to in s 70(2)(a), but I do not think that the expression " per se " carries over into those provisions, otherwise the Parliament would have used it again in them. Parliament did in fact use it again in s 78(2)(a) --- again in respect of the disclosure in the complete specification of a patent. The disclosure in the complete specification of which s 70(2)(a) speaks is different from the notions of "inclusion", "containing" and "consisting of" that are referable to the ARTG which are addressed in the later provisions. The omission of " per se " from those later provisions suggests that it is to suffice that the goods that are included in the ARTG "contain" only non-essentially or incidentally the pharmaceutical substance that is required to be disclosed per se in the complete specification. In my view, the per se qualification has done its work once the pharmaceutical substance disclosed in the complete specification has been identified. Thereafter, the question is the simple one whether the goods included in the ARTG contain or consist of that pharmaceutical substance, unencumbered by any per se notion. However, Lundbeck further submits that the definition of "pharmaceutical substance" (with the associated definition of "therapeutic use") in Schedule 1 (see [486] above) itself and without more signifies that Cipramil does not contain (+)-citalopram. I do not accept this submission either. Both (+)-citalopram and racemic citalopram are for a therapeutic use which is of the same kind in each case. Indeed, the therapeutic benefit of citalopram comes from the presence in it of (+)-citalopram. It would not be right to say that Cipramil does not contain (+)-citalopram merely because the therapeutic effect of the racemate is less effective because of the additional presence in it of (---)-citalopram. In its "contain" submission, Lundbeck seeks to emphasise the different properties of citalopram and (+)-citalopram for the purpose of showing the "inappropriateness" of regarding the former as containing the latter. I will first summarise, in turn, the various aspects of Lundbeck's "contain" submission. The later registration (16 September 2003) was of LEXAPRO escitalopram (as oxalate). Lundbeck points to the fact that escitalopram oxalate (Lexapro) was approved as a "new chemical entity" by the TGA. The evidence shows that the TGA adopted the guidelines "Investigation of Chiral Active Substances" used in the European Union (the legislative basis is Directive 75/318/EEC as amended). Section 5.3 of those guidelines deals with the "Development of a new single enantiomer from an approved racemate". The decision to develop an enantiomer should be explained. It is thereby assumed that the applicant has the contents of the full dossier on the corresponding racemate at his disposal. Suitable "bridging" studies should be carried out to link the complete racemate data to the incomplete data on the selected enantiomer. The use of racemate results should be explained. Professor Day had a wealth of other experience in the fields of Pharmacology, Clinical Pharmacology, Toxicology, Rheumatology and Therapeutics. At the time of making his affidavit, he was Professor of Clinical Pharmacology in the School of Physiology & Pharmacology and the St Vincent's Clinical School at the University of New South Wales, a position he had held since 1989. He was also Director of the Department of Clinical Pharmacology and Toxicology at St Vincent's and Director of St Vincent's Clinical Trials Centre, positions he had held since 1989 and 1993 respectively. Professor Day stated that in the context of the discussion of listings on the ARTG, he treated "medicine" as meaning the same thing as "pharmaceutical substance" and "chemical entity" as meaning the same thing as the active component of a pharmaceutical substance. He said that a new chemical entity medicine must be a different chemical entity medicine from one that is already registered on the ARTG and that separate registrations for two chemical entity medicines indicates the TGA had taken the view that they are not the same thing. It follows, according to Lundbeck's submission, that s 70 of the Act does not deny Lundbeck an extension of term, because that which has been registered on the ARTG as a new chemical entity cannot be "contained" in something that was already registered on the ARTG. Lundbeck submits, therefore, that it is not appropriate to identify a racemate by reference to the rotation of polarised light: both enantiomers being present in equal proportions, there is no net rotation of plane-polarised light. Therefore, so the submission goes, it is inappropriate to characterise the enantiomers when in racemic form as (+) or (---) or to say that the racemate citalopram contains (+)-citalopram. Elaborating on this submission, Lundbeck contends that the appropriate descriptors of the enantiomers of citalopram when in a racemic mixture are S-citalopram and R-citalopram. Lundbeck accepts that the racemic mixture citalopram contains the molecule S-citalopram (escitalopram), and that when separated from the racemate that enantiomer rotates plane-polarised light to the right, and is therefore then appropriately called (+)-citalopram. In cross-examination, Professor Davies was careful not to assent to the proposition that the (+)-citalopram was present in the racemate, preferring to state that molecules of the S configuration were present in the racemate. Lundbeck submits that it would be inconsistent with this view to hold that citalopram contains (+)-citalopram because, in the racemate, it does not exist in the isolated and pure form, but rather at 50% purity. One of Lundbeck's submissions highlights the semantic nature of much of the argument. One contains equal amounts of each enantiomer and the other contains only a single enantiomer. No doubt, however, Lundbeck was referring to the "S-enantiomer". In relation to the physical and chemical properties of citalopram and escitalopram, Lundbeck points out that the solubility and melting point of the two are different as, of course, is the capacity to rotate plane-polarised light. Lundbeck also points out that the evidence is that the single enantiomer can react with other chiral compounds at a rate different to the rate at which the racemate reacts with them. All that this shows, however, in my opinion, is that the racemate is not one and the same thing as the enantiomer. The statute's use of the alternatives "contain, or consist of" also takes account of this fact. In relation to pharmacological properties, Lundbeck refers to the different physio-chemical interactions with the receptor manifested in different pharmacodynamics and pharmacokinetics. Again, I do not think that these differences resolve the present question. Professor Montgomery, Emeritus Professor of Psychiatry at the Imperial College School of Medicine, University of London, said that it was correct to say that the racemate and the S-enantiomer had "the same active ingredient" only if it was assumed that the other enantiomer, the R-enantiomer was inactive. Professor Montgomery said that he initially made that assumption and for that reason expected that the efficacy of the active enantiomer would be the same as that of the racemate at half the dose. He was surprised that the data from early studies showed that the enantiomer had a different level of efficacy, demonstrating that the R-enantiomer was also active. Lundbeck submits that it is not to the point that the serotonin reuptake inhibitory activity resides in the S-enantiomer: the point is that the R-enantiomer is also active, even though counteractive. In relation to "clinical effects", Lundbeck concedes that the evidence that citalopram and escitalopram have different clinical effects has been disputed. It submits, however, that the uncontested difference between the physical properties and the pharmacology properties in vitro and in animals is sufficient to establish that they are different substances. That distinction, which I accepted above in the course of dealing with Lundbeck's "pharmaceutical substance per se submission, is between the conditions in s 70(2)(a) that must be satisfied in respect of the disclosure made in a patent for which an extension is sought, on the one hand, and the requirements of ss 70(3)(a) and 71(2)(b) concerning goods included in the ARTG, on the other hand. It is ss 70(3)(a) and 71(2)(b), not s 70(2)(a), that determine whether the 9 December 1997 ARTG registration for Cipramil was a registration of goods containing or consisting of the pharmaceutical substance disclosed in the Patent. The question is simply whether Cipramil contains the (+)-enantiomer of citalopram that was disclosed in the Patent. The word "contain" is an ordinary English word and its meaning is plain. In its conjunction with the alternative "consist of", "contain" means, according to the New Shorter Oxford English Dictionary , "include as a part ... of its substance or content" or "have inside itself". In s 70(5)(a) it is "goods" that are to contain or are to consist of the pharmaceutical substance in question. In this context, "contain" signifies a physical relationship that is something less than "consist of". If goods A consist of B and C, they may be seen to contain B and to contain C, but not to consist of either alone. B and C will also be goods, although they need not be recognised as continuing to have a separate existence. For example, there is no difficulty in saying that a cake "contains" milk and eggs although they are no longer recognised as having a separate existence in the cake. In relation to the New Chemical Entities Submission, I do not think that the TGA's guideline, the resolution of ADEC or the evidence given by Professor Day bear upon the question of the proper construction of the statutory provisions. While (+)-citalopram can be accepted to be a new chemical entity as against the racemate, this does not answer the statutory question whether the latter (or, more precisely, Cipramil) "contains" the former. In response to Lundbeck's reliance on the TGA's guideline and the resolution of ADEC in support of its New Chemical Entities Submission, Alphapharm might just as irrelevantly call in aid statements made by Lundbeck to the TGA in connection with its application to register Lexapro. Alphapharm referred to the fact that Lundbeck had no difficulty in frequently referring to escitalopram as the enantiomer of the racemate citalopram to which the therapeutic activity of citalopram was attributed. Non clinical studies show that the serotonin reuptake inhibitory activity of citalopram is attributable to the S-enantiomer, escitalopram. A series of recent non-clinical and clinical studies comparing escitalopram and citalopram to placebo found that equivalent doses of these two drugs, ie containing the same amount of the S-enantiomer, showed better effect of escitalopram. These results suggested that the R-citalopram in citalopram inhibits the effect of the S-enantiomer. The Rotation of Plane Polarised Light Submission does not show that the racemate does not contain the (+)-enantiomer. The expression (+)-citalopram refers to a physical thing, a molecule. That molecule's property of rotating plane-polarised light to the right is no more than a means of identifying it and distinguishing it from (---)-citalopram and from (±)-citalopram, at a time when it was not known which of the S and R enantiomers was the (+)-enantiomer. The identifying and distinguishing feature of rotating plane-polarised light to the right has no other significance in the Patent or in the case otherwise. It is now known that in the case of citalopram, the (+)-enantiomer is the S-enantiomer. I do not see any difference between asking if Cipramil contains the (+)-enantiomer and asking if it contains the S-enantiomer. Citalopram contains the molecule that is identified as (+)-citalopram. It is so identified because, when isolated, it rotates plane-polarised light to the right. It is beside the point that it is only once it is isolated that it can be seen to demonstrate the reason underlying its name. The only reason why (+)-citalopram can not be seen to rotate plane-polarised light to the right when it is in the racemate, is that (---)-citalopram is also present, in an equal amount, with its property of rotating plane-polarised light to the left to precisely the same extent. The two equal but opposite propensities cancel each other out. Nor do I find the Purity Submission persuasive. The 50% of the racemate that is either enantiomer is 95% pure. The word "contains" is an alternative to "consists of". While it would be wrong to say that the racemate consists of either enantiomer to the extent of 95% purity, it contains each of the two 95% pure enantiomers to the extent of 50% of its composition. This view is not inconsistent with my construction of claim 1, which I held to refer specifically and distinctly to the pure (+)-enantiomer, and not to that enantiomer when merely a part of the racemate. The word "contain" in ss 70(3)(a) and 71(2)(b) gives a context and raises a question not present in the Patent specification: was the pharmaceutical substance (+)-citalopram that was disclosed in the Patent contained in something larger, racemic citalopram, or, more precisely, in the goods Cipramil? Nor do I accept the Different Pharmacological Properties and Effects Submission. I have referred above to the physical relationship of inclusion which I think the word "contains" refers to in the present context. The language does not, in my view, invite or permit anything other than an inquiry into the question whether, as a matter of physical relationship, the goods Cipramil contain the molecule that, from its isolated state, derives the name "(+)-citalopram". Lundbeck Australia seeks: The following matters may be noted at the outset. First, the above formulation of the relief claimed refers to either all or some unidentified part of the information that Lundbeck provided to the Secretary "in respect of applications for the registration of therapeutic goods" of the kind described (the reference to "applications" in the plural will be noted). This is far too wide. Section 25A(2) defines "protected information" in a far more limited way. In its statement of claim, Lundbeck Australia purported to give "particulars" of the information. However, it did so only in terms of the three broad classifications set out at [37] above. Lundbeck Australia has led evidence of documents it provided to the Secretary, but documents are not information. A document may contain information that satisfies the criteria of "protected information" set out in s 25A(2) and other information that fails to do so. It does not follow from the inclusion in a document of the former, that the Secretary is prohibited by s 25A(1) from using the latter. Second, para (b) within s 25A(2) requires, firstly, that the information be "about the active component". On the basis that Lexapro is the "new goods" referred to in s 25A(2)(a), the active component is escitalopram. Accordingly, it is necessary to identify information that is "about" escitalopram. Not all information that Lundbeck Australia gave to the Secretary in relation to its application to register Lexapro was about escitalopram. Third, again according to para (b) of s 25A(2), the information must be "not available to the public". The Court would need to be satisfied that the information to be referred to in its order was not already available to the public, and would have to include in the order a condition that the order cease to operate in relation to any remaining information upon its becoming available to the public. The order that Lundbeck Australia proposes incorporates a qualification of the latter kind. However, it does not identify and exclude certain information that is shown to be already available to the public. Fourth, there is the question whether the criterion contained in para (c) of s 25A(2) is satisfied. When escitalopram oxalate (under the name Lexapro) was included in the ARTG on 16 September 2003 (less than five years ago --- see para (e) of s 25A(2)), citalopram hydrobromide was already included in the ARTG under the name Cipramil (having been registered on 9 December 1997). The issue here is whether Cipramil was goods "consisting of, or containing", for the purposes of para (c) of s 25A(2), escitalopram, the active component of Lexapro. The affinity between this fourth question and the questions raised in the Lundbeck Appeal (Extension of Term) Proceeding (Section K above) is clear. Fifth, Lundbeck Australia has referred to the need for confidential information that it gave to the Secretary not to be disclosed to Alphapharm. An example is information relating to patients. However, s 25A and the relief sought by Lundbeck Australia relate only to the use to be made by the Secretary when evaluating therapeutic goods for registration. A holding that the Secretary may use information given to her by Lundbeck Australia for that purpose does not mean that the Secretary is at liberty to disclose that information to Alphapharm. I am not concerned for present purposes to identify limitations on the use that it would be proper for the Secretary to make of information given to her that is not "protected information" within s 25A. Lundbeck Australia has made three applications to the Secretary for registration of therapeutic goods that are relevant to the present case: Cipramil : As noted above, this was citalopram hydrobromide, which was registered on the ARTG as Cipramil on 9 December 1997. Cipralex : The application for registration of Cipralex was unsuccessful, and Cipralex was never registered in the ARTG. Lexapro : As noted above, this was escitalopram oxalate, which was registered on the ARTG as Lexapro on 16 September 2003. Accordingly, information that Lundbeck Australia provided to the Secretary in relation to its application to register Cipralex is not within the definition of "protected information", and the application to register Cipralex can be put to one side. The same information may be within the definition by reason of its having been also supplied in relation to the later application to register Lexapro. According to the covering letter on the Cipralex application, and according to the evidence of Gitte Dyhr, Divisional Director of Regulatory Affairs at Lundbeck, that application was a "bridging application" in the sense of an application intended "to bridge" from the data filed in respect of an earlier drug (in this case, Cipramil) to the additional data filed to support the application for registration of another drug (in this case, Cipralex). The Cipralex application was rejected by the TGA, and Lundbeck was required to file, and did file, additional data. This led to the registration of Lexapro. On 15 June 2005, Alphapharm applied for registration on the ARTG of its generic product containing escitalopram as the active component. It is not disputed that "[Alphapharm's] generic escitalopram product is bioequivalent to Lundbeck's escitalopram product" or that Alphapharm's application was "an abbreviated application that does not include the vast amount of data, including clinical study and patient data, and expert reports, that a complete application for registration of a new drug substance would include". In substance, Alphapharm invited the TGA, when evaluating its application, to rely on the data that had been filed by Lundbeck Australia, including clinical studies, patient data and expert reports, in support of Lundbeck Australia's application to register Lexapro. The Secretary took the view that this information was not protected information within the meaning of s 25A(2) of the TG Act. The Secretary agreed, however, not to deal with this information further in connection with Alphapharm's application without prior notice to Lundbeck Australia. In its statement of claim Lundbeck Australia alleges that it will suffer loss and damage if the information in question is not treated as "protected information" within s 25A, and is used to evaluate Alphapharm's therapeutic goods. What is the "information" that Lundbeck Australia contends is protected? Is that information "about" the enantiomer (+)-citalopram for the purposes of s 25A(2)(b)? Is that information "available to the public" within the meaning of s 25A(2)(b)? Ms Dyhr graduated from the Royal Danish School of Pharmacy with a Master of Science in Pharmacy in 1982. After working with ICI-Pharma, now Astra Zeneca, Ms Dyhr became, in 1987, Regulatory Affairs Associate at Lundbeck. In that position, she was responsible for planning and coordinating regulatory activities worldwide for pharmaceutical products manufactured by Lundbeck. In 1991, Ms Dyhr was made Head of Department of Regulatory Affairs, assuming responsibility for all operational activities for regulatory affairs, including those related to development projects and marketed products. In 1996, Ms Dyhr became Lundbeck's Divisional Director of Regulatory Affairs and in that capacity became responsible, worldwide, for activities related to development projects and marketed products. One of Ms Dyhr's responsibilities in this role is to direct the preparation and filing by Lundbeck subsidiaries of applications to regulatory authorities worldwide for marketing authorisations. Ms Dyhr states that she was asked "whether the information about escitalopram contained in the documents in Lundbeck's applications is available to the public". She states that in order to answer this question, she reviewed Lundbeck's applications (to the TGA). Ms Dyhr states that the information is contained in documents falling within one or other of the following four categories: Study reports; Journal articles; Experts' reports; and Summaries of the application or parts thereof. They include such information as the qualifying criteria for patients participating in a clinical study, the dosing régimes adopted, and the statistical plan to be adopted in analysing the resulting data. Sometimes Lundbeck contracts with an external principal investigator to carry out clinical studies. In such cases, Lundbeck follows a standard procedure designed to ensure confidentiality of the results. However, certain information from study reports is sometimes made available to the public, as described in further detail below. Such journal articles are often included in Lundbeck's applications for regulatory approval in addition to the underlying clinical study reports and data. A scientific paper or journal article will contain a summary of part of one or more studies together with a discussion and conclusion in a form suitable for inclusion in a scientific journal. Accordingly, so Ms Dyhr states, to the extent that information contained in a study report is reproduced in a scientific journal article, it will have become publicly available. Ms Dyhr points out, however, that scientific papers and journal articles are usually between four and ten pages in length, whereas a corresponding study report will typically run to hundreds of pages, since it includes far more detail, including all of the underlying data, which is not appropriate for inclusion in a paper or article. Ms Dyhr states that in relation to Lundbeck's application to register escitalopram, there were two expert reports, one of which dealt with pharmacology and toxicology (originally dated January 2001 and revised in November 2001), and the other of which dealt with the clinical studies (and included a number of addenda). Because some data from the studies conducted in relation to escitalopram have been published in scientific journals, the expert reports contain some information that has been made available to the public. However, in addition, the expert is given access to all of the underlying data, including the unpublished data. Often the expert will request that further statistical analyses be conducted of the data. For this reason, expert reports usually contain information about the product which will not have been made available to the public. The expert reports themselves are not published, except to the regulatory authorities. To the best of Ms Dyhr's knowledge and belief, no regulatory authority to which Lundbeck has submitted an expert report in relation to escitalopram has a practice of making such reports publicly available. I accept that the TGA would not make expert reports publicly available and would treat them as confidential. Ms Dyhr points out that the opinion of the expert, as expressed in his or her report, never becomes available to the public. The two expert reports in respect of escitalopram are in evidence as exhibits. Ms Dyhr states that preparation of such summaries is mandatory for the purpose of seeking regulatory approval in Australia and elsewhere. She acknowledges, however, that the summaries do contain some information about escitalopram which has been made available to the public, because some of the data to which the summaries refer have been published in scientific journals or otherwise become available to the public. She gives as an example the FDA in the United States of America, which prepares drug approval reviews. In relation to escitalopram, the FDA has published certain reviews of the regulatory dossier filed in the USA. These reviews are available to the public, including the public in Australia, via the internet. Exhibited to Ms Dyhr's affidavit is an example of a review from the FDA's website. Barry John Spencer, who is employed by Alphapharm as a "Senior Patent Officer", has put into evidence as Exhibit BJS-1 a CD-Rom containing copies of documents that he downloaded from the FDA website. The documents relate to the FDA Drug Approval Process for Lexapro. It is clear that the documents are publicly available in Australia. There are 18 documents comprising 683 pages. Ms Dyhr states that other countries such as Sweden and France adopt a similar process of reviewing the dossiers, although the reviews produced by authorities other than the FDA are brief (about four to six pages in length), and no country has published any information that is not also included in the reviews published by the FDA. Mr Dyhr states that the European Medicines Agency (EMA) which provides a centralised process for seeking regulatory approval in European Union countries, also produces a summary (briefer than that produced by the FDA) in relation to applications filed using the centralised procedure of the EMA. However, in respect of escitalopram Lundbeck did not use that procedure. Rather, it made applications directly in each country in which it wished to market escitalopram. Accordingly, the EMA has never produced such a summary relating to escitalopram. Ms Dyhr states that except as disclosed in the summaries described above, to the best of her knowledge, the various regulatory authorities to which Lundbeck has submitted information corresponding to that provided to the TGA have treated the information as confidential and have not made it publicly available. Ms Dyhr states that Lundbeck itself has recently adopted a practice of publishing on a website in summary form "the results of all studies conducted in relation to its products". Mr Dyhr states that this Lundbeck website includes four to six page summaries of each of the complete studies conducted by or on behalf of Lundbeck in relation to escitalopram, and she exhibits to her affidavit an example. She summarises this information as being: the opinions expressed by the independent experts in their expert reports; and the underlying raw data in relation to the studies. Ms Dyhr exhibits to her affidavit four scientific papers and five scientific posters (which are a subset of one of the papers) based on the data generated by that clinical study. She contrasts the limited disclosure made in the scientific papers with the comprehensive disclosure made in the clinical study itself. In Exhibit GD-7 to her affidavit, Ms Dyhr lists the documents supporting Lundbeck's applications to the TGA which, she says, record the raw data in respect of each relevant study. She states that this is the information about escitalopram that has never become available to the public in any form. Lundbeck Australia does not dispute that (+)-citalopram is an active component of Lexapro. Alphapharm and the Secretary submit, however, that according to the plain meaning of s 25A, it is also an active component, indeed on one view, the active component of Cipramil, and that Cipramil consists of or contains (+)-citalopram. Lundbeck Australia does not admit that escitalopram oxalate in tablet form, which was the subject of its Lexapro application, consists of or contains (+)-citalopram as an active component. Lundbeck Australia relies heavily on the background to the relevant statutory provisions and on the arguments it made as to why Cipramil does not "contain" (+)-citalopram for the purposes of the definition of "first regulatory approval date" in s 70(5) of the Act (see Section K above). Section 25A of the TG Act was inserted with effect from 17 April 1998 by the Therapeutic Goods Legislation Amendment Act 1998 . This will be achieved through the introduction of a new data protection scheme for new chemical entities, referred to as 'active components' in the amending legislation. Under the new 'data protection' scheme to be introduced by this bill, this data will now have five years of 'data protection'. During this time, any other company seeking to register a generic copy of the registered product containing, or consisting of, the active component will be required to seek the agreement of the originator company before the TGA can directly or indirectly access or reference the originator company's data relating to the same active component. However, they must develop and lodge their own full data package, instead of lodging an abbreviated package that demonstrates bioequivalence with a new active component. Most products that have a new active component will attract separate protection under a patent during their first five years on the market, but the 'data protection' regime will provide a safety net for those products which may fall outside the norm. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Members shall protect ... data submitted to governments or governmental agencies in accordance with paragraph 3. 2. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use. (a) If a Party requires, as a condition of approving the marketing of a new pharmaceutical product, the submission of undisclosed test or other data concerning safety or efficacy of the product, the Party shall not permit third persons, without the consent of the person who provided the information, to market the same or a similar product on the basis of that information, or the marketing approval granted to the person who submitted such information, for at least five years from the date of marketing approval by the Party. With respect to pharmaceutical products, if a Party requires the submission of ... new clinical information (other than information related to bio equivalency) ... which is essential to the approval of a pharmaceutical product, the Party shall not permit third persons not having the consent of the person providing the information to market the same or a similar pharmaceutical product on the basis of the marketing approval granted to a person submitting the information for a period of at least three years from the date of the marketing approval by the Party ... 17-[26] . Lundbeck Australia also refers to ss 15AA and 15AB of the Acts Interpretation Act 1901 (Cth) (the AI Act). Section 15AA provides that in the interpretation of a provision of an Act, a construction that would promote its underlying purpose or object is to be preferred to a construction that would not do so. In support, Lundbeck Australia suggests that despite having required Lundbeck Australia to submit a "full regulatory application" in support of its application to register Lexapro, the TGA would not treat the information submitted in the same way as it would treat information contained in a full regulatory application submitted in support of applications to register other therapeutic goods. "... This will be achieved through the introduction of a new data protection scheme for new chemical entities , referred to as "active components" in the amending legislation ". "... Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities , the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use ". (a) If a party requires, as a condition of approving the marketing of a new pharmaceutical product, .... (d) For the purposes of this Article, a new product is one that does not contain a chemical entity that has been previously approved for marketing by the Party ". Article 17.10 of the Australia/United States Free Trade Agreement. Instead, it insisted on the preparation and submission of additional pharmacology and clinical studies. The purported particularisation in the statement of claim of the information that Lundbeck Australia claims is "protected information" within s 25A cannot be accepted as a serious attempt to identify information at all. There have been progressive attempts by Lundbeck Australia to narrow its description of the information that it contends is protected information. Ms Dyhr was taken to the tables of contents of Parts III and IV of Lundbeck's application to the TGA for the registration of escitalopram oxalate. Those tables of contents comprised 55 pages and 10 pages respectively, each page being part of a list of studies. Ms Dyhr agreed that the studies identified in italics within the lists were studies that came from the application for registration of Citalopram (citalopram hydrobromide). Lundbeck Australia accepted that the information that was contained in the studies, the titles of which were in italics in the two tables of contents, is not "protected information" because five years had passed since the day Cipramil was included in the ARTG (9 December 1997) - see s 25A(2)(e) of the Act. It will be noted that Annexure D represents a retreat from the position as represented in Exhibit GD-7. the information contained in any of the documents identified in Annexures B, C & D to these submissions. The significance of Exhibit BJS-1 appears at [580] above. Annexures B, C and D were discussed at [599] above. The Secretary accepts that Lundbeck Australia is entitled to some form of relief if it is shown that some or all of the information it gave to her in relation to its application to register escitalopram oxalate (Lexapro) is "protected information" and "if an appropriate form of relief can be framed". She submits, however, that Lundbeck Australia has not identified "protected information" within s 25A with sufficient particularity to enable a meaningful order to be made. (3) Is the information "about" the enantiomer (+)-citalopram for the purposes of s 25A(2)(b)? Questions 3 and 4 have been indirectly referred to in the course of my discussion of Question 2. Lundbeck Australia would not be entitled to relief in respect of information that was not "about" escitalopram. In oral submissions, Lundbeck Australia submitted that it should not be accepted that s 25A called for a line by line analysis. Lundbeck Australia invited me to accept that "the data package should be treated as a whole" . The Secretary submits that Exhibit GD-7 does not assist in identifying protected information as it lists only documents that are said to contain protected information. The Secretary contends that Lundbeck does not, and indeed could not, assert that all of the information contained in those documents is "about" escitalopram. For example, the study reports necessarily contain information on other comparable drugs which is not "about" escitalopram. One example is a cardiovascular study by M Maginn, "The effect of S-citalopram (...), citalopram (...), sertraline (...), fluoxetine (...), paroxetine (...), femoxetine (...), on ECG and Hemodyamics in the isolated Perfused guinea-pig heart". This was a report of "Non-Clinical Safety Research" conducted by Lundbeck. Another example is information contained in study reports describing patients' circumstances and the results in the cases of those taking placebo. A further example is information about packaging and manufacturing and about the applicant, Lundbeck Australia, itself. Similarly, Alphapharm submits that the unexpressed assumption underlying Ms Dyhr's evidence appears to be that because a study relates to escitalopram or citalopram, and has been included in an application to the TGA, the whole of the documentation of the study is "about" the active component. A particular example emphasised by Alphapharm is a study report of Forest Laboratories, Inc concerning the study "MD-01". Alphapharm submits that, for example, page 15 of that study ("List of Patient Narratives") could not be said, by any stretch of the information, to be "about" escitalopram. (4) Is the information "available to the public" within the meaning of s 25A(2)(b)? The evidence has exposed Lundbeck's initial claim as an ambit claim that was far too wide. As indicated above, Lundbeck has progressively narrowed its description of the information in respect of which it seeks relief because of evidence that documents to which its claim referred were in fact already available to the pubic. I referred earlier to much of the evidence of public availability. Clearly, once a document is available to the public, all the information contained in it is also available to the public. However, the converse does not apply. It does not follow from the fact that a particular document is not available to the public that the information in it is not available to the public. There are three possibilities: the whole of the information in the document may be contained in another document that is available to the public; some of the information in the first document may be contained in another document that is available to the public; or some or all of the information contained in the first document may be available to the public otherwise than through another document. As noted earlier, any injunctive relief to be granted in aid of s 25A would have to be subject to a condition that once the information to which the relief referred subsequently became available to the public, it then ceased to fall within the scope of the injunction. It is not in dispute that: Lundbeck Australia relies on the submissions on which Lundbeck relied in support of its submission that the pharmaceutical substance per se that is disclosed in the complete specification of the Patent and that falls within its claims is not a pharmaceutical substance that citalopram, the subject of the Australian Citalopram Patent, contains or consists of. Those submissions were the New Chemical Entities submission, the Rotation of Plane-Polarised Light Submission, the Purity Submission, and the Different Pharmacological Properties and Effects Submission. I adopt what I have said in Section K above in relation to those submissions and also make the following comments concerning them. In relation to the New Chemical Entities submission, I note that the term "new chemical entity" is not used in s 25A or elsewhere in the TG Act. Moreover, the fact that Professor Day or others regard citalopram and escitalopram each as a "new chemical entity" is not relevant to the mixed question of law and fact that I must decide, namely, whether the former "consists of or contains" the latter within the meaning of the statute. In relation to the Rotation of Plane-Polarised Light submission, I think that the reference to (+)-citalopram is also a reference to the molecule S-citalopram. That molecule exists, whether in the racemate or separated from it. The identity of the molecule does not change according to whether it forms part of the racemate or not. Its identity does not change just because in the racemic mixture its property of rotating plane-polarised light clockwise can not be observed because it is neutralised by the equally strong property of the molecule R-citalopram of rotating plane-polarised light anti-clockwise. In relation to the Purity Submission, I need not add to what I said in Section K. In relation to the Different Pharmacological Properties and Effects Submission, the Secretary emphasises that whatever the merits of that submission in relation to s 70 and associated sections of the Act, it misses the point in relation to the definition of "protected information" in s 25A(2) of the TG Act, because the comparable concept used in s25A(2) is "active" component. Escitalopram is the active component of Lexapro and an active component that Cipramil at least contains. Section 25A(3) clearly contemplates that therapeutic goods may contain more than one active component. In the case of Lexapro, the only active component is escitalopram. In the case of Cipramil, there are probably two active components: S-citalopram and R-citalopram, S-citalopram being the therapeutically beneficial one. The word "containing" in s 25A(2)(c)(i) must be read in the light of the definition of "active component" in s 25A(3). It is not required that escitalopram be the active component of Cipramil in order for s 25A(2)(c)(i) to be enlivened. It satisfies that provision if escitalopram is contained as one of two or more active components in Cipramil. I do not think that s 25A(2)(c)(i) is ambiguous or obscure or that the ordinary meaning conveyed by it which I have indicated above leads to a result that is manifestly absurd or unreasonable within s 15AB of the AI Act. Therefore, I do not derive assistance from the numerous extraneous materials to which I have referred above. Such matters as the conduct of officers of the TGA and of Alphapharm, the evidence given by Professor Day and the references to "new chemical entity" that were introduced into the TG Regulations (by the Therapeutic Goods Amendment Regulations 2002 (SI No 2/2002)) after s 25A was introduced into the TG Act, are all irrelevant to the question of the proper construction of the TG Act. In my opinion, Cipramil contains as an active component escitalopram, the active component of Lexapro, for the purposes of s 25A of the TG Act. In view of the conclusion I have reached on Question 1, Lundbeck Australia's application should be dismissed and it is not necessary that I consider Questions 2, 3 and 4. However, as they were fully argued, I will address them, albeit together. Alphapharm cites authorities in which it has been held that an injunction against use of confidential information must identify the confidential information with sufficient particularity: O'Brien v Komesaroff (1982) 150 CLR 310 at 324-8; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 438-439; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443; American Cyanamid Co v Alcoa of Australia Ltd (1993) 27 IPR 16 at 20-21. Those cases, unlike the present one, were concerned with identifying information that had the requisite character of confidentiality by reason of the application of general law principles. We are concerned here to identify particular information that was given by Lundbeck Australia to the Secretary that satisfies the criteria specified in s 25A(2). I readily agree that the information must nonetheless be identified with precision and not merely in global terms, if it is to be the subject of an order of the Court. However, the process of identifying the information is rather different from the process of identifying information that is confidential in accordance with general law principles. Whether particular information falls within s 25A is an objective question that entails no element of administrative discretion on the Secretary's part. Lundbeck Australia submits that under s 25A, the onus rests on the Secretary to satisfy herself that certain information lies outside the definition of "protected information". It is true that if Lundbeck Australia had not launched the present proceeding, s 25A would have obliged the Secretary not to use protected information for the purpose mentioned in the section. The section would therefore have obliged the Secretary to decide, at peril of a successful proceeding for an injunction against her if she should err, which information fell within the definition. In that situation, the language of "onus" is not appropriate. Once Lundbeck Australia seeks declaratory and injunctive relief, however, it bears the onus of identifying information that falls within the definition. It is not an appropriate exercise of discretion for the Court to enjoin conduct simply in the general terms of the statutory obligation, leaving the Secretary to determine, at peril of committing a contempt of court, whether particular conduct falls within the injunction. Moreover, "entitlement" to an injunction is established only if Lundbeck Australia proves non-compliance by the Secretary, actual or threatened, with the statute, and this requires Lundbeck Australia to establish that the Secretary has used or is threatening to use, particular information that falls within the definition. Lundbeck Australia must identify all of the information that satisfies all of the (cumulative) criteria of the definition of "protected information": the definition does not contain excisions, exclusions or exceptions, the onus of proving the operation of which may have rested on the Secretary. In my opinion, as a matter of identification of the information that the Secretary is to be ordered not to use, the formulation proposed by Lundbeck Australia in its closing written submissions (at [601] above) is adequate. It provides for the inevitable exception based on information becoming available after the date of the orders. Lundbeck Australia has attempted in Annexures B, C and D to its submissions (referred to in the proposed orders) to capture all information about escitalopram that is publicly available. In case anything has been omitted, any other information that has become publicly available is also to be excepted from the scope of the proposed order. I do not think this introduces objectionable vagueness or uncertainty. The next question is whether I am satisfied that all of the information described in paras (a)(i), (ii) and (iii) is "about" escitalopram. I am so satisfied. There may be scope for considerable argument concerning the word "about". However, subparas (i), (ii) and (iii) within para (a) of the orders proposed by Lundbeck Australia are all tied to escitalopram, which is mentioned expressly in subparas (i) and (iii) and is referred to by implication in subpara (ii). The parties asked that I not make orders in any of the proceedings before the Court but that I publish my reasons and allow them the opportunity to agree upon the form of orders to be made. In the present proceeding, this course would have allowed the Secretary the opportunity of identifying any particular difficulty that she would encounter in complying with an order of the kind proposed. However, because I have answered Question 1 above unfavourably to Lundbeck Australia, she will not need to do so. There is no issue concerning Lundbeck's title to the Patent or Lundbeck Australia's being the exclusive licensee of the Patent or being entitled to sue for infringement of it. In this Section M, I will refer to Lundbeck and Lundbeck Australia as "the Lundbecks" and, generally speaking, will not distinguish between them. The Lundbecks' cross-claim is for infringement of Claims 1, 3, 5 and 6. The Lundbecks seek permanent injunctions, an order for delivery up for destruction, damages or, at the Lundbecks' option, an account of profits, and associated relief. As particulars of infringement, the Lundbecks allege that: In the letter dated 21 September 2005 to Corrs, Mallesons stated that Alphapharm had given the TGA a certificate pursuant to s 26B(1)(a) of the TG Act in the standard form approved by the Secretary, and that for purposes in connection with having goods containing escitalopram oxalate (Escitalopram Oxalate Goods) included in the ARTG and/or obtaining similar regulatory approval under the laws of foreign countries, Alphapharm had manufactured such goods at its manufacturing plant at Carole Park, Queensland (particulars of the quantities, dosages, dates of manufacture and countries were set out in a schedule to the letter). Alphapharm has imported and intends in the future importing API...in the form of tablets for the Australian market. I will discuss the evidentiary position further below. That amending Act also inserted s 119A into the Act. Item 4 of Schedule 7 of the amending Act provides that s 119A applies "in relation to the exploitation, at or after the time [s 119A] commences, of inventions claimed in patents in force at or after that time". The Explanatory Memorandum for the Bill for the amending Act stated that s 78(2) continued to apply in relation to any exploitation of patents that occurred prior to the commencement of s 119A. It would therefore seem that s 119A is the provision on which Alphapharm would have to rely in respect of any exploitation on or after 25 October 2006. Section 119A is wider than s 78(2). According to the Explanatory Memorandum, the purpose of the amendment was to "allow springboarding as an exception to patent infringement on any pharmaceutical patent at any time for purposes solely in connection with gaining regulatory approval of a pharmaceutical product in Australia or another territory". Importantly, s 119A applies where no extension of the term of the patent has been granted. If Alphapharm is successful in raising a s 78(2) defence, it could also rely on s 119A in respect of its conduct on or after 25 October 2006. Neither party referred to the repeal of s 78(2) or its replacement by s 119A. As noted at [28] above, on 27 May 2004 the Commissioner granted an extension. Alphapharm pleads that both before and since 27 May 2004 it has manufactured goods containing (+)-citalopram only for purposes in connection with having those goods included in the ARTG and/or for obtaining similar regulatory approval under the laws of foreign countries. The Lundbecks point out that no evidence has been led in relation to infringement of claims 1, 3 and 5, apart from the admissions made by Alphapharm contained in Mallesons' letters of 21 September 2005 and 14 July 2006 referred to earlier. The Lundbecks also rely on Alphapharm's Notice Disputing Facts dated 26 May 2006. The Lundbecks submit that by reason of Mallesons' letters and Alphapharm's Notice Disputing Facts, Alphapharm admits that: escitalopram oxalate is a non-toxic acid addition salt of (+)-citalopram; it imported raw materials containing escitalopram oxalate before 27 May 2004; it imported raw materials containing (+)-citalopram before 27 May 2004; it has manufactured goods containing escitalopram oxalate at its Carole Park, Qld manufacturing plant for the purpose of obtaining regulatory approval since November 2002; the first batch of tablets containing escitalopram oxalate was manufactured by Alphapharm for the purpose of obtaining US regulatory approval in November 2002; the active ingredient in the goods is (+)-citalopram; the goods are pharmaceutical compositions in unit dosage form; the goods contain a pharmaceutically acceptable carrier or excipient; the active ingredient in the goods is present in an amount between 0.1 milligrams and 100 milligrams per unit dose. In relation to Alphapharm's defence based on s 78(2) of the Act, the Lundbecks submit that this defence is an affirmative one that is not supported by any evidence led by Alphapharm and that the defence must therefore fail. In any event, according to the Lundbecks' submission, the defence is not raised by Alphapharm, and could not be raised by it, in relation to the period prior to 27 May 2004. The Lundbecks address Alphapharm's submission that the method followed by its supplier, A (for confidentiality reasons, I will substitute the letter "A" for references to the Lundbecks' overseas supplier), involved the use of a bromo-diol rather than the cyano-diol. The two involve the same sequence of bond forming reactions except for the delayed introduction of the cyano group in the case of the [A] process. The experiment has to be tried to find out. The mesomeric electron-donating ability of a bromo-substituent might make the bromo-diol more sensitive to acid than the cyano-diol. In the cyclised products the tertiary C-O bond is forced to lie in a closer to coplanar arrangement with the bromo/cyano-substituted arene ring thus reducing any substituent effects. SGD: There will be essentially no material differences between the cyano-phthalan and the bromo-phthalan in terms of acid sensitivity. However, understandably the Lundbecks do not submit that Alphapharm has infringed the Patent by manufacturing and marketing its generic citalopram product. Alphapharm relies on s 78(2) of the Act noted at [642] above. It submits that paras (c) and (d) of s 78(2) are satisfied. The formulae are set out in [10] above. It will be noted that formula II refers to CH 2 OH, whereas formula II' gives CH 2 OR, the R being a labile ester group. Alphapharm submits that the cyano-substituent on the diol is an essential integer in the various steps of claim 6(b). Claim 6(b) refers to formula II (and not to formula II'), and the specification at page 2, lines 21-28 refers to "benzonitrile" which, Professor Davies agreed, means "cyano-". Alphapharm relies on other references in the Patent specification to formula II and to "nitrile". Alphapharm submits that "the wording of the claims makes it clear that the relevant area has been deliberately left outside the claim", citing Sachtler at [53]. Alphapharm submits that the cross-examination of Professor Banwell established that the steps of the A process were different from the integers of Claim 6(b). Another defence raised by Alphapharm concerns the definition of "exploit" in Schedule 1 to the Act. Section 13(1) of the Act provides that, subject to the Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to do so. Section 13(3) provides that a patent "has effect throughout the patent area". The "patent area" is defined in the Dictionary in Schedule 1 and may, for convenience, be thought of as being "Australia". Her Honour cautioned against the purported application of the "pith and marrow" or "substance of the invention" approach, untrammelled by the form of the claims (at [55]). It is necessary for the Court to construe claim 6(b) in the light of the common general knowledge as at the priority date. How would the non-inventive person skilled in the art at that time, possessed of that common general knowledge, have understood the words of the claim? There is little case law in Australia in relation to "mechanical equivalents" and "non-essential integers" in the context of chemical formulae. In Saccharin Corporation Ltd v Anglo-Continental Chemical Works Ltd (1900) 17 RPC 307 at 319, Buckley J held that a method claim was infringed notwithstanding that changes had been made, because the same result was achieved. In Beecham Group Ltd v Bristol Laboratories Ltd (1977) 1B IPR 665 ( Beecham) , the plaintiff alleged infringement of patents for a pharmaceutical compound by the importation, offering for sale and sale in the United Kingdom of the antibiotic, Hetacillin. The plaintiff held four patents relating to a new class of semi-synthetic penicillins and to methods for their manufacture. One such penicillin was Ampicillin, a valuable antibiotic. The clinical effectiveness of Hetacillin was due entirely to Ampicillin, of which it was an acetone derivative. In the presence of water, as and when administered as an antibiotic, Hetacillin would revert into Ampicillin by a reversible chemical reaction. It was argued that what is claimed in the patents as an essential feature of the class of products to which ampicillin belongs is the presence of an amino group in the alpha position, and that this feature is absent in hetacillin. This is literally true at the time of importation and sale but it ceases to be true as soon as hetacillin is put to use for the only purpose for which it is intended. The substitution for the postulated amino group of the variant incorporated in hetacillin is evanescent and reversible and for all practical purposes of use can be regarded as the equivalent of the amino group in ampicillin. In the apt phrase used by the Court of Appeal, it is the reproduction of the substance ampicillin, albeit temporarily masked. In the imported hetacillin, there was a substituent for the amino group in the alpha position, but the substitution of the variant was "evanescent and reversible" and could be regarded as the equivalent of the amino group in the alpha position in the patented drug ampicillin. The Lundbecks draw an analogy with the bromo-diol's performance of the function of the cyano-diol. In Re Application of Eli Lilly & Co [1982] 1 NSWLR 526, it was argued by the Commissioner in an application under s 90 of the Patents Act 1952 (Cth) for an extension of term, that the patentee had not properly exploited the invention. The patent was in respect of a pharmaceutical invention called monensic acid and a new process for producing that product. The patentee had exploited and used commercially only monensin sodium, a salt of monensic acid. The Commissioner argued that the salt was a product chemically distinct from the acid. Wootten J was of the view (at 532) that a proper and convenient way to test the matter was to ask whether the sale of monensin sodium in Australia by another person would be an infringement of the patent. After referring to Beecham , his Honour held (at 534) that "the mere conversion of monensic acid to monensin sodium with the retention of substantially the same molecular structure and the same therapeutic effects, and involving only the use of a simple and well understood process, would fall within the 'pith and marrow' doctrine". In the Canadian case Pfizer Canada Inc v Apotex Inc (1998) 78 CPR (3d) 3, the court stated that the doctrine of equivalents applies to compositions where there is equivalence between chemical ingredients. That approach was followed in the Canadian case Merck Frosst Canada Inc v Canada (Minister of National Health and Welfare) (2000) 8 CPR (4 th ) 48. In the later case, the court stated, quoting from the earlier one, that "basically, there is equivalence when the substituting ingredient or device 'performs substantially the same function in substantially the same way to obtain the same result'". Accordingly, the court accepted expert evidence that the chemical properties and activities of the substituted ingredient were similar to those of the ingredient that it replaced. That evidence showed that both compounds were electron withdrawing groups and would therefore allow a particular reaction to occur, resulting in the same products. Importantly, the court accepted expert evidence that "a person reasonably skilled in the art would have known of the inter-changeability of that ingredient not contained in the patent with the one that was". Accordingly, the court found infringement proved. He agreed that ECT-I and ECT-II are steps that take place in order to form the diol precursor, and prior to the first step identified in claim 6(b). Steps ECT-III to ECT-VIII correspond with the integers in claim 6(b) with only one qualification: Step ECT-III uses a bromo-diol, whereas claim 6(b) uses the cyano-diol. It follows that step ECT-VII, which describes the cyanation process that exchanges the CN for the Br, is not an integer of claim 6(b). In re-examination, Professor Banwell said that the (+)-enantiomer of citalopram in the freebase form is obtained at the A step ECT-VII (the second last box in the left column in the table set out at [650] above), that is, when the cyanation process exchanging the CN for the Br occurs. The remaining evidence on the present issue is found in an affidavit of Hans Petersen of 13 December 2006, Exhibit MGB-8 to Professor Banwell's affidavit of 6 March 2007 entitled "Response to Petersen Affidavit", and an affidavit of Professor Davies sworn 30 March 2007 addressing both Mr Petersen's affidavit and Professor Banwell's response to it. Mr Petersen is a Senior Specialist in the Process Research department of Lundbeck. He was instructed to compare the "[A] Process Description" with the process claim found in claim 6 of the Patent. At para 13 of his affidavit, Mr Petersen set out, including in diagrammatic form, each step of the A process and the corresponding step of the example of the Lundbeck process described as "resolution by methods (b) and (c)" on p 7 of the Patent specification. Mr Petersen divides both processes into four corresponding steps. In relation to step 3 ("Exchange from Bromo to Cyano"), he states that the exchange of the bromo group (Br) for a cyano group (CN) to create escitalopram is required only in the A process, since in the Lundbeck process the required cyano group is already in place before Step 1. The only difference between the two processes described above is that, in the Lundbeck Process, the cyano group required in the final escitalopram compound is already present in Step 1 whereas, in the [A] Process, a bromo group is present and is exchanged for the cyano group at the end of the process, after ring closure. The cyanation step used in the [A] process is well known for the racemic analogue and has been for many years. In the patent (US 4,136,193) in which the racemate of citalopram was first disclosed, this process of exchanging a bromo group for a cyano group using copper cyanide in DMF was described. In fact, the same patent describes that this cyanation process can be undertaken at various points in the synthetic path to citalopram. One other variation, described in WO 01/49762 A1 is the preparation of 5-cyano-phthalide from the corresponding bromo compound. I would expect the resolution of either the racemic bromo-diol (as in the [A] Process) or the racemic cyano-diol (as in the Lundbeck Process) to proceed in a very similar manner. This is due to the high degree of similarity between the two diols which include the following factors. (a) There is no difference in the overall skeleton of the two molecules. The only difference is in the two substituents, 5-Br or 5-CN, both of which are at the same position. (b) The substituents (5-Br or 5-CN) are para to the stereogenic centre and on the opposite side of the molecule from the amino group (ending in NMe 2 ) which is the location on the molecule at which salt formation takes place and this distance and orientation reduces the prospect that or degree to which salt formation is influenced by the 5-Br/5-CN substituent. (c) For the purpose of the resolution step, in each diol, there is the same distance between the hydroxyl group, the chiral centre and the amino group. Accordingly, the resolution step is not significantly influenced by the 5-Br/5-CN substituents. (d) Both the 5-Br and 5-CN groups are electronegative substituents. This means that they both attract electrons. This heightens the overall similarity between the two molecules because these substituents have the same way of donating or withdrawing electrons to or from the phenyl ring to which they are bound. A CN group is often referred to as a "psuedohalogen" due to its electron withdrawing effects. (e) Accordingly, the characteristics and reactivity of the bromo-diol are not materially different to the characteristics and reactivity of the cyano-diol. It is clear to me, and I believe that it would have been apparent to me and any chemist in 1988, that the cyano-diol of the Lundbeck Process could be replaced by the bromo-diol or indeed a diol with any halogen or pseudohalogen in the place of the cyano group, without making any material difference to the way in which the process works. This is because (i) these different substituents have very similar properties, (ii) none of the chemistry involved in the Lundbeck Process involves interaction with these substituents and (iii) these substituents can be replaced with the desired cyano group by a straightforward and well known cyanation process at any stage in the synthetic route. ... the two processes represented by Mr Petersen in paragraph 13 have very fundamental and significant differences. The step of the [A] Process described in paragraph 13 (which corresponds to ECT-III in the [A] Documents) shows the aromatic group containing a hydroxymethyl substituent at the 2 position and a bromine (Br) atom substituent at the 4 position. In comparison, the Lundbeck Process involves a cyano (CN) or nitrile group at the same 4 position within the relevant molecule. Bromine and cyano groups are fundamentally different substituents. The two compounds shown in paragraph 13 of the Petersen Affidavit are not chemically equivalent and, as a result, their respective chemistries are different. The bromo ([A] Process) and cyano (Lundbeck Process) substituents attached to the 4 position on the aromatic group result in different chemical properties that Mr Petersen has overlooked in his analysis. In organic chemistry a cyano group attached to a benzene ring 'behaves' as an electron-withdrawing group and is regarded as a meta-directing group. On the other hand, bromo substituents attached to a benzene ring are considered inductively electron-withdrawing groups but act mesomerically as electron donating groups. Bromo substituents in this chemical arrangement are ortho- and/or para- directing groups. In lay terms this means that these two substituents (CN vs Br) are known to exert quite different effects on the associated aromatic ring and other groups attached to this ring. The replacement of a bromo substituent for a cyano substituent has fundamental chemical consequences. The fundamental chemical differences between bromo and cyano substituents were well known to a skilled addressee well before 14 June 1988 and reported in standard chemistry textbooks such as Morrison and Boyd. It is also noteworthy that Mr Petersen's 3D representation in paragraph 13 of chemical structures in both the [A] Process and Lundbeck Process confirming the stereochemistry of the diastereomeric salts are not in Claim 6 of the Patent. Indeed, the word diastereomer does not appear in Claim 6 at all. Mr Petersen's representation also includes the absolute configuration of S-diol and R-diol in the [A] Process although this is not reported in the [A] documents. Unless Mr Petersen has performed a crystal structure on these respective compounds or, alternatively, carried out spectroscopic or chemical correlation studies, neither Mr Petersen ([n]or anyone else) can assign these absolute configurations as Mr Petersen has done. He states that in 1988, if he had known the content of the Patent in suit and Lundbeck's previously published patents concerning citalopram and had been trying to arrive at a single enantiomer of citalopram without making use of the cyano-diol, the first thing he would have tried would have been to use the bromo-diol instead, conducting the other steps described in the Patent on the bromo-diol, and, if successful, cyanating bromo-citalopram to citalopram. Professor Davies disagrees with much of Professor Banwell's evidence in Exhibit MGB-8. Professor Davies agrees with Professor Banwell, however, that there can be significant reactivity differences between a bromo and a cyano group, but maintains that such differences have no material effect on the kind of chemistry involved in the patented process. He agrees with Professor Banwell's explanation of the characteristics of a cyano group as being meta-directing, whereas bromo substituents are ortho- or para-directing, but he maintains that this is of relevance only in relation to electrophilic aromatic substitution reactions. The Lundbeck and A processes do not, he explains, involve electrophilic aromatic substitution. Professor Davies says that Professor Banwell overplays the significance of the differences between the bromo and cyano substituents on the relevant chemistry involved in the Lundbeck and A processes, in para 5 of Exhibit MGB-8. Professor Davies agrees that there will be differences in solubility, melting point and so on, but does not believe that there will be any relevant differences in reactivity. Professor Davies strongly disagrees with Professor Banwell's contention in para 8 of Exhibit MGB-8 that the replacement of a bromo-substituent for a cyano-substituent in the A process has relevant fundamental chemical consequences. In relation to Professor Banwell's evidence in para 9 of Exhibit MGB-8, Professor Davies states that both bromo and cyano substituents are electron withdrawing, the only real difference manifesting itself in the product orientation seen in electrophilic aromatic substitution reactions which are not involved in the present case. The step ECT-IV that Professor Banwell, in para 11 of Exhibit MGB-8, states has been omitted by Mr Petersen, relates, according to Professor Davies, to liberation of the salt to return to the free base. Professor Davies says that this is not a step that is material to the processes in question. However, he points out that, at para 23 of Mr Petersen's affidavit, Mr Petersen refers to the resolution steps generally and that it is clear from Example 2 in the Patent specification that the reaction proceeds on the basis of a liberated salt as a base. The Lundbeck and [A] Processes are, in essence, identical with each other. The differences between the bromo and cyano substituents are not, in my view, likely to have a material effect on the way the processes work. The differences identified by Professor Banwell in paragraph 5 of MGB-8, would be relevant only if electrophilic aromatic substitution reactions were required, which they are not in the process in question. As I noted in paragraph 9 above, had I, in 1988, knowledge of the patent in suit and Lundbeck's previous published patents concerning citalopram and been trying to arrive at a single enantiomer of citalopram without making use of the cyano-diol, I believe that the first thing that I would have tried would have been substituting the bromo-diol in place of the cyano-diol, conducting the other steps described in the patent in suit on the bromo-diol and, if successful, cyanating bromo-citalopram to citalopram. This is what is described in the [A] Process. I have made all enquiries which I believe are desirable and appropriate. No matters of significance which I regard as relevant have, to my knowledge, been withheld from the Court. I find that although in other contexts there are differences between using the cyano-diol as against the bromo-diol, there are none in the context of the present process. I accept Professor Davies's evidence that in 1988 he would have chosen to use the bromo-diol rather than the cyano-diol for the purpose to hand if he had been instructed that the cyano-diol was not available. Although Professor Banwell pointed to differences between the use of the two diols, his evidence did not establish how those differences were of any relevance in the present context. In substance, what Alphapharm has done has been to create an additional step, the product of which it later removes. Apart from that evanescent substitution, the A process is the same as that spelt out in claim 6(b). Accordingly, subject to Alphapharm's other defences, I find that use of the A process used to produce the (+)-enantiomer of escitalopram would infringe claim 6(b). There is no dispute that the acts of infringement must occur within the patent area, which is for present purposes, Australia (see [659] above). In relation to claim 6(b), "exploit" has the meaning identified in para (b) of the definition of "exploit". Accordingly, in general terms, Alphapharm submits that para (b) provides for two classes of exploitation of a method or process invention: in Australia, using the method or process; and in Australia, making, hiring, selling or otherwise disposing of, offering to make, sell, hire or otherwise dispose of, using or importing, or keeping for the purpose of doing any of those things, a product resulting from the use referred to in (1). The difference between the constructions supported by Alphapharm and the Lundbecks concerns the meaning of the expression "the use referred to in (1)". According to Alphapharm, that notion includes the "in Australia" element, whereas according to the Lundbecks it does not. A consequence of the construction supported by Alphapharm is that in the case of an invention which is a method or process, importation is not a form of exploitation unless the product imported had resulted from the use of the method or process in Australia. However, as the Lundbecks submit, where the product results from the use of the method or process in Australia, the very making of the product, having occurred in Australia, would itself be a contravention of the patented method or process (para (a) of the definition of "exploit"). Accordingly, the effect of Alphapharm's submission would be that in the case of an invention of a method or process, the reference to importing is superfluous. I do not think that the construction supported by Alphapharm is correct. There is no suggestion in the express terms of the definition of "exploit" that importation, with nothing more, is not to be a form of exploitation in the case of a patented method or process. The territorial connection with Australia is one that is implied, and the proper construction of the definition of "exploit" has the territorial connection attaching twice, but not three times. The notion of "in Australia" does not follow the expression "from such use" at the end of para (b). However, I do not think it is open to the Lundbecks to seize on part of the admissions made by Alphapharm and to ignore the qualifications subject to which those admissions were made, one of which was that the only purpose for which Alphapharm manufactured the pharmaceutical substance in question was to have the goods included in the ARTG. In my view, Alphapharm's s 78(2) defence succeeds in relation to the period after 27 May 2004 to 25 October 2006, and s 119A would apply to any exploitation by Alphapharm that has occurred in the period on or after 26 October 2006. The objection to which most submissions were addressed was an objection by Alphapharm and Arrow to large parts of the affidavit of Professor Montgomery sworn 20 December 2006 in which he expressed opinions based on reports of clinical studies carried out by other persons. However, before dealing with that objection, I will deal with the others that are outstanding. 8 ICH Harmonised Tripartite Guideline, Choice of Control Group and Related Issues in Clinical Trials E10. In my opinion, none of these documents are admissible. Documents 4 and 5 relate to foreign patent applications. In each case, the applicant is Lundbeck. Document 4 comprises a Danish patent application that was apparently made on 24 May 1989 in respect of (+)-citalopram and a method for its preparation, and subsequent correspondence between Lundbeck and the Danish Patent Office (DPO). The DPO refused the application, expressing the opinion that the product had not been shown to differ substantially from what was already known prior to the application filing date, including the racemic citalopram, and the fact that almost the entire therapeutic effect resided in one of the optically active antipodes of a racemic compound. The DPO referred to ss 2 and 16 of the Danish Patents Act. The DPO also rejected method claims that were included in the application. While Alphapharm may be encouraged by the fact that the Danish Patent Office accepted arguments somewhat similar to submissions it has put to me, this does not make the Danish file wrapper rationally probative in relation to the issues I have to decide under the Act. In other words, the relevance of the document is not shown. Document 5 is an International Application published under the Patent Cooperation Treaty bearing an international filing date of 12 July 2002 and entitled "Method for the Preparation of Escitalopram". Likewise, its relevance to the issues I have to decide under the Act is not shown. I note that my rulings in relation to Documents 4 and 5 are consistent with certain observations made on applications for orders for discovery by Burchett J in F Hoffmann-La Roche AG v Chiron Corporation (2000) 47 IPR 516 at [19]---[21] and by Branson J in Lubrizol Corporation Inc v Imperial Chemical Industries plc [2000] FCA 1464 ; (2000) 50 IPR 526 at [33] (although, unlike the present case, those cases involved the exercise of a discretion and a balancing exercise). Documents 7 and 8 were tendered in order to diminish the effect of Professor Montgomery's evidence, but neither of them was put to him. Their probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to Lundbeck, and I refuse to admit them (see s135(a) of the Evidence Act ). In the light of Dr Bøgesø's qualifications, experience and position, this testimony is admissible, although subject to the question of the weight to be given to it. Dr Bøgesø was not put forward as an expert witness, but as a witness of fact. I certainly accept that his evidence does not exclude the possibility that someone, somewhere may have "managed to solve citalopram with a resolving agent via a fractional crystallisation of diastereomeric salts". In the first sentence, Professor Davies states that the average skilled person, if he or she, in 1988, had embarked on a project to obtain the individual enantiomers of citalopram, would not "have gone to anything like" the lengths to which Dr Bøgesø and his colleagues went, and "even less if the task was to develop an improved anti-depressant". In the last sentence Professor Davies states that such a person would not have had such a depth of knowledge of the molecule as Dr Bøgesø and his colleagues had, and would not have pursued synthesis of the enantiomers with their "determination, vigour and tenacity". Counsel for Arrow submits: "I don't think it's going to be a significant matter, but it's not really a matter for an expert in Professor Davies's position to give an opinion on that. That's really a matter for the court. " In my opinion the evidence is admissible. Professor Davies's training, study and experience in the field, including, in particular, his knowledge of the interests and concerns of the pharmaceutical industry as at the priority date, was considerable. He knew the state of relevant research at that time. It does not matter that the opinion expressed is about "a fact in issue or an ultimate issue": s 80(a) of the Evidence Act . Again, however, the question as to the weight to be given to the testimony remains. In a table in its submissions, Alphapharm identified 13 passages in Professor Montgomery's affidavit to which it objected. However, to speak of "13 passages" is apt to mislead by way of understatement. The passages objected to were extensive. Nine of the 13 each embraced numerous paragraphs of the affidavit Arrow also objected to certain paragraphs of Professor Montgomery's affidavit (not all of which were identical to those objected to by Alphapharm), and adopted the submissions made by Alphapharm. In so far as I should decide that the passages or any of them are admissible, Alphapharm and Arrow seek a direction pursuant to s 136 of the Evidence Act limiting the use to be made of the passages. I will begin by giving a brief overview of Professor Montgomery and his affidavit. I will then address, in general terms, the General Relevance Objection, the Factual Basis Objection and the application for the s 136 direction. He graduated with a Bachelor of Science (Honours) degree from the University of London in 1960 and a Bachelor of Medicine and Bachelor of Surgery (MBBS) from University College Hospital, London, in 1963. He received a Diploma in Psychological Medicine (DPM) from the Royal College of Physicians and Surgeons in 1973 and a Doctor of Medicine (MD) from the Karolinska Institute in Stockholm, Sweden, in 1978. Professor Montgomery became a Member in 1973, and then a Fellow, in 1982, of the Royal College of Psychiatrists (FRCPscych). I will not trace the whole of Professor Montgomery's career and experience. In 1978 he, together with a colleague, developed the Montgomery-Asberg Depression Rating Scale (MADRS) to measure levels of depression. Professor Montgomery describes the MADRS as "the most sensitive rating scale for depression" and as being "widely used". Professor Montgomery was successively Senior Lecturer, Reader and then Professor in Psychiatry at St Mary's Hospital Medical School, London (now part of Imperial College School of Medicine, University of London) from 1979 to 1998. In 1999 he was appointed as Emeritus Professor of Psychiatry at the Imperial College of Science, Technology and Medicine, London. Professor Montgomery was a Member of the Council of the Royal College of Psychiatrists from 1980 to 1992, President of the British Association of Psychopharmacology from 1990 to 1992, and President of the European College of Neuropsychopharmacology from 1992 to 1995. Professor Montgomery was a member of the Committee on Safety of Medicines UK (CSM) from 1987 to 1993 and, as the only psychiatrist on the Committee, he considered all applications in the field of psychiatry and neurology at that time, including all of the antidepressants for which marketing approval was sought. He estimates that he completed a total of about 40 expert reports (now called "clinical overviews") to support regulatory applications for central nervous system medication, including for SSRIs and other antidepressants. For 16 years Professor Montgomery has been the editor of International Clinical Psychopharmacology and European Neuropsychopharmacology . He is also on the editorial boards of other scientific journals. Professor Montgomery has published several hundred scientific papers, research reports, reviews and book chapters and has authored some 25 books. Professor Montgomery was awarded the Prix Erasme de Psychiatrie in 1999 by the Free Erasmus University of Brussels, the Neuroscience Award in 2001 by the European College of Neuropsychopharmacology, and a Lifetime Achievement Award in 2006 by the British Association of Psychopharmacology. For more than 30 years, Professor Montgomery's work has involved treating patients suffering from psychiatric illnesses and research into those illnesses, with a particular focus on depression. Professor Montgomery has been consulted by most pharmaceutical companies (he names 15) and chairs Lundbeck's "Global Advisory Board of Experts". In para 4 of his affidavit, Professor Montgomery refers to a list of publications constituting Exhibit SAM-1 to his affidavit. There are 61 of them, including 12 authored by Professor Montgomery alone, or with co-authors. Where I refer to a publication in this affidavit, I am referring to the publication as referred to in the list contained in Exhibit SAM-1. Where I refer to each of these publications in the body of my affidavit, unless I or the context indicates to the contrary, I intend to indicate that the cited publication provides, in my view, sound scientific support for the proposition in relation to which I cite the publication . It is well tolerated by elderly patients and is the one least likely to cause drug-drug interactions. (b) Escitalopram is even more selective and potent and is as well tolerated as citalopram. With escitalopram, there is evidence that the higher doses are more helpful in severe depression. Although somewhat lengthy, I think it desirable to set out these paragraphs. Citalopram is a 50:50 racemic mixture of two mirror image molecules, or enantiomers (see below). In 1992 it was believed that only one enantiomer was responsible for the therapeutic effect (Hyttel 1992 2 ) [the footnote states "Although published some years after the patent in suit, the Hyttel 1992 paper is based upon the data contained in the patent in suit".]. In those circumstances, eliminating the enantiomer which is not responsible for producing the desired therapeutic effect, could have been expected to result in a more specific drug with potentially fewer side effects but without improved clinical effect. The interpretation of adverse reactions and drug-drug interactions is also easier if only one enantiomer is present. The issue of drug-drug interactions is of particular importance in patient populations, such as depressed patients, in which polypharmacy frequently occurs. Furthermore, regulatory authorities favoured enantiomerically pure drugs. In 1988, knowledge of the importance of, and different effects of, individual enantiomers was not widespread. At that time (1988), there was no information publicly available as to whether both enantiomers or only one of them was responsible for the therapeutic effect of Citalopram. There was no publicly available information suggesting that the R enantiomer of citalopram had a negative effect. If only one enantiomer was responsible for the therapeutic effect, by eliminating the enantiomer which was not responsible for producing the desired therapeutic effect, I, and I believe other clinicians, would have expected that a drug would be more specific with potentially fewer side effects, but without improved clinical effect. In other words, I, and I believe other clinicians, would have expected that where one enantiomer is practically devoid of therapeutic effect, separating a racemate into its individual enantiomers would result in similar efficacy at half the dose. As I have noted ... above, I sat on the Committee on Safety of Medicines UK (CSM) from 1987 to 1993. The approach taken by the CSM in 1988 to racemates and separate enantiomers was that it was nice to receive data in relation to separate enantiomers of pharmaceutical products. However, if the data in relation to a racemate was that the racemate was therapeutically active and there was no pressing rationale, such as toxicity or other unwanted side effects, to separate the racemate, then there was no reason to do so. I was aware in 1988 of pharmaceutical industry practice to try to separate a chiral compound into its individual enantiomers in order to check for unwanted receptor affinities and potential deleterious side effects. However, this practice did not extend to separating chiral compounds into their individual enantiomers to ascertain whether one had a beneficial or deleterious effect on the compounds efficacy. In 1988 close attention was not yet paid to enantiomers and I would not have expected an active enantiomer with the same or similar receptor affinities as the racemate to have any benefits over and above a racemate which did not have deleterious or unwanted effects. In 1988, knowledge that one enantiomer was practically devoid of 5-HT reuptake inhibitory potential, had it been available, would have led me, and I believe other clinicians, to the expectation that the drug profile would be at least as good as citalopram at half the dose. On this basis, the ratio of predicted efficacy would be that a half-dose of escitalopram would produce the same degree of inhibition of 5-HT reuptake as a full dose of citalopram. However, as discussed below unexpected differences in favour of escitalopram have been found. In vitro and in vivo studies have shown that escitalopram is a more potent SSRI than citalopram, and that the R-enantiomer is practically devoid of 5-HT uptake inhibitory potency. Citalopram is active in several well-accepted animal models predictive for antidepressant effect. It is therefore not surprising that escitalopram has also been found to be active in these same animal models. The R-enantiomer was practically devoid of 5-HT reuptake effects, confirming the in vitro data. In many places in his affidavit, Professor Montgomery cites articles in support of statements, thereby indicating acceptance of the conclusions in those articles (as contemplated by para 4 of his affidavit set out at [728] above). The surprising finding in studies with some of these animal models has been the earlier response to escitalopram compared with citalopram. In the rat model of chronic mild stress (Willner 1997), administration of TCAs such as imipramine, or conventional SSRIs, normalizes sucrose intake after three to four weeks of treatment. This is in line with the characteristic delayed onset of antidepressant effect observed in the clinic. In contrast, escitalopram produced a complete antidepressant-like effect after only one week of treatment (Sanchez 2000, Montgomery 2001). This earlier response with escitalopram was unexpected, suggesting that the R-enantiomer might modulate the effect of the S-enantiomer, delaying the antidepressant action. The role of the R-enantiomer has been investigated further in a series of preclinical studies, which have shown that the R-enantiomer reduces the positive effect of the S-enantiomer (Mork 2003). Consequently, escitalopram shows earlier and greater efficacy than when the R- and S-enantiomers are given together (Mork 2003, Chen 2005, Sanchez 2004). Escitalopram, compared to other SSRIs and SNRIs, is unique in having, in addition to its 5-HT reuptake inhibitory effects, a pronounced effect via an affinity-modulating allosteric site (Chen 2005). The allosteric binding site has been reported to modulate the binding to the primary site and thereby enhance the binding (Plenge 1991). Escitalopram has been shown to increase the stabilization of the binding to the serotonin transporter via the allosteric mechanism compared to other SSRIs and venlafaxine (Chen 2005). This unique self-enhancing effect on the serotonin transporter goes a long way to explain the obvious clinical superiority of escitalopram as an antidepressant and as an anxiolytic. While I acknowledge that there is a danger in assuming that the content of a book written by the deponent of an affidavit can simply be put into affidavit form, I must assess the affidavit and objections to it on their merits. Alphapharm submits, firstly, that a difference in therapeutic effect as between the two is irrelevant to the questions arising under s 25A of the TG Act. Alphapharm emphasises that the statutory question arising under the TG Act is whether, when Lundbeck lodged its application for TGA approval of escitalopram oxalate, another therapeutic good "consisting of, or containing" the same active component was already included in the ARTG. According to Alphapharm's submission, that question is not answered by reference to the superior efficacy of escitalopram over citalopram. Secondly, and for a similar reason, Alphapharm submits that in the Lundbeck Appeal (Extension of Term) Proceeding, the statutory question for consideration under s 70 of the Act and reg 10.7 of the Patents Regulations for the purpose of ascertaining the "first regulatory approval date" is not answered by evidence of the present kind. Thirdly, Alphapharm submits that in so far as evidence of the kind mentioned is said to be relevant to the validity of the Patent in the Revocation Proceeding, "after-acquired knowledge" concerning the superior benefits of the invention cannot buttress a claim for the presence of an inventive step. Accordingly, Alphapharm submits that Professor Montgomery's evidence of the kind mentioned is not relevant in any of the three proceedings mentioned. Arrow supports Alphapharm's objection made in the Revocation Proceeding for the purposes of the Arrow Proceeding. Lundbeck countered the General Relevance Objection in the Revocation Proceeding and the Arrow Proceeding on the basis that the evidence was relevant to the issue of obviousness. As noted in Section E at [224], I accept Professor Montgomery's evidence and that of other witnesses: that it was common general knowledge at the priority date that it was possible that at most all of the beneficial effects of citalopram might reside in one enantiomer, the other being mere "ballast"; and, if so, that by means of using a single enantiomer, all the benefits of citalopram might be obtained from half the dosage. The Patent specification accords with the position as I have described it in the preceding paragraph. There is a series of decisions of the various courts of the United States in which it has been accepted that unexpected superiority in effectiveness is probative of non-obviousness: see, for example, Sterling Drug Inc v Watson 135 F Supp 173 (1955) at 175-176; In re Gershon , 372 F 2d 535 (1967) at 537; In re Skoner , 517 F 2d 947 (1975) at 950; Ex parte Sohda 2002 WL 519757 at 2-3; In re Chupp , 816 F 2d 643 (1987) at 646-647; Ortho-McNeil Pharmaceutical Inc v Mylan Laboratories Inc 348 F Supp 2d 713 at 755-756. In some of these cases it has been said that the evidence of unexpected superior clinical benefits has been admitted to counter prima facie obviousness arising from other evidence. I do not find other evidence in the present case raising a prima facie case of obviousness. In any event, this was not a basis of admissibility relied upon by Lundbeck. In Canada, it has been suggested that in relation to obviousness, little weight should be given to "subsequently recognised advantages": see Janssen-Ortho Inc v Novapharm Ltd [2006] Carswell Nat 3249 at [113](8), [114](8). It's not advanced for the proposition that because there was this unexpected benefit, that somehow makes it inventive. That's not what we're saying. We're simply not advancing that argument. But we are advancing the argument on motivation. If you didn't expect this unexpected benefit, then the fact that you have this massive benefit doesn't mean that you were motivated to move mountains to get there. In fact, by its objection, Alphapharm is seeking to keep out Professor Montgomery's evidence that escitalopram was later found to have therapeutic benefits far superior to those of citalopram. Those which reveal an "unfelt want" are as likely, or sometimes more likely, to involve an inventive step. However, neither Aickin J in Wellcome nor their Honours in Astra were saying that evidence of unexpected benefits is admissible. Rather, the point they were making was that evidence of previous unsuccessful attempts to satisfy a long-felt want, while admissible, might not be entitled to much weight since inventive step can be present, not only in the presence of a long-felt want and associated motivation, but also in their absence. It seems to me that Lundbeck has set up a "straw man" to knock down. In the light of the nature of the case that Lundbeck had to counter, it was only evidence of what was commonly known and expected at the priority date that it was entitled to seek to prove. Evidence of post-priority date surprises did not fall within that description. Since arriving at the conclusion expressed in the last paragraph, I have read what Kitchin J has said on the present issue in Generics v Lundbeck at [231]---[237] and the passages from the authorities to which his Lordship refers, namely, Richardson-Vicks Inc's Patent [1995] RPC 568 at 581 and Glaxo Group Ltd's Patent [2004] EWHC 477 ; [2004] RPC 43 at [113] . I note that my conclusion is generally in line with those three authorities. In summary, while I would admit any parts of Professor Montgomery's affidavit that go to the pre-priority date common general knowledge and expectations of the hypothetical skilled but non-inventive addressee or team as to the benefits to be found in a separate enantiomer, I do not admit the passages tendered to prove that the post-priority date clinical studies and data established that in fact the therapeutic benefits of escitalopram far exceeded those expectations. In relation to the Lundbeck Appeal (Extension of Term) Proceeding, Professor Montgomery's evidence showing that escitalopram has different pharmacological and clinical effects was initially potentially relevant to the question of whether Cipramil consisted of or contained the pharmaceutical substance (+)-citalopram because of submissions made by Lundbeck as to the meaning and application of provisions of the TG Act. However, I have now rejected Lundbeck's submissions in that respect (see Section K above), and the evidence is therefore shown to be irrelevant. Finally, in relation to the TGA (Protected Information) Proceeding, Lundbeck Australia contended that Professor Montgomery's evidence showing that citalopram and escitalopram have different pharmacological properties and effects was relevant to the question whether Cipramil can be said to consist of or contain (+)-citalopram. According to the submission, his evidence was relevant to that question because of Lundbeck Australia's submission as to the meaning and application of the expression "active component". However, again, I have now rejected Lundbeck's submission in that respect too (see Section L above), and so the evidence is shown to be irrelevant. In sum, the General Relevance Objection is sustained in the Lundbeck Appeal (Extension of Term) Proceeding and the TGA Proceeding and, to the extent mentioned, in the Revocation Proceeding and the Arrow Proceeding. ... Professor Montgomery articulates a series of opinions regarding the efficacy of citalopram vs (+) citalopram on the basis of his interpretation of reports or articles, which in turn report the results of certain clinical studies (most of which were conducted by or on behalf of Lundbeck). No person has given evidence regarding the conduct of those studies, the underlying data concerning the studies has not been provided and there has been no disclosure of primary documents that might reveal (for instance) the aims, objectives or methodology of those studies. The authors of the Journal Articles relied upon have not given evidence. As submitted above, Alphapharm was able to call the pooled studies seriously into question, on the basis of limited material. The Journal Articles themselves constitute reports of selected information taken from and summarized as the results from clinical studies. Further, there is no evidence as to the existence of other unpublished studies the results of which may be unhelpful to the Lundbeck arguments. Professor Montgomery does not refer to the underlying data, but relies on the results as reported in the Articles. The Journal Articles themselves are at times opaque as to the studies upon which their conclusions are based ... Further, not all of the studies upon which the Montgomery expert evidence is based were published. Accordingly, the basis upon which Professor Montgomery has expressed his opinions is hearsay evidence which cannot be admitted as evidence of the truth of its contents. Alphapharm submits that, in the absence of proof of that factual basis, the evidence of Professor Montgomery in this regard is inadmissible. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. I do not think it necessary to review all of these cases. It is necessary to distinguish between two potential meanings of the notion of a "basis rule". The expression may be used to refer to a supposed rule that evidence of expert opinion is not admissible unless the expert identifies the assumed factual basis for his or her opinion, thereby distinguishing between what is opinion and what is not. This goes to the form taken by the expert's evidence. The provisions of s 79 of the Evidence Act tend to have the practical effect of requiring attention to the form that expert evidence takes: HG v The Queen [1999] HCA 2 ; (1999) 197 CLR 414 at [39] per Gleeson CJ. As I noted in Harrington-Smith v State of Western Australia (No 2) [2003] FCA 893 ; (2003) 130 FCR 424 at [25] , in the absence of a distinction between opinion and assumed factual basis, the Court may not be able to be satisfied: On the other hand, the expression "basis rule" may be used to refer to a supposed rule that evidence of expert opinion is not admissible unless the factual basis of the opinion is proved by admissible evidence. Generally speaking, Professor Montgomery's evidence is not criticised for not identifying the basis of his opinions: he identifies precisely enough the journal articles on which he relies, and where he does not attribute a statement to a particular article, he is making only an introductory statement (for example, para 77 of his affidavit which was set out at [732] above) or giving an overall summary of the effect of all of the articles. What is put by Alphapharm is that Professor Montgomery's opinions are not admissible because the factual basis for them, being the actual carrying out and recording of the results of the clinical studies reported in the journal articles, were not proved by admissible evidence (see para 416 of Alphapharm's submissions set out at [754] above). In the Law Reform Commission's Interim Report on Evidence (ALRC No 26, 1985), the Commission described these exceptions as (a) the expert's accumulated knowledge, (b) the reported data of fellow scientists, and (c) information commonly relied upon in an industry, trade or calling (ALRC No 26 vol 1 at [131], vol 2 at [91]). The Commission cited in support: English Exporters (London) Ltd v Eldonwall Ltd [1973] 1 Ch 415 ; R v Abadom [1983] 1 WLR 126 ; Borowski v Quayle [1966] VR 382 ( Borowski ); H v Schering Chemicals Ltd [1983] 1 All ER 849 ( Schering Chemicals ); Reid v Kerr [1974] 9 SASR 367 ; Rowley v London and North Western Railway Co [1852] EngR 1037 ; (1873) LR 8 Exch 221 ; Dickins v Randerson [1901] 1 KB 437 ; R v Perryman (1907) 147 CCC Sess Pap 109 (Lawrence J). There is some overlap between the three categories. No one professional man can know from personal observation more than a minute fraction of the data which he must every day treat as working truths. Hence a reliance on the reported data of fellow scientists, learned by perusing their reports in books and journals. The law must and does accept this kind of knowledge from scientific men...[T]o reject a professional physician or mathematician because the fact or some facts to which he testifies are known to him only upon the authority of others would be to ignore the accepted methods of professional work and to insist on finical and impossible standards.....In general, the considerations which define the (professional) are (a) a proper source of information, (b) an extent of personal observation in the general subject, enabling him to estimate the general plausibility, or probability of soundness, of the views expressed, and (c) the impossibility of obtaining information on the particular technical detail except through reported data in part or entirely. The true solution must be to trust the discretion of the trial judge, exercised in the light of the nature of the subject and the witness' equipments. The decisions show in general a liberal attitude in receiving technical testimony based on professional reading. But this is an area where the hearsay rule does not apply and the matter dealt with in the evidence would clearly have been admissible. The same judge-made exception to the hearsay rule was recognised in the standard texts on evidence at that time: see, for example, D Byrne QC and JD Heydon, Cross on Evidence (3 rd Australian Edition, Butterworths, 1986) at [15.31], [17.161], citing, in addition to Borowski and Schering Chemicals , See v Milner (1980) 2A Crim R 210 (FCA); Holt v Auckland City Council [1980] 2 NZLR 124; Cuthill v State Electricity Commissioner of Victoria [1981] VR 908 at 915 (FC); Baker v Australian Asbestos Insulations Pty Ltd [1984] 3 NSWLR 595 at 607. This involves the drawing of unrealistic distinctions. The issue is resolved by defining the hearsay rule as preventing the admissibility of hearsay evidence where it is relevant by reason only that it would affect the court's assessment of the facts intended to be asserted. Under the proposal, evidence by an expert of the facts on which his opinion is based will be admissible as evidence of those facts. Potential dangers have been raised. First, there is the danger that false evidence may be placed before the court. However, the expert will usually form a judgment about the accuracy of what he is told. In addition the tactical pressure on the parties to verify the facts relied upon by the expert should ensure that problems of assessment of the evidence will not arise. They will either call more direct evidence or have to face adverse comment. When assessment problems do arise, the exclusionary discretions may be used. This is similar to the present approach. Another danger suggested is that it could result in an increase in evidence adduced --- particularly that which is adduced in the Family Court and is of marginal relevance. As at present, the expert will do no more than adduce evidence of the basis of his opinion --- what he was told will be relevant to that opinion and the assessment of it. However, the relevance proposal and relevance discretion will apply and give the courts express control where now that control and its extent is unclear. It has also been suggested that parties will want to answer the allegations of marginal relevance and this will give rise to an increase in the evidence given. However, this should not occur. First the party against whom the evidence is led can object to the relevance of the facts related by the expert --- only those affecting his opinion will be relevant. As to such facts, that party will have to decide, as at present, whether he accepts those facts or wishes to challenge them. He would have to do this whether the evidence was admitted as the basis of the expert's opinion or to prove the facts asserted --- it would be a foolish party who relied on that distinction in relation to key factual elements and did not call rebutting evidence. The proposal in fact has the potential to save time and costs. At present, the party leading the expert evidence should lead non-hearsay evidence to confirm all the statements made to and relied upon by the court. If he does not, it will be open to the opposing party to argue that the opinion should be rejected --- the hearsay rile will lie in wait. Under the proposal he can call witnesses to confirm the key material, and leave it up to the opposing party to cross-examine the witness to raise the matters in issue. If he does not and leads evidence in rebuttal, it will be possible for the first party to call further evidence. The hearsay rule itself is set out in s 59 of that Act. The representations made by the authors of the articles cited by Professor Montgomery are "previous representations" as to the carrying out of the clinical studies and the results of them. Sections 59 and 60 are perhaps an odd way of grappling with the present issue. It seems clear, however, that it was intended that in a case like the present one, statements of the bases for expert opinions like those made by Professor Montgomery were to be characterised as being relevant for a purpose other than proof of the facts intended to be asserted by the representations by the authors of the articles. Prior to the enactment of s 60 , the summaries given by Professor Montgomery of the effect of the journal articles would have been ruled admissible as falling within the exceptions dictated by necessity referred to at [761]-[765] above. In their joint report, Uniform Evidence Law: Report of December 2005, the Australian, New South Wales and Victorian Law Reform Commissions have recognised that s 60 had the effect of excluding from the hearsay rule an expert's statement of the factual basis of his or her opinion (see [7.74] ff). The Commissions recognised (at [7.74]) that an expert relies on "statements made to him or her by others about their observations of events which are facts in issue, together with a wide range of factual information from more remote sources". The Commissions gave as illustrations: knowledge acquired by experts from reading the work of other experts and from discussion with them; the reported data of fellow experts relied upon by such persons as scientists and technical experts in giving expert opinion evidence; factual material commonly relied upon in a particular industry or trade or calling. In addition to Borowski , they cited PQ v Australian Red Cross Society [1992] 1 VR 19 ; R v Vivona (Unreported, Victorian Court of Criminal Appeal, Crockett, Tadgell and Teague JJ, 12 September 1994); R v Fazio (1997) 93 A Crim R 522. Such evidence is hearsay at common law, but s 60 lifts the statutory hearsay rule in that situation. However, it stated that "the expert will usually form a judgment about the accuracy of what he is told". It also stated that when "assessment problems [in relation to the evidence] do arise, the exclusionary discretions [a reference to Part 3.11 of that Evidence Act ] may be used". Such a use of s 136 of the Evidence Act (which falls within Part 3.11 of the Evidence Act ) was referred to by Finkelstein J in Quick v Stoland at 382 and by Nicholson J in Daniel v State of Western Australia [2000] FCA 858 ; (2000) 178 ALR 542 at [30] - [34] . In a sense, it is true, as Alphapharm submits, that the relevant parts of Professor Montgomery's evidence consist of a review of scientific literature. This characterisation, however, does not adequately reflect the significance of his testimony. A person lacking his "specialised knowledge based on [his] training, study or experience" (see s 79 of the Evidence Act ) would not know how to go about locating relevant articles, would not be able to distinguish between relevant and the irrelevant ones, would not be able to interpret the articles, and would not be able to assess their overall effect in the light of the questions on which his opinion evidence is required. Part of Professor Montgomery's specialist knowledge is precisely knowledge of the identity of the scientific journals that publish research carried out within his area of expertise, knowledge of the clinicians who have been working and publishing in the area, and knowledge of the relevance and reliability of their published work in relation to the questions raised. Professor Montgomery gave evidence of the peer-review process that is followed in the case of the two journals of which he has been the editor for approximately the last 16 years. Three or four reviewers are approached, with the possibility of substitutes if any of those approached initially prove to be too slow in providing their comments as reviewers. The article will be accepted for publication if the reviewers so recommend. The reviewers may suggest amendments which, in Professor Montgomery's experience, only rarely have authors declined to adopt. If, for any reason, reviewers cannot be found for an article, it will not be accepted for publication. Professor Montgomery said that, in the case of both of the journals of which he is editor, approximately 75% of the articles submitted are rejected, some of them out of hand. While Professor Montgomery did not give evidence of the peer-review process that is followed in the case of the other journals in which the articles he cited were published, I infer that all of those journals in which they were published were peer reviewed and that their editors followed a generally similar peer review process to that followed by Professor Montgomery himself. It is true that when the Parliament enacted s 60 , it was considered that Part 3.11 of the Evidence Act , which contains s 136 , would act as a safeguard to limit the operation of s 60 in appropriate circumstances (see [765], [772] above). However, I will not make an order under s 136. The evidence with which I am concerned is the evidence of Professor Montgomery's opinions. If the opinions were otherwise admissible, I would not think it appropriate to limit the use to be made of them pursuant s 136. Ultimately, if the scientific community, represented here by Professor Montgomery, accepts as a sufficient basis for the forming of opinions, the reportings of clinical studies published in peer-reviewed articles in scientific journals of high repute, I do not see why the Court should interfere by limiting the use to be made of the opinions. The weight to be accorded to Professor Montgomery's opinions remains a matter for the Court. Criticisms made by Alphapharm of particular opinions expressed by him are to be taken into account as going to the weight to be given to those opinions (see Quick v Stoland at 378 per Branson J; Welsh v The Queen (1996) 90 A Crim R 364 at 369, 371). His Honour is then invited to make a determination of the validity of these arguments based upon the cross-examination of Dr Mitchell and of Professor Montgomery and use this determination as one of the factors in deciding the weight to be afforded to a particular expert's evidence. Because Alphapharm's General Relevance Objection has succeeded, that evidence of Professor Mitchell was rendered irrelevant. This seems to me to reflect the only practicable way in which opinion evidence of the kind given by Professor Montgomery can be dealt with. I do not think, however, that they stand against the approach that I have taken above. In my opinion, for the reasons given above, s 60 of the Evidence Act defeats the Factual Basis Objection. I would have declined to make an order under s 136 of that Act if the passages objected to had not succumbed to the General Relevance Objection. The four proceedings will be fixed for a date for the making of such orders. Directions will be made for the filing and service of submissions as necessary. While the reasons set out above were being proofread in preparation for delivery of judgment, the English Court of Appeal on 10 April 2008 gave judgment in H Lundbeck A/S v Generics (UK) Ltd [2008] EWCA Civ 311 , the appeal from the judgment of Kitchin J in Generics v Lundbeck previously noted. With respect, I do not think it necessary to incorporate references to their Lordships' reasons, which are, generally speaking, consistent with what I have written above. I certify that the preceding seven hundred and eighty-five (785) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | validity patent for (+)-enantiomer of the racemate, citalopram, and for method of obtaining that enantiomer patentee also held previous patent for the racemate both the racemate and the enantiomer, drugs for the treatment of depression (+)-citalopram claimed to be therapeutically more effective than citalopram challenge to validity of claim for (+)-citalopram construction of claim whether for (+)-enantiomer as an independently existing molecule or whether also for (+)-enantiomer when part of racemate whether claim for (+)-enantiomer anticipated by patent for citalopram whether (+)-enantiomer as an independent molecule was obvious australian test for obviousness application of that test to product claims for the (+)-enantiomer, and to method claim for the method of obtaining it lack of utility product claim for a dosage that, inter alia , was less than and more than a useful dosage range. held : (1) upon its proper construction, product claimed was the independently existing enantiomer; (2) the invention of the independently existing enantiomer was not anticipated by the patent for the racemate; (3) the australian "matter of routine" test for obviousness, when applied to the invention of the product, equated to the question whether those skilled in the art, as a matter of routine, would have had the goal of obtaining separate enantiomers in the expectation that one would be a desirable drug for the treatment of depression; (4) one of the product claims relating to dosage failed test of utility; (5) on the evidence, neither the (+)-enantiomer nor the method for obtaining it was obvious at the priority date. extension of term patent for (+)-enantiomer of the racemate, citalopram, and for method of obtaining that enantiomer patentee also held previous patent for the racemate both the racemate and the enantiomer, drugs for the treatment of depression (+)-citalopram claimed to be therapeutically more effective than citalopram both cipramil (goods based on racemic citalopram) and lexapro (goods based on (+)-citalopram) entered in australian register of therapeutic goods (artg) application for extension of term of patent for (+)-citalopram commissioner of patents initially granted extension sought subsequently, following hearing before her delegate, decided to reduce term of extension on ground that "first regulatory approval date" was date when goods cipramil based on racemate had been entered in artg appeal by patentee opponent pharmaceutical company contending that no extension at all should have been granted because application for extension had been made outside six month period following date of first inclusion in artg of goods containing the (+)-enantiomer, namely, cipramil, of which the active pharmaceutical substance was the racemate questions of proper construction of patents act 1990 (cth) ss 70 , 71 , 77 whether goods based on racemate "contain" individual enantiomer meaning of "first regulatory approval date" in s 70(5) of act. held : (1) cipramil contained pharmaceutical substance (+)-citalopram; (2) application for extension of term of patent had not been made within six months of first inclusion in artg of cipramil; (3) in circumstances, commissioner had lacked power to grant any extension to term of patent; (4) register of patents to be rectified by removal of particulars of extension. infringement patent for (+)-enantiomer of the racemate, citalopram, and for method of obtaining that enantiomer generic company applying to therapeutic goods administration (tga) for registration of generic drug based on (+)-enantiomer of citalopram whether doctrine of "mechanical equivalents" or "non-essential integers" applicable to method of obtaining pharmaceutical compound generic pharmaceutical company producing generic drug only for purpose of applying for regulatory approval s 78(2) of patents act 1990 (cth). held : (1) doctrine of mechanical equivalents applied so that certain different steps in method did not prevent generic company's method from infringing method the subject of patent; (2) no infringement by reason of s 78(2). therapeutic goods act 1989 (cth) (tg act), s 25a protected information patentee held earlier patent for racemate (citalopram) and under later patent for one of its enantiomers ((+)-citalopram) registration in australian register of therapeutic goods (artg) of therapeutic goods (cipramil) of which racemate was active component later registration in artg of therapeutic goods (lexapro) of which (+)-citalopram was active component generic company applying for registration in artg of goods of which (+)-citalopram was active component question whether information that patentee had supplied to therapeutic goods administration (tga) in connection with its application to register lexapro could be used by tga in connection with generic company's application to register generic drug s 25a of tg act had effect that certain information about other therapeutic goods not to be used in evaluation of therapeutic goods for registration in artg whether information supplied by patentee on its application for registration of lexapro was such "protected information" in respect of generic company's application to register generic drug question whether cipramil was goods "containing" (+)-citalopram for purposes of s 25a(2)(c) of tg act. held : (1) cipramil contained (+)-citalopram; (2) information given by patentee in relation to registration of lexapro was therefore not protected information and could be used by tga in evaluation of generic company's application to register generic drug. expert opinion evidence professor of psychiatry citing carrying out of clinical studies and their results for purpose of showing that patented enantiomer had far greater therapeutic effects than those of previously patented racemate clinical studies carried out after priority date whether surprisingly favourable results relevant whether citation of clinical studies and their results admissible whether order should be made under s 136 of evidence act 1995 (cth) limiting use to be made of psychiatrist's evidence. held : (1) carrying out of clinical studies after priority date of patent and the results of those studies irrelevant to state of common general knowledge as at priority date, and therefore not probative on issue of obviousness; (2) citation of clinical studies and their results not rendered inadmissible for failure to prove them otherwise than by psychiatrist's hearsay evidence; (3) s 60 of evidence act 1995 (cth) applied to the clinical studies and their results, cited by psychiatrist; (4) no order made under s 136 of that act. patents patents patents patents evidence |
On 31 May 2007, I gave judgment in this matter dismissing the application: Barrick v Qantas Flight Catering Limited [2007] FCA 835. In those reasons, I said, at [2]-[6]: ... the Federal Court proceedings, which were commenced by an application filed on 17 June 2002, involve an extraordinary collocation of alleged causes of action, many of which are misconceived or assert a cause of action not known to the law. It is a sad but true observation that the applicant's case has been conducted on the basis essentially of assertion, and the absence of probative evidence. This is, quite simply, an extraordinary assumption of what the Federal Court is empowered to do. There was no cause of action available to the applicant by which she could revisit the the issues which were the subject of findings in the Australian Industrial Relations Commission (AIRC) to the effect that the applicant was complicit in a fraudulent scheme. The applicant asserted that in the AIRC proceedings, the conduct by the respondent in resisting her application for unlawful termination or reinstatement was false, and was a representation in trade or commerce entitling the applicant, pursuant to the Trade Practices Act 1976 (Cth) to recovery of legal expenses. As my reasons for judgment in the principal proceedings demonstrate, I was and am of the view that the proceedings in the Federal Court were brought for the dominant purpose of having the Federal Court revisit the determinations of other courts and tribunals (including the proceedings in the AIRC) and the findings concerning the conduct of the respondent, or its officers, in such proceedings, which were determined adversely to the applicant. In particular, it was said that the proceedings in the Federal Court were brought to obtain findings from the Federal Court contrary to those of the AIRC, "to clear the applicant's name". Applicant, on the basis of the Respondent's conduct, and it's clearly set out in the statement of claim that various things --- there were various court proceedings, there was the AIRC --- all of these things are set out in the statement of claim. And we are asking the Court --- we have come to the Court and said these things could not have happened unless something untoward was done, and we say something untoward was done and we say that --- we are asking the Court to assist us, by the process of discovery and disclosure and so on, to actually quite precisely revisit all the things which have happened and how they happened and how they could possibly have happened. The stated purpose in seeking a declaration was to sustain proceedings in another court at some later time. The causes of action pleaded by the applicant, the nature and purpose of the principal proceedings, and the evidence sought to be relied on by the applicant are such that, in the ordinary course, it would be appropriate to make an order for costs on an indemnity basis against the applicant. In my judgment, the proceedings were commenced without reasonable cause and were, from first to last, untenable: Bagshaw v Scott [2005] FCA 104 at [46] and [102]. From the outset, the proceedings had no substantial or any prospects of success, and it is clear, in my judgment, that the proceedings were commenced, maintained, and conducted vexatiously. Notwithstanding all of the above, for the reasons which follow, I think it right, in all the circumstances of this case, simply to order that, except where specific costs orders have been made with the opposite effect, the applicant pay the costs of the respondent of and incidental to the proceedings. I note that the dates that had been first set down for the hearing of the trial had to be vacated because of the inadequacy of the respondent's preparation for trial. In respect of that matter, I ordered the respondent to pay the costs of the applicant thrown away by the need to adjourn the trial of the proceedings. On 31 May 2007, I dismissed the application and set a timeframe in respect of the making of submissions as to costs. On 14 June 2007, I received from Mr Cusask of Cusack Galvin & James, solicitors for the applicant, submissions on behalf of the applicant. Those submissions did not address the question of costs, and appeared instead to seek to re-litigate issues in respect of which judgment had been delivered. On 21 June 2007, a Notice of Motion and costs submissions were received from Blake Dawson, as solicitors for the respondent. That Notice of Motion, as amended, sought: The Applicant pay the Respondent's costs of the proceedings, including all reserved costs and costs of this Notice of Motion, on an indemnity basis . The Applicant's solicitor, Cusack Galvin & James (a firm) (also known as Cusack, Galvin & James Solicitors and Advocate) being constituted by the members Mr Michael Damian James and Mr William Patrick Cusack or in the alternative Mr Michael Damian James and Mr William Patrick Cusack, members of the firm Cusack Galvin & James (a firm) (also known as Cusack Galvin & James Solicitors and Advocate) or in the alternative Mr William Patrick Cusack (' Applicant's Solicitor') , pay the Respondent's costs of the proceedings, including all reserved costs on an indemnity basis . The Applicant and the Applicant's Solicitor, be jointly and severally liable for such costs. On 24 October 2007, the solicitors for the respondent requested a further directions hearing, because, with the concurrence of the solicitors for the "Applicant's Solicitor" (a generic term for the various alternative third parties referred to in the Notice of Motion as set out above), the respondent sought to split its case as between Mrs Barrick and the other parties, on the basis that any claim against Mrs Barrick could be determined first, and the remaining issues deferred to a later date, pending mediation between the affected parties. That request was rejected by me. I indicated, and the parties were advised, that the questions raised in the request could be agitated at the projected hearing on 26 October 2007 if required. On 26 October 2007, the solicitors for the respondent indicated that they were unable to proceed on the hearing, in particular, because they had been served with further material in the form of a lengthy affidavit, only on the morning on 26 October 2007. On that day, I heard the matter of the costs application as against Mrs Barrick personally, and directed that the question of costs as between the other parties would be adjourned. I reserved judgment on the matter of any costs against Mrs Barrick, in the light of the amounts of material that had been relied upon and the lateness of filing of some of those documents, in particular, new material filed by Mrs Barrick on the morning of 26 October 2007. I then made further orders in relation to the hearing of the Notice of Motion filed by the solicitors for the respondent, and made a programming series of directions for the hearing of the balance of the matter. On 5 February 2008, the further hearing of the Notice of Motion commenced. At the conclusion of the hearing on that day, the respondent indicated it wished further to amend the Amended Notice of Motion, and widen the relief sought in the alternative for orders for indemnity costs. The relevant amendments were made to paragraphs 6 to 12 of the Notice of Motion. Following argument, on the following day, 6 February 2008, on whether the further amendments should be allowed, I granted leave to the respondent to file a Further Amended Notice of Motion. I ordered the respondent to pay the costs of the third party respondents to the Notice of Motion thrown away by the amendments, and the need to adjourn, and I ordered that those costs be paid on an indemnity basis. On 8 February 2008, the respondent filed a Further Amended Notice of Motion. Before that Further Amended Notice of Motion could be heard, the parties to the Notice of Motion filed consent orders in the following terms: The further amended notice of motion filed 8 February 2008, insofar as it seeks relief against Cusack Galvin & James (a firm) (also known as Cusack, Galvin & James Solicitors and Advocate), Mr Michael Damian James, and Mr William Patrick Cusack, be dismissed. No order as to costs. The only matter remaining to be decided was the application in paragraph 1 of the Notice of Motion filed on behalf of the respondent, which seeks costs on an indemnity basis against Mrs Barrick. In respect of that aspect of the matter there are a number of documents relevant to the propriety of making the orders sought against Mrs Barrick. Those documents include a transcript of the hearing on 26 October 2007, and submissions in reply on behalf of the respondent, and a series of submissions made by Mrs Barrick against any order for costs. Where the basis for an order of indemnity costs against a party is, in truth, founded on the conduct of the applicant's solicitor, both in the pleading and prosecution of the applicant's case, and further, where there is a claim by a respondent against that third party solicitor seeking costs on an indemnity basis because of that solicitor's conduct, that has been settled as between the parties to that claim, it seems to me to be unfair to make an order that Mrs Barrick pay the costs of the respondent to the principal proceedings on an indemnity basis. It is probable that there is no practical difference between an order that Mrs Barrick pay the costs of the respondents on a party and party basis, and an order that she pay the costs of the respondent on a indemnity basis, having regard to the likely level of costs, and her financial position. Given the particular litigation history in the present case, it would be in my judgment wrong to order that the applicant pay the respondent's costs on an indemnity basis, having regard to the nature of the proceedings which the respondent brought against the applicant's solicitors, and the resolution of the claims of the respondent in that regard. I therefore order simply that the applicant in the principal proceedings pay the costs of the respondent to those proceedings, to be taxed if not otherwise agreed. That general order as to costs, is, of course, subject to any particular aspect of the proceedings in which a specific costs order has been made. | whether the usual order as to costs should be made whether costs should be awarded on an indemnity basis where basis for an order was founded on the conduct of the applicant's solicitor where claim against third party solicitor settled held that having regard to the nature of the proceedings it would be unfair for the applicant to pay costs on an indemnity basis usual order as to costs made costs |
His disability was described as 'Stress, Depression and Anxiety' . A symptom was said to be 'alcoholism' . The respondent claimed to have been diagnosed as suffering from 'war caused PTSD [post traumatic stress disorder] and major depression' . The conditions were said to have their origin in Mr Warren's service in Vietnam. His claim was rejected by the Repatriation Commission. A delegate determined that 'post traumatic stress disorder and alcohol dependence or alcohol abuse are not related to service' . That rejection was affirmed by the Veterans' Review Board. A Deputy President of the Administrative Appeals Tribunal set the Commission's decision aside and substituted a determination that the respondent's conditions of post traumatic stress disorder and alcoholic dependence were each war-caused diseases within the meaning given to that expression by s 9 of the VEA, and remitted the matter to the Repatriation Commission for determination of the rate of the pension. The Commission appeals from that decision. Section 44 of the Administrative Appeals Tribunal Act 1975 (Cth) limits such an appeal to questions of law. 2 A summary of the respondent's service appears in the Tribunal's reasons. He served in the Australian Regular Army between 1963 and 1972 and saw operational service in South Vietnam between January 1971 and March 1972 with the 17 th Construction Squadron Workshop and 198 Works Engineers. The respondent was based in Nui Dat when he arrived in South Vietnam and then in Vung Tau in August 1971. He returned to Nui Dat in September 1971 and from November 1971 to March 1972 he was based in Van Kiep. He held the rank of Sergeant on his discharge in June 1972. This case involves mental conditions or disorders. 'Disease' is defined to include any physical or mental ailment or disorder; and 'incapacity' of a veteran 'from a war-caused disease' is a reference to the effects of the disease. Section 9 provides that a disease contracted by a veteran shall be taken to be war-caused if it resulted from an occurrence that happened while the veteran was rendering operational service, amongst other things. 4 Sections 120 and 120A are concerned to provide a method of determining whether there is a link between an injury or disease and operational service, and in that process they provide a standard of proof to be applied towards the ultimate question raised by s 120(1) --- whether the injury or disease was war-caused. 'PTSD' is dealt with by a SoP being Instrument No 3 of 1999. Under the heading 'Kind of injury, disease or death' , PTSD or death from PTSD is identified. The pattern of repeated self administration may result in tolerance, withdrawal and compulsive alcohol use behaviour. 13 The source for the diagnostic criteria for each of the SoP is stated to be DSM-IV, which is defined to mean the fourth edition of the 'American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders'. A reference to DSM-IV disclose that the criteria listed in each of the SoP in question reflect those identified in DSM-IV as necessary to a diagnosis, albeit in a summary form. The diagnostic categories, criteria, and textual descriptions are meant to be employed by individuals with appropriate clinical training and experience in diagnosis. It is important that DSM-IV not be applied mechanically by untrained individuals. The specific diagnostic criteria included in DSM-IV are meant to serve as guidelines to be informed by clinical judgment and are not meant to be used in a cookbook fashion. For example the exercise of clinical judgment may justify giving a certain diagnosis to an individual even though the clinical presentation falls just short of meeting the full criteria for the diagnosis as long as the symptoms that are present are persistent and severe. On the other hand, lack of familiarity with DSM-IV or excessively flexible and idiosyncratic application of DSM-IV criteria or conventions substantially reduces its utility as a common language for communication. Four steps were identified as necessary to be undertaken by the Tribunal, where a SoP had been determined, in connexion with causation. In summary, the Tribunal is first required to consider whether the material before it discloses a hypothesis connecting the disease with the service of the veteran. If a hypothesis is raised, the Tribunal must determine whether there is a SoP in force. If there is, it must consider whether the hypothesis is reasonable, according to the SoP. If this point is reached the Tribunal may return to the question posed by s 120(1) - whether it is satisfied, beyond reasonable doubt, that the incapacity did not arise from a war-caused injury. It is only at that point in the process that the Tribunal engages in finding facts as to the question of causation. 15 It remains to mention s 120(4) of the VEA, which provides for a standard of proof where a determination or decision is to be made which does not arise under s 120(1) or (2). It provides that the matter is to be decided to the reasonable satisfaction of the decision-maker. The Tribunal explained, at the outset of its reasons, that there had been an issue as to whether the respondent was properly diagnosed with the condition, but that in the course of submissions the legal representative for the Commissioner conceded that diagnosis. The Tribunal remarked that 'that concession was rightly made' . 17 The Tribunal expressed itself as satisfied that the material pointed to a hypothesis which connected the respondent's PTSD with the circumstances of his service. Four events were identified by the Tribunal as relevant. The Tribunal found that two of them were consistent with Factor 5(a) of the SoP. They had been identified by Dr Rogers. It is not necessary to further describe them or the Tribunal's findings. Each involved the respondent being confronted by an event which involved a potential threat of death or serious injury by a loaded weapon being pointed at or near to him. The third step referred to in Deledio 83 FCR 82 was therefore satisfied, in the Tribunal's opinion. The Tribunal then proceeded to the fourth step in Deledio 83 FCR 82, to determine whether it was satisfied beyond a reasonable doubt that the PTSD did not arise from a war-caused injury. The question which arose here was whether the respondent's account was credible, given that it emerged over time. The Tribunal considered the evidence and found the respondent to be a reliable witness and historian. There was support for the authority of his account, in the Tribunal's view. The PTSD from which he suffered was war-caused, within the meaning of s 9 of the VEA, it concluded. 18 The Tribunal then turned to the medical evidence from each of Drs Gillman, Mulholland and Rogers with respect to the respondent's alcohol consumption. In his report of 19 May 1997, Dr Gillman had said that he obtained from the respondent a history of ' somewhat excessive alcohol consumption ' and regarded him as suffering from alcohol dependence. Dr Rogers' report of 21 November 2002 also contained a diagnosis of alcohol dependence, with physiological dependence. Beside that diagnosis was a reference to 'DSM IV 303.90 '. The Tribunal noted that the doctor's reasoning for ' that conclusion ' not to be readily apparent. I take this to refer to the physiological dependence. The respondent saw Dr Mulholland in September 2005. The respondent apparently detailed a history of excessive intake of alcohol over a ten year period, from 1971 to 1981. He reported to the doctor that he was now consuming modest quantities of alcohol. In these circumstances he was consuming more modest quantities of alcohol. Dr Mulholland concluded that 'a current diagnosis of alcohol dependence is not appropriate' . Despite this conclusion the Tribunal preferred the diagnoses of Dr Gillman and Dr Rogers. In the Tribunal's view, whilst the respondent's alcohol dependence might be currently under control, or in remission, the fact that he drinks every day of the week, coupled with the history of earlier, very excessive, drinking, led to a conclusion that his condition was still properly diagnosed as alcohol dependence. Given the findings that I have made in relation to post traumatic stress disorder that concession is proper. In those circumstances it is not necessary to undertake any further analysis in relation to this claimed condition beyond noting that it also must be regarded as being war-caused. It seeks an order substituting a negative finding. No order is directly sought with respect to the decision concerning the respondent's PTSD, although the two conditions are inextricably linked, because the finding with respect to the respondent's condition of alcohol dependence is based upon his suffering from PTSD at an earlier time, as the passage set out at [18] above shows. The Notice of Appeal seeks an order that the matter, which I take to be the whole proceeding, be remitted to the Tribunal for fresh determination. 20 The Notice of Appeal relied upon some fourteen alleged errors of law. It was sought to further identify the legal nature of the errors in written submissions and leave was sought to amend the Notice of Appeal, presumably to the same end. The respondent objected to the amendments. Apart from the withdrawal of one allegation, the amendments are superficial. They do not in any event properly reflect the nature of the applicant's case. 21 The applicant's case on appeal may be stated shortly. Its focus is upon the diagnostic criteria in each of the two SoP. It is contended that in each case the Tribunal was required to be satisfied that the criteria were met, by reference to the SoP. In the case of the PTSD it is alleged that the Tribunal failed to consider the SoP criteria at all. With respect to the condition of alcohol dependence, there was either no evidence to support such a conclusion or the findings made were not consistent with the requirements of the SoP criteria. If the respondent did suffer from alcohol dependence, it is submitted that there was no evidence that the respondent suffered from a psychiatric disorder at the time of clinical onset of alcohol dependence, as par 5(a) of the SoP requires. This contention is therefore connected to the Tribunal's findings concerning the respondent's PTSD. The applicant's reference in submissions to the application of the SoP, in the context of ss 120 and 120A, is likely to confuse the true issue. The appeal concerns the threshold question, arising from ss 13 and 9, namely whether the respondent in fact suffers from the injury or disease upon which his claim to a pension is based. The cases confirm that s 120(1) assumes the existence of the relevant injury or disease; that the question whether it is suffered by the veteran is separate from the following questions as to causation; and that it is to be determined by the decision-maker to its reasonable satisfaction, as s 120(4) requires: see Fogarty v Repatriation Commission [2003] FCAFC 136 per Kenny J at [35] and following; Benjamin v Repatriation Commission (2001) 70 ALD 622; Repatriation Commission v Cooke (1998) 90 FCR 307 at 310-311; Repatriation Commission v Budworth [2001] FCA 1421 ; (2001) 116 FCR 200; Repatriation Commission v Gosewinckel (1999) 59 ALD 690 at 700-702. Some of these cases have been concerned with the decision-maker applying the wrong standard, or making its factual determination as to the character or existence of the disease when applying the hypothesis seen to arise to the 'template' of the SoP. Repatriation Commission v Hill (2002) FCAFC 192 ; 69 ALD 581 furnishes an example of the latter error. The Court observed (at [61]) that reference to the elements of PTSD would have been relevant if there was a dispute as to whether the veteran was suffering from the disorder, but they were not relevant at stage 3 of the Deledio 83 FCR 82 questions. 23 The question that the appeal raises is whether it is necessary that the Tribunal make its findings, as to the existence of the disease claimed, expressly and in detail, by reference to the criteria in the SoP. The applicant relies upon cases which hold that it is necessary for the decision-maker to have regard to the definition of injury or disease in the applicable SoP: see Repatriation Commission v Codd [2005] FCA 888 at [48] and Gosewinckel 59 ALD at [55]. Those cases however also make plain that it may be expected that the Tribunal will act upon medical opinion as to diagnosis. The point made by Weinberg J in Gosewinckel 59 ALD at [55], is that the Tribunal is not in a position to accept a doctor's opinion as to the existence of a disorder without knowledge of the criteria essential to its diagnosis. 24 The function of the SoP, in general terms, is to identify the minimum factors which must be present in the circumstances of the veteran's case, to provide the necessary linkage between the disease suffered and operational service. The factors necessarily refer to the disorder in question. The principal purpose of the definition of each of PTSD and alcohol dependence is to permit a determination as to whether the SoP applies to the condition as found by the Tribunal, presumably upon the basis of a clinical diagnosis. The diagnostic criteria for the disorders in the SoP are said to be 'those specified in DSM-IV, and are as follows' . The criteria are intended as part of the definition for the purpose of the application of the SoP. 25 The anterior, or threshold, question for the Tribunal is whether the veteran suffers from the disease as claimed. It is a distinct and separate statutory question, in the nature of a precondition to any entitlement to a pension. There is no provision of the VEA which expressly requires the Tribunal to have regard to the SoP criteria in determining this question. The requirement that the Tribunal be reasonably satisfied that the veteran suffers from the claimed disease will usually require medical opinion. A clinical diagnosis of a condition classified under DSM-IV would necessarily have regard to that Manual and the criteria provided by it. 26 The applicant's case must therefore be that it is to be inferred, as a matter of statutory construction, that the SoP diagnostic criteria are to be applied to a finding with respect to the anterior statutory question. Their application may be implied if the statute was intended to operate in a particular way. In that regard there is a clear connexion between the condition to be found and the criteria, or at least a practical consequence if they do not correspond. Although the anterior question is separate from that as to whether the SoP applies, if the condition found is characterised by criteria which differ from those in the SoP, the claim will fail because the SoP will not apply. The possibility of a reasonable hypothesis arising will be removed. 27 It may be inferred that the SoP were written upon an assumption that if a veteran was found to be suffering from a condition classified by DSM-IV, a diagnosis in accordance with that Manual would have been made. It was intended that the SoP apply where such a diagnosis was made. This assumption, of correspondence, might suggest the application of the SoP criteria in relation to the finding of the existence of the condition. There is however one difficulty with that approach. It is DSM-IV as a whole which will inform a clinical diagnosis, upon which a finding will be based. The Manual itself explains that there is more to a diagnosis than the application of the criteria in a 'cookbook' fashion. A person having symptoms which fall short of meeting the stated criteria may nevertheless be diagnosed as suffering from the condition. DSM-IV refers to the need to exercise clinical judgment, which I take to include the application of experience. In some cases the SoP criteria may not therefore be met. 28 It cannot be inferred that the SoP were drawn on the basis of some misunderstanding as to the application of DSM-IV. They were drawn by reference to it. It could not therefore have been intended that the strict application of the criteria summarised in the SoP definition was to be a requirement of, or a substitute for, a proper clinical diagnosis. The threshold question in each case will be whether the diagnosis was one properly made, having regard to DSM-IV. Because clinical judgment is involved, differences of opinion may arise. They will need to be resolved by the Tribunal on the materials before it. 29 Once the Tribunal has made its finding the VEA does not require the diagnosis to be assessed against the SoP definition, as if the latter were a check list. The purpose of the definition must be borne in mind. It is to identify which condition or disorder in DSM-IV it refers to. If the Tribunal or other decision-maker has accepted a diagnosis of a DSM-IV classified disorder, the SoP will apply to it. It may have been sufficient to refer to the description of the disorder, but the SoP have gone further and summarised the relevant criteria. This may have been intended as a useful guide for decision-makers. That is not important for present purposes. There is nothing in the operation of the relevant provisions of the VEA which requires the SoP definition to be utilised by the decision-maker in determining the existence and nature of the DSM-IV classified condition. The possibility of a lack of correspondence should not arise. 30 The only question in the present case was whether there was evidence upon which the Tribunal could reasonably be satisfied that the respondent suffered from PTSD and alcohol dependence. The evidence of Dr Rogers was not only that of a diagnosis of each condition, but also that each diagnosis was made in accordance with DSM-IV. Those assertions were not challenged by the applicant. No aspect of his diagnoses was identified as outside the purview of DSM-IV. 31 In relation to the PTSD the Tribunal also had before it the report of Dr Mulholland, in which he expressed the opinion that the respondent's symptoms did not warrant a conclusion that he suffered from a psychiatric disorder. The doctor conceded that the length of time over which the respondent had been receiving psychiatric treatment and the observation of an independent lay witness, as to changes in the respondent's personality, might suggest a psychiatric disorder. The respondent had been seeing Dr Rogers for some four years by the time of the hearing. Moreover Dr Mulholland expressed concern that the respondent may have been understating his problems. 32 The Tribunal was clearly prepared to act upon Dr Rogers' evidence and said as much. It would have been entitled to do so, regardless of the concession made by the applicant's legal representative that the diagnosis was one properly made and capable of acceptance by the Tribunal. It is therefore strictly unnecessary to deal with the applicant's submissions with respect to the concessions, but it seems to me necessary to do so, since it now involves the conduct of the applicant on an appeal before this Court. 33 The applicant embarked upon a surprising course on the appeal. It argued that the concession was not properly made, or that it should not be held to it. Reference was made in submissions to the concession being something of a 'surrender '. It is correct that the concession occurred after discussion between the Tribunal and the applicant's legal representative. Clearly enough he considered that the Tribunal was not impressed with the applicant's foreshadowed contention that Dr Rogers' diagnosis should not be accepted, although the applicant had not directly challenged it. He advised the Tribunal that he would no longer press the contention and would focus the applicant's argument upon the application of the Deledio 83 FCR 82 steps, which is to say upon the assumption that the Tribunal accepted the diagnosis of PTSD. The Tribunal enquired whether the applicant's legal representative wished to take that position. It appears that it was concerned that he may have felt some pressure to do so, arising from the discussion. It seems to me that the Tribunal may have been overly polite. There is no indication in the transcript that the legal representative was at all pressured. This is confirmed by what followed. The question asked by the Tribunal, whether the legal representative accepted the diagnosis of PTSD, was answered directly and in the affirmative. The legal representative advised that he did not feel under any pressure, but recognised that a finding contrary to the applicant was inevitable. In any event he concluded by saying that he was 'happy to put the Commission's case on whether or not the condition of PTSD is related to service through the Statement of Principles having regard to Deledio and the other cases, and I also put our case on the basis that there is no diagnosis present of an alcohol disorder' . At the Tribunal's request he confirmed that the issues arising were causation, with respect to the PTSD, and that there was no diagnosis of alcohol abuse. 34 As a general rule it is only in the clearest case, and for the most cogent of reasons, that a party who has conceded a matter is able to make the validity of what was conceded the basis for overturning a decision: Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Aust) Pty Ltd [1978] HCA 8 ; (1978) 139 CLR 231 at 241. If there was some error on the part of the Tribunal in acting upon the concession, or something approaching injustice to the applicant in holding it to the concession, the Court might exercise its discretion to permit it to argue to the contrary of it and require a fresh hearing upon the matter: Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 186 at 194-195; Nation v Repatriation Commission [No 2] (1993) 18 AAR 273 at 293. The concession on the part of the applicant's legal representative was perfectly clear. The fact that he considered that the Tribunal was likely to accept Dr Rogers' diagnosis is no basis for permitting the applicant to resile from the concession. It amounted to an exercise of professional judgment, as to whether to pursue the issue at all. It could hardly be said to amount to an injustice to hold it bound to it. The only injustice it would work would be to the respondent. 35 The applicant submitted that the Tribunal was not entitled to act upon the concession, as it had a statutory duty to decide the question, whether the respondent suffered from the condition, for itself and referred to Perpetual Trustee Company (Canberra) Limited v Commissioner for Australian Capital Territory Revenue (1994) 50 FCR 405 at 419. In that case however the Tribunal had decided a case on the basis of admitted facts which provided only an artificial and inadequate basis. The Court did not hold that a Tribunal could not accept proper and relevant admissions of fact. In the present case there was nothing to prevent the Tribunal accepting the admission, which was clear in its terms and was made in the background of evidence of a diagnosis of PTSD. It was in any event intending to act upon that evidence. 36 I turn then to the applicant's argument concerning the Tribunal's finding that the respondent suffered from alcohol dependency. The applicant's general submission, that the doctors and the Tribunal were required to refer in detail to the criteria in the SoP, (or DSM-IV), in arriving at their diagnosis or finding respectively, is dealt with by the preceding reasons. On the applicant's alternative approach, and in an endeavour to raise a question of law, it was contended that there was no evidence to permit such a finding. A mere insufficiency of evidence would not suffice. It is necessary in cases such as this to be precise as to the nature and quality of the error attributed to a decision-maker: Re Minister for Immigration and Multicultural Affairs; Ex parte S20/2002 (2003) 198 ALR 59; [2003] HCA 30 at [5] ; Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 626 at [40]. From that point it may be possible to identify the legal principle, or statutory provision, that attracts the suggested consequence: S20/2002 198 ALR at [5]. 37 There was evidence which supported the finding made by the Tribunal, that of Drs Gillman and Rogers. They had both diagnosed alcohol dependence, Dr Gillman as at 1997 and Dr Rogers in 2002 and 2004. Dr Mulholland did not consider that a diagnosis was open, on the account of the respondent that his heavy consumption of alcohol had been over a ten year period which ended in 1981 and that, by the time Dr Mulholland saw him in September 2005, the respondent had control of the problem, having reduced his consumption to only 150 ml of port wine each day and somewhat more on one or more occasions a week. 38 The applicant sought, in the first place, to overcome the two doctors' diagnosis by elevating a statement made by the respondent to Dr Gillman, that he did not consider that he had such a problem, to a denial of his case. It is not difficult to understand why the Tribunal did not expressly deal with the contention. It was clearly entitled to disregard it. Dr Gillman had done so, whilst expressing the view that the respondent had little insight into his condition. 39 I infer from the applicant's submissions from this point, that it is contended that the only evidence that the Tribunal could consider was that of the respondent himself, in his account to Dr Mulholland, and the doctor's opinion thereon. This approach assumes that the account and opinion must be accepted and that the other doctors' diagnosis are no longer reliable, because there was a significant change in the respondent's habits. The applicant submitted that the Tribunal was not entitled to assume a continuation of heavy drinking and the condition of alcohol dependence by reference to the respondent's level of consumption as reported to Dr Mulholland. The Tribunal was not entitled to rely upon the fact that the respondent drank every day, even if in the lower quantities reported to Dr Mulholland, as substantiating a diagnosis. The criteria referred to a constellation of symptoms and the Tribunal's reasons went no way towards identifying them, it was submitted. The submission misunderstands the Tribunal's reasons. It was not making a diagnosis itself. At issue was whether the diagnoses of alcohol dependence, particularly that of Dr Rogers made a year before and by reference to DSM-IV, could be said to be no longer relevant because they were based upon a different level of alcohol consumption. It was concerned with the question, which had been directed to Dr Mulholland, whether it could be said that the respondent was in remission, given that doctor's evidence that the underlying tendency to heavy drinking was likely to remain. 40 It is scarcely necessary to point to the authorities which remind that the decisions of tribunals are not to be read too closely or literally. A number of cases have recognised that a tribunal may be taken to have considered the whole of the evidence, although its conclusions are stated shortly: see for example Ex parte s20/2002 198 ALR at [14] and Gosewinckel 59 ALD at [59]. In the present case the Tribunal may have identified one factor which influenced it towards a conclusion that the respondent's condition remained that which Drs Gillman and Rogers had diagnosed. It would have been obvious to the Tribunal that the period of the respondent's heavy drinking reported to Dr Mulholland was inconsistent with the histories reported to those two doctors and upon which their diagnosis had been made. In his 2004 report Dr Rogers confirmed his earlier diagnosis, despite the respondent having reduced his consumption. The Tribunal's reasons contain a reference to the possibility that the respondent's condition might have been in remission at the time when he saw Dr Mulholland, a matter which had been raised with the doctor in the course of the hearing. The doctor said that was a difficult question. Importantly, the doctor had not made a diagnosis of an existing condition because the respondent gave him a history of his control of drinking over a long period of time, since the early 1980s. He said that if there was a more recent history of heavy drinking, a diagnosis of a condition in remission was possible. The doctor was there answering a question relating to alcohol abuse, but he referred generally, in his answer, to conditions relating to alcohol where the sufferer may readily relapse. His views would appear to be of general application. 41 The Tribunal's reasons disclose that it was not persuaded from the diagnosis of alcohol dependence made by the two doctors. Such a conclusion would have required it to accept the respondent's current drinking was as reported to Dr Mulholland when there were obvious inconsistencies in the history he gave about his drinking. It accepted only as a possibility that the respondent could be in remission. Even if it had accepted that to be the case, the earlier diagnoses would remain unaffected. The respondent would still suffer from the condition. It may reasonably be inferred that it did not accept that any change in the respondent's behaviour was such as to have been likely to remove the basis for the diagnoses. 42 The applicant's last point concerns the Tribunal's finding that factor 5(a) of the SoP, relating to alcohol dependence, had been satisfied because of its findings with regard to the respondent's PTSD. The respondent submits that the Tribunal's reasons (at [18] above) may have two meanings: that he was suffering from PTSD at the time of clinical onset of his alcohol dependence or that he experienced the same severe stressor as that attributed to the PTSD. The latter finding may well have been open, but the Tribunal's reasons make plain that it was factor 5(a) to which its finding was addressed. There was evidence which supported the finding, including that of Dr Rogers who regarded the conditions as related and the heavy consumption of alcohol to have followed upon the latter of the incidents in Vietnam. The applicant had itself expressly conceded in its Statement of Issues that if the Tribunal finds that PTSD and alcohol dependence are both present, it would be to the Tribunal to find that fact 5(a) of SoP No 3 of 1999 am No 76 of 1998 is satisfied' . I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. | appeal from a decision of the administrative appeals tribunal disability pension claim for pension for post-traumatic stress disorder and alcohol dependence operation of statement of principles and ss 120, 120a, 196b of the veterans' entitlement act 1986 (cth) whether respondent suffers an injury or disease whether necessary for decision-maker to have regard to the definition of the injury or disease in the applicable statement of principles function and application of statement of principles and dsm-iv whether tribunal entitled to act upon a concession whether insufficiency of evidence to permit finding inconsistency of evidence. veteran's affairs |
The publication was made on 29 March 2007 and was not repeated. The matter now in issue is that of remedy, the Australian Competition and Consumer Commission seeking a significant suite of orders which Harbin in large measure resists. 2 The context in which I need to consider this matter is somewhat unusual. In September 2004 the ACCC accepted an undertaking of indefinite duration from Harbin under s 87B of the Act which amongst other things obliged Harbin to establish, maintain and have independently audited annually a compliance program which was to have specific regard to conduct that might breach Part V of the TP Act. The undertaking is, in several respects, more expansive in its terms than would be acceptable to a Court making orders under s 86C of the Act: see Australian Competition and Consumer Commission v Visy Paper Pty Ltd (No 2) (2004) 212 ALR 564 at [55]-[56]. It has not been alleged that this undertaking has been breached. Nonetheless, a further probation order is being sought under s 86C. 3 My own view of the relief that is appropriate to be ordered is less burdensome than what is now sought by the ACCC (the amended application filed at the hearing responded to objections raised in Harbin's written submissions), but is more demanding than Harbin would concede. 5 (i) Harbin, trading as "Ray's Outdoors", carries on a business as a retailer of outdoor and camping goods at approximately 37 retail stores throughout Victoria, New South Wales, South Australia and Queensland. At the relevant time it had three such stores in South Australia, one of which, at Elizabeth, was a new store. 6 (ii) During the period 29 March to 31 March 2007, Harbin conducted an "Elizabeth Opening Sale" to promote the new store. On 29 March it caused the publication of a full page advertisement in the Advertiser newspaper promoting the sale. The Advertisement contained amongst other things an image of a barbecue adjacent to which were (a) the words "Rio Grand BBQ" in black text; (b) the characters $299.99 in black text struck through with a red line ("the Strikethrough Price"); and (c) the characters $99 in red text ("the Sale Price"). 7 (iii) By so doing Harbin represented that the price ordinary customers would have paid in Ray's Outdoors stores to purchase the barbecue immediately prior to 29 March 2007 was the Strikethrough Price ("The Price Representation"); and that it was offering the barbecue for sale to ordinary customers in Ray's Outdoors Stores at a saving of $200.99 for the duration of the sale ("the Saving Representation"). 8 (iv) It is agreed for the purposes of this proceeding that ordinary customers are members of the public other than persons who, when purchasing a product at Ray's Outdoors Store, qualify for a discount by reason of a circumstance that is additional to the purchase of a product. 9 (v) Contrary to the Price Representation, the price ordinary customers would have paid in Ray's Outdoors Stores to purchase the barbecue immediately prior to 29 March was less than the Strikethrough Price. And prior to that date, ordinary customers last paid the Strikethrough Price on 15 October 2006. 10 (vi) Contrary to the Saving Representation, Harbin was offering the barbecue for sale to ordinary customers at a saving of less than $200.99 for the duration of the sale. 12 The following are other agreed facts said to be relevant to relief. 13 (viii) In 2004, the Commission conducted an investigation of Harbin regarding its failure to correctly label elastic luggage straps it offered for sale at "Ray's Outdoors Stores" in Victoria in compliance with the Trade Practices (Consumer Product Safety Standards) Amendment Regulation 1999 (No 1) (Regulation), a mandatory consumer product safety standard applicable to elastic luggage straps. On 21 September 2004, Harbin offered and the Commission accepted an undertaking pursuant to s 87B of the Act from Harbin to (inter alia) use its best endeavours to implement an upgraded corporate trade practices compliance program in accordance with Annexure C to that Undertaking. The scope of the compliance program covers Part V of the Act (including ss 52 and 53(e) of the Act). I comment further on the undertaking below. 14 (ix) On 5 July 2007, the Commission raised with Harbin its concern that the Strikethrough Price in the Advertisement was higher than the price at which the barbecue had been offered for sale immediately prior to 29 March 2007. On 10 July 2007, Harbin acknowledged and agreed with the Commission that it had not offered the barbecue for sale at the Strikethrough Price immediately prior to 29 March 2007. 15 (x) At the time of publication of the Advertisement, a range of people within Harbin were responsible for the creation, sign-off and publication of the Advertisement including procurement personnel and the advertising department. Accordingly, no one officer or employee of Harbin took ultimate responsibility for the pricing representations in the Advertisement. Harbin accepts there was a deficiency in this regard with respect to the Advertisement. 16 (xi) The Commission issued proceedings on 12 December 2007. In respect of that program, it undertook to implement the arrangements outlined in an annexure to the undertaking. • Harbin, at its own expense and for the purpose of ensuring that it maintained and continued to implement the compliance program, cause annual audits of the compliance program to be carried out in accordance with specified requirements which included the engagement of an independent compliance professional with expertise in trade practices law to conduct the audits. • Harbin was to implement promptly and with due diligence the recommendations which the Auditor might make which were reasonably necessary to ensure that Harbin maintained and continued to implement the compliance program in accordance with the requirements of the undertaking. • Harbin was, at its own expense, to cause to be produced and provided to the ACCC copies of each of the Audit Reports within 14 days of Harbin receiving them. 18 I note in passing that there is a body of opinion in decisions of this Court which questions both whether there is legislative authority for the Court acting under s 86C of the TP Act to order a respondent to instruct an expert to audit a compliance program and to deliver to the ACCC audit reports: see BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167 ; (2004) 207 ALR 452 at [42] - [52] ; Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693 ; (2004) 207 ALR 329 at [50] ; or, if there be some other source of power so to do: see BMW Australia at [51]; whether it would ordinarily be appropriate to make such orders: see Visy Paper (No 2) at [56]. I share these doubts. 19 The additional evidence that has been put on by both parties has not added significantly to the factors that might inform the exercise of my discretion. The only person who gave oral evidence was Tom Vukovic. He is the Chief Executive Officer of Harbin who joined the company about four months after the publication of the offending advertisement. While he could, and did, give evidence about the compliance procedures that were in place at the time, he could not illuminate how the misleading advertisement came into existence. No one who was employed by the company at that time gave evidence. All that I have by way of explanation is the agreed fact that there was no person who had ultimate responsibility for pricing representations and, seemingly, that human error was the cause of the inaccuracy. 20 The ACCC has challenged the adequacy of the steps that have been taken by Mr Vukovic to improve Harbin's compliance regime (criticism was levelled both at its compliance documentation as it related to strikethrough pricing and at Harbin's inquiries as to circumstances surrounding the making of the Advertisement especially in relation to an only now disclosed, almost contemporaneous, Easter sale). Nonetheless, it is the case that remedial steps have been taken, prompted perhaps by the ACCC's importuning. It is unnecessary that I detail the change here given that I am satisfied that they represent a genuine response to the compliance problem exposed in this proceeding and, in particular, the absence of a clear line of responsibility for pricing representations. 21 I would also add that no evidence has been advanced by the ACCC that Harbin's s 87B undertaking has not been complied with in full. There is no suggestion that Harbin was designedly delinquent in the matter. The only proper inference to be drawn as to how the error in the pricing representation found its way into the advertisement is that it was facilitated by a system's defect (the absence of effective line of responsibility for pricing representations) which produced an inadequate check on the potential for human error in making pricing representations. Importantly, notwithstanding that the ACCC characterises Harbin's breach of the TP Act as "very serious", I consider that in the spectrum of Part V contraventions, Harbin's conduct is far from the egregious. I will deal with these in turn. It objected to the ACCC's original proposals (which sought two separate declarations) and advanced its own proposed declaration. The ACCC in its amended application proposed a slight variant on Harbin's. As I indicated at the hearing, I will make the declaration in the form Harbin proposed. While the ACCC's proposal is the more simple, Harbin's is the clearer. And the matter, in my view, is an appropriate one for the grant of declaratory relief. For businesses which rely upon newspaper advertisements as a regular vehicle for inviting consumer interest in bargains, sales, etc, the prospect of having a declaration made against it can be salutary when, as I note below, it is linked with an order for corrective advertising. 2. We doubt whether unintentional misconduct in contravention of s 52 would lead to such relief. It is necessary for a claimant "to demonstrate that the injunction will serve a purpose": ibid; though it is unnecessary to that end to show that commission, continuance, or repetition of contravening conduct is threatened or apprehended: see s 80(4) and BMW Australia at [36]. 26 In the present matter the ACCC seeks to find justification for the grant of an injunction (albeit in appropriately limited terms that can be clearly understood and practically complied with: cf Australian Competition and Consumer Commission v Prouds Jewellers Pty Ltd (No 2) (2008) ATPR 42-230) in the following considerations (i) there is a need to prevent recurrence of contraventions given the inadequate procedures Harbin had in place at the time; (ii) inadequate investigations of the circumstances were made; (iii) Harbin has indicated it intends to continue to engage in two price advertising; (iv) Harbin has not provided documentary reassurance to the ACCC; and (v) the contravention occurred while Harbin had a compliance program in place. 27 For my own part, I am not satisfied that it is appropriate in the circumstances to sanction Harbin's single and unintentional contravention of the Act with the imposition of an injunction. If it be the case that Harbin needs further to be sensitised to the seriousness of breaching the TP Act and to be made more attentive to the purposes of its compliance program, this can be achieved by other more appropriate means which can be adapted to Harbin's particular circumstances, as I will indicate. Harbin has already demonstrated preparedness to change its procedures. I should add, I do not accept that its conduct after the contravention reflects so adversely upon it as to provide some justification for the award of injunctive relief. 3. One such purpose, I would note, is to "aid in the enforcement of the primary orders and the prevention of repetition of the contravening conduct": Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 1387 ; (1999) 95 FCR 114 at 133. 29 It has been recognised on a number of occasions that this remedy can be a peculiarly apt one where the contravening conduct occurred in the course of a company's routine business advertising: see eg Australian Competition and Consumer Commission v Target Australia Pty Ltd (2001) ATPR 41-840 at 43,382. In such cases, particularly where no injunction is to be granted, a corrective advertising order can assist in making an advertiser "more assiduous in ensuring that it does not repeat the contravening conduct": Prouds Jewellers (No 2) at [13]. The making of such an order would, in my view, be salutary in the present matter. 30 I acknowledge that a considerable period has passed since the offending publication was made. While this may in a given instance be a factor telling against ordering corrective advertising, here it is not. Such an order, coupled with declaratory relief rather than an injunction, provides an appropriate coercive incentive to Harbin. 31 The form of corrective advertisement I will order to be published will be in the terms of that annexed to these reasons. With one necessary modification to reflect my refusal to award injunctive relief, it follows the form proposed by the ACCC. 4. Ancillary orders regarding the implementation of review recommendations etc are proposed. 33 Given there is a compliance program already in place pursuant to the 2004 s 87B undertaking and that that program is subject to independent, annual audits which are to be conducted in accordance with prescribed procedures leading to a report to be furnished to the ACCC, I intend to do no more than direct that a copy of my reasons and orders be served by Harbin on the independent auditor and that the ACCC be given written notification of that service within 14 days of such service. I give this direction while acknowledging that the undertaking itself imposes some obligations on Harbin which, as I earlier indicated, would not be imposed by the Court if making a s 86C probationary order. In the circumstances, though, I consider my direction will be likely to serve the review purposes sought by the ACCC but in a way less burdensome to Harbin. 5. 35 Though the ACCC did not secure the amplitude of remedies it sought, it can properly be said to be the successful party and has in substance, though not necessarily in form, been vindicated in the composite of orders etc I propose to make. 36 Acknowledging that the discretion to award costs must be exercised judicially and that a successful party can be awarded all of its costs notwithstanding it has failed on a particular issue or claim, I am not satisfied that the present case is one in which my refusal to grant all of the relief sought ought be reflected in a partial reduction of costs to be awarded the ACCC. 37 I will order that Harbin pay the ACCC's 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 Finn. The advertisement promoted a "Rio Grand" BBQ at a sale price of $99 and represented that the price at which the BBQ was offered for sale immediately prior to the sale was $299.99. The Federal Court found that we misrepresented what ordinary customers would have paid to purchase the BBQ immediately prior to the sale and what ordinary customers buying the BBQ during the sale would have saved because immediately prior to the sale the BBQ had been offered for sale to ordinary customers at less than $299.99. This advertisement has been paid for by Harbin Pty Ltd trading as "Ray's Outdoors". | misleading or deceptive conduct dual pricing appropriateness of orders sought where compliance program with external audit obligations already imposed under a s 87b undertaking service of reasons for judgment and orders on the external auditor directed misleading or deceptive conduct dual pricing terms of declaratory orders whether order for corrective advertising should be made where corrective advertising serves an appropriate preventative purpose in the circumstances trade practices trade practices |
The first respondent to the proceedings, Leveraged Capital Pty Ltd ("Leveraged") and the proposed fourth respondent, Opes Prime Stockbroking Ltd ("OPSL") are members of what I will call the Opes Prime Group. Administrators were appointed to Leveraged and OPSL on 27 March 2008. On the same day, ANZ Banking Group Limited ("ANZ") appointed Receivers and Managers to Leveraged, OPSL and other members of the Opes Prime Group pursuant to fixed and floating charges held by ANZ. On 2 May 2008 in the case of Leveraged and 16 October 2008 in the case of OPSL, the creditors of those companies resolved that they be wound up and the Administrators became the Liquidators of each of the companies. These proceedings were commenced on 9 May 2008 when the applicant, Altinova Nominees Pty Ltd ("Altinova"), obtained ex parte interlocutory injunctive relief against Leveraged, the second respondent Mr Emeni, and the third respondent, Green Frog Nominees Pty Limited ("Green Frog"). The substance of Altinova's claim against Leveraged, Mr Emeni and Green Frog is set out at [23] of the reasons for judgment of Lindgren J in Altinova Nominees Pty Limited v Leveraged Capital Pty Limited (2008) 66 ACSR 293. It is that the true arrangement between Altinova's principal, Mr Seckold, and Mr Emeni was a margin loan under which Altinova retained beneficial ownership in the shares deposited initially with OPSL and then Leveraged. Altinova has previously obtained leave to proceed against Leveraged when it was in voluntary administration. However, Altinova now seeks leave to proceed against Leveraged following the passing by the creditors of that company of a resolution for it to be wound up: s 500(2) of the Corporations Act 2001 (Cth). Leave is necessary under that sub-section because the winding up of Leveraged is taken to be a creditors' voluntary winding up: s 446A of the Corporations Act . In addition, Altinova seeks leave under Order 6.2 (or 6.4 or 6.8) of the Federal Court Rules to join OPSL as the fourth respondent in the proceedings. If OPSL is to be joined, Altinova requires leave under s 500(2) of the Corporations Act to proceed against it. Leveraged's defence of the proceedings is being conducted on its behalf by the Receivers pursuant to their power under the Charge. The Receivers will continue to conduct the defence notwithstanding the subsequent appointment of the Liquidators. However, the Liquidator of Leveraged appeared on the motion and put submissions to me in response to Altinova's application for leave to proceed against Leveraged. No point was taken against the Liquidators that the Receivers are conducting the defence. The Receivers of Leveraged neither consented nor opposed the application for leave under s 500(2). The Liquidators accepted that it was appropriate for leave to be granted to proceed against Leveraged but that leave should be limited to the "proprietary claims" against Leveraged and the question of liability for damages. But the Liquidators submitted that leave ought not be granted to proceed in relation to the question of the quantum of any damages or compensation for which Leveraged may be found to be liable. The Receivers of OPSL have indicated that they do not propose to exercise their power under the Charge to defend the proceedings against OPSL if that company is joined. The Liquidators submit that leave ought not to be granted to join OPSL or to proceed against it. The issue which arises on the application to join OPSL and to proceed against it is whether this course ought to be adopted in preference to leaving Altinova to pursue the claim by lodging a proof of debt with the liquidators. It is necessary to consider the claims made in the Amended Statement of Claim proposed to be filed by Altinova in order to determine the issues which arise in relation to each of the applications. They are sufficiently set out in Lindgren J's reasons for judgment (2008) 66 ACSR 293at [3] --- [21]. Nevertheless, these facts are said to give rise to a large number of legal consequences as pleaded in the Proposed Amended Statement of Claim ("PASC"). The relevant claims may be summarised as follows: An equity of redemption based upon implied terms in the margin lending agreement with OPSL which was novated to Leveraged: see [5] --- [13] PASC. That Green Frog holds the securities under an express or resulting trust for Altinova; see [14] --- [16] PASC. That under a Master Securities Lending Agreement entered into initially with OPSL and replaced by an agreement with Leveraged, Altinova agreed to lend securities only if it elected to do so: see [17] --- [23] PASC. That securities lent by Altinova to Leveraged would only become subject to the Master Securities Lending Agreement at Altinova's election, and Altinova did not so elect. Altinova seeks a declaration that the securities were transferred to Leveraged under a Second Margin Lending Agreement and not the Second Alleged Master Securities Agreement, and therefore that Altinova's rights as equitable mortgagor and beneficiary in relation to the securities remain: see [17] --- [23] PASC. Various oral representations made by Mr Emeni to Mr Seckold that Altinova's securities would not be lent to short sellers. Similar representations are said to have been made on the Opes Prime Group website. The representations are said to give rise to relief under s 87 of the Trade Practices Act 1974 (Cth) (and corresponding State Fair Trading laws) and to proprietary claims: see [24] --- [40] PASC. Alternatively, a breach of the implied terms as to fitness of financial services arising under the Australian Securities and Investments Commission Act 2001 (Cth) (" ASIC Act "): see [41] --- [58] PASC. ] A constructive trust arising ad hoc: Australian Broadcasting Corporation v Lenah Game Meats Pty Limited [2001] HCA 63 ; (2001) 208 CLR 199 at 316: see [59] --- [63] PASC. A constructive trust arising from an antecedent relationship: see [64] --- [66] PASC. Unconscionable conduct within s 12CB of the ASIC Act . This is said to give rise to a proprietary claim to the securities held by Green Frog: see [79] --- [81] PASC. The essence of the claims seems to be contained in [94] --- [95] PASC in which Altinova pleads that the misleading conduct referred to above also amounted to a breach of OPSL's obligations as a financial services licensee. These claims are said to give rise to proprietary relief in respect of the securities: see generally [86] --- [97] PASC. Those authorities are the decision of McLelland CJ in Eq in Re Sydney Formworks Pty Ltd (In Liquidation) [1965] NSWR 646 ; the decision of Street J in Re AJ Benjamin Limited (In Liq) [1969] 2 NSWR 374 and the decision of McPherson J in Ogilvie-Grant v East (1983) 7 ACLR 669. See also the discussion of the authorities of Lehane J in Meehan v Stockmans Australian Café (Holdings) Pty Limited (1996) 22 ACSR 123 at 126-127; by Lee J in Executive Director of the Department of Conservation and Land Management v Ringfab Environmental Structures Pty Ltd & Ors [1997] FCA 1484 and by Finkelstein J in O D Transport (Australia) Pty Ltd (In Liquidation) & Ors v O D Transport Pty Ltd & Ors (1997) 80 FCR 289. The authorities contain two possible explanations of the objective of the predecessor of s 500(2) of the Corporations Act . The first is that the prohibition on proceeding without the grant of leave is intended to effect the statutory policy of ensuring that the assets are distributed rateably amongst all creditors so that no creditor will obtain an advantage over another. As McPherson J observed in Ogilvie-Grant at 672, the question of whether leave ought to be granted is reduced to one of choosing between two alternative forms of procedure, namely filing a proof of debt or commencement of legal proceedings. His Honour said that the effect of the subsection is that the claimant is required to lodge a proof of debt unless he or she can demonstrate that there is a good reason for departure from that procedure. What is required is evidence clearly establishing the existence of a serious claim and a real dispute. Another factor to which reference has been made in the authorities is whether the company was insured against the liability in respect of which the plaintiff is suing: Re Sydney Formworks at 651; Meehan at 127. The subsidiaries which were covered by the policy included OPSL. The limit of indemnity under the policy is $10 million any one claim and $10 million in the aggregate. (b) Any writ, statement of claim, summons, application or other originating legal or arbitral process, cross-claim, counter claim or third or similar party notice served upon the Insured which contains a demand for compensation made by a third party against the Insured. The insured named in item 4.1 of the schedule is Opes Prime Group Limited. There is no item 4.2 in the Schedule but the certificate of currency issued by QBE lists seven subsidiaries which include OPSL. The Schedule to the policy describes the period of cover as being from 4 August 2007 to 31 October 2008. "Financial Service" means the services provided by the Insured as specified in item 6 of the Schedule. There are a large number of exclusions contained in section 4 of the Policy. I do not propose to set them out in my reasons as the insurer has not pointed to any particular exclusion upon which it relies. On 23 December, the insurer's solicitor wrote to the solicitor for the liquidators. The following paragraphs of the letter are relevant:- Assuring a claim for indemnity is currently pressed, QBE reserves its rights under the Policy while it investigates OPSL's entitlement to indemnity for the Claim. While its investigations are ongoing QBE does not intend to exercise its right under Section 5.2 of the Policy to assume conduct of the Claim. All of the proceedings appear to have been brought by former clients of OPSL. The proceedings have been instituted in the Federal Court in the Victorian Registry, and in the Supreme Courts of New South Wales, Queensland and Victoria. The proceedings are listed in [11] --- [12] of the affidavit of Mr J R Ludholm and in [8] of the affidavit of Ms T C Beltrane. I do not propose to list the details of those proceedings. Leave to proceed against OPSL appears to has been given in the matters of Panopus PLC v Opes Prime StockBroking Limited (Receivers and Managers appointed) (Administrators appointed) (Supreme Court of Victoria proceeding 5835 of 2008); Asia Pacific Links Limited v Opes Prime Stockbroking Limited & Ors (Federal Court of Australia proceeding NSD 878 of 2008); and Phisci Pty Ltd v Green Frog Nominees Pty Ltd (in liq) (No 3) [2009] FCA 43. There are a number of other proceedings where leave has been sought but not yet granted. The proceedings involve more than 100 claimants and include a number of class actions. There are 817 client accounts in total. The Liquidators' preliminary calculations indicate that the close-out position of the Client Creditor accounts (after netting off) are likely to result in the client creditors being owed approximately $300 million by OPSL at the date of liquidation. In coming to this view, I have taken into account the factors referred to below. First, I am satisfied that there is a serious claim and a real dispute within the test stated in Vagrand . It is true, as Mr Strong submitted, that the claim against OPSL is, in a sense, "pre-emptive" because OPSL has not made a proprietary claim in respect of the securities. Nevertheless, the claims arise out of the same factual matrix as those already made against Leveraged and Mr Emini and this of itself seems to me to be a significant factor in favour of the grant of leave. Although the factual matrix is not particularly complex, the claim turns in part upon the terms of conversations which may be disputed and there are questions of law which may be difficult to determine. Second, although the insurer has reserved its position, it is at least arguable that the policy responds to a claim for indemnity from OPSL. In my view, that is a sufficient basis for a grant of leave but I will reserve liberty to the Liquidators to apply to revoke the grant of leave if the insurer denies indemnity. It is critical to the administration of the winding up of OPSL, and to the conduct of all the existing proceedings that the insurance position be determined as soon as possible. The proceeds of the policy would be quarantined under the provisions of s 562 of the Corporations Act but the total of the available indemnity is limited to $10 million. This may have to be divided among a large number of claimants. This is a reason for the grant of leave because it will be conducive to the Court's supervision of the claims against OPSL. Moreover, if Altinova were to be left to the proof of debt procedure in respect of the claim against OPSL, the insurance policy may not be engaged because a proof of debt would not fall within the definition of "claim" under the policy. Third, I have taken into account the evidence which discloses that the Liquidators do not at present have funds to conduct a defence. The short answer to this is that I have proceeded on the basis that it is sufficiently arguable that the insurer is obliged to provide indemnity to OPSL. Also relevant to this factor is the existence of the other proceedings that are already on foot against OPSL. Fourth, there is some force in the Liquidators' submission that many of the claims made by Altinova against OPSL can sound only in damages and that Altinova seeks to improve its position by agitating the claims as proprietary in nature. Mr Strong therefore submitted that the observations about the grant of leave to pursue proprietary claims made by Finkelstein J in Phisci Pty Ltd v Green Frog Nominees Pty Ltd [2008] FCA 638 at [22] are distinguishable. Nevertheless, in my view the short answers to these submissions are the existence of the insurance policy and the relationship between the claims against OPSL and those already on foot against Leveraged and Mr Emini in this action. Fifth, I have taken into account the statement made to me by counsel for Mr Emini that it would be unsafe to proceed on the basis that his client will defend the proceedings. The position of Mr Emini is of course an important one because the relevant conversations are said to have taken place between Mr Seckold on behalf of Altinova and Mr Emini on behalf of Leveraged and OPSL But, at this stage, there is nothing to suggest that Mr Emini will not defend, apart from the caveat expressed by his counsel. It seems to me that in those circumstances I do not have a sufficient basis for making a positive determination that Mr Emini will not participate in the proceedings. Sixth, it is true that no proprietary claim has been asserted by OPSL and that the Liquidators do not presently have funds to investigate such a claim. But this issue cannot be allowed to remain open indefinitely as a possible claim to be made by OPSL. The submissions made by Mr Strong on this question are sufficiently met by reserving liberty to the Liquidators to apply to vary or revoke the grant of leave. An order in those terms was made in Asia Pacific Links Limited v Opes Prime Stockbroking Limited & Ors (Federal Court of Australia proceeding NSD 878 of 2008). The grant of leave will of course be subject to the usual term that Altinova is not to enforce any judgment or order which it may obtain against OPSL without the further leave of the Court. Moreover, as in Ringfab , the terms on which leave is to be granted should release OPSL from any obligation to file proceedings, give discovery or otherwise participate in the litigation, pending further order of the Court. No doubt this was, at least in part, because the proceedings have already been commenced and have progressed to the stage that leave was granted to proceed against Leveraged when it was in voluntary administration and the proceedings are being defended by the Receivers who have filed a cross-claim against Altinova. See Ogilvie-Grant at 672. Leave has already been granted by the Court to proceed against Green Frog which is in liquidation. It holds 2,180,000 shares in Coeur d'Alene Mines Corporation which are the subject of Altinova's proprietary claim. It is therefore appropriate that leave be granted to proceed against Leveraged so that the totality of the claims may be pursued and so that the grant of leave to proceed against Green Frog is not rendered nugatory. It is of course a significant factor in favour of the grant of leave that the Receivers of Leveraged have exercised their power under the charge to defend the proceedings. Moreover, the Receivers' cross-claim is still on foot and, if it is successful, Green Frog, as a party to the proceedings will be bound by a declaration that the securities held by Green Frog are beneficially owned by Leveraged. The real issue in relation to the grant of leave against Leveraged was whether it ought to be limited so as to exclude quantification of any damages that may be awarded to Altinova. In my opinion the grant of leave should be so limited. There are two reasons for this. First, s 554A of the Corporations Act provides that a liquidator must make an estimate of the value of a debt or claim or refer that question to the Court. This procedure would enable the Liquidators to value the claim and thereby avoid the necessity for the Court to assess the value separately in each of the cases that may be decided favourably to an applicant. Second, excluding quantification of the claim from the grant of leave is more conducive to the Court's overall supervision of the administration because it may be that there will in due course be issues for determination that are common to these and other proceedings. Third, if Altinova is not successful on the issue of liability and the issue of whether it has suffered any recoverable loss, there will be no need for the parties to incur the expense of quantifying the claim. The Liquidators did not suggest that the grant of leave against OPSL be limited in the same way. However, the reasons given above would apply equally to the application to proceed against OPSL. Critical to their approach must be the Liquidators' estimate of any likely dividend payable out of the winding up and the question of the availability of the insurance cover. The amount of any dividend is likely to turn upon the outcome of other litigation brought by the Liquidators against third parties, including in particular ANZ. In my view, the parties to all the proceedings should try to arrange a joint mediation as soon as possible. The insurer should be involved in the mediation; so too should ANZ. Of course, my powers to order a mediation do not extend beyond this proceeding but I have no doubt that all of the relevant Courts would join in taking whatever steps are necessary to facilitate the making of all appropriate arrangements. Two days ago, Finkelstein J handed down reasons for judgment in Phisci Pty Ltd v Green Frog Nominees Pty Ltd (In liq) (No 3) [2009] FCA 43. His Honour granted leave to proceed against OPSL essentially upon the ground that the claim is to recover the applicant's own property. His Honour limited the grant of leave to issues of liability only. The approach which I have taken is as in accordance with that followed by his Honour. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | leave sought to proceed against first respondent in liquidation leave sought to join proposed fourth respondent in liquidation existence of serious claim and real dispute position of insurer reserved leave granted to proceed against first respondent and to join proposed fourth respondent leave limited to proprietary claims and liability for damages leave excludes quantum of any damages or compensation proposed fourth responded not required to participate in litigation applicant not to enforce judgments or orders against first and fourth respondent without further leave of court corporations |
AAB's central claim is that the respondent, Allan Hawley Jacobs, trading as Fightboi Health and Fitness Centre, infringed its word trademark by use of the deceptively similar word "Boxercise". 2 On 9 December 2005, the respondent filed his Defence and Cross-claim. On 17 March 2006, AAB filed a notice of motion seeking to strike out portions of some paragraphs of the defence and two paragraphs of the cross-claim's prayer for relief. In the alternative, AAB asks the court to order that these paragraphs be struck out unless the respondent files further and better particulars. ... The generic word BOXERCISE has become more well known than the applicant's BOXACISE mark and is not held as meaning and distinctively or exclusivity indicating a sport and fitness service provided by or under the authority of the applicant. The BOXACISE mark has lost distinctiveness and exclusivity through misuse; the applicant falsely and recklessly allows his mark to be replaced by the word BOXERCISE for a fee indifferent to the deception and confusion it causes. The applicant does so (1) in breach of the Trade Marks Act [1995 (Cth) ("TMA")] , without being required or authorised to do so by the Act, a direction of the Registrar or an order of a court and (2) in breach of s52 of the Trade Practices Act 1974 [(Cth) ("TPA")]. The applicant's BOXACISE mark now lacks the essential characteristic of being capable of distinguishing his services in respect of which his marks are registered. ... The applicant falsely and recklessly applies the name BOXERCISE which is substantially identical with his registered trade marks 597134 and 577380 without being required to do so by the Act, a direction of the Registrar or an order of the court. ... The word BOXERCISE has become a sign that since the date of registration of the Applicant's trade mark is accepted as a sign that describes or is the name of an exercise and fitness service. The applicant falsely and recklessly applies the name BOXERCISE which is substantially identical with his registered trade marks 597134 and 577380 without being required to do so by the Act, a direction of the Registrar or an order of the court. The applicant accepts money for allowing individuals to use the term BOXERCISE. ... The applicant falsely and recklessly applies, and allows others to apply the BOXERCISE word for a fee. The applicant does so (1) in breach of the [TMA] , without being required or authorised to do so by the Act, a direction of the Registrar or an order of a court and (2) in breach of s52 of the [TPA] . Pursuant to s24 and s 87 of the [TMA] the Registrar of Trademarks is to rectify the register and remove trade marks number 597134 and 577380. Pursuant to s146(2) and s149 of the [TMA] a penalty in whatever form the court thinks fit is to be imposed on [AAB] for falsely and recklessly applying BOXERCISE a sign substantially identical with BOXACISE registered trade marks NUMBER 597134 AND 577380 without being required or authorised to do so by the act, a direction of the Registrar or an order of a court. Counsel for AAB reiterated this today. It is clear from correspondence between the parties that AAB says that the challenged parts of the defence and cross-claim do not comply with O 11 and O 12 of the Federal Court Rules 1979 ("the Rules"). AAB claims that the pleadings demonstrate the following deficiencies, among others: (1) the pleadings fail to particularise allegations of misrepresentation (i.e., that the applicant acted "falsely and recklessly") in contravention of O 11 r 10, O 12 r 2 and O 12 r 3; (2) the pleadings do not particularise which provisions of the TMA that AAB is alleged to have breached; (3) the pleadings do not provide particulars as to how and why such provisions have been breached; (4) the pleadings do not provide particulars regarding the claim that the BOXACISE mark has lost its exclusivity; and (5) the pleadings do not particularise the allegation that the applicant accepts money for allowing individuals to use the word BOXERCISE in place of the word BOXACISE. 5 The respondent appears in person in this matter. His pleadings lack the precision expected of pleadings drafted by a legal practitioner. Whilst allowance can be made for the respondent's lack of representation, the requirements of the Rules apply to all litigants. For the reasons I am about to give, AAB is entitled to have the defective pleadings struck out. 6 Without providing an exhaustive list of defects, it is sufficient to state that the challenged portions of the respondent's Defence and Cross-Claim do not comply with the Rules. For example, paragraphs 6, 7, 9 and 21 all allege that AAB acted "falsely and recklessly" in some regard. This allegation appears akin to one of fraud, and as such must be further particularised pursuant to O 12 r 2: see Banque Commerciale SA (In Liquidation) v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279 at 285 per Mason CJ and Gaudron J. Even if it is not intended as an allegation of fraud (or misrepresentation or wilful default), O 12 r 3 obliges the respondent to particularise the facts relied upon for his allegations that AAB had such a condition of mind. 7 Also, the respondent must provide particulars of AAB's alleged breach of s 52 of the Trade Practices Act 1974 (Cth): see Johnson Tiles Pty Ltd v Esso Australia [2000] FCA 1572 ; (2001) ATPR 41-794 at 42,547-42,548, [63] - [66] per French J with whom Beaumont and Finkelstein JJ agreed (outlining the detailed requirements for pleading a claim under s 52 of the TPA). 8 Furthermore, pursuant to O 11 r 10 the respondent must plead specifically the provisions of the TMA he claims AAB has violated. Amongst other things, O 11 r 10 requires a party to plead specifically any matter of fact or point of law that, if not specifically pleaded, might take the other party by surprise. It is insufficient to specify provisions in the prayer for relief. It must be borne in mind that no relief can be granted unless justified by what has been pleaded in the body of the pleadings. 9 If the deficiencies in the pleading could be cured by the provision of further and better particulars, I would order that such particulars be provided. There is, however, a basic problem that the provision of particulars will not overcome. It is a fundamental rule of pleading that a respondent must state in his defence the material facts essential to any affirmative case he wants to make in answer to the applicant's claim. These facts (and not the evidence for them) are to be stated in a summary form according to the pleading rules. As far as convenient, each material fact or other matter is to be put into a separate paragraph, with paragraphs numbered consecutively (O 11, r 1 and r 2). Proper particulars are required of the relevant allegations (see, e.g., [6]-[8] above). Paragraphs 6, 7, 9 and 21 of the defence and cross-claim do not comply with these requirements. 10 A court is ordinarily cautious when exercising its discretion to strike out a pleading. No court wishes to deprive a respondent of the opportunity to defend himself in proceedings brought against him. In light of the deficiencies in the respondent's pleadings, I would strike out the challenged parts of paragraphs 6, 7, 9 and 21. As paragraphs 2 and 3 of the respondent's prayer for relief are based on the challenged paragraphs of his defence, those paragraphs of the prayer for relief will also be struck out. At the same time, I would grant the respondent liberty to file a draft proposed amended Defence and Cross-claim. As counsel for AAB noted, this course will afford the parties an opportunity to ensure the pleading is in proper form before it is finally filed. 11 By its notice of motion, the applicant sought its costs of the motion on an indemnity basis. Counsel properly did not press this application today. It is true that the applicant sough to put the respondent on notice that there were problems with his pleading late last year when it wrote its letter of 22 December 2005. Ordinarily, however, costs in this court are awarded on a party and party basis. The respondent has made a good faith effort to respond to the allegations against him. In Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 (" Re Wilcox ") at 156-157, Cooper and Merkel JJ said that: (a) the court ought not to depart from the usual party and party basis for costs unless this was warranted by the circumstances of the case; and (b) these circumstances arise "as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the court in departing from the usual course". I do not find that the circumstances of this case warrant a departure from the usual course. 12 Nevertheless, the applicant has been successful in its motion and, notwithstanding the respondent's opposition, costs should follow the event. I propose to order that the respondent pay the costs of the motion on a party and party basis. 13 I also propose to direct that the parties file and serve submissions on the following two questions: whether or not the proceeding should be transferred to the Queensland District Registry; and (2) whether or not the proceeding should be referred to mediation under O 72 of the Federal Court Rules. I have already raised these matters with the parties in the course of the recent directions hearing. I would also make a further direction in the terms discussed in court today in relation to matters presently the subject of a confidentiality order. 14 Counsel for AAB has undertaken to draft a minute of orders in conformity with these reasons and to seek instructions in relation to an undertaking as to confidentiality. Accordingly, I defer making orders until counsel has had an opportunity to take instructions and prepare draft orders. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | application to strike out paragraphs of defence failure to particularise allegations of misrepresentation failure to particularise breaches of statutes defective pleadings struck out respondent granted leave to file amended defence and cross-claim practice and procedure |
On 10 December 2004 a delegate of the first respondent refused to grant the bridging visa. By a decision dated 20 July 2005 the Migration Review Tribunal ('the Tribunal') affirmed the decision of the delegate to refuse the bridging visa. On 25 July 2006 a Federal Magistrate dismissed an application for judicial review of the decision of the Tribunal. This is an appeal from that decision. I join the Tribunal as the second respondent. The appellant arrived in Australia on 12 March 2000, entering on a Temporary Business Entry (Class UC) Subclass 456 visa. The appellant applied for a protection visa on 7 April 2000 and he was on that date granted a Bridging A (Class WA) visa. 4 Thereafter, the appellant embarked upon a succession of applications for judicial review of the RRT's decision. 5 His first judicial review application was brought in the Federal Court in June 2002. This application was transferred to the Federal Magistrates Court and was ultimately dismissed by consent on 16 September 2002. 6 However, notwithstanding the dismissal by consent of the application for review, the appellant was still in Australia in August 2003, when he commenced a second application for judicial review - this time in the High Court. The High Court remitted the application to the Federal Court and on 9 February 2004, Emmett J refused the appellant's application for an order nisi. 7 Not deterred, the appellant then commenced on 19 April 2004, a further application for judicial review of the RRT's decision - this time in the Federal Magistrates Court. The appellant's application for judicial review was dismissed by the Federal Magistrate as being vexatious and an abuse of process on 17 September 2004. The appellant then brought an application in the Federal Court, to extend time within which to appeal against the decision of the Federal Magistrate. This application was dismissed by Jacobson J on 16 November 2004 when the appellant did not attend the hearing. 8 On 7 December 2004, the appellant filed in the High Court an application for special leave to appeal against the decision of Jacobson J. On 9 December 2004, the appellant made an application to the first respondent for the bridging visa, in order to give him 'lawful status while awaiting the outcome of judicial review'. At the date of making that application, the appellant did not have a Class A bridging visa - the appellant's Class A bridging visa granted in 2000 having expired on 22 July 2002. As previously mentioned, the delegate refused the application for the bridging visa on 10 December 2004. The appellant then sought a review of the delegate's decision by the Tribunal. 9 The Tribunal found that at the time the bridging visa application was made, subcl 010.211(3) of Sch 2 of the Migration Regulations 1994 (Cth) ('the Regulations') applied to the appellant's application. The Tribunal finds that the visa applicant was not the holder of a Bridging A (Class WA) or Bridging B (Class WB) visa at the time that he made the application for judicial review to the High Court on 7 December 2004. The visa applicant is therefore unable to satisfy subclause 010.211(3)(c) and therefore the application for review must fail. In particular, at the time the applicant applied for the visa, he did not hold a bridging A or bridging B visa. Because of that fact, he was ineligible for the further bridging visa he sought. The MRT simply applied the migration regulation. The MRT had no option but to do so. It does not attempt expressly to identify any alleged error made by the Federal Magistrate. To the extent that the notice of appeal condescends to particularity, five potential grounds of appeal are discernible. Grounds D and E do not disclose any possible grounds of appeal and I dismiss those grounds of appeal. 14 Further, ground B of the appellant's notice of appeal contends that the delegate and the first respondent did not have the jurisdiction to make and give effect to the delegate's decision to refuse the bridging visa. It is said that s 66(1) and s 66(2) of the Migration Act 1958 (Cth) ('the Act') were not observed. These subsections prescribe how a decision made in respect of a visa application is to be notified to the visa applicant. These issues were not raised before the Federal Magistrate and no submissions were advanced in support of this ground. The notification of the decision in this case complied with s 66(2) by referring to the regulation in question. The appellant's contention has no prospect of success. I refuse leave to raise these issues in this appeal. 15 Grounds A and C of the appellant's notice of appeal have potential application to the issues dealt with by the Federal Magistrate. It is possible to construe the grounds as: firstly, that the Federal Magistrate should have found that there was a breach of natural justice by the Tribunal, and secondly, that the Federal Magistrate ought to have found that the Tribunal made an error of law in that it misconstrued subcl 010.211(3) of Sch 2 of the Regulations. 16 As to the first of the two grounds, to which I have referred above, I take the reference to a breach of natural justice, to be a reference to the grounds raised before the Federal Magistrate that the Tribunal had failed to comply with s 359A of the Act by not advising the appellant of its potential findings in relation to subcl 010.211(3) of Sch 2 of the Regulations, and, of its statement about the appellant's litigation history referred to in par 33 of its reasons. In my view, the Federal Magistrate did not err in holding that the Tribunal did comply with s 359A of the Act by notifying the appellant, by its letter of 6 May 2005, of its potential findings in respect of the application of the Regulations to his situation. As to the appellant's litigation history, I am of the view that the Federal Magistrate was correct in determining that the reference to the appellant's litigation history in par 33 of the Tribunal's reasons did not form 'part of the reasons' in the sense referred to in s 359A of the Act, and that there was no breach of the section. 17 The appellant also contended before the Federal Magistrate that the Tribunal had failed to comply with s 368 of the Act by not giving notice to the appellant of its potential findings in relation to the application of the Regulations. The Federal Magistrate said that the Tribunal's letter of 6 May 2005 did advise the appellant of the potential findings. Further, the Federal Magistrate held that s 368 of the Act really set out the necessary elements of a written statement of reasons given by the Tribunal. The Federal Magistrate found that the Tribunal's written statement of reasons contained the elements referred to in s 368 and that the Tribunal had not committed any jurisdictional error in relation to s 368 of the Act. It is possible that the appellant sought to impugn these findings of the Federal Magistrate under the general ground of 'a breach of the rules of natural justice' referred to in Ground A of the notice of appeal. For the reasons he gave, the Federal Magistrate did not, in my view, err in making the findings he made in relation to s 368 of the Act. I, therefore, dismiss the first ground of appeal --- being Ground A. However, each of the Tribunal and the Federal Magistrate took a different view as to 'time' by reference to which the assessment called for in subcl 010.211(3)(c), had to be made. The Tribunal thought that the appropriate 'time' was 7 December 2004, being the date of the application to the High Court for special leave, which the Tribunal characterised, in my view, incorrectly, as the making of an application for judicial review. On the other hand, the Federal Magistrate found that the appropriate 'time', was the time that the appellant made his application for the bridging visa in question, namely, 9 December 2004. 20 In my view, however, on a proper construction of the regulation, the appropriate 'time', by reference to which the assessment is to be made of whether a bridging visa applicant, held a qualifying bridging visa, under subcl 010.211(3)(c), was at the time of the making of the founding application for judicial review of the decision refusing the substantive visa. The reference in subcl 010.211(3)(c) to 'that application' is a reference to the application which is referred to in subcl 010.211(3)(b), namely, the application for judicial review referred to in subpar (3)(b)(i). Accordingly, in my view, the question whether the appellant held the qualifying bridging visa, had to be assessed by reference to the position on 19 April 2004 --- being the date that the appellant made his application for judicial review to the Federal Magistrates Court. It was the decision by the Federal Magistrate to dismiss that judicial review application which was 'on appeal' within the meaning of subcl 010.211(3)(d), when the application for leave to extend time to appeal was made to Jacobson J, and, in respect of which the special leave application dated 7 December 2004 was made. 21 In my view, the Tribunal erred in characterising the High Court special leave application as an application for judicial review, in general, and, in particular, as 'that application' referred to in subpar (3)(c). Further, the Federal Magistrate erred in construing subpar 3(c) as specifying the application for the bridging visa, rather than the application for judicial review, as the relevant application. 22 It, therefore, follows that, in misconstruing subcl 010.211(3)(c), and in misconstruing the date, by reference to which the crucial assessment of whether the appellant held the qualifying bridging visa, had to be made, the Tribunal fell into jurisdictional error. The Federal Magistrate also erred in failing to find that the Tribunal had misconstrued the subclause and the appropriate date. 23 However, in my view, it would be futile to allow the appeal and to send the matter back for the Tribunal to decide the appellant's application according to law. This is because it is clear that on the application of the proper test, namely, the date on which the appellant made his application for judicial review, namely, 19 April 2004, the appellant did not hold the qualifying bridging visa referred to in subcl 010.211(3)(c) - it being the fact that the appellant had last held such a qualifying bridging visa on 22 July 2002. 24 The appeal is dismissed with costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | appeal application for bridging visa whether appellant satisfied criteria in subcl 010.211(3) of sch 2 to the migration regulations 1994 (cth) proper construction of subcl 010.211(3) of sch 2 to the migration regulations migration |
The scheme of arrangement provides for the merger of the plaintiff with another public company, Bluestone Tin Limited ('Bluestone'), which is to be accomplished by the transfer of all the shares in the plaintiff to Bluestone, in consideration for the issue to the plaintiff's shareholders of five shares in Bluestone for every one share in the plaintiff. On 18 December 2006, I made orders approving the scheme of arrangement, subject to the deletion of cl 7.3(a) of the scheme of arrangement. I said that I would give reasons for the making of the orders. These are my reasons. 2 On 7 November 2006, the Court made orders for the convening of a meeting of the members of the plaintiff to consider, and if thought fit, to approve the proposed scheme of arrangement. 3 The evidence is that there has been compliance with the orders for the advertising and convening of the meeting, and that there has been compliance with other conditions of approval of the scheme of arrangement. The meeting was held at 10 am on 13 December 2006 with the required quorum of members present in person or by proxy. The meeting approved the proposed scheme of arrangement, subject to the approval of the Court, under s 411(4)(b) of the Corporations Act , by passing the appropriate resolution by a majority of 98.37 per cent of the members present by voting in favour of the resolution. In Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742, Lindgren J approved a scheme of arrangement, on condition that the 'no encumbrances' clause, which was cl 9.3(b) of that scheme of arrangement, was deleted. Counsel for the plaintiff has submitted that WebCentral should not be followed, because the scheme of arrangement did not address itself to third parties who may have interests in the shares of the plaintiff; and the clause went no further than describing the position of third parties under the law, in any event. 6 In my view, the plaintiff's argument does not provide any basis for departing from the decision of Lindgren J in WebCentral . An argument to like effect was put to Lindgren J and rejected. In my view, it is no answer to this objection to say that a security holder's fears would be immediately allayed upon its being informed that cl 9.3(b) did not go beyond describing the position that prevails at law, in any event, and that in relation to the security interest the clause might just as well have been omitted. The security holder would reply, I think with justification: "Then why cause me concern (and the cost of obtaining legal advice) by having the clause in the scheme? 8 Accordingly, I ordered that the 'no encumbrances' clause should be deleted from the scheme of arrangement. The members of the plaintiff were required to receive at least 28 days notice of the members' meeting under s 249HA(1) of the Corporations Act . However, circumstances occurred which resulted in the members of the plaintiff in fact receiving 27 days notice of the members' meeting held on 13 December 2006. The circumstances were as follows. 10 The scheme booklet was collected by Australia Post on 14 November 2006 but not mailed until the next day, 15 November 2006. Clause 16.5 of the plaintiff's constitution deals with the time for service and provides that where a notice is sent by post the service of the notice is taken to be effected, in the case of a notice of a general meeting, on the day after the day of posting. In the present case, therefore, notice is taken to have been served on 16 November 2006. 11 On the application of s 105 of the Corporations Act , the date on which the general meeting was to be held (that is, 13 December 2006) is counted, but the date upon which the notice of the meeting was deemed to have been given (that is, 16 November 2006) is excluded. The result is that the members of the plaintiff received 27 days notice of the general meeting held on 13 December 2006. 12 Section 1322(1)(b)(ii) of the Corporations Act , says a 'defect, irregularity or deficiency of notice or time' is included within the meaning of a 'procedural irregularity'. In my view, the delay of one day in the notice given for the meeting has not caused any substantial injustice. Therefore, in accordance with s 1322(2) of the Corporations Act , the meeting is not invalidated because of the procedural irregularity in the giving of the inadequate period of notice. 13 As to s 411(17) of the Corporations Act , the plaintiff produced in evidence a letter from the Australian Securities and Investments Commission, issued in accordance with s 411(17)(b) of the Corporations Act , stating that the Commission had no objection to the scheme of arrangement on the basis that it was satisfied that it had not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Ch 6 of the Corporations Act . 14 For the abovementioned reasons, I made orders approving the scheme of arrangement, subject to the deletion of cl 7.3(a) of the scheme of arrangement. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | scheme of arrangement 'no encumbrances' clause procedural irregularity corporations |
In order for her nominations to be valid, pursuant to the rules of the organisation, Ms Butler had to be a financial member attached to a particular divisional branch of the organisation, and had to have had that status for at least 12 months, at the date of closing of nominations. The question whether Ms Butler was a member attached to the relevant divisional branch is unusually complicated, because of difficulties of construction of the relevant rules, the failure of the rules to make provision for some matters, and failure to observe the rules in some respects. 2 The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union ('the Union') is an organisation, registered pursuant to the WR Act. The provisions of the WR Act governing the registration and conduct of the affairs of registered organisations are now found in Sch 1B of the WR Act. Notwithstanding that those provisions are found in a schedule, they are designated as sections and subsections, as if they were provisions found in the body of the WR Act itself. Attached to the decision was a list of the offices within the Union for which prescribed information in relation to the conduct of elections had been lodged. Among the offices listed were three branch committee of management members from the Lines and General Divisional Section of the Victorian Postal and Telecommunications Branch ('the P&T Branch'), and one divisional executive member from the Lines and General Divisional Section of the P&T Branch. The deputy industrial registrar's decision pronounced that he was satisfied that an election for all the offices listed in the attachment was required to be held under the rules of the Union, and announced that he was making arrangements for the conduct of the election by the Australian Electoral Commission, in accordance with s 189(3). 4 The elections were conducted by the Australian Electoral Commission. In Victoria, the returning officer was John Pepper. After the returning officer had called for nominations, he received two nomination forms in respect of Valerie Ann Butler, each signed by two financial members of the Union attached to the Lines and General Divisional Section of the P&T Branch. In one form, Ms Butler was nominated for the office of branch committee of management member. In the other, she was nominated for the office of divisional executive member. The returning officer received both forms on 2 May 2005, the closing date for nominations. 5 The applicant in the present proceeding, Ms Gail Cholosznecki, objected to the nominations of Ms Butler. The returning officer made inquiries of Ms Butler, and of the branch secretaries of the P&T Branch and Victorian Telecommunications and Services Branch ('the T&S Branch'). After considering responses to those inquiries, the returning officer decided to accept the nominations of Ms Butler. Ballots were conducted in relation to a number of offices, from 1 June 2005 to 30 June 2005. On 5 July 2005, the returning officer declared the results of the ballots. He declared Ms Butler elected to both of the offices for which she had been nominated. In the ballot for three branch committee of management members, Ms Butler's vote tally was the third highest of five candidates. In the ballot for divisional executive member, Ms Butler defeated Ms Cholosznecki, the only other candidate, by 49 votes, 183 to 134. Those who were successful in the elections took office on 1 August 2005, and are due to hold office until 31 July 2007. 6 On 30 September 2005, Ms Cholosznecki applied to the Court, pursuant to s 200(1), for an inquiry into the elections for the offices to which Ms Butler was elected, alleging that there had been an irregularity in relation to each election, because Ms Butler was not eligible to be nominated. There is no dispute that Ms Cholosznecki is a member of the union, and therefore has standing to apply pursuant to s 200(1). On 18 October 2005, in accordance with s 201, being satisfied that there were reasonable grounds for the application, I fixed a time and place for the conduct of the inquiry, initially for directions only. I directed service of the application on a number of parties, including the two unsuccessful candidates for the office of branch committee of management member, the Union, the Communications Division of the Union, the P&T Branch, and the T&S Branch. At the first directions hearing, on 24 October 2005, there were appearances on behalf of Ms Cholosznecki, Ms Butler, the Australian Electoral Commission and the returning officer, and the Union. An affidavit of service has now been filed, establishing that service on the other parties was effected in accordance with my order. At the hearing of the inquiry, those representing the Australian Electoral Commission and the returning officer, and the Union, sought and were granted leave to withdraw from the hearing. Leave to withdraw was granted to the representative of the Union, despite my misgivings about being deprived of any assistance the Union might have been able to give me with respect to the construction of its rules. The issues were therefore argued between counsel for Ms Cholosznecki and counsel for Ms Butler. By r 6.1.1 of its national rules, the Union is to have divisions. Rule 6.1.2 refers to three divisions, each apparently corresponding with a former registered organisation, which became part of the Union. The third of these, the Communications Division, 'shall also be known as the Communication Workers Union Division. ' Rule 6.1.3 provides that each member shall be attached to a division or divisional group as the case may be. Rule 6.1.4 designates the provisions of r 2, the rule providing for eligibility for membership of the Union, corresponding with each of the three divisions. 10 Rule 23.1 of the Union's national rules requires that each division or divisional group shall, in accordance with the rules of the division, keep a membership register. 11 The Communications Division of the Union has its own rules. ' The TOA Branch corresponds with the former Telecommunications Officers Association, and is not relevant for present purposes. The divisional sections are the Postal Divisional Section, the Technical Divisional Section, the Lines and General Divisional Section, and the Operator Divisional Section. Members allocated to the Technical Divisional Section and the Operator Divisional Section shall constitute the Telecommunications and Services Branch in the State or Territory in which they are employed. 18 Rule 66(a) of the Communications Division rules makes a number of provisions about eligibility to be a candidate for office within a divisional branch of the Communications Division. In July 1999, she submitted an application for membership of the Union to the T&S Branch. She was accepted as a member and attached to the T&S Branch. Within the T&S Branch, she was allocated to the Technical Divisional Section. Thereafter, until March 2005, Ms Butler paid her dues to the T&S Branch. On 8 July 2003, she was elected as a branch committee of management member of the T&S Branch, and she continued to attend meetings of the branch committee of management of the T&S Branch until March 2005. 20 Ms Butler submitted a further application for membership, dated 18 July 2003, to the P&T Branch on or about that date. In response, she received a letter dated 31 July 2003 from the then Victorian Branch Secretary of the P&T Branch. May I extend to you a very warm welcome. The card was not in evidence, but was said to have been in terms that indicated that Ms Butler was a member of the Union attached to the P&T Branch. Within the records of the P&T Branch, she was shown as having been allocated to the Lines and General Divisional Section. Ms Butler then continued to pay dues to the P&T Branch. Her name appeared in its register of members and she was treated by the P&T Branch as being a member of the Union attached to the P&T Branch. Shortly after the events described in [20]-[22], Ms Butler was appointed a part-time industrial officer of the P&T Branch. It is unclear whether anyone in the administration of the P&T Branch was aware that Ms Butler's name continued to appear on the register of members of the T&S Branch, or that she continued to pay dues to the T&S Branch, in addition to those she paid to the P&T Branch, and to attend meetings of the branch committee of management of the T&S Branch. Ms Butler herself was unaware of r 5.1.3 of the national rules of the Union until March 2005. Rule 5.1.3 of the national rules expressly prohibited her from being attached to more than one divisional branch. The only provision in the rules under which Ms Butler could have become attached to the P&T Branch was the provision in r 5.1.5, allowing her to be transferred to another divisional branch, and this had not occurred. Accordingly, Ms Cholosznecki contended that Ms Butler had not been attached to the P&T Branch for the requisite period of 12 months prior to the close of nominations, and was consequently ineligible to be nominated for the positions to which she was purportedly elected. 26 Counsel for Ms Butler drew attention to the authorities which established the existence of the principle known as the doctrine of incompatible offices. Ultimately, the argument on behalf of Ms Butler was based on the principle of surrender by implication, which is said to underlie the doctrine of incompatible offices. On this view, if Ms Butler became attached to the P&T Branch, she impliedly surrendered her attachment to the T&S Branch, because r 5.1.3 expressly made it clear that she could not retain both, and the accession to the second nullified the first. This leaves open the question whether Ms Butler did validly become attached to the P&T Branch. It may be that the doctrine of implied surrender applies even where there is an invalid attempt to take up a new position that is incompatible with a position already held. If that principle were to be applied to the facts of the present case, the result would be that Ms Butler would be attached to neither the P&T Branch nor the T&S Branch, unless she became attached validly to the P&T Branch. Accordingly, it was necessary for counsel for Ms Butler to contend that she had been transferred to the P&T Branch, in accordance with r 5.1.5, or that even in the absence of such a transfer, by her own actions she had become attached to the P&T Branch, without the necessity for a formal transfer. 27 Both of the relevant parties accepted, and it seems to be clear beyond argument, that the effect of r 5.1.3 was to prevent Ms Butler from being attached to more than one divisional branch at the same time. It was also accepted that her attachment to the T&S Branch, from the time she joined the Union in 1999, was valid. It therefore became necessary to determine whether Ms Butler was transferred from the T&S Branch to the P&T Branch, in accordance with r 5.1.5. One difficulty relating to this issue is the absence of any rules of the 'appropriate division', ie the Communications Division, providing for transfer from one divisional branch to another, and the absence of evidence as to any recognised process for such transfer. There is a question whether Ms Butler's unilateral actions, or the actions of the P&T Branch in accepting her application of 18 July 2003, could result in her being transferred for the purposes of r 5.1.5. There is then a question whether, in any event, r 5.1.5 is to be read as a provision exhaustive of the circumstances in which a member may cease to be attached to one divisional branch and become attached to another. In particular, there is a question whether this can be effected by unilateral action of the member, or by acceptance of such action by the recipient divisional branch. If such a process of unattachment and reattachment be possible, there is a question whether it occurred in the present case. 28 Underlying a number of these issues are questions as to the nature and content of the principle of implied surrender. It is to those questions that I turn first. All three judges of the Full Court, Smithers J at 256, Evatt J at 260 (agreeing with Northrop J) and Northrop J at 262-263 accepted the existence of the doctrine. The majority (Evatt and Northrop JJ) held that the doctrine even applied to a situation in which the holder of one office attempted to assume a second, incompatible, office, but the attempt was unsuccessful because the second office was not vacant. Smithers J disagreed on this point. Northrop J, in the passage to which I have referred, relied on the Iron Ship Coating Co Ltd v Blunt (1868) 3 LR CP 484 as authority for the existence of the doctrine. The doctrine has since been applied in Mellor v Horn (1988) 25 IR 157 at 159-161, and in Johnson v Beitseen (1988) 41 IR 395 at 412-413. It has been mentioned in Sherrif v Townsend (1980) 48 FLR 20 at 54 by Northrop J (dissenting on the relevant issue), and in Price v Hodgson (1992) 41 IR 178 at 179. As, if a forester, by patent for life be made justice in eyre of the same forest pro hâc vice, the office of forester will be void; for, it is incompatible, being subject to correction by the justices in eyre. " Several other illustrations are there put: amongst them, that "the chief justice of C.B. cannot be prothonotary or clerk of the papers in the same Court. " This is founded upon a principle which runs through the whole of the law, and is applicable to surrenders by implication. There appears to be no reason why this broader principle should not apply to membership of a registered organisation or, as in the present case, to attachment of a member to a division or divisional branch within a registered organisation. That being so, the central assumption of Ms Cholosznecki's case, that Ms Butler could not become attached to the P&T Branch, because of her continued membership of the T&S Branch, is demonstrated to be false. Rather, if Ms Butler became attached to the P&T Branch, in the absence of anything in the rules of the Union to the contrary, her membership of the T&S Branch ceased. 32 It is apparent from the authorities that the relinquishment of the first position does not depend upon the existence of a subjective intention to relinquish it. The only intention required is the intention to assume the second position. Although the doctrine of incompatible offices has sometimes been put in terms of implied resignation from the first office, it is clear that the first office is lost by operation of law, not by any determination on the part of the person concerned to lose it. In Egan , the national assistant secretary of a registered organisation allowed himself to be appointed as the national secretary, when there was thought to be a vacancy in the latter office. The appointee deliberately refrained from resigning as national assistant secretary, because he was aware that the resolution declaring the office of national secretary vacant might not be valid, as turned out to be the case. He was consciously attempting to hold both offices. Because the Court found the offices to be incompatible, in the sense that the same person could not hold the two at once, he was held to have abandoned the office of national assistant secretary. At 262-263, Northrop J emphasised the proposition that the doctrine applies by operation of law, by comparing it to the doctrine of election between inconsistent rights. 33 The proposition that the implication in the principle of surrender by implication arises from the operation of law, rather than as a matter of fact from the nature of the conduct, or as a matter of presumed intention, of the person concerned, is important in the understanding of the relationship between the principle and any express provisions. Of course, any implication must be subject to what is provided expressly. Determining whether the principle of surrender by implication is ousted by express provision in a particular case involves examining the relevant express provisions from the standpoint of whether they are inconsistent with the implication by law, rather than whether they are inconsistent with an implied intention on the part of the person concerned to produce a particular outcome. Thus, in Johnson , the presence of an express rule of the registered organisation, in accordance with which the person concerned could have resigned the first office, was held to be insufficient to oust the application of the doctrine of incompatible offices. This was so, notwithstanding authority that a purported resignation that did not accord with the express rule concerning resignation would have been ineffective to bring about a resignation. It is an implication which arises by operation of law, where incompatible offices exist. Like all implications, it may be excluded by the express terms of the rules. It is not, however, to be regarded as an implied term, arising from the presumed intention of all parties to the rules. A party asserting that the branch rules contain an implication that more than one office cannot be held validly may find that such an implication is only to be found together with an implication that the assumption of a second office vacates the first. In accordance with the doctrine of incompatible offices, this must be so, unless it is excluded by clear words. The words of r 29 do not refer to the doctrine of incompatible offices. They contemplate an express attempt to resign, rather than one which arises by operation of law. They may operate to prevent a resignation from taking effect where the person resigning simply states an intention to refuse to continue to hold the office. That was the position in Hassett v Harding . Rule 29 does not have the appearance of a complete code, governing all types of resignation, including those arising by operation of law. It is sufficient if, by their nature, the two positions are incompatible. The illustrations cited by Willes J, in the passage I have quoted in [30] make this plain. So do the facts of the Iron Ship case itself. In that case, there was an express provision in the articles of association of the company that a director could not be appointed to any other office in the company. The person concerned held the office of secretary of the company, which he was held to have vacated by accepting appointment as a director, although the articles of association made no express provision about this order of events. The express provision illustrated the incompatible nature of the two offices. In Egan , Mellor and Johnson , there were no express provisions that could be called in aid in determining whether the relevant offices were incompatible. In each case, the two offices involved membership of deliberative bodies, the members of which were elected. It was the implication, gathered from the relevant rules, that it was not intended that one person should have more than one vote on such a deliberative body, which led to the conclusion that there was incompatibility involved in one person holding more than one of the offices. 35 With this understanding of the principle of surrender by implication in mind, it is necessary to turn to the specific issues in the present case. Was Ms Butler transferred? The task of determining whether Ms Butler was transferred from the T&S Branch to the P&T Branch is not made any easier by the absence of any other provision in the national rules of the Union, or the Communications Division rules, for the process by which the transfer is to be effected. 37 Dictionary definitions are not particularly helpful. The Macquarie Dictionary defines 'transfer', when used as a transitive verb, as 'to convey or remove from one place, person, etc., to another. ' As an intransitive verb, the Macquarie Dictionary defines 'transfer' to mean 'to transfer oneself', or 'to be transferred. The first is the division, divisional branch or divisional sub-branch from which the member is being transferred. The second is the division, divisional branch or divisional sub-branch to which the member is being transferred. The third is the member himself or herself. As a matter of logic, it might be said that the process of being transferred could involve action by the division, divisional branch or divisional sub-branch from which the member is being transferred, action by the division, divisional branch or divisional sub-branch to which the member is being transferred, action by the member who is being transferred, or some combination of those three elements. In the present case, the question is whether Ms Butler was transferred from the T&S Branch to the P&T Branch by a combination of action on her part and action on the part of the P&T Branch. It seems clear that the T&S Branch played no part at all in the process. It is therefore necessary to construe the phrase 'be transferred' in r 5.1.5, in order to determine whether what Ms Butler did, and what the P&T Branch did, resulted in Ms Butler being transferred. In order to construe the phrase 'be transferred', it is necessary to see what clues as to its meaning might lie within the Union's rules. 39 The first clue is the fact that the verb is expressed in the passive voice. The rule does not say that a member may transfer from one division, divisional branch or divisional sub-branch to another. The use of the passive voice suggests that being transferred is something that someone other than the member concerned does to the member concerned, not something that the member concerned does himself or herself. The question, therefore, appears to be whether a member is to be transferred by action by the transferor division, divisional branch or sub-branch, action by the recipient division, divisional branch or divisional sub-branch, or combined action by both. 40 It is important to note that r 5.1.5 applies to transfers between divisions, as well as between divisional branches and divisional sub-branches. There is nothing in the rule to indicate that the phrase 'be transferred' should bear a different meaning, according to whether the transfer is between divisions, divisional branches or divisional sub-branches. This point has some importance, because there are some indications in the national rules of the Union that provide clues as to how the phrase 'be transferred' should be construed when the transfer concerned is one between divisions. 41 The first such indication is found in r 5.1.5 itself. A transfer is to be 'in accordance with the rules of the appropriate division. ' According to the definition in r 4.1, the appropriate division is the division to which a member has been attached. This suggests that, whatever might be the content of the process of transfer, it is a process to be initiated by the division from which the member is being transferred, and not by the recipient division. The absence of any rules of the Communications Division governing any process of transfer of members does not nullify the point that r 5.1.5 contemplates that a transfer between divisions is to be conducted according to a process prescribed by rules of the transferor division. In turn, this suggests that a transfer between divisional branches or divisional sub-branches is to be a process initiated in and controlled by the transferor divisional branch, or divisional sub-branch, as the case may be. 42 Support for this view is to be found in r 23 of the national rules of the Union, which imposes on each division or divisional group the obligation to keep a membership register, and in r 50 of the rules of the Communications Division, which devolves the obligation to keep the register of members onto the secretary of each divisional branch. As a practical matter, for a member to be transferred from one divisional branch to another would require that his or her name be removed from the register of members of the transferor divisional branch and placed on that of the recipient divisional branch. This process could not occur without at least the involvement of the secretary of the transferor divisional branch. Similarly, r 32(a) of the rules of the Communications Division provides for payment of contributions to the branch secretary. A transfer to another divisional branch would involve a transfer of this obligation, so that it became an obligation to pay contributions to the branch secretary of the recipient divisional branch. If the rules provided for a single national register of members, and for payment of contributions to a national official, it might be easier to imagine that a transfer process could operate without the involvement of the division, divisional branch or divisional sub-branch from which the member was being transferred. 43 Counsel for Ms Cholosznecki contended that Ms Butler could not have been transferred from the T&S Branch to the P&T Branch unless she had resigned from the T&S Branch. The difficulty with this argument is that r 5.1.4 of the national rules of the Union provides that, upon resignation from a division, the member shall be deemed to have resigned from the Union. It is apparent from this rule that a member could not be transferred from one division to another by a process involving resigning from the transferor division, because the act of resignation would bring about the member's resignation from membership of the Union altogether. If resignation cannot be part of a transfer from one division to another, it is difficult to see how it could be part of the process of being transferred from one divisional branch to another, because the one rule, r 5.1.5, provides for each kind of transfer. 44 I have considered whether some guidance is available from r 5.5 of the national rules of the Union, under which clearances are to be granted in accordance with the rules of the appropriate division. As I understand the expression, a clearance is normally something granted by one trade union, if a member wishing to resign and join another trade union has paid all dues owing in respect of the trade union from which the member is resigning. Armed with the clearance, the member may then present his or her application for membership of a new trade union and be treated as having good standing with the trade union from which he or she has recently resigned. This understanding appears to be consistent with the provisions of r 32(b) of the rules of the Communications Division, under which an applicant for membership of the Union through the Communications Division is excused from any obligation to pay an entrance fee if he or she has a clearance from a bona fide industrial organisation. There is no evidence in the present case as to whether clearances are granted for a transfer between divisions, or between divisional branches. In the absence of such evidence, it is difficult to call in aid r 5.5 in the construction of r 5.1.5. 45 Slight though the indications found in the rules are, they tend to suggest that the process of being transferred, contemplated by r 5.1.5, is intended to be a process in which the division, divisional branch or divisional sub-branch from which the member is being transferred is, at the very least, to be involved. In the present case, it appears clear that the T&S Branch was not involved in any process of transferring Ms Butler to the P&T Branch. What was done appears to have been done entirely by Ms Butler herself, by submitting her fresh application for membership of the Union to the P&T Branch, and by the P&T Branch, in accepting and processing that application for membership and allocating Ms Butler to the Lines and General Divisional Section. The fact that Ms Butler continued to carry out the functions attached to the office of member of the committee of management of the T&S Branch, to which she had previously been elected, and continued to pay dues to the Branch Secretary of the T&S Branch, suggests that the T&S Branch was not at all involved in any process of transferring her to the P&T Branch. It is unlikely that those administering the T&S Branch would have chosen to act contrary to the rules of the Union by continuing to treat Ms Butler as a member of the T&S Branch, if they had been aware that she had become a member of the P&T Branch, and if they had been aware of the provisions of r 5.1.3 of the national rules of the Union. It is therefore necessary to conclude that Ms Butler was not transferred from the T&S Branch to the P&T Branch in accordance with r 5.1.5. No action taken by Ms Butler, the P&T Branch, or both in conjunction, could be effective to transfer her. The document Ms Butler submitted to the P&T Branch in July 2003 was an application to become a member of the Union. Such an application would ordinarily be submitted by a person who is not already a member of the Union. Further, the application was dealt with by the P&T Branch as if it were an application by a person not already a member of the Union. If the P&T Branch had dealt with the application as if it were an application by an existing member of the Union to become attached to the P&T Branch, it might have been necessary to consider whether a member could become attached to a divisional branch, and thereby impliedly surrender any attachment to a previous divisional branch, by indicating an intention to change attachments, which was accepted by the divisional branch to which the intention was signified. As a matter of fact, this was not what occurred in the present case. Plainly, no-one involved in the administration of the P&T Branch was aware that Ms Butler was already a member of the Union, attached to the T&S Branch, when her new application was processed. She was treated as an entirely new member. 47 Nothing in the rules of the Union appears expressly to prevent one person holding two memberships of the Union. Dual, or multiple, memberships are contrary to the structure of the Union's rules, however. If they were to be regarded as being permitted by the rules, dual or multiple memberships would enable a single person, with sufficient resources to pay all necessary dues, to exercise more than one vote in elections within the Union. Such a situation would tend against the achievement of the object found in s 5(d) , in accordance with which the provisions of Sch 1B of the WR Act are intended to 'provide for the democratic functioning and control of organisations. ' In accordance with this object, s 141(1)(b)(iv) requires that the rules of an organisation provide for the control of committees of the organisation and its branches respectively by the members of the organisation and branches. If the rules of an organisation permitted multiple membership, and therefore multiple voting, they would very likely be held to impose on members conditions, obligations or restrictions that, having regard to the objects of Sch 1B and the WR Act, and the purposes of the registration of organisations, were oppressive, unreasonable or unjust, in contravention of s 142(1)(c). The provisions of s 143(1)(a), in conjunction with the definitions of 'direct voting system' and 'collegiate electoral system' in s 6, would be violated by rules of an organisation that permitted one person to hold more than one membership. In theory, a person with sufficient resources, could hold sufficient memberships to acquire effective control of an organisation or a branch of an organisation by dominating the elections of its officers. It follows that, while not expressly prohibiting dual membership, the rules of the Union must be read and construed on the basis that each member of the Union will be a separate person and each person can only hold one membership of the Union at one time. 48 Once this is accepted, it follows that the conferment of a second membership on a person is incompatible with the continued holding of that person's previous membership. By operation of law, in accordance with the principle of implied surrender, the person must be taken to have relinquished the previous membership. In accordance with that doctrine, it cannot be said that the holding of the first membership renders it impossible for the person to acquire a second membership. Rather, the correct analysis is that the acquisition of the second membership involves implied surrender, by operation of law, of the first membership. 49 The principle of implied surrender can only apply to the extent to which it is not excluded by express provisions of the Union's rules. In this respect, the provisions of r 32(d) of the rules of the Communications Division are highly relevant. As I have said, those provisions reflect the requirement of s 141(1)(b)(viii), that the rules of an organisation must provide for the resignation of members under s 174, and s 174 itself. Although r 32(d) is expressed in permissive terms, it may be taken to be a code as to the manner in which a person intending to effect a resignation from membership of the Union may do so. In accordance with authorities like Hassett v Harding (1976) 27 FLR 457 at 460-461, it would probably be held that an attempt to resign otherwise than in accordance with r 32(d) would be ineffective. The fact that r 32(d) is a rule, and is in a form, required by the WR Act reinforces this view. 50 The principle of implied surrender effects a surrender by operation of law, as I have said in [32]. It does not operate to effect a surrender as a result of the implication of an intention on the part of the person concerned to surrender. There is therefore a question whether the principle of implied surrender is inconsistent with an express rule applying only to the manifestation of an actual intention to resign. 51 On this point, I take the same view as I took in Johnson at 412-413. Despite the existence of r 32(d) of the Communications Division rules, it is my view that an attempt to acquire a second membership automatically vacates the first membership of the person making the attempt. 52 It follows that, by making her application by means of her form dated 18 July 2003 to the P&T Branch, and by the manner in which the P&T Branch dealt with that application, Ms Butler again became a member of the Union. Her accession to this membership had the effect of bringing about the cessation of her previous membership. At the same time, it had the effect of causing her to cease to be a member attached to the T&S Branch and to become a member attached to the P&T Branch. No issue of an entrance fee arose because the committee of management exercised its power, derived from r 32(c) of the Communications Division rules, to waive such a fee, in respect of all those it admitted to membership at its meeting on 12 August 2003. The conclusion that Ms Butler became a member of the Union, attached to the P&T Branch, would follow even if there had been no provision such as r 5.1.3 of the national rules of the Union, because of the inherent impossibility of holding two memberships of the Union. 53 To the extent to which Ms Cholosznecki attempted to rely on r 46(c) of the rules of the Communications Division, her case must also fail. It is not clear at precisely what point in time Ms Butler was allocated to the Lines and General Divisional Section in the P&T Branch, but it is safe to presume that the rules were complied with (the presumption of regularity) in the absence of evidence to the contrary, and therefore that the allocation was made prior to Ms Butler's appointment as an industrial officer of the P&T Branch. Rule 46(c) operated to cause that allocation to continue after Ms Butler was appointed an industrial officer. Her earlier allocation to the Technical Divisional Section in the T&S Branch did not survive her implied surrender of her earlier membership of the Union, and could not be revived by operation of r 46(c). This was more than 12 months prior to the closing of nominations in the elections for the offices for which she was a candidate, and to which she was elected. She complied with the requirement of r 66(a) of the Communications Division rules that she be a 'continuously financial member' of the P&T Branch for a period of not less than 12 months immediately prior to the closing date of nominations. Accordingly, there was no irregularity in the returning officer accepting her nominations for both of those offices. 55 It follows that the application for an inquiry into the elections must be dismissed; an order pursuant to s 206(4) can only be made if the Court finds that an irregularity has happened. 56 At the conclusion of the hearing of the inquiry, I raised the question whether Ms Cholosznecki would be entitled to a certificate pursuant to s 325(1), if her application were unsuccessful. Counsel for Ms Cholosznecki was not at that stage in possession of instructions to seek such a certificate. There seems little doubt that such a certificate ought to be granted. The issues raised by the application for an inquiry are complex. The returning officer found them to be so. They have caused me to have to reserve my judgment, in order to reach a conclusion about them. I am therefore prepared to certify that Ms Cholosznecki acted reasonably in applying for an inquiry into the elections the subject of this proceeding. If it should turn out that Ms Cholosznecki does not wish to avail herself of the certificate, she need not do so. 57 Otherwise, s 329(1) applies to the proceeding, and no order for costs can be made. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | registered organisation election nomination whether valid whether financial member attached to divisional branch for required period member attached to one divisional branch subsequent membership application to another divisional branch continued to pay dues to, and to act as member of committee of management of first divisional branch treated as member attached to, and also paid dues to, second divisional branch rules prohibited attachment to more than one divisional branch whether transferred from one divisional branch to another whether second application for membership brought about implied surrender of first membership principle of surrender by implication whether inconsistent with express provisions of rules as to resignation of membership. 'be transferred' industrial law word and phrases |
The issue raised is whether all or part of the Notice to Produce travels beyond the documents contemplated by O 15A r 6 of the Federal Court Rules 1979 (Cth), and seeks to obtain and test the substance of documents which are appropriate for discovery only in post-action discovery when pleadings have been made and issues are more clearly defined. 3 In support of its application of 19 June 2007, Optiver filed two affidavits. The first was an affidavit of Mr Shale, a software development manager at Optiver, who was responsible for developing and overseeing the development of the software which is the subject of the proceedings. He describes the development and performance of the automated securities trading software, and other software, which it is said, may have been misappropriated by the respondents. He refers to the resignation of the fifth to ninth respondents from Optiver, with whom he had worked on the software program, and says that they had established a new business in competition with Optiver. He explains why he believes the respondents may have used Optiver's automated trading software developed during their employment without its consent. 4 The other affidavit filed by Optiver was that of Mr Keldoulis, a director responsible for supervising all aspects of Optiver's business. He refers to searches made of the ASIC register and to inquiries made to ascertain whether there was any indication that the former employees had misappropriated the securities trading software. He expresses the belief that some or all of the respondents are in possession of a copy of the software written by Optiver's employees in the course of their employment. It is not designed to be a preliminary hearing of the merits of the case. The extent of such discovery will be narrower and on a different basis than the discovery which occurs after proceedings have been instituted and the issues are defined. It is a step which precedes the institution of substantive litigation and is to some extent exploratory in nature. 6 Despite the narrower scope of pre-action discovery and the different questions to which it relates, an estimation of the strength of a prospective case including consideration of possible defences may be material. Pre-action discovery is only directed to provide evidence sufficient to enable an applicant to decide whether to commence the proceedings . The sufficiency of this evidence need not go so far as to enable the applicant to decide there is a prima facie case or to evaluate the prospects of success on the ultimate hearing at any high level of probability. Pre-action discovery is not designed to enhance or justify a decision which has already been taken to commence proceedings: see Matrix Film Investment One Pty Ltd v Alameda Films LLC [2006] FCA 591. The focus of this form of discovery is on the question whether the requirements of O 15A r 6(a), (b) and (c) have been made out and, if so, whether the Court should exercise its discretion to require production. In discovery after an action has been commenced, the question is whether there are documents relevant to the matters and issues raised on the pleadings, including but not limited to those referred to in O 15 r 2(3). Any determination of an application for pre-action discovery must be made having regard to these considerations. 7 There is now no doubt that the Court has power to make an order that a Notice to Produce be issued in a pre-action discovery application if directed to the questions set out in O 15A r 6. However, notwithstanding this power, the Court retains its broad discretion whether to allow a Notice to Produce to stand in whole or in part: see Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd [2005] FCAFC 115 ; (2005) 142 FCR 428. In that case, as pointed out by Hill J at 438, although the issues in pre-action discovery are very limited, they can give rise to contestable issues of fact which can be the subject of cross-examination. Accordingly, before making a determination, the Court must consider whether the relevant Notice to Produce is limited to the establishment of those matters necessary to be satisfied under the requirements of O 15A r 6. A Notice to Produce like any other litigious measure must not be an abuse of process. 8 The relevant principles concerning pre-action discovery are concisely summarised by Hely J in St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 at 153. It is unnecessary to reproduce his Honour's summary, but I have applied those principles in my consideration of the challenge to the present Notice. 9 The Notice to Produce in this application has four parts. The documents sought in the first part (paragraphs [1]-[4]) relate to the determination of issues in the proceedings and conform to the requirements of O 15A r 6. The documents sought in the second and third part (paragraphs [5]-[17] and paragraphs [18]-[20] respectively) relate to matters arising out of Mr Shale's and Mr Keldoulis' affidavits respectively. The documents sought in the fourth part (paragraphs [21]-[24]) relate to other miscellaneous matters. 10 Paragraphs [1]-[4] are relevant and appropriate and need not be struck out. I consider that they are not expressed too broadly because the descriptions of the documents sought are narrowed in each case by the introductory words. In addition, they are related to facts which may be contested on the application. Cross-examination on a suitably controlled basis may be allowed in some circumstances, but this is subject to the discretion of the Court, and extensive cross-examination on pre-action discovery is to be discouraged. As a consequence, it may be appropriate to allow some investigation of the documentary basis for the contention that there have been reasonable inquiries as to the sufficiency of the records and evidence relating to whether Optiver has already made a decision whether to commence proceedings. The making of any decision to commence prior to the O 15A r 6 application is important because pre-action discovery is concerned to identify any material on the basis of which such a decision can be made. If a decision has already been made, the application is not necessary and pre-action discovery will not be granted. I allow paragraphs [1]-[4] of the Notice to Produce. 11 As to the remaining paragraphs, I consider that each of them should be disallowed. Although O 15A r 6(a) does address the broad question of whether there is reasonable cause to believe that an applicant may have the right to obtain relief, these 20 paragraphs in the Notice to Produce go beyond seeking documents to test that question and extend to matters going to the strength of Optiver's case. 12 By way of example, paragraph [5] seeks the personnel file and curriculum vitae of Mr Shale and paragraph [8] seeks production of all documents which record or evidence the methodology adopted and measurements made by Mr Shale in support of the proposition concerning the response times of Optiver's software. These paragraphs are clearly directed to testing the substantive question of the reliability of Mr Shale's evidence, at a level of particularity which is a matter for determination at the final hearing. It is not appropriate to embark on a determination of these questions on this application for pre-action discovery. Likewise, paragraph [24] of the Notice to Produce seeks all documents which record or evidence any occasions when any of the fifth to ninth respondents accessed Optiver's computer systems and copied any files or source codes within a specified period. This information is not appropriate for pre-action discovery, but rather goes to test the conclusions of Mr Keldoulis and Mr Shale in their respective affidavits. Substantially similar objections apply to the other paragraphs. 13 For these reasons, I grant the application in relation to paragraphs [5]-[24] of the Notice to Produce, and they are struck out. Having regard to the outcome, each party should pay its own costs. | preliminary discovery requirements of o 15a r 6 of federal court rules 1979 (cth) purpose of preliminary discovery narrower than discovery after action commenced preliminary discovery need only provide evidence sufficient to enable applicant to decide whether to pursue proceedings. practice and procedure |
The respondent also issued a notice under s 260-5 of Sch 1 to the Tax Administration Act 1953 (Cth) ('TAA') to each of Jason Real Estate Pty Ltd and Mr Paul Silvestri ('the Garnishee Notices'). Each of the Garnishee Notices sought that any money owed by the party in question to the applicant be paid to the respondent. 2 By notice dated 15 September 2006, the applicant objected to the notice of assessment. 3 By application and statement of claim filed on 20 September 2006 the applicant applied for relief pursuant to s 39B(1) and 39B (1A) of the Judiciary Act 1903 (Cth) and review of the decisions pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth). The applicant acquired the property pursuant to a Family Court Order made in late 1992. Not long after, the applicant asked her husband to be her accountant and investment adviser in relation to the properties acquired in the family law settlement. In 1994 the Shail Superannuation Fund in the joint names of the applicant and her husband was set up ('the Fund'), with money being invested in the Fund on behalf of the applicant. 5 The applicant's husband left Australia for Cyprus in about May 2005 and between May 2005 and March 2006 amounts totalling over $5 million were withdrawn from a bank account of the Fund. 6 On about 5 August 2006, the applicant entered into a contract of sale for the property with a purchaser, Mr Paul Silvestri, for the amount of $510,000 with 10% deposit payable immediately, and settlement to occur on 22 September 2006. 7 On about 21 August 2006, the respondent sought information about the contract of sale of the property through the real estate agent engaged for the sale of the property, Jason Real Estate Pty Ltd. On 24 August 2006, the respondent, through his delegate the Deputy Commissioner, made an assessment of the applicant's income and tax payable in respect of the year ended 30 June 2005. The assessment provided that the applicant's taxable income was $1.73 million for that year, and the tax payable was $842,062, due and payable on 5 June 2006 pursuant to s 204 of the ITA Act. 8 On 25 August 2006, an officer of the respondent left the notice of assessment at the applicant's post office box along with an information letter and reasons for decision. In the facsimile she indicated that she had not received any notice of assessment or other information. On the same date, Mr Zafiriou responded to the applicant's facsimile, enclosing the assessment and copies of the Garnishee Notices. In response, the applicant requested details of the basis upon which the respondent calculated the applicant's taxable income. On 31 August 2006, Mr Zafiriou responded by way of facsimile enclosing an explanation to the assessment. That until 25 September 2006 or further order the respondent be restrained from trying to recover money due under the contract of sale between the applicant and the purchaser in respect of the property from the purchaser or the applicant's real estate agent. 2. That the proceeds of sale under the said contract be paid into Court to be held until the determination of the proceedings or further order, without prejudice to the respondent's rights under the Garnishee Notices. The applicant challenged the Garnishee Notices on the basis that the respondent issued them for an improper purpose. Further, the applicant challenged the validity of the Garnishee Notices on the basis that the assessment was not effectively served on her in accordance with the Income Tax Regulations 1936 (Cth) ('the Regulations') prior to the service of the Garnishee Notices. The section does not create a valid assessment where none has been made at all. The section requires an actual assessment as a condition of its operation. But otherwise, the effect of s 175 is that compliance with particular provisions of the Act is not essential to the validity of an assessment. The section requires an actual assessment as a condition of its operation". 16 Section 175 is often used in conjunction with s 177. 18 The Hickman principle states that a privative clause (s 175 in this case) is given effect only if the purported exercise of the power is bona fide, relates to the subject matter of the legislation and is reasonably capable of reference to the power given to the body exercising it. If any of these issues be resolved in favour of the taxpayer, an amendment of the assessment so as to reduce the taxable income or the tax liability of the taxpayer must follow. The width of that jurisdiction and the evidence purpose of the Act to channel all issues as to the true tax liability of the taxpayer into the objection, review and appeal procedures found the clearest implication that exceptions to the broadest literal application of s 175 must be narrowly confined and a corresponding operation must be attributed to s 177(1). If it appears, either on the face of a notice of assessment or from elsewhere that the Commissioner has not attempted in good faith to determine the taxable income or has not made an assessment definitive of the tax liability of the taxpayer, the assessment does not attract the protection of s 175. Nor, in my opinion, does s 177(1) make the production of such a purported notice of assessment conclusive evidence of the due making of the assessment. In the decision of Briglia v Commissioner of Taxation [2000] ATC 4,247 the court held that two assessments which included the same amount in the assessable income of two different taxpayers for the same year were valid. The decision in Richard Walter also makes it clear that the existence of two assessments, which include the same amount in respect of the same year of income but issued to different taxpayers, does not demonstrate a want of bona fides on the Commissioner's part, providing that at the time the Commissioner made the assessments he was bona fide able to form the view that each assessment could be correct: see Richard Walter at 188, 200, 202 and Darrell Lea at 186. It follows from this that uncertainty on the Deputy Commissioner's part as to the facts relevant to the exercise of his power of assessment does not evidence any absence of bona fides in the Hickman sense. The power to assess is, as s 167 shows, not limited to cases where the Commissioner has enough information on which to make a positive finding of fact. The Commissioner is not required to determine on the balance of probabilities that one person rather than another is the person subject to the tax liability in respect of the particular income. Except in very limited circumstances, the taxpayer's rights to dispute liability to taxation are provided for by the objection, review and appeal procedures in Pt IVC of the TAA and are to be pursued by those procedures rather than by proceedings such as this one. However, if it appears, either on the face of a notice of assessment or from elsewhere, that the Commissioner has acted for an improper purpose, has not attempted in good faith to determine the taxable income or has not made an assessment definitive of the tax liability of the taxpayer, the assessment will not attract the protection of s 175. In my view, taking the facts together, they do not lend any support to sustain the factors relied upon by the applicant. The respondent was involved in gathering information relevant to the assessment well prior to the making of the assessment. Nothing in the explanation of the respondent as to the assessment, or in any documentation emanating from the respondent, gives any indication of a lack of bona fides or an improper purpose, or a failure to properly evaluate the assessment. The fact that the respondent did not make further inquiries of the applicant, or failed to accept her version of events does not support a finding of a lack of bona fides or an improper purpose. It may well be that the respondent has not given sufficient weight to some of the factual contentions raised by the applicant, but this does not mean the process of assessment is relevantly flawed. In my view, the best the applicant can do in this case is to ask me to draw the inference of a lack of bona fides and the existence of an improper purpose upon the basis of the timing of events, the factual position as asserted by the applicant, and the failure of the respondent to investigate further the position of the applicant in view of her willingness to co-operate. 25 However, I do not consider the evidence of the applicant sufficient to prove on the balance of probabilities a lack of bona fides, an improper purpose or a failure to genuinely make an assessment by the respondent. 26 On the basis of the evidence relied upon by the applicant, I do not think it was incumbent upon the respondent to introduce any evidence to refute the suggested inference of lack of bona fides or improper purpose I have been asked to draw by the applicant, and the failure to call a witness cannot fill the gaps in the evidence of the applicant. 27 A principal contention of the applicant was that, taking into account the chronology of events and surrounding circumstances, the sole or driving purpose of the making of the assessment was to allow the respondent to issue the Garnishee Notices, and that this was an improper purpose. It is one thing to raise an assessment having regard to tax collection, even to enhance the ability to collect the tax -- the Tax Act provides as much: see for example ss 167 and 205. However, it is entirely another matter to raise the assessment with speed, imprecision and inadequacy of examination, investigation and inquiry in order to take advantage of a window of opportunity for its simple collection. In other words, raising an assessment in order to collect tax, rather than to determine the tax due, is not a bona fide attempt to exercise the powers of assessment conferred by the Tax Act. Once the notice of assessment has been served, the taxpayer is liable to tax and s 218 may be activated. In this case the result has been bankruptcy. I do not find any "speed", "imprecision", or "inadequacy of examination, investigation and inquiry" in the making of the assessment, or for the purpose of taking advantage of any "window of opportunity" to collect tax. The investigation into the applicant had been ongoing for some time before the assessment was made, and there is no other evidence of any inadequacy of examination, investigation or inquiry. Assuming the approach of Einfied J is correct, I am not satisfied that the assessment was made other than in circumstances of determining the tax due. 29 Even if the assessment was issued in conjunction with the issue of the Garnishee Notices, this does not lead to the conclusion that the assessment is invalid. There is sufficient indication of urgency in the situation to warrant the steps that were taken. In my opinion, the s 218 connection is a purely neutral fact in the determination of whether the assessment itself was invalid. I also cannot be satisfied that the assessment was tentative or provisional. The notice of assessment clearly sets out the applicant's taxable income, and a fixed sum that is due and payable. There is no indication that the tax liability stated is tentative or provisional: see Richard Walter at 237 per McHugh J. 31 The variety of matters upon which the applicant sought to rely go no further than establishing that the respondent might have taken an alternative view as to the assessment. The matters relied upon could usefully be raised in Pt IVC proceedings in challenging the amount of the tax liability, however, they do not assist in the determination of the validity of the assessment itself in the Hickman sense. 32 Accordingly, the applicant's grounds that challenge the validity of the assessment are not made out and must fail. Given my findings below in relation to the validity of the Garnishee Notices, I need not consider whether the Garnishee Notices were themselves issued for an improper purpose. The requirement of service has implications in this case for the validity of the Garnishee Notices, because the effectiveness of the Garnishee Notices depends upon there being a debt due to the Commonwealth, which in turn depends upon service of the notice of assessment being effected prior to the service of the Garnishee Notices. If the notice of assessment was not effectively served on 25 August 2006, then the Garnishee Notices are invalid. 34 According to the evidence of Mr Zafiriou, whom I accept as being a truthful witness, on 25 August 2006, an officer of the respondent, Mr Fisher, placed the notice of assessment in post office box 311 at Dallas Post Office in Victoria, the post office box of the applicant. On the same day, Mr Zafiriou gave the Garnishee Notices to Mr Silvestri and Jason Real Estate Pty Ltd. The evidence is unsatisfactory as to the exact sequence of these events on the 25 August 2006, but because of the view I take, it is unnecessary to consider the evidence in this regard any further. 35 The starting point is s 174 of the ITA Act, which provides that as soon as conveniently may be after any assessment is made, the Commissioner must serve notice thereof in writing by post or otherwise upon the taxpayer: s 174(1). The respondent submitted that the service of the notice was effected on 25 August 2006, and relied upon two submissions. 36 The respondent's primary submission was that the placing of the notice of assessment in the applicant's post office box conformed to the requirements of the Regulations and as a result was deemed service. 40 The first issue is the type of address given, specifically whether it was a postal address or a physical address. An address may be both a physical address and a postal address, as for example a street address. 41 The respondent submitted that in most cases, the postal address and physical address are interchangeable. Whilst I agree with this submission, there may be instances, however, where a physical address does not constitute a postal address, such as remote locations which are not serviced by the postal authority. Further, leaving aside for the moment the circumstances of this case, there may be examples of postal addresses that do not constitute physical addresses, such as document exchange ('DX') addresses. Such addresses are merely reference points for the mailing of articles. In such an instance, one cannot leave an article at the address but must post it through the postal authority, who will deliver the article to its designated recipient. 42 The reference to a 'physical address' lends itself to the concept of an address at which articles may be physically left, as opposed to a place to which articles may be posted. The ordinary notion of a "post office box" is of a container at a post office into which mail that has been duly posted is placed by the postal authorities for retrieval by or on behalf of the holder of the box. Whether or not such a box is, in this context, the "address of a place", it is not the address of a place at which a document may be "left" by way of service. Looking at reg 36 on its own, the question is only whether the address is a physical address, as opposed to the other question of whether the address is one at which articles can actually be left. However, the similarity is more obvious when reg 36 is viewed in conjunction with reg 40(1), which provides that, where a physical address is given by a person, service can be effected by "leaving a copy of the document at that address". Therefore, the question really is whether the address is one at which articles are capable of being left. If one answers that question in the negative --- the address is not one at which a document is capable of being left --- it follows that the address cannot constitute a physical address for the purposes of the Regulations. 44 Ordinarily, a person cannot leave articles at a post office box, but rather must send the article by way of post, which the postal authority will then deliver to the box. There is no doubt that the physical post office box is a tangibly identifiable place, and in that sense, it is a physical place. However, it does not follow that it is a physical address for the purposes of reg 40(1). In my view a post office box address cannot constitute a physical address because it is, ordinarily, an address to which articles can only be posted. 45 The second issue is whether the applicant actually gave the respondent a preferred address for service. The evidence shows that the applicant gave the relevant post office box address in her income tax return for the year ended 30 June 2004. Some doubt was raised about this at the hearing, however I am content to proceed on the basis that the post office box address was the applicant's preferred address for service. It is therefore unnecessary to consider reg 38 which provides for substitution of a preferred address for service. 46 Therefore, on having taken the view that the post office box address does not constitute a physical address for the purposes of reg 40(1), I find that the Regulations cannot be relied upon to deem the leaving of the notice of assessment by the respondent at the applicant's post office box on 25 August 2006 as effective service on that date. 47 This leads me to the respondent's second argument, which was that, absent deemed service pursuant to reg 40(1), service was still effected on 25 August 2006 by leaving the notice of assessment at the post office box. 48 The respondent submitted that it had done more than what was required by the relevant legislation and accordingly service was good. In support of this proposition, the respondent relied upon the decision of the Victorian Court of Appeal in Emhill Pty Ltd v Bonsoc Pty Ltd [2005] VSCA 239 ; (2005) 12 VR 129 which concerned service of a statutory demand under s 109X of the Corporations Act 2001 (Cth). That context is important because service of a statutory demand is something that requires the same rigour as the service of a notice of assessment when one is not relying on actual service. 49 In that case, the legislation provided for service of a copy of the document in question and what was served was an original. The Court of Appeal held that strict compliance with statutory requirements for service did not prevent someone from doing more than what is required in the statute. On the contrary, in my view, where doing the lesser would suffice, doing the greater must also suffice. That case concerned actual service. One can easily accept that serving an original document on a person is better, or at least no worst, than serving a photocopy. For a person to attempt to avoid service on such a technicality clearly goes against the doctrine of strict compliance. However, here the assertion is that leaving a document at a place is better than posting the document to that place. That may be true. However, in the circumstances of these proceedings the best form of service is actual service and leaving the notice of assessment at the post office box of the applicant is clearly not a better form of service. Without the benefit of the regulations or there being deemed service upon the applicant, including a deeming as to the time of service, the respondent cannot show that the notice of assessment was actually served upon the applicant prior to the service of the Garnishee Notices. As a fact, I cannot assume that the applicant, even through an agent, became aware on 25 August 2006 that the notice of assessment was placed in her post office box. There was no positive evidence before me that the applicant in fact received notice of the assessment on 25 August 2006. Indeed, the uncontested evidence of the applicant was that as at 29 August 2006 she still had no notice of the assessment. It is obviously an advantage to the Australian Taxation Office in some cases to be able to serve notices and other communications by following the method prescribed by either para (b) or para (c) of reg 59, but I consider that, if it does so, it is bound to adhere strictly to the letter of the regulation. Any departure from a plain and natural interpretation of the words of reg 59 could bring doubt and uncertainty into an area which is clear and definite. Regulation 59 is a protection for the Deputy Commissioner against taxpayers who may seek to evade their tax obligations by avoiding service of documents. The Taxation Office merely has to follow an appropriate option given by reg 59 to be able to pursue its administrative duties. It will only encounter legal difficulties if it disregards strict compliance with reg 59, even though the departure may appear completely technical and really of no significance. Strict compliance with the requirements of service is necessary, absent which evidence must be adduced to prove actual service, and here that actual service on the applicant occurred on 25 August 2006 prior to the service of the Garnishee Notices. 54 It is to be noted that the operation of reg 40 does not affect the operation of other laws of the Commonwealth, states or territories that deal with the service of documents: see reg 40(3). However, given that the notice of assessment was not served by post or left at the address of the place of residence or business, neither the Evidence Act 1995 (Cth) or the Acts Interpretation Act 1901 (Cth) assist the respondent. Accordingly, I am not satisfied that the notice of assessment was served on 25 August 2006, so there was no debt due and payable to the Commonwealth on that date, and the Garnishee Notices were invalid. It is clear that the notice of assessment has now been served on the applicant, and the debt is due and payable. The respondent submitted that in the meantime the tax must be paid. 56 I will allow the parties time to consider their position in relation to the money in Court. Accordingly I will hear submissions as to what orders should be made in light of these reasons. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | validity of notice of assessment whether lack of bona fides whether issued for an improper purpose application of the hickman principle requirements of service under the income tax regulations 1936 (cth) ('the regulations') whether post office box address can constitute a "physical address" as well as a "postal address" for the purposes of the regulations taxation |
2 This case is concerned with the nature of Cadbury's reputation in this particular shade of purple and whether Darrell Lea's conduct, in all the circumstances, has misled, or is likely to mislead, consumers into thinking Darrell Lea's products are those of Cadbury or that Darrell Lea itself or its products have some kind of association with Cadbury. The business goes back to 1824 when John Cadbury opened a shop selling cocoa and drinking chocolate in Birmingham. The Cadbury group employs over 55,000 people and has manufacturing operations in 35 countries. 4 Cadbury has operated in Australia since the 1920s when the predecessor of its parent purchased a confectionery business from Thomas Edward Cooper and established a factory at Claremont, near Hobart in Tasmania. This factory remains the main manufacturing centre for Cadbury in Australia. The Cadbury business both worldwide and Australia has expanded through amalgamations. In 1969 there was a global merger between Cadbury and the Schweppes soft drink business. In the mid 1960s Cadbury acquired the Australian manufacturer MacRobertsons whose line of products included Cherry Ripe and Freddo Frog. The largest of these is the chocolate segment which accounts for approximately 75 per cent. Cadbury holds 55 per cent of the chocolate confectionary market as a whole and Cadbury Dairy Milk holds 73 per cent of the market for block chocolate (both figures by value). 6 Cadbury is beyond doubt the dominant figure in the chocolate confectionery market in Australia. Its particular strength lies in moulded block chocolates and especially Cadbury Dairy Milk, which is Cadbury's flagship brand. Cadbury's Dairy Milk is a milk chocolate product. It is sold in plain form, with a dark purple wrapping. Other moulded block milk chocolate products include Fruit & Nut, Hazelnut, Snack, Crunchie, Caramello, Brazil Nut, Black Forest, Three Wishes, Malt Crisp, Cashew, Breakaway, Marble, Mousse, Nut Break, Top Deck, Roast Almond, Triple Decker, Turkish Delight and Peppermint. Cadbury's Dairy Milk is available in different size blocks, 400g, 250g, 150g, 100g, 55g and also in rolls, special treat size, share packs and "chocettes" (bite size balls). These include Easter eggs as well as seasonal assortment packages for Christmas stockings. Thirty per cent of all boxed chocolates are bought at Christmas, the largest chocolate giving season, and Easter eggs make up ten per cent of all chocolate sales. 9 Cadbury's confectionery, and in particular its chocolate products, are primarily sold through retail outlets such as supermarkets, convenience stores, service stations, tobacconists, newsagents and milk bars. Cadbury chocolate products are also sold at fund raising and sporting events, cinemas, amusement parks, sporting venues and public vending machines. Subject to some very minor exceptions which will be mentioned hereafter, Cadbury does not sell its chocolate products from premises which are, or are seen to be, owned or occupied by Cadbury itself. 10 In 1998 there were approximately 86,000 outlets selling Cadbury confectionery products in Australia. Cadbury has a large dedicated sales force responsible for ensuring that its products are available at retail level and displayed to maximum effect at point of sale. As part of Cadbury's marketing strategy, it was seen as desirable to "refresh" branding from time to time. However, the changes are subtle and the distinctive appearance remains essentially the same. 13 In Australia Cadbury can truly be said to be a household name identified with chocolate, comparable to Vegemite, Kodak and Ford in their own fields. It is hardly surprising therefore that this brand features prominently and consistently throughout Cadbury's advertising, packaging, point of sale presentation and other aspects of its marketing. 14 Another very well known device used by Cadbury is the "glass and a half" symbol, that is to say a representation of two glasses from which milk is pouring. The contents of the glasses are not equal because they represent "a glass and a half of full cream milk". Often the device shows the milk pouring directly into a block of Cadbury Dairy Milk chocolate. 16 In 1990 an international meeting of Cadbury marketing directors held in Ireland agreed to adopt a strategy of developing common design principles to be applied to Cadbury's products internationally, and to facilitate the progressive convergence of Cadbury's marketing strategies and brand presentation in each of its key markets. Subsequent meetings have been held annually or bi-annually. 17 In 1992 the Cadbury Board in Australia resolved to extend the use of purple from Dairy Milk, which at that time was packaged predominantly in purple, to the rest of the moulded block chocolate range which until then used purple, if at all, only for the colour of the word "Cadbury". 18 In 1995 Cadbury worldwide adopted a "Masterbrand strategy". This involved having an umbrella role for the Cadbury brand, with the Cadbury Dairy Milk brand and its associated recipes e.g. Fruit & Nut, Hazelnut etc having a "Megabrand strategy". Each product line would have a clear positioning but would live under the overall Cadbury Masterbrand umbrella. Our promotional efforts would focus on reinforcing distinct qualities for the Masterbrand for Cadbury and Megabrand for Cadbury Dairy Milk and its associated recipe variants. In this way I expected the brand equity associated with the Cadbury brand, and the main Cadbury branding icons, including purple, to strongly promote most of Cadbury's chocolate range globally. I felt this branding architecture across the Cadbury chocolate range would reinforce the distinctiveness of the brand and build the reputation for quality that the Cadbury brand had with most consumers. By aligning the graphics, trademark, advertising and general get-up I believed we would further aid consumer recognition for Cadbury products. In addition, Cadbury began to incorporate a direction to its retail distributors that its moulded chocolate range be displayed on shelves in such a way as to create a "purple bullseye", with Cadbury Dairy Milk in the centre or focal point of the layout. 20 Cadbury supplies what are called planograms to retailers such as supermarkets. Planograms are suggested layout plans for the shelving of both Cadbury and rival products. There is no evidence in this case that Cadbury buys shelf space in supermarkets or otherwise is in a position to dictate presentation of its products, although obviously enough supermarket proprietors have an interest in displaying a popular product such as Cadbury chocolate as attractively as possible. 21 In addition to packaging, the dark shade of purple has been used in point of sale material such as display units, dump bins and counter stands, in television, print, outdoor and cinema advertising, in promotional activities in uniforms, company vehicles, factories and offices, in manuals, reports, catalogues, stationery, letterheads and on the Cadbury website. 22 Notwithstanding all this, a majority (56 per cent) of Cadbury's total sales for chocolate confectionery products is constituted by products which do not prominently feature, or are not promoted by reference to, the use of the dark purple shade. 23 Cadbury's marketing budget in 2005 for chocolate confectionery products was almost $40 million. That includes media expenditure such as advertising on television, in magazines, press, outdoor and cinemas, promotions, sponsorship, point of sale materials, selling equipment and displays. 24 Cadbury sponsorships have included the 1996 Australian Olympic team, Australian Rules football (1997 and 1998 Mark of the Year), horse racing (1999 Cadbury Roses Stakes Day and 2002 Cadbury Guineas), Triathlon Australia and charitable foundations such as Ronald McDonald House. Cadbury was also a sponsor of the 2000 Sydney Olympics and undertook significant marketing activities in Sydney during this period. Each of these activities involved the use of the colour purple in connection with the name Cadbury. 25 Particular mention should be made of television advertising. For most of the 1980s Cadbury ran television commercials featuring Professor Julius Sumner Miller. The usual theme involved Professor Miller performing a basic physics experiment for admiring children and then relating the lesson of the experiment to the virtues of Cadbury Dairy Milk. There was heavy emphasis on the glass and a half element. Apart from the coloured wrapping of the chocolate itself, purple did not figure particularly noticeably. 27 These commercials, it would have to be said, are considerably more subtle and appealing than the rather evangelical tone of those starring Professor Miller. They feature a kind of mantra "Chocolate is Cadbury is chocolate is Cadbury..." and rather retro colouring with heavy purple emphasis. A striking image shows a man in between city skyscrapers being wafted aloft by purple balloons. 28 Other campaigns followed in 2001 and 2002 which also included the colour purple. The most recent one "Wouldn't It Be Nice" featured animated cartoon figures in various adventures in a largely purple world. 29 In all of these commercials, with the exception of the Professor Miller ones, there is a lot of purple, but equally there is a lot of emphasis, both visually and aurally, on the name Cadbury. By 1934 there were twelve stores in Sydney. Operations began in Melbourne in early 1940. From its commencement it was a family business that manufactured its own chocolates and other confectionery which it then sold through its own stores, as is recognised in the company's name. Apart from the period 1967-1982 when it was publicly listed, it has remained family owned and operated. It is the largest privately owned confectionery manufacturer in Australia. Operations have extended into Victoria, Queensland and Tasmania. 31 In 2002 Darrell Lea's share of the Australian confectionary market was 2.5 per cent. In peak seasons for chocolate sales that share increased to 4 per cent for Christmas and 6 per cent for Easter. 32 From the late 1970s use has been made of licensing and other agency arrangements where Darrell Lea products are sold through self-contained stands or presentation units located in newsagencies, pharmacies, florists and recently through a small number of independent supermarket (IGA) outlets. In 2001-2003 a small number of Darrell Lea Easter products were sold in Woolworths/Safeway supermarkets and Big W stores. Since then Darrell Lea has not sold to such supermarkets. These sell a substantially smaller range than the Darrell Lea retail stores. 35 The bulk (about 70 per cent) of Darrell Lea sales are through their shops, many of which are in major shopping centres, although sales through compact units and mini units are more profitable. The brand imagery wasn't developed by the compacts and so forth. As well as chocolate products Darrell Lea produces licorice and particularly Rocklea Road, a chocolate-coated marshmallow product. Its chocolate including bars, individually wrapped chocolate, chocolate in boxes, cartons or cellophane bags and specialty seasonal products such as Easter eggs. Darrell Lea does not produce moulded chocolate blocks. 37 Darrell Lea products usually have the name Darrell Lea printed on the box or wrapper or have a tag with the name attached. This allegation was, understandably, not pursued at trial. The respective names Cadbury and Darrell Lea (whether with or without their distinctive script) look and sound quite differently, and are quite distinct from each other. From at least 1991 Darrell Lea has used in exterior and interior fit outs as well as on price tickets, packaging and staff uniforms a light purple colour which it calls, by reference to a Dulux colour chart, "boysenberry" but may also be called a lilac. In mid 2004 Darrell Lea determined to update its brand image and started using a mid blue colour in its store, signage and packaging. 41 Between 2000 and 2004 Darrell Lea has used purple in a shade like that used by Cadbury, in various product categories including self-consumption chocolate, gift lines, Rocklea Road, Bo Peep, Pick and Mix, and Christmas products and on specific products including chocolate boxes, sticky labels, cartons of chocolate, bonbons and point of sale material. 42 Since Darrell Lea's change to blue some purple continues to appear on dump bins in stores. A brochure for Christmas 2005 shows a purple background with a heading "Santa's Favourite" and a picture of Santa Claus with reindeer flying over a city. His purple sleigh is loaded with chocolate boxes although none of them are coloured purple. The Darrell Lea brand name appears prominently. Darrell Lea used a purple and bronze copper theme in association with Darrell Lea signage and brand usage. The purple is like that used by Cadbury. It is distinct from the lighter shade boysenberry. This was the only evidence isolating a specific decision by Darrell Lea to use purple. If this decision were made with the intention of misleading consumers into thinking that Darrell Lea products were associated with Cadbury, that would be strong evidence that such misleading in fact occurred: Australian Woollen Mills Limited v F S Walton & Co [1937] HCA 51 ; (1937) 58 CLR 641 at 657. 44 The primary evidence as to this matter was given by Ms Anne McGlinchey who is currently an independent marketing and retail consultant but worked for Darrell Lea and an associated company from 1989 to 2003. In particular from January 2000, after returning from maternity leave, she was Darrell Lea's Marketing Manager until she left the company in October 2003. 45 When Ms McGlinchey commenced her duties as Marketing Manager she reported to Mr Bruce Goldman the then General Manager of Retail and Marketing. At the time she believed that the Darrell Lea shops looked "tired and dowdy and needed to be freshened and updated". There were too many different colours used, products were too difficult to find and the store layout was not clear. Each store presented its own range of in-store gifts which differed not only from one store to another but also within stores. 46 She reviewed Darrell Lea's marketing approaches in previous years. The colour schemes were never static, different colour schemes were used for different seasonal events, for example St Valentine's Day (red, white and blue), Easter (yellow) and Christmas (red and green). Ms McGlinchey considered that it was time to move away from the traditional colour themes. She wanted to select non-traditional colour themes and ensure that packaging, point of sale materials etc reflected these themes. On commencing with Darrell Lea in January 2000 she immediately began working on the Christmas theme for that year. She believed the red and green colours were dated and needed to be changed. She researched what colour themes other specialty retailers had implemented for Christmas over the last few years. This research revealed that many retailers were moving from the traditional red and green. For example Marks & Spencer in the United Kingdom were using purple and dark red with metallic copper. Thorntons, a chocolate manufacturer and retailer in the United Kingdom, were combining purple with raspberry red and mint green with a white and silver strip. Large Australian retailers such as Myer and David Jones had not used the traditional red and green for many years. Generally she thought Darrell Lea's market position was too downmarket and she wished to move its market position more up to the Myer, Grace Bros, David Jones department store level. 47 Throughout the year Ms McGlinchey attended meetings of members of the Darrell Lea marketing team including Mr Goldman and Ms Samantha Shakespeare, the Seasonal Product Manager, to discuss the Christmas 2000 theme colour. Initially she and Ms Shakespeare thought of royal blue and silver for Christmas 2000 but rejected that scheme since it was being used by Myer. They considered purple and silver but ultimately decided on a warmer, richer colour and so determined to replace silver with copper. Ms McGlinchey believed the colours complemented the dark wood panelling which was used both on the outside of the stores and for counters on the interior of the stores. Darrell Lea on the other hand was a vertical retailer and focussed on the indulgence and gift markets. I consider Darrell Lea to be far more focussed on gift giving than what Cadbury was. However she saw the Darrell Lea marketing of seasonal events as being totally different because it was focussed on gift giving. It was not really about competing with the supermarkets but more about competition with the department stores and speciality retail outlets like the Body Shop. She admitted that when deciding on a purple and copper scheme she knew that Cadbury sold its chocolate confectionery predominantly in purple. It was put to her that she was using purple to associate the Darrell Lea brands with "the good name of Cadbury" and that she "used purple to copy Cadbury". She strongly denied both allegations. She agreed that some of the purple used by Darrell Lea would have been similar to the Cadbury's purple. She agreed that the promotion at Christmas with the purple colour scheme was successful. She was not directly challenged on her detailed account of her coming to a choice of purple and copper via her own research and experience of UK retailers. Her evidence on this point is not inherently implausible. It was corroborated by Ms Jennifer Ettia, an independent graphic designer and image specialist, who was retained by Darrell Lea in November 1989 and was involved with Ms McGlinchey in the design of the Christmas 2000 range. The rule cannot be employed to fill gaps in the evidence, or to convert conjecture and suspicion into evidence. 51 While Ms McGlinchey did not have the power to make the ultimate decision on colour choice, she was a key figure in the process and on her unchallenged evidence the genesis of the idea for the Christmas 2000 colour scheme was hers. Darrell Lea also called Ms Hurst, who took over Ms McGlinchey's position, and Mr Michael Lea, one of the two directors of the company and who has had a lifetime's experience in its business. Mr Jason Lea, Mr Michael Lea's cousin, who was a director at the time of the 2000 Christmas planning, has recently died. If one accepts Ms McGlinchey, Ms Ettia and Ms Hurst, as I do, as truthful and reliable witnesses, it just seems inherently unlikely that Mr Goldman or Mr Tolmie would have harboured, unbeknowns to Ms McGlinchey, Ms Ettia and Ms Hurst, a secret purpose to misappropriate Cadbury's business by deliberately misleading consumers. As Walton makes clear, this would be the act of a dishonest trader. An allegation of such a kind falls to be assessed in the light of the rule in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336. He first started working for the company when he was ten years old, part time during the school holidays, and became a full time employee in 1969. He was successively assistant accountant, head accountant and, since 1975, a director of the company. Although his chief responsibilities lay on the financial side, I am satisfied that in a business of this sort he has an intimate knowledge of all aspects of the company's business and of the market in which it operates. 53 Mr Lea says that for many years a number of other manufacturers or wholesalers have used the colour purple on chocolate and chocolate confectionery products. In particular Violet Crumble chocolate bars, a chocolate coated honeycomb bar, initially manufactured by the firm Hoadley which has since been taken over by Nestlé, have been wrapped in a purple coloured wrapper for at least fifty years. It will be necessary to return to this product. Mr Lea's evidence on this issue was not challenged. 55 The Violet Crumble and other Nestlé products were the subject of a "Co-existence Agreement" made between the United Kingdom parent company of Cadbury and the parent company of Nestlé in Switzerland and executed by the Cadbury company on 9 December 2005. This agreement was tendered as a confidential exhibit. However Cadbury has waived confidentiality by its assertion in this case that it has exclusive reputation and goodwill in the use of the colour purple in relation to chocolate products. As will be seen, the agreement is inconsistent with such an assertion. In any case, a claim for commercial confidentiality must yield to the need for a Court to explain its reasoning for a decision. Moreover, the subject matter of the agreement does not appear to contain material the publication of which would damage the parties' competitiveness, such as manufacturing formulae or internal costings. 56 The recitals to the agreement include the fact that the parties have applied for and registered and are using various marks in respect of chocolate and similar goods in Australia and New Zealand and that to "avoid confusion in the minds of the public and to settle the various oppositions to each other's marks which the parties have filed" the parties wish to enter into a "trade mark co-existence agreement concerning their respective uses of certain of their marks in Australia and New Zealand". In fairness to him, however, it appears that although he was put forward as Cadbury's witness on this issue, his knowledge was limited to a review of Cadbury's files and the production of letters of demand. The conduct of litigation and threats of litigation was in the hands of Mr Rod McNeil, Cadbury's General Counsel Asia Pacific, who was not called as a witness. 59 On 20 March 2002 Mr McNeil wrote to a company called Magic Chef Pty Ltd of North Balwyn, Victoria stating that it had recently come to his attention that the company was marketing in Australia chocolate under the name "Milk Choc Cooking Buds" in predominantly purple packaging. The Australian public will thus believe that you are marketing 'Milk Chocolate Cooking Buds' chocolate using high quality chocolate sourced from the world's leading chocolatier. Mr McNeil required Magic Chef to cease and desist from marketing such products, destroy all stock in its current packaging, provide Cadbury with a full list of all retail or trade outlets and forward details of the supplier to it of the Milk Choc Cooking Buds chocolate. Legal action in the event of non-compliance was threatened. 61 On 27 March 2002 Mr John Wilder, a director of Magic Chef, replied with a polite but firm and well-reasoned letter. Mr Wilder expressed surprise at Cadbury's approach, particularly as in the past Magic Chef had worked in association with Cadbury, being a customer of various confectionery lines from the jelly and chocolate range which were subsequently repacked and marketed under the Magic Chef logo, with full knowledge and approval of Cadbury. At one stage Cadbury produced and packaged a bar line from its excess raw material known as "Magic Chef Chokky Plus" specifically for Magic Chef. Mr Wilder noted that Nestlé marketed chocolate lines in purple packaging which, he believed, pre-dated Cadbury's use of purple packaging and that Nestlé had never written with concern about his company. From information received from end users and enquiries made to date, there does not appear to have ever been an instance where it has been apparent that customers or consumers have thought that Magic Chef or the product in question has or had any association with Cadbury. Our products have obtained a reputation in their own right and we are surprised by Cadbury's concern that consumers may be confused between any of your products packaged in purple packaging and our 'milk choc cooking buds'. This was clearly not the case here. The letter concluded by stating that Magic Chef obviously did not wish to engage in litigation with Cadbury but asked that it reconsider its position. 63 Mr Nowicki said in cross-examination said that he had not seen Mr Wilder's letter before. Such issues were "delegated to general counsel". The inference appears reasonably open that Cadbury decided not to pursue any further action against Magic Chef after receipt of Mr Wilder's letter. 64 On 4 April 2003 Mr McNeil on behalf of Cadbury wrote a similar letter of demand to Alpha Confectionery of Balaclava in Victoria complaining about that company's "Alpha" 150 g dark chocolate Easter egg in predominantly purple packaging. The letter made substantially the same demands as the one to Magic Chef already quoted and was followed up by letters from Cadbury's then solicitors, Corrs Chambers Westgarth, on 2 and 13 May 2003. Despite a call for production, Cadbury produced no further correspondence. The thrust of the Cadbury letters was that a positive response was called for from Alpha and in the absence of such response legal action would be taken. However, it seems that Alpha ignored the letter and nothing happened. 65 On 28 May 2003 Mr McNeil wrote a similar letter of demand to the Hunter Valley Chocolate Company of Pokolbin, New South Wales complaining of the use of a logo and brochure using purple. The company retained solicitors and a lengthy correspondence ensued which culminated in an agreement on 4 September 2003 in which the company agreed to cease using the colour purple after the end of the following month. 66 So the responses to Cadbury's demands on third parties and Cadbury's action in the light of such responses did not follow a consistent pattern. On one occasion (Hunter Valley Chocolate), after initial resistance and following negotiation, Cadbury eventually achieved its objective. On another occasion (Alpha) Cadbury's demand was ignored and nothing happened. On another occasion (Magic Chef) Cadbury's demand was firmly resisted and Cadbury backed off. 67 Mr Nowicki says that Federal Court proceedings were taken against Kenman Developments Pty Ltd and others concerning "Meadowsweet Fine Chocolate" (1990), Willow Confectionary Pty Ltd and others concerning Easter bunny products (1997) and Ontrack Pty Ltd concerning a Grand Marnier chocolate product (2003). However, there was no evidence as to what happened with those proceedings. 68 The issue of third party use of the colour purple in connection with chocolate was clearly raised in Darrell Lea's defence: see par 15. The research methodology was provided by a firm called QBrand Consulting after consultation with Professor Roger Layton, Emeritus Professor of Marketing at the University of New South Wales. Notice should be given in writing by the party seeking to have the survey conducted to the other parties to the proceeding. The parties should attempt to resolve any disagreement concerning the manner in which the survey is to be conducted and any of the matters mentioned in 2 above. The matter of the survey should be raised with the Court at the directions hearing as soon as possible after the steps mentioned above have been taken. They were selected at random from the Melbourne Telephone Directory. Seventy-one per cent were female. They were screened to exclude, amongst other things, people who did not buy chocolate at all or who bought an excessive amount of chocolate. Participants were shown different forms of chocolate (blocks, Easter eggs etc) in batches with wrappings in different colours, one colour for each batch --- blue, gold, purple, red and green. In fact, all chocolate was from Cadbury, although there was nothing to indicate that to participants. Other brands were mentioned and were collectively described as "Other Brands". As it happened, in respect of each colour the "Other Brands" category scored within the first three answers given by participants. With blue for example, the margin is more than three to one. With gold it is more than two to one against the nearest single competitor (Nestlé). Since Cadbury uses many colours other than purple in its marketing the explanation may be that the name Cadbury and chocolate are so dominant in the minds of consumers that with a number of colours there is a tendency to think "if it's chocolate it must be Cadbury's". In other words there may be a leap from chocolate to Cadbury without paying too much attention to the colour. 75 Other questions were asked as to the range of chocolate the participant found appealing (on a scale of one to ten) and how much, considering taste and appearance, the participant liked a particular range (again using a scale of one to ten). 76 Overall while the Shelton survey was conducted professionally enough, it has its limitations. It was confined to the Melbourne metropolitan area. It seems to have an over weighting of female participants. No children under 18 were involved. The test itself was conducted in a rather clinical environment, unlike the setting in which actual consumer purchasing decisions are made. The goods weren't branded, it was only a question of what they thought the brand was. Care was taken to ensure that there was no indication of brand throughout the experiment. Difficult to answer that question because the experiment as such was designed to not introduce brand except insofar as there was a perception on the part of the customer or respondent as to what that brand might be. It would require a separate experiment, perhaps with brand identification, to see whether in fact it changed the answers significantly or not. Cadbury sought an adjournment for a "short period of time" --- subsequently identified as about five to seven days --- to have a further survey conducted (this time in accordance with Practice Note 11) to investigate the issue identified in the previous day's cross-examination as to the response of consumers where colour was used with the brand names. The application was refused. Nevertheless such evidence is admissible and in appropriate circumstances can be "very material" and of "some importance": Royal Warrant Holders' Association v Edward Deane & Beal Ltd [1912] 1 Ch 10 at 14-15, cited with approval by Gummow J, with whom Black CJ and Lockhart J agreed, in Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 389. I know their chocolate from the purple wrappings and advertising. I saw some purple wrapped chocolate but when I got to the checkout I saw it was Darrell Lea's. But I was in a hurry so I bought it anyway. Cadbury was directed to file its evidence for trial in November 2005. So for almost five years Cadbury was aware of the need for obtaining evidence to support its case, which is all about confusion in the market place. It seems unlikely that Cadbury would have been unaware of the importance of evidence of actual misleading, or that it would not have made some effort to obtain it. In other words, the colour purple in the context of chocolate has a secondary meaning as an identifier of Cadbury chocolate products. Reference was made to a trade mark case BP plc v Woolworths Ltd (2005) 212 ALR 79 where Finkelstein J held that a shade of green could be registered as a trade mark for BP because customers identified BP service stations by the colour green alone (the Full Court has recently granted leave to appeal: Woolworths Ltd v BP plc [2006] FCAFC 5). 83 This is purely a question of fact. Thus in Cadbury Schweppes Pty Ltd v The Pub Squash Co Ltd [1981] RPC 429 at 460-461 Powell J, in a judgment upheld by the Privy Council, held that although the plaintiff's soft drink "Solo" in a lemon coloured can had achieved a level of recognition and acceptance, it did not follow that the proprietor of "Solo" thereby became entitled to a monopoly in yellow coloured cans or that the mere fact the defendant adopted a yellow can for its product dictated a finding of passing off. In other words, it may not be enough that a particular colour is associated in the mind of consumers with a particular product. In the present case, purple may prompt in the reasonable consumers' mind a remembrance that purple has been associated with Cadbury chocolate, but not necessarily the conclusion that the purple packaged product presented for sale to him or her therefore must be Cadbury's. 84 In the present case Cadbury's own evidence (see [18] above) speaks of the elements in the "brand architecture": the name Cadbury, the colour purple, the glass and a half device etc. The architectural metaphor is apt. The architecture of a building involves the whole, not just one component such as a roof or wall. Cadbury's marketing shows how the name Cadbury and the colour purple are inextricably intertwined, with each one reinforcing the other and creating a total impact more than the sum of the parts. This is particularly striking in the late 1990s commercials which had not only extensive use of purple but the repetitive mantra "Cadbury is chocolate is Cadbury is chocolate". In any case, since Cadbury is without doubt one of the most well, and favourably, known names in all consumer marketing, and dominates the field of chocolate in Australia, it would be irrational in the extreme for Cadbury not to make the maximum use of the name. 85 In cross-examination Mr Nowicki was pressed to think of an example where the colour purple alone would be used for Cadbury with no indicia of branding such as the Cadbury name and the glass and a half device. There was a noticeable pause, perhaps upwards of half a minute. No, within the show specifically, within the production itself there are components independently where we only use purple. No program of "Dancing with the Stars" was in evidence, but if Cadbury were paying substantial amounts to sponsor a high-rating television show it is inconceivable that the name Cadbury would not be transmitted aurally and visually to viewers, even if some elements of the show, such as sets and costumes, contained only purple. If all that viewers saw in a program about dancing was some use of purple, why should they think of chocolate at all, let alone Cadbury chocolate? I am not satisfied that "Dancing with the Stars" is a true example of the purple colour alone used without the name Cadbury. 86 Shortly after that passage of evidence there was a mid-morning break. Upon resumption, Mr Nowicki volunteered that he had thought of another example where purple alone was used. The example he gave was the 2002 Manchester Commonwealth Games where the Queen's baton was purple as part of the Cadbury marketing plan associated with the event. This would have been a transient use, in the most literal sense. 87 I conclude that, for all practical purposes, Cadbury's use of the colour purple in marketing, promotion, advertising, packaging, and point of sale is always associated with the famous name Cadbury. The only exceptions have been the Cadbury shop at the Claremont factory and some stores at the Sydney 2000 Olympic Games. Darrell Lea did not have a presence at either place. There was some evidence of Cadbury show bags but no particular evidence as to the kind of premises from which the bags were sold at shows. By contrast, the major part of Darrell Lea's sales come from its own stand alone shops. It has a very minor presence in some supermarkets and not in major supermarkets. Cadbury's submission that its products and those of Darrell Lea "are distributed via the same trade channels" is quite inaccurate. 89 There was in evidence some photographs of Darrell Lea presentations in an affidavit of Peter Selvay exhibits 1 and 4 taken in 2005. The first is taken at the IGA Supermarket at Coldstream, Victoria and the second at a Video Ezy store at Noble Park, Victoria. The first shows Darrell Lea's products on a different side of the aisle to Cadbury's and a sign with a prominent Darrell Lea name, purple against a blue background, and at least 1m 2 square as far as one can judge from a photograph. The second shows separate stalls. Again the Darrell Lea sign, this time in a blue, is on the opposite side of a passageway to a Cadbury stand. As far as the photographs show, there seems to be a clear differentiation. There were no photographs in evidence of Cadbury and Darrell Lea products displayed side by side in planogram style. The general impression from the evidence is that Cadbury and Darrell Lea products are not presented for retail sale in close proximity to each other (unlike Cadbury and Nestlé products side by side in planogram layouts). With Darrell Lea there is not nearly the same sense of identifiable products. Looking at photographs of the presentations in their shops and smaller units, while jumble may be a too harsh a word, they do not have the forceful presentation of individual products that appears in Cadbury supermarket displays. 92 Chocolate is often bought on impulse. But the fact that the purchase is impulsive, in the sense of sudden, quick or not premeditated, does not necessarily mean that rationality is abandoned. Take pricing for example. The bulk of Cadbury customers are blue collar working class and, in the words of Mr Michael Busutil, Cadbury's Marketing Manager Moulded, "price is obviously a key consideration for them" and "the marketplace changes dramatically from year to year". In the past, driven by competition from Nestlé in the moulded block sector, the price on a standard block has at times been discounted from $4.07 to $2.49. Some accounts run promotions for 40 weeks of the year. 93 This suggests that many consumers have made a choice that some other use for their $4 is more value to them than a block of Cadbury chocolate, and that they have made similar decisions until the price reaches $2.50. This is a perfectly rational choice. But another basic consideration in a consumer purchase decision, apart from price, is identity of subject matter. If consumers are capable of making a choice that chocolate is or is not worth buying at a given price, then why is it to be supposed that on seeing chocolate in a Darrell Lea shop with a Darrell Lea label they are likely to think it is Cadbury chocolate just because it has a purple wrapping? 94 Colour plays an important part in product recognition by consumers. But this is not the only aspect which triggers recognition. Brand, logos and particularly in the present case, the place from where the product is presented for sale all play a part. 96 There is wide awareness amongst Australian consumers of the use by Cadbury of a dark purple colour (i) in connection with the marketing, packaging and presentation of certain chocolate products particularly Cadbury Dairy Milk and other block milk chocolate products, and (ii) as a corporate colour. 97 Cadbury does not have an exclusive reputation in the use of this dark purple colour in connection with chocolate. Other traders have, with Cadbury's knowledge, for many years used a similar shade of purple. Cadbury has not consistently enforced its alleged exclusive reputation. In relation to its chief competitor Nestlé, Cadbury has, for its own commercial reasons, permitted a use of purple in relation to popular chocolate products. 98 Cadbury markets many chocolate products which have little or no purple in their packaging. 99 Cadbury products, regardless of the presence or absence of purple in the packaging, always bear the Cadbury name in a distinctive script. 100 Cadbury's use of purple in marketing advertising and promotion is, and is seen by consumers to be, inextricably bound up with the well known name Cadbury in its distinctive script. Cadbury never uses the colour purple in isolation as an indicium of trade. 101 Cadbury products, with insignificant exceptions, are not sold at retail level at premises owned or occupied by Cadbury. 102 Cadbury's marketing of chocolate heavily emphasises specific products and in particular Cadbury Dairy Milk block chocolate. 103 Darrell Lea is a name well known in connection with chocolate in those parts of Australia where it operates, even though not as well known as Cadbury. 104 The names Darrell Lea and Cadbury are quite distinct in sound and appearance (especially with the respective scripts the parties have adopted) and not likely to be mistaken for each other. 105 Darrell has since at least Christmas 2000 used in its marketing, packaging, promotion and point of sale presentation a purple colour much like that used by Cadbury. There has been particular use at Christmas 2000 to 2004 inclusive and also uses at other times. Such usage has diminished and purple has been to a significant extent replaced by blue since 2004. 106 Darrell Lea did not adopt the colour purple with the intention of leading consumers to believe its products were Cadbury products or that it, or its products, had some kind of association with Cadbury. 107 Most of Darrell Lea's retailing occurs in premises which its owns or occupies. Other retailing occurs from separate stands or displays in retail premises, such as newsagents, pharmacies, convenience stores and video stores. Darrell Lea has only a minor presence in supermarkets and only, in the past, to a very limited and transient extent in the major chains. Its products are not presented for sale in close proximity to Cadbury's. 108 Darrell Lea's marketing gives less emphasis to particular products than does Cadbury. 109 Darrell Lea does not sell moulded block chocolate. 110 Darrell Lea uses its name in a distinctive script widely and consistently in marketing, packaging and point of sale presentation. 111 Colour recognition or attraction can play an important part in consumer decisions to purchase chocolate. 112 Consumer decisions to purchase chocolate are often made quickly and on impulse but not necessarily irrationally. Price and brand recognition can play an important part. Section 52 provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 53 , a subset of s 52 , relevantly for present purposes, provides that a corporation shall not, in connexion with the supply of goods (c) represent that goods have sponsorship or approval that they do not have or (d) represent that the corporation itself has sponsorship, approval or affiliation it does not have. Cadbury's pleading can be summarized as follows. In the present case neither side sought to draw any significant distinction between them. Realistically there is no basis on which Cadbury could succeed under the Trade Practices Act but fail on passing off, or vice versa. 118 Since it is common ground that Darrell Lea products in fact have no sponsorship, approval or connection with Cadbury or its products, and that Darrell Lea's business is entirely unconnected with that of Cadbury, the critical issues in this case relate to the representations that, in all the circumstances, Darrell Lea by its conduct would convey to a hypothetical ordinary and reasonable member of the class constituted by prospective purchasers of chocolate products: Campomar v Sociedad Limitadav Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at [102] - [105] . 119 In focusing on the representation alleged to be made by Darrell Lea it is important to keep in mind the consistent rejection by courts of the highest authority of any generalized notion of unfair trading. Attention must be confined to the statutory causes of action and the common law tort of passing off. (The present case is not concerned with the unconscionability sections of the Trade Practices Act . This is sufficiently evidenced by the history of the law of copyright and by the fact that the exclusive right to invention, trademarks, designs, trade name and reputation are dealt with in English law as special heads of protected interests and not under a wide generalization. 120 In relation to passing off, a statement by Lord Oliver in Reckitt & Colman Ltd v Borden Inc (1990) 17 IPR 1 at 7 is valuable not only for its statement of the law but for its reminder that these kinds of cases turn essentially on their own particular facts. It has been observed more than once that the questions which arise are in general questions of fact. Neither the appellants nor the respondents contend that the principles of law are in any doubt. The law of passing off can be summarised in one short general proposition - no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying get up (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a representation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff's. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers, or, in a quia timert action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff. Cadbury and Darrell Lea are competitors in the retail chocolate market, yet they each have distinctive product lines which are sold from different sorts of premises under distinctive trade names. They have distinct identities in the market place. Cadbury does not own the colour purple and does not have an exclusive reputation in purple in connection with chocolate. Darrell Lea is entitled to use purple, or any other colour, as long as it does not convey to the reasonable consumer the idea that it or its products have some connection with Cadbury. I am not satisfied that this has occurred, or is likely to occur. 122 There will be an order that the application be dismissed. Darrell Lea foreshadowed an application for indemnity costs. The question of costs will be adjourned to a date to be fixed. Outlines of submissions are to be filed by Darrell Lea seven days and by Cadbury three days before the adjourned date. I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey . | misleading and deceptive conduct competitors in retail chocolate market use of colour purple whether applicant has exclusive reputation use of colour in connection with trade names marketing from different sorts of premises trade practices |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse to grant a protection visa to the appellant. 2 The appellant applied for a protection visa on 25 June 1996 the grant of which was refused on 14 August 2003. The Tribunal, differently constituted, affirmed the delegate's decision on 22 June 2004 but that decision was remitted to the Tribunal for reconsideration pursuant to orders made by consent on 23 March 2005 in the Federal Magistrates Court. 3 The appellant is a citizen of Bangladesh. The appellant claimed to have a well-founded fear of persecution for reason of religion. The appellant claimed he was a Hindu persecuted by Muslim extremists. The appellant claimed he had always suffered discrimination whilst growing up. The appellant fled Bangladesh after riots in 1990 between Hindus and Muslims regarding the Babri Mosque. He claimed that during the riots the appellant's father's business was set on fire and his family was assaulted. The appellant claimed that subsequently he became the founding general secretary of a community youth force to protect temples from the rioting (known as the Durga protection committee) and that he was well-known in the community. The appellant claimed that he became involved in altercations with Muslims which resulted in a false murder charge being brought against the appellant. He also claimed that his two older siblings died as a result of attacks by Muslim fundamentalists. The appellant also claimed that as he has been overseas for some years, he would be seen as a person of wealth and be vulnerable to threats of blackmail if he were to return to Bangladesh. 4 On 17 August 2005, the Tribunal sent the appellant a letter indicating its concerns with the appellant's evidence. The appellant replied in writing on 9 September 2005 and attached a number of documents, including an unsworn statutory declaration prepared by the appellant's former migration agent in July 1996. 5 The Tribunal found the appellant not to be credible. The Tribunal found 'the Applicant's accounts of the events which led him to leave Bangladesh for India in around December 1991 is a fabrication and I do not accept that the documents which the Applicant produced in purported corroboration of that account are genuine'. Whilst the Tribunal accepted that the appellant was a citizen of Bangladesh and a Hindu by religion, the Tribunal rejcted the appellant's claims of persecution for reason of his religion. The Tribunal found there were inconsistencies between the appellant's statements dated 6 February 2003 and his evidence at hearing; especially regarding the appellant's elder sister's death; inconsistencies in the appellant's written statement and oral evidence regarding the appellant's injuries and the attack of September 1991; and that the medical report made no mention of all the appellant's claimed injuries. The Tribunal considered country information which suggested Muslim fundamentalists have little influence in Bangladesh and that minority religions are able to live and worship with few difficulties. The Tribunal relied on the country information which indicated fraudulent documents are readily obtainable in Bangladesh. 6 In light of the appellant's credibility, the Tribunal preferred country information that stated the Bangladeshi government respected the right to practice other religions than Islam and that the government had deployed security forces regarding religious violence. The Tribunal did accept the appellant would be vocal against injustices to minorities if he returned to Bangladesh. 7 The Tribunal also considered the appellant's claims regarding his residence overseas but found if he were to be blackmailed due to his perceived wealth that was not Convention related as extortionists are disinterested in the individual. The Tribunal therefore did not accept there was a real chance the appellant would be persecuted for a Convention reason. 8 On 24 November 2005, the appellant applied to the Federal Magistrates Court of Australia for judicial review of the Tribunal's decision. On that hearing, the appellant relied on four grounds. First, the appellant claimed that there was a breach of s 424A of the Migration Act 1958 (Cth) ('the Act') in relation to the appellant's statement dated 6 February 2003 and a statement dated July 1996. The appellant claimed that he had instructed his migration agent not to forward the latter document to the Tribunal and thus it was not given to the Tribunal for the purposes of the application. Secondly, the appellant asserted the Tribunal had made a jurisdictional error by ignoring relevant material and/or failing to take into account a relevant consideration in that the Tribunal did not consider the appellant's explanation for the inconsistencies in the statements such as his confusion and mental condition. Thirdly, the appellant claimed the Tribunal's decision was vitiated by apprehended bias in that the Tribunal failed to properly identify the documents when the appellant was confused and failed to consider the appellant's explanations regarding the documents. Fourthly, the appellant relied on a ground asserting a denial of natural justice and procedural fairness in relation to a contravention of ss 420 and 425 of the Act. 9 The Federal Magistrate, in considering the Tribunal's decision in light of the claims made by the appellant, found there was no breach of s 424A of the Act. His Honour found that it was clear that the Tribunal was unaware of the July 1996 statement at the time of the hearing and that it was the appellant who had informed the Tribunal that he had made a statement in 1996. It was the appellant who, after the hearing, had attached the July 1996 document to the response to the letter sent by the Tribunal pursuant to s 424A of the Act and thus the document fell within s 424A(3)(b) of the Act. In relation to the statement of 6 February 2003, the Federal Magistrate was of the view that the Tribunal had complied with its obligations by sending a letter pursuant to s 424A(1) of the Act. He concluded that the Tribunal considered in detail matters raised by the appellant's letter in response to the inconsistencies. 10 The Federal Magistrate found that the Tribunal had not failed to take into account a relevant consideration. In particular, he found that the Tribunal had taken into account an explanation given by the appellant in a letter written by the appellant on 9 September 2005. 11 The Federal Magistrate found no evidence of bias or apprehended bias. As to the first ground he found that the appellant was invited and attended hearing; and that the appellant was invited at the hearing to comment on adverse material. 12 He found that the appellant was afforded the right to a hearing as required by s 425 of the Act. His Honour found no jurisdictional error and dismissed the application. The Tribunal did not bring an impartial mind to the resolution of the matter before it. The Tribunal denied the appellant natural justice and procedural fairness by breaching ss 420 and 425 of the Act. 5. The Tribunal denied the appellant natural justice as the Tribunal was biased or there was an apprehension of bias. He did, however, provide written submissions which had clearly been prepared by someone with knowledge of the law. The appellant also made oral submissions. The written submissions raise matters outside the notice of appeal. However, they should be addressed and I will do so after first dealing with the grounds of appeal. 15 The first ground does not identify any errors said to have been made by the Tribunal and may simply be noted. 16 Ground number 2 is the same ground 3 as considered by the Federal Magistrate. 17 It appears from a reading of the transcript that the appellant thought when he attended the hearing that the Tribunal was in possession of the July 1996 statement which had been given to the Department. As the Federal Magistrate noted, the appellant's misapprehension was corrected by the Tribunal and he was invited to submit any copy of the statement to the Tribunal. 18 It seems to me that the Tribunal cannot be criticised for bringing to the appellant's attention the fact that the Tribunal had not received the statement and inviting the appellant to provide the statement. 19 Ground number 3 is a restatement of the ground before the Federal Magistrate of apprehended bias. Whilst giving evidence before the Tribunal and talking of his sister's death, the Tribunal told the applicant to take his time in telling his story and asked if he would like a break. Later in its reasons, the Tribunal rejected the appellant's account because it said the account was inconsistent with the appellant's written statement. The appellant submitted that the versions of the events were not inconsistent. Therefore, the Tribunal might be thought to be biased. Whether or not that be the appropriate formulation, there is, in our view, no reason to depart from the objective test of possibility, as distinct from probability, as to what will be done or what might have been done. To do otherwise, would be to risk confusion of apprehended bias with actual bias by requiring substantially the same proof. There is nothing in the Tribunal's reasons that could lead a reasonable lay observer to apprehend that the Tribunal might not bring an impartial mind to the determination of the matter before it. 22 It cannot be said that simply because the Tribunal rejected the appellant's account a fair-minded lay person might think that the Tribunal might not have brought an impartial mind to the hearing. That submission, if accepted, would make decision making impossible. 23 Ground number 4 refers to the appellant's submissions which were before the Federal Magistrate. This finding as to credit was based, at the very least in part, on what the Tribunal saw as inconsistencies between the evidence given by the applicant at the hearing and the contents of the February 2003 and July 1996 documents. Further, it was based on the evidence at the hearing as received by the Tribunal through the official interpreter --- which is relevantly different from the Bengali translation provided by the applicant. It cannot be said that the decision would not have been different if the Tribunal has acted in accordance with s 420 and s 425 of the Migration Act 1958 . There the argument ended. The ground must be rejected. The appellant was invited to attend the hearing as he ought to have been: s 425 of the Act. He gave evidence and was invited to comment upon material which the Tribunal considered might be adverse to him. The Federal Magistrate concluded that the Tribunal had complied with its obligation under s 425. I agree with that conclusion. 25 Section 420 is facultative in that it absolves the Tribunal from some of the constraints imposed on courts of law: Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 628, 635, 642-644, 659, and 664-668. Section 420 does not impose a duty upon the Tribunal which, if breached, would involve jurisdictional error. 26 Ground number 5 appears to be a restatement of ground number 3, together with the further complaint that the Tribunal was actually biased. No complaint of that kind was made to the Federal Magistrate. No particulars of the complaint had been made on this appeal. 27 I am unable to discern any fact or circumstance which could lead to the conclusion that the Tribunal was actually biased. 28 In his written submissions the appellant raised seven grounds. The first is again a general complaint that the Tribunal made a jurisdictional error by denying the appellant procedural fairness and natural justice. That can be noted. 29 The second ground may be considered with the fifth. Both of those grounds raise questions relating to the adequacy of the notice given under s 424A of the Act. 30 The third ground asserts 'the Tribunal is bound to follow procedural (sic) in reaching its decisions and a failure to accord procedural fairness will lead to jurisdictional error, which is not protected from review by the privative clause'. 31 The application to the Tribunal was lodged on 25 August 2003 after the enactment and commencement of s 422B of the Act (4 July 2002). 32 Section 422B provides that Division 4 of Part VII of the Act is taken to be an exhaustive statement of the requirements of the natural justice hearing rule. To that end, the Tribunal is obliged to comply with Division 4. Section 422B has been recently considered by the Full Court of this Court in Minister for Immigration and Multicultural Affairs v Lay Lat [2006] FCAFC 61 ; (2006) 151 FCR 214. In that case, the Court was called upon to construe s 51A which is relevantly in the same terms as s 422B. The Court held that the intention of the legislature was to provide a comprehensive procedural code for procedural fairness and at the same time to exclude the common law natural justice hearing rule, although the bias rule is not excluded. The legislature intended to reverse the result of the decision in Re Minister for Immigration and Multicultural Affairs; ex parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 where the majority held that the then wording of the Act did not exclude the common law rules of natural justice. There is, on the strength of that authority, no obligation on the decision maker to provide procedural fairness except in accordance with s 422B. 33 In this case, there is no suggestion that the Tribunal did not comply with s 422B except insofar as it is complained that the Tribunal did not comply with s 424A. 34 In paragraph 4 of the grounds the appellant asserts that the Tribunal failed to act in accordance with s 424A of the Act in that the Tribunal did not provide to the applicant particulars of the information that indicated that forged or fraudulently obtained documents are readily available in Bangladesh. 35 That ground was raised in the application for review by the Magistrate and abandoned before the Magistrate. 36 There was no obligation to provide the appellant with the information referred to because it was not information specifically about the applicant or another person but was information about a class of person of which the applicant is a member: VHAP of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 80 ALD 559; QAAC of 2004 v Refugee Review Tribunal [2005] FCAFC 92 ; VJAF v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 178. 37 Grounds 2 and 5 raise the issue whether the Tribunal failed to comply with its obligations under s 424A of the Act. In particular, it is complained that the Tribunal failed to give the appellant particulars of information contained in the July 1996 declaration. It is necessary because of the provisions of s 424A(3)(b) to identify precisely how the 1996 statement came to the attention of the Tribunal. 38 The appellant first applied for a protection visa on 25 June 1996. On 21 February 1997 his solicitors wrote to the Minister's Department enclosing a statutory declaration from the appellant in which he withdrew his application for a protection visa. 39 On 25 February 1997 the appellant's solicitors sent a further statutory declaration sworn the same day in which the appellant advised that he did not wish to withdraw his refugee application and requested that the Department disregard his statutory declaration sworn 18 February 1997. 40 On 7 February 2003 the appellant's solicitors provided the Department with the appellant's statement of 6 February 2003. 41 On 5 August 2003 the appellant's solicitors made a long submission to the Department and enclosed the appellant's statement of 26 June 2003. 42 The hearing before the Tribunal commenced on 3 August 2005. During the hearing, it became apparent from what the appellant said that the appellant had made a statement in 1996. He was advised that the statement had never made it to the Department of Immigration. He said that he gave the statement to his lawyer but he did not know exactly what had happened. 43 Following the hearing, the Tribunal wrote to the appellant advising the appellant that it had information that would be the reason or part of the reason for deciding that the appellant was not entitled to a protection visa. It referred to the statements of 6 February 2003 and 26 June 2003 and the inconsistencies between those statements and his evidence. 44 The appellant responded to the s 424A letter on 9 September. With that letter he provided the July 1996 statement which, as I have said, was in the form of the statutory declaration but unsworn. 45 The July 1996 statutory declaration is in the same form as the statement of 6 February 2003 save that it is a statutory declaration. I then realized that this is the statutory declaration which was prepared in July 1996 in my aforementioned migration agent's office with the assistance of a Hindi speaking Indian acquaintance. Following the completion of the statutory declaration I have signed the declaration in front of the agent who had authenticated my signature. The former agent gave me a copy of the same from the printer but not from the photocopier. I discovered that there were many discrepancies in the statutory declaration. Within a week I returned to his office and handed over the copy of the declaration to the agent pointing out the discrepancies. I now can't remember what the agent exactly advised me on that occasion but I can vividly remember requesting him not to send that declaration to the DIMIA as some of the information was incorrect and misleading. The tribunal only mentioned the dates of the two subsequent statements to me but did not show me despite seeing my utter confusion and denial of my submission of two statements in 2003. Nor was it, he contended, sent to the Tribunal for the purpose of the application to the Tribunal. 49 The first contention may be accepted but is itself irrelevant: Minister for Immigration and Multicultural Affairs v Al Shamry [2001] FCA 919 ; (2001) 110 FCR 27. The relevant application in s 424(3)(b) is the application for review. 50 His contention that he did not provide the July 1996 declaration for the purpose of the application must be rejected. The July 1996 declaration was provided in response to the s 424A letter received from the Tribunal. While the applicant explained that in some respects the July 1996 declaration was not accurate, it was still provided to the Tribunal for the purpose of the application. 51 Ground 6 of the written submissions claims that the Tribunal made a jurisdictional error in that it ignored relevant material and/or failed to take into account a relevant consideration. 52 The material, which it is said that the second respondent failed to have regard, is said to be contained in the respondent's reply to the s 424A letter of 9 September 2005. 53 In my opinion, that contention must be rejected. It is clear from a reading of the Tribunal's decision that it had regard to the explanations given by the appellant in that letter. It simply did not accept them. 54 The last ground raised is again a complaint of apprehended bias. That ground has already been covered in dealing with the grounds of appeal. 55 In my opinion, the appeal must be dismissed. The title of the first respondent should be amended to read 'Minister for Immigration and Citizenship'. 2. The Refugee Review Tribunal should be added as second respondent to the appeal. 3. The appeal should be dismissed. 4. The appellant should pay the first respondent's costs. | appeal from decision of federal magistrate reviewing decision of refugee review tribunal no jurisdictional error appeal dismissed. migration |
2 Weinberg J had before him an appeal by the appellant from the decision of the Administrative Appeals Tribunal (the Tribunal) dismissing, as frivolous and vexatious, his application for review of a decision of the Social Security Appeals Tribunal (SSAT). Apart from that variation, the appeal was dismissed. 3 The history of proceedings in various courts and tribunals between the appellant and the respondent commencing in 1999 and continuing up to 2006 are set out in Weinberg J's reasons at [7] to [24]. It is not necessary to record them again. Every person has a right to apply to a tribunal, or a court, to seek remedies in consequence of an alleged infringement of his or her rights. Because a direction given under s 42B(1)(b) denies a person this right, it is a remedy that should not be invoked except in an extreme case. See generally Ramsey v Skyring (1999) 164 ALR 378 at 389-91 (per Sackville J). The Full Court also noted that the expression 'habitually and persistently' implies more than 'frequently', and suggests a degree of stubbornness on the part of the person in question. The element 'without any reasonable ground' is of course to be determined objectively. It is immaterial that the person may believe in the justice of his or her argument, and may not understand that the argument has been authoritatively rejected. It was entitled to have regard to his entire course of dealings in relation to social security benefits since his accident in 1991, and the fact that his latest foray before it involved an argument that could, and should, have been addressed years earlier. In those circumstances, I can see no error in the Tribunal's having concluded that a limited direction of the kind given was warranted. Apart from recounting the lengthy history of the matter already recorded by Justice Weinberg, the respondent's solicitor also noted various costs orders made against the applicant, none of which has been complied with. To the extent they have been taxed, they total $30,855.20. Other costs orders are yet to be taxed. 7 A bankruptcy notice has issued against the appellant in the sum of $30,855.20. He did not pay the amount of the debt or make arrangements to the creditor's satisfaction within the time stipulated in the notice. 8 A single judge may determine an application for security for costs in respect of an appeal: Dranichnikov v Centrelink [2002] FCA 1622 ( Dranichnikov ). 9 The appellant did not appear on the application for security. I was told by the respondent's solicitor that the appellant had informed him that he was unable to attend because he was unwell. The appellant also said that his daughter, who usually assisted him in court, was also unable to attend. There was no other evidence of illness, and the appellant did not ask for an adjournment. 10 As the history of the various proceedings makes clear, the matter before the Tribunal had already been the subject of a series of decisions made internally by Centrelink officers, the SSAT, the Tribunal, the Federal Magistrates Court, this Court and the High Court. 11 The appellant has had his day in court on the frivolous and vexatious issue before Weinberg J. There is an exception in the case of appeals, but there the appellant has had the benefit of a decision by one of Her Majesty's Courts, and so an insolvent party is not excluded from the Courts, but only prevented, if he cannot find security, from dragging his opponent from one Court to another. 12 The appellant's prospects of success on the appeal are a relevant consideration on any application for security: Dranichnikov at [20]. As Bowen CJ said in J & M O'Brien Enterprises Pty Ltd v The Shell Co of Australia Ltd (No 2) (1983) 70 FLR 261 at 264, that is especially so in the case of an appeal, where the appellant has had his day in court. The matters the appellant wishes to raise on the appeal have already been decided against him. As appears from Dranichnikov at [23], that is a consideration pointing to the appropriateness of an order for security. The appellant's appeal is in my view without merit. There is nothing to suggest any error in the decision under appeal. 13 Another relevant consideration is the appellant's failure to pay any of the costs ordered against him. See Dranichikov at [19]. Clearly, if no order for security is made, the respondent will incur further costs which are unlikely to be paid. 14 The fact that the appellant has not paid any of the taxed costs orders, and the general circumstances of the case, suggest that he may well be unable to pay the costs of an unsuccessful appeal. 15 The respondent has satisfied me, for the purposes of Order 52 rule 20, that an order for security should be made. On the material before me I was unable to fix the amount. I adjourned the matter so that the respondent could justify, by evidence of someone with costs expertise, the amount of security sought. Having now received an affidavit estimating the costs at $11,159, I will order that security be provided in the sum of $10,000, which is the amount sought in the motion and the only amount of which the appellant has received notice. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | security for costs appellant appealed from decision requiring him to seek leave before making further applications matters raised already determined by court. practice and procedure |
He was sentenced in the New South Wales District Court to 19 months imprisonment on the Commonwealth counts and to an additional 9 months on the State counts. The Commonwealth sentences commenced on 26 November 2004 and expired on 25 June 2006. 2 The present proceedings were instituted on 19 June 2006, i.e. at a time when the applicant was still serving a term of imprisonment in respect of Commonwealth offences. From 25 June 2006 the service of his State sentences commenced. His application and its complaints relate in various ways to the circumstances of his incarceration in New South Wales prisons. The application itself has been brought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the AD(JR) Act") --- a matter of considerable significance as I will indicate below. 3 There are six respondents. The first is the Commonwealth of Australia; the second, the Human Rights and Equal Opportunity Commission ("HREOC"); the third, the Commonwealth Ombudsman; the fourth, the New South Wales Ombudsman; the fifth, the Commissioner of Corrective Services (NSW); and the sixth, the GEO Group Australia Pty Ltd, a company contracted to conduct the day-to-day running of the Junee Correctional Centre, a State prison at which a portion of Mr Clarkson's sentence was served. 4 Four of the six respondents, the first, fourth, fifth and sixth, have sought summary dismissal of the application as it relates to them respectively. In relation to the second respondent, the proceeding has been adjourned as Mr Clarkson has foreshadowed the filing of an amended application. HREOC does not oppose this course being taken. I will return to this matter below. The Commonwealth Ombudsman indicated in correspondence with Mr Clarkson that he had no jurisdiction to entertain the particular complaints made to him. Nonetheless the Ombudsman has objected to the competency of the proceedings on an essentially procedural ground, i.e. that the application was made outside of the period prescribed by s 11(3) of the AD(JR) Act. This proceeding also has been adjourned for further timetabling at a later date. 8 Part 1B of the same Act deals in some detail with various aspects of the sentencing, imprisonment and release of federal offenders. Some number of the provisions of this Part deal expressly with how a federal offender is to be, or can be, treated when serving a federal sentence in a State or Territory prison. 10 In relation to the State of New South Wales an arrangement under s 3B was entered into on 12 November 1990 ("the Arrangement"). The reason for this is that the definition of a "decision" to which that Act applies expressly excludes "a decision by the Governor-General": s 3(1). The significance of that exclusion is of no little importance. 12 The primary issue that arises in the motions for dismissal of the proceedings relate to the operation of the Arrangement in the setting of the Crimes Act (Cth) and the Constitution . It is Mr Clarkson's case that decisions made both in the implementation of the Arrangement by the Commonwealth and in respect of the oversight of the Arrangement by the Commonwealth, are amenable to review under the AD(JR) Act. It equally is his case that, though State officers are responsible for the practical implementation for the conduct of the imprisonment of federal offenders, in so acting they are acting for, and on behalf of, the Commonwealth (seemingly implementing power given to them by the Commonwealth by virtue of the Arrangement and s 3B of the Crimes Act (Cth)). In consequence Mr Clarkson contends that the Commonwealth and the State officials are taking decisions of an administrative character under a Commonwealth enactment. 13 As the Commonwealth's motion raises issues discrete from those of the State respondents, it is appropriate to deal with it separately. The decision made not to amend the 1990 Commonwealth/State NSW Agreement to include provisions designed to give effect to Article 10(3) of the ICCPR. 2. The decision made not to amend the 1990 Commonwealth/State NSW Agreement to include provisions designed to give effect to Article 14 of the ICCPR. 3. The decision made not to amend the 1990 Commonwealth/State NSW Agreement to include provisions designed to give effect to the Commonwealth incentives on diet by mandating the inclusion in the diet of Federal Offenders of 3 serves of fruit and 5 serves of vegetables per day. 4. The decision made not to manage and administer the powers and functions exercised on behalf of the Commonwealth by State NSW Officers in relation to Federal Offenders to ensure that Federal Offenders incarcerated in State NSW Gaols are treated with humanity, with respect for the inherent dignity of the person and are not subjected to harassment, threats, humiliation or contained in a combatant, hostile and oppressive environment and are treated in accordance with the ICCPR Protocols, the Standard Guidelines and otherwise according to law. 5. The decision made not to intervene to prevent State NSW DCS from proscribing access by Federal Offenders to laptop computers for Educational purposes and for the preparation for legal proceedings. 6. The decision made not to intervene to prevent State NSW DCS from proscribing access by Federal Offenders to Desktop computers other than on conditions that effectively prevent them from being used for Educational purposes and for the preparation for legal proceedings. 7. The decisions made not to intervene to prevent GEO removing the Desktop computers from the Education Centre at Junee CC on 23 June 2005; deleting Federal Offender inmate files stored on HDD relating to Educational purposes and for the preparation for legal proceedings and destroying Federal Offender inmate files stored on Floppy Disks relating to Educational purposes and for the preparation for legal proceedings. 8. The decision made not to intervene to prevent GEO from withholding access by Federal Offenders to Desktop computers from 23 June 2005 until 19 September 2005. 16 Put shortly, Mr Clarkson's claims relate, first and foremost, to the alleged consequences to him of a decision of the Commissioner of Corrective Services denying access by inmates (not simply federal offenders) of Junee Correctional Centre to personal laptop computers on 18 March 2005 because of security concerns. That decision, it is alleged, affected Mr Clarkson's ability (a) to prepare for legal proceedings --- hence the reference to Art 14 of the International Covenant on Civil and Political Rights ("the ICCPR"); and (b) to pursue educational activities conductive to his "reformation and social rehabilitation": cf Art 10 of the ICCPR. Distinctly, he complains of the diet that has been provided and the manner in which federal offenders are treated in New South Wales prisons. 17 The Commonwealth's application for summary dismissal of the application under s 31A of the Federal Court of Australia Act 1976 (Cth) on the basis that Mr Clarkson has "no reasonable prospect of successfully prosecuting the proceeding" has a number of strands to it. First, it is contended that the decisions in question, though ascribed to the Commonwealth, appear to be decisions of the Governor-General and hence are not reviewable under the AD(JR) Act. This, in my view, clearly is the case in relation to the first to third of the decisions impugned and the application must to that extent be dismissed as incompetent. 18 It is by no means clear who was, or were, the decision-maker(s) allegedly responsible for the fourth to eighth decisions ascribed to "the first respondent". The Commonwealth's legal representatives sought particulars of these decisions. Mr Clarkson's response was that it was known to the Commonwealth if such decisions were ever made and by whom, assuming the Commonwealth actually addressed the matters in question. If it did not --- and he has foreshadowed seeking discovery in relation to that question --- he might seek to amend the application to raise claims under s 6 and s 7 of the AD(JR) Act. 19 What it appears Mr Clarkson is doing in proceeding as he has, is to seek what is in essence preliminary discovery under O 15A of the Federal Court Rules but without having to comply with the limitations imposed by O 15A r 3 on identity discovery and O 15A r 6 on information discovery: see Airservices Australia v Transfield Pty Ltd (1999) 92 FCR 2000; St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147. The application could be said to be objectionable as an abuse of process for this reason alone. 20 This points up the fundamental flaw in the application. It not only assumes that decisions have been made, it further assumes they were made under an enactment, so attracting the provisions of the AD(JR) Act. No tenable basis at all has been advanced to found this second assumption. 21 Mr Clarkson has contended that the decisions were made under the Arrangement by the Commonwealth. For reasons I give below in dealing with the motions of the State respondents, I reject this. Even if the Arrangement could properly be characterised as an "enactment" for the purposes of the AD(JR) Act: see s 3(1) "enactment" (c); it neither expressly or impliedly reserves particular decision making functions to the Commonwealth of the types alleged, nor does it make the decisions of State officials relating to federal offenders by virtue of the Arrangement decisions of the Commonwealth under the Arrangement. 22 While I am prepared to accept for present purposes that, notwithstanding the Arrangement, the Commonwealth may nonetheless retain tutelary responsibilities towards federal offenders in State prisons which might in exceptional circumstances found a claim in tort: cf S v Secretary, Department of Immigration and Multicultural and Indigenous Affairs [2005] FCA 549 ; (2005) 143 FCR 217; or for injunctive or mandatory orders against the Commonwealth, such claims are far removed from the type of proceeding raised by this application. The present application is incompetent. 23 There is one additional matter to which reference should be made. All of the fourth to eighth "decisions" were made in 1991 (the 4 th decision) or in 2005 (the 5 th to 8 th decision). No satisfactory explanation has been given for the long delay before the present proceeding was instituted on 19 June 2006. Were the application not otherwise objectionable, it is not one for which it is likely a court would extend time for its lodging in the Court: see s 11(1)(c) of the AD(JR) Act; and see Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349; Comcare v A'Hearn (1993) 45 FCR 441 at 444; Mees v Kemp [2004] FCA 366 at [93] - [99] . 24 I will order that the application against the first respondent be dismissed with costs. As I understand it, he contends that each of these respondents when performing functions in relation to him as a federal offender does so under the Arrangement and by so doing make decisions under an enactment for AD(JR) Act purposes, as the Arrangement, being an "instrument" made under an enactment, i.e. the Crimes Act (Cth), is an "enactment" under s 3 of the AD(JR) Act. 26 Central to this contention is the proper construction of the Arrangement in its statutory and constitutional setting. Section 120 of the Constitution obliges the States to provide places of detention and to receive and hold federal prisoners: R v Turnbull; Ex parte Taylor [1968] HCA 88 ; (1968) 123 CLR 28 at 37. The Commonwealth, furthermore, can make laws to give effect to s 120. Section 3B and Part 1B of the Crimes Act (Cth) are such laws. 27 When one turns to the 1990 Arrangement made under s 3B , its burden, in my view, is readily enough apparent. Against the background of the obligation imposed on the States by s 120, it provides for the utilisation of New South Wales' facilities for, and the exercise by State officials of their powers and functions in relation to, the carrying out of sentences passed on federal offenders under the Crimes Act (Cth), when federal offenders are put in the care, custody and control of the State of New South Wales for that purpose. While Part 1B of the Crimes Act (Cth) deals with specific aspects of a federal offender's incarceration in a State prison (e.g. the movement of prisoners: s 19A ; and the remission and reduction of sentences: s 19AA) , the s 3B Arrangement is general and facilitative in character. Importantly it does not change the character or status of the facilities used under the Arrangement or of the powers exercised etc by the officers of the State of New South Wales. State officers exercise State powers in State institutions albeit in relation to federal offenders. So, for example, neither the Ombudsman nor the Commissioner of Corrective Services is constituted an "officer of the Commonwealth" in consequence of the Arrangement. Equally, when the Commissioner made certain decisions about inmate access to personal computers this was done under cl 60 of the Crimes (Administration of Sentences) Regulation 2001 (NSW), which Regulations were made pursuant to s 79 of the Crimes (Administration of Sentences) Act 1999 (NSW) . 28 Turning to the various State motions, first it can only be said that the proceeding against the NSW Ombudsman is entirely misconceived. On 15 August 2005 Mr Clarkson made a complaint to the Commonwealth Ombudsman concerning circumstances at Junee Correctional Centre. On 24 August, that Ombudsman wrote to Mr Clarkson informing him that he could not investigate the actions of the NSW Department of Corrective Services, but had referred the complaint to the NSW Ombudsman. On 1 November 2005, the State Ombudsman wrote to Mr Clarkson advising him that a decision not to investigate his complaint had been made. That decision was later reviewed and confirmed by the Ombudsman. Mr Clarkson then challenged that decision in the present AD(JR) Act proceedings. 29 I simply have no jurisdiction to entertain this application. The NSW Ombudsman is an office established under the Ombudsman Act 1974 (NSW) and has the functions conferred or imposed on the Ombudsman by or under that Act or any other New South Wales Act. 30 In investigating etc Mr Clarkson's complaint, the NSW Ombudsman was acting under State legislation and did not make any decision under any enactment to which the AD(JR) Act applied (whether via Schedule 3 of that Act or otherwise). 31 Finally, in receiving Mr Clarkson's complaint, i.e. via the Commonwealth Ombudsman, the NSW Ombudsman did not exercise any powers or functions of the Commonwealth Ombudsman. The transfer of the complaint occurred simply because Mr Clarkson forwarded his complaint to the incorrect complaint-handling body rather than as a result of any exercise of Commonwealth power. 32 Secondly, the Commissioner of Corrective Services' motion. The eight decisions of the Commissioner impugned in the application are the counterparts of the eight decisions of the Commonwealth I have earlier dealt with. The first three such decisions (relating to not amending the 1990 Arrangement) are wholly misconceived. The Commissioner is not a party to that Arrangement: see Crimes Act (Cth), s 3B. The fourth "decision" (i.e. not to manage and administer powers to ensure federal offenders were treated with humanity, etc) is not even plausibly related to an enactment sufficient to attract AD(JR) Act supervision. Neither is any actual decision as such identified. To the extent that this ground complains of a failure to make a decision, it is not suggested there was a duty to do so. Decisions 5 and 6 (relating to access to laptop computers) were, as already noted, taken under State legislation and not under any enactment to which the AD(JR) Act applies. Decisions 7 and 8 (relating to failures to act in relation to the sixth respondent), appears to focus on the alleged responsibilities the Commissioner may have had in oversight of GEO Group Australia Pty Ltd in its performance of a management agreement for a correctional centre entered into under s 238 of the Crimes (Administration of Sentences) Act 1999 (NSW). Assuming the Commissioner made the decisions alleged, those decisions clearly were made in the exercise of State power and were not made under an enactment to which the AD(JR) Act applied. I would reiterate that Mr Clarkson has not suggested any statutory source of these decisions other than the Crimes Act (Cth) and the Arrangement. 33 I will order that the application against the fifth respondent be dismissed with costs. 34 The GEO Group's motion. The eight "decisions" alleged to have been made by this respondent replicate the decisions made against the Commonwealth and the Commissioner, save that they are adapted to take account of the fact that, as the body actually conducting Junee Correctional Centre, its decisions were simply management decisions. These need not be set out here. The company's motion must succeed and on a simple basis. The operative instruments which were the source of the power of the GEO Group to take decisions (or for that matter to perform duties) were the management contract or the Crimes (Administration of Sentences) Act 1999 (NSW): Glasson v Parkes Rural Distributions Pty Ltd [1984] HCA 49 ; (1984) 155 CLR 234 at 241. It was from these that the GEO Group derived such capacity as it had to affect Mr Clarkson as a prisoner at Junee Correctional Centre: cf Griffith University v Tang [2005] HCA 7 ; (2005) 221 CLR 99 at [78] ff. The sixth respondent did not, relevantly, take decisions under an enactment for AD(JR) Act purposes. The application against it will be dismissed with costs. | applicant convicted of federal and state offences applicant serving consecutive terms of imprisonment in new south wales prisons arrangement made between governor-general (cth) and governor of state of new south wales for detention of federal offenders constitution s 120 and crimes act 1914 (cth) s 3b application under administrative decisions (judicial review) act 1977 (cth) in relation to eight alleged decisions decisions attributed variously to three commonwealth respondents and four state respondents. claim by applicant that decisions made in implementation of and pursuant to arrangement amenable to review claim that state officers responsible to federal offenders are acting on behalf of commonwealth whether alleged decisions of parties made under an enactment for purposes of ad(jr) act. application by first, fourth, fifth and sixth respondents for summary dismissal of proceedings under s 31a of federal court of australia act 1976 (cth) no reasonable prospects of success statutory and constitutional setting of arrangement. administrative law administrative law practice and procedure |
The application relates to land identified in a map which is attached to the application (the "claim area"). The claim area lies to the south of Cairns, borders Mission Bay and includes the Yarrabah township. There are numerous respondents including the State of Queensland (the State"), Yarrabah Aboriginal Shire Council (the "Council"), Ergon Energy Corporation Limited, Telstra Corporation Limited, Black and White (Quick Service) Taxis Pty Ltd, numerous fishermen and other parties including Mr Harry Blucher Ludwick ("Mr Ludwick"). I am presently concerned with a claim by Mr Ludwick that he is entitled to a lease or licence to occupy part of the claim area ("Mr Ludwick's claim"). The question arises in these proceedings by virtue of the requirements of s 225(b) , (c) and (d) of the Native Title Act . The Council is the successor in title to councils having different names which have performed local government functions over the claim area. In these reasons I will use the term "Council" to describe the body performing such functions from time to time. It will not generally be necessary to identify the particular Council in question. At all relevant times a department of the Government of Queensland has been responsible for Aboriginal affairs and the administration of legislation dealing with that subject. Over the years the name of that department has changed many times. In these reasons references to the "Department" should be so understood. Mr Ludwick's claim arises out of legislation concerning the occupation and use of Crown land. Such legislation has been administered by another department, the name of which has also changed from time to time. I will refer to that department as the "Lands Department" and to the relevant Minister as the "Minister for Lands". The claim area is vested in the Council pursuant to a deed of grant in trust dated 27 October 1986. Mr Ludwick lives on a block of land (the "Bukki block") within the claim area. It is on Bukki Road at Bukki, near Yarrabah. The block is about four and half acres in size and is marked on an aerial photograph which is exhibit HBL 2 to Mr Ludwick's affidavit filed on 7 March 2008. Mr Ludwick is not a member of the Combined Gunggandji People as defined in the application and does not claim to be a traditional owner of any part of the claim area. He claims to be entitled pursuant to statute to a lease of the Bukki block or to a licence to occupy it. At one stage he also claimed an equitable licence to occupy the Bukki block. That claim was not pursued at trial. In these reasons I consider the validity of Mr Ludwick's statutory claims. He says that he has always identified as an Aboriginal person and has been accepted as such by the Yarrabah community and every other Aboriginal community in which he has lived. Mr Ludwick married Amanda Harris on 20 June 1952. They had two children. They separated in the late 1950s. One of their children, Harry John Ludwick ("Harry Jnr"), now lives on a block of land adjacent to the Bukki block. After separating from his wife Mr Ludwick entered into a de facto relationship with Irene Gibson, which relationship lasted for about 17 or 18 years and yielded six children, including a son ("Harold"). For more than 20 Years Mr Ludwick has lived with Patricia Dianna Yeatman. There are no children of the relationship, but Ms Yeatman has children from a previous relationship. Mr Ludwick was about ten years old when he went with his mother and other family members to live in Yarrabah. They had previously lived in Dimbulah at Eureka Creek. The family moved because Mr Ludwick's father had gone to the War. Mr Ludwick did not see him again. At that time Yarrabah was run by the Church of England as a mission. Girls and boys were accommodated in separate dormitories. Children were separated from their mothers. Brothers were separated from sisters. Mr Ludwick believes that his mother died whilst he was living in the boys' dormitory. He lived there until he was about 14 and then was put to work on a mission farm at Oombunghi. His first job away from Yarrabah was as a stockman on Gunnawarra Station near Mt Garrett. He was there for about a year. He then went cutting cane at Gordonvale, which was closer to Yarrabah. He also worked at a sawmill at Mareeba. During the relevant seasons he lived in barracks provided on site. He also worked as a drover at Bessells Station near Georgetown and at Gilbert River Station. He cannot remember all of his employment history. About a year before he married Ms Harris he became head stockman for the Yarrabah mission. The mission kept its own beef cattle for feeding the people at the mission. It also had horses and a bullock team for hauling logs. At that time the livestock was kept at Oombunghi, a farming area. Because the cattle were breaking down fences to get at the vegetables, those conducting the mission decided to move the stock to Bukki. Mr Ludwick went with them and lived there. At that time there were about 10 or 11 houses in the area. It had been part of the mission settlement but had been abandoned. There was a small sulky track near the houses. At that time the only access was by horse. When Mr Ludwick first moved to Bukki he lived on a block of land (the "original block") which was on the opposite side of the creek from the Bukki block. In those days it was not necessary to obtain permission to live anywhere on the mission or to build a house. Two men who were working with Mr Ludwick helped him to build a house on the original block, using bush materials. Mr Ludwick also planted a small garden. He was too busy to have a more extensive garden. The land on the other side of the creek (including the Bukki block) was used as a large holding paddock for horses. Mr Ludwick built a stockyard within that horse paddock for use in branding and dipping cattle. He built the stockyard in the same year as the first jet aircraft flew into Cairns. He remembers hearing the roar whilst he was fencing. Other evidence suggests that the first jet aircraft flew into Cairns in the mid-1960s. Mr Ludwick and his wife resided together on the original block and were there when both of their children were born. It was on the opposite side of the creek from the mission. When the creek was in flood, there was no access. For this reason Mr Ludwick decided to move to the other side of the creek. At that time the two children were living with Mr Ludwick's mother-in-law in the mission. They visited their parents from time to time. When Mr Ludwick was about 28 or 29 years old he received a letter from the Director of the Department advising him that he was entitled to claim the original block and that, "no one would move me off it". At that time the Church was still running the mission. He had not spoken to anybody about living on the original block. He was surprised to receive the letter. Whilst he was living with Ms Harris they moved onto the Bukki block. The house on the original block was falling down. They pitched a tent on the Bukki block and lived there whilst they cleared it with the intention of building another house. By that time the government had taken over the mission from the Church and was destroying the stock. The stockyard was no longer in use. Mr Ludwick was no longer the head stockman. It took about five months to clear the block. He also levelled it, planted lawn and cleared old fences. Before he commenced to build a house on the Bukki block, his wife left him and moved back to the mission to live with her parents. Shortly after his wife left, Mr Ludwick laid a concrete slab and built two small sheds. He accepts that an aerial photograph taken in about 1968 does not show the sheds. He accepts that they must have been built after that date. Mr Ludwick continued to live on the Bukki block for about six months after his wife's departure, and then went elsewhere to work. He did not intend to leave for long and always intended to return to live on the Bukki block. He worked in Malanda for about 18 months and then returned to the Bukki block for a short time. He obtained other employment with the Main Roads Department at Mt Molloy on the road to Cooktown. Whilst he was so employed he met Irene Gibson who was living at the Hopevale Mission. They became attached to each other, although he was still married to his wife. This seems to have caused some difficulty in the Hopevale Mission, but that is not relevant for present purposes. Subsequently, he and Ms Gibson moved to Alice Springs. He was employed in loading and unloading trains. Whilst residing in the Northern Territory, they had a son who died when he was about four years of age. Ms Gibson returned to Malanda where her sister and brother-in-law were living. Mr Ludwick stayed in the Northern Territory. He and Ms Gibson had been together for about 15 years, during which time they had six children. Their last child was born in 1975. They had lived in Alice Springs and Larrimah in the Northern Territory and Malanda and Hopevale in Queensland. At no time did they live on the Bukki block. Mr Ludwick would visit it for a few days at a time, especially when they were living at Malanda. He was never absent from it for more than about eighteen months to two years at a time, and always intended to return eventually. After separating from Ms Gibson, Mr Ludwick returned to Yarrabah, intending to live there permanently. This was in about 1980. Yarrabah was then run by the Council. At a Council meeting held on 4 September 1980, a motion was passed "granting" permanent residency to Mr Ludwick. It seems that such decision had no real effect other than as an indication of willingness to accept Mr Ludwick as a resident. In a letter to the Director of the Department dated 15 October 1980 the Manager at Yarrabah advised that Mr Ludwick had applied for residency. It was said that he was living with his brother (Arthur Ludwick) at Yarrabah, unemployed, separated and with no dependants. There was no objection to the application. The permit was subsequently issued by the Department. Mr Ludwick considers that he would not have lived with his brother for very long. They would not have got on well together. His brother was then living with his wife (Ruby) near the police station. He stayed with them from time to time, but only for a couple of days at a time. Arthur died some years ago. Mr Ludwick said that if he had not built the sheds at Bukki before his departure for Malanda, then he built them shortly after his return, probably in 1980. He lived in one shed and stored his property in the other. He bought the sheds in Cairns and erected them on the block. He transported them from Cairns in his sister's utility vehicle. There was no proper road at that time. He subsequently planted a vegetable garden. A couple of years after building the small sheds he expanded the concrete slab and built a larger shed over the top of the other two with the aim of increasing the size of the living area. Initially, he did not fully enclose the larger shed. It was just a roof mounted on posts. At about that time he also built a fence around the whole block using bush timber and wire which he had purchased. The fence is still there, although he has, from time to time, replaced posts. Mr Ludwick was happy living at Bukki but also enjoyed camping trips when he would fish and catch crabs. During the crabbing season he would go away for a few weeks at a time, build a humpy on the beach and go fishing and crabbing every day. At some stage he asked his son and daughter-in-law to look after the Bukki block whilst he was away. On one of his crabbing trips he met Ms Yeatman, probably in about 1987. She wanted to live at Bilma near the beach, and so he stayed with her there for some time, frequently returning to check on the Bukki block. Ms Yeatman built a house at Bilma. After about two or three years they moved to the Bukki block and have lived there ever since. Ms Yeatman gave the Bilma house to her son. Mr Ludwick and Ms Yeatman made improvements on the Bukki block, working on it every day. Over about two years they: Everything was done by hand, using materials which they had purchased. They worked constantly on the block in order to maintain it. During a cyclone a large branch from a mango tree fell on the house. Mr Ludwick rebuilt the damaged part. In either 2002 or 2003 the Council installed a septic tank system. It was supplied at Council expense and installed by workers from the Community Development Employment Programme. Quite recently Mr Ludwick and Ms Yeatman built a guest cottage on the block. Mr Ludwick said that when he built his house, he believed that he could remain on the Bukki block "forever". He said that Yarrabah people had been doing so for years, even after the government took over the mission from the Church. He said that the Council knew that he was building his house and other structures on the Bukki block and did not stop him, or tell him that he could not do so. He bought cement from the Council for his work on the site. The Council upgraded the road, installed the septic tank and provided him with a refuse bin. He has not received any letters or notices from the Council or anybody else, concerning his occupation of the Bukki block, save for notice of the Applicant's claim. Don't let anyone move you off. You don't shift for nobody. Mr Fourmile, apparently another a person having some position in the Council, also told him "Don't you move off the land". At a town meeting there was discussion concerning the location of Mr Ludwick's front fence (which was too near the road). He was also told not to plant too near to the creek. At one stage, a long time after he went to live on the Bukki block, a young man called Chris Burns came to the block and told Mr Ludwick that his grandfather (Peter Burns) had bought it. Mr Peter Burns had been a carpenter at Yarrabah. He had passed away prior to Chris Burns' visit. Mr Ludwick told him that nobody could buy land from the government because it was reserved for residents of Yarrabah. Mr Burns left. Mr Ludwick has not heard from him again. In a letter dated 4 March 1981, apparently from Mr Ludwick, to Mr Kilhoran (sic) at the Department, there was reference to an application for a 15 acre block at "Bucky". The writer asserted that a majority of members of the Council had supported the application, but it had, nonetheless, been refused. The writer sought Mr Killoran's intervention in connection with the application. Mr Ludwick has no recollection of ever having made such an application. He says that the letter is not in his handwriting but concedes that the signature appears to be his. The Department responded on 5 March 1981, indicating that enquiries were being made. was granted permission to use about 10 acres of land on the Bucki [sic] Road towards Judu. Harry's property would be on the same side of the road as that belonging to Ernie Bounghi and Colin Neal --- All in favour. Mr Ludwick's son, Harold is never called Harry. I understand that a camp has been established on the area and a start has been made on the farming enterprise. However, it has been agreed that logs for the sawmill will be taken from the area in the near future and this will have the effect of providing access to the camp site. Arthur lived in the Yarrabah township but never at Bukki. He died a few years ago. His brother, Alf, has a block at Bukki, but it is only about five acres. In minutes of a Council meeting held on 28 July 1982, under the heading "Correspondence Inward", there is reference to an item, "Harry Ludwick re housing". Mr Ludwick is unable to explain this item. He says that it might refer to his son, Harry Jnr. A letter dated 16 December 1985 to the Executive Officer at Yarrabah from the Department refers to "Tenancy agreement for Harry Ludwick". Mr Ludwick says that he has never had a tenancy agreement. The reference may be to his son. On 21 April 1987 an application by Harry Ludwick and Harold Ludwick was lodged with the Council for its approval "that a lease be granted" over unidentified land. The applicants' dates of birth are shown as 29 November 1928 and 9 May 1969. Mr Ludwick says that one signature looks like his, although he usually includes his middle initial. He does not believe that he ever made such an application and does not understand why there would be an application in the name of Harold (his son), given that he has never lived at Yarrabah and has never wanted to do so. He is married and lives in Hopevale. And if the council agrees with the request, I would like to sign my land at Buckee [sic] over to my sister Eileen and her husband. His sister Eileen has never wanted to move on to the Bukki block. However it suggests that the Council recognized Mr Ludwick's occupation of the Bukki block. The documents to which I have referred were presumably supplied to Mr Ludwick's legal advisers by the State or the Council in the course of these proceedings. At a later stage the State produced further documents which are exhibited to the affidavit of Margaret Jean Reid. Ms Reid is employed by the Department of Communities as a senior policy officer, with responsibility for keeping the records relating to indigenous policy and administration. Since August 2006 she has been involved in researching the files created by the various departments which have had responsibility for Aboriginal affairs since 1898, including litigation concerning the Yarrabah area. She has searched for documents relevant to this matter but was unable to find any letter of the kind referred to by Mr Blucher in para 35 of his affidavit (received when he was 28 or 29 years of age and concerning his entitlement to the original block). Neal building a house at Bucky [sic]. Co-op. claiming land. Near distributing land at Bucky [sic] among their own people. No one else there. One of white staff came ... The purpose of the letter seems to have been to inquire as to whether there were "funds" to which he and Ms Yeatman were entitled, presumably funds paid by way of wages and held in trust pursuant to former government arrangements. I am, to some extent, relying on personal knowledge rather than evidence in so speculating. The letter shows that from 1943 to 1946 Mr Ludwick worked for canefarmers at Lucinda and from 1947 to 1948 at Gunnawarra Station. From 1948 to 1952 he did station work. He returned to Yarrabah at the end of 1952 but left again to work elsewhere. One aerial photograph shows the two sheds on the Bukki block in 1994. Another aerial photograph, taken in 2002, shows the Bukki block, with the boundary marked in red. There are also a number of photographs taken on the block. They show an attractive tropical environment, well maintained and with substantial planting. The buildings are not of high quality but appear to be sturdy enough. At the request of the parties I visited the block. The photographs provide a reasonably accurate impression of it. In his cross examination Mr Ludwick agreed that the sheds on the land were first erected after the opening of the road. Prior to that time goods were brought to Yarrabah by barge. This suggests that the huts were built somewhat later than Mr Ludwick suggested. It was suggested to him that the road was opened in 1972. Other evidence suggests that a rough road was built in 1966 or 1967. He seemed to agree with the suggestion that he had laid the concrete bases for the sheds in the early 1980s. However other evidence suggests an earlier date. He said that when he returned to Bukki in the early 1980s some of the old fencing was still standing. He removed it all. He agreed that he lived at Bilma with Ms Yeatman from 1986 or 1987 until 1990. In his cross-examination he seemed to agree that whilst at Bilma he had been preparing the Bukki block in the expectation that they would live there (TS 110 ll 35-36), and that they had planned that "our" son (presumably Ms Yeatman's son) move into the Bilma house (TS 110 ll 25-26). Before meeting Ms Yeatman he had cleared an area in front of the existing house but not behind it. On the right hand side, looking from the road, he had cleared to the creek. He is not sure as to when he planted the vegetable garden but thought that it may have been after he returned with Ms Yeatman. He gave inconclusive evidence concerning the erection of new fences. There was a fence which followed the road as far as the creek and another fence to the left of the house. This was built some time after 1990. He agreed that much of the fencing was probably constructed after he returned with Ms Yeatman. The premises required substantial work. He and Ms Yeatman lived there whilst they were doing that work. Some of the planting in the lower land on the block (to the left of the house) was done after he returned with Ms Yeatman. He also agreed that fruit trees on the land were planted after 1990. He said that whilst he was at Bilma he returned to the Bukki block about once every three or four weeks. However he did not stay on the block during such visits. Mr Ludwick gave further evidence-in-chief, largely relevant to the area of land to which he might be entitled. He said that in about 2004, reticulated water was installed on the Bukki block. Prior to such installation he had taken water from the creek. Before the installation of the septic tank there had been a pit toilet, located about 20 feet from the corner of the house and away from the road. Mr Ludwick built it. He also said that he had grown vegetables and fruit for his own consumption. At one stage he had kept goats for meat, but that had been unsuccessful. He kept chickens for their eggs. He needed the generator to provide electricity. It would have been unsafe and uncomfortable to install it in the house. For this reason he built the generator shed. The house was located so as to avoid damage from falling timber. He has never fished in the creek but has seen other people doing so. He uses coconuts from coconut trees on the land for eating and also as chicken feed. The area to the left of the house cannot be used for agriculture because water accumulates there. Initially, access to Yarrabah was by horse. For that reason he kept horses on the block. I consider Mr Ludwick to be an honest, and generally reliable, witness. It is likely and understandable that time has dulled his memory as to some matters. I did not form the impression that he was seeking to strengthen his case by exaggeration or misrepresentation. I suspect that the Department and the Council have, on occasions, confused him with one or more of his brothers and sons. That does not detract from his claim to the Bukki block. Some documentary evidence gives general support to his claim. I refer in particular to the Council letter of 14 July 1992. He wanted her to live with him there. However she wanted to live at the beach. They lived there for some time but were eventually told by "tribal people" (presumably members of the claim group) that they were no longer allowed to do so. Ms Yeatman obtained some land at Bilma where she and Mr Ludwick built a house. They lived there for a couple of years and then moved to the Bukki block so that her younger son could move into the house. Ms Yeatman thinks that they have been together for more than 20 years, and that they moved to Bukki in about 1990. When she arrived there, the big shed had been built with the two smaller sheds beneath it. A fence had been erected. Whilst they were at Bilma, Mr Ludwick visited Bukki from time to time to check on the block. He did not suggest that he was performing any major building work. Hence Ms Yeatman understood that the improvements which she saw on the property when she first arrived had been built prior to her meeting Mr Ludwick. After moving to the Bukki block, they enclosed the big shed and then removed the two small sheds. The big shed is now their home. Within the first year or two they added a verandah and started building separate sheds for use as a carport, a boatshed and a generator shed. They subsequently built a cottage for guests. They planted fruit trees and other gardens. They purchased their cement from the Council and made it clear that they were using it to build on the Bukki block. About four years before the date of her affidavit (4 March 2008) the septic tank was installed by the Council. Mr Ludwick's eldest son, Harry Jnr, was born in Cairns on 22 November 1952 and raised by his mother, Amanda Harris. She died on 9 January 2007. He is married and has lived in Yarrabah for all of his life. He is now living at Bukki, next to the Bukki block. He has always understood that when he was very young, he lived with his mother and father on a block of land at Bukki, on the other side of the creek from the Bukki block. He recalls that when he was about 13 or 14 years old, in about 1966, his father started to take an interest in the Bukki block. In those days he was "coming and going from Yarrabah". He recalls that in about 1974, the two small sheds were erected side by side. Harry Jnr was then working as a carpenter for the Department of Community Services. The head carpenter lent him a concrete mixer for his father's use. The land had already been cleared. A vegetable patch had been established. I accept this evidence as offering the most reliable indication of when the sheds were built. Mr Ludwick's evidence was clearly unreliable on this score. Harry Jnr said that his father had been living away from Yarrabah, but returned at about the time that his son was born on 21 March 1981. Whilst his father was away Harry Jnr and his wife used the Bukki block for weekends. After his father returned to Yarrabah in about 1981, he lived at Bilma for some time and then built a big shed over the top of the two small sheds and removed the two small sheds. If Mr Ludwick lived at Bilma in the early 1980s, it must have been some years prior to his residing there with Ms Yeatman. The big shed had been built by about 1992 when Harry Jnr came from Mourigan to live at Bukki. Darryl Ralph Pollard was born on 12 June 1961 and moved to Yarrabah with his parents in October 1976. On 13 April 1985 he married Eileen, one of Ms Yeatman's daughters. They have six children. He has resided continuously at Yarrabah since 1976, save for a period from September 1994 to December 2002. During that period he and his family lived at Kowanyama, nearer to his work. However he returned frequently to Yarrabah. In about 1984 Mr Pollard applied to the Yarrabah Shire Council for a lease over land at Buddabadoo. In 1986 he and his wife decided to build a home. They decided that the Buddabadoo block was too far away from town, and that they would prefer to live at Bukki. Towards the end of 1986 they applied to the Council for a lease over land at Bukki, indicating that they no longer wished to apply for land at Buddabadoo. They said that they had spoken to Peter and Willy Yeatman (who had previously claimed the Bukki land). Messrs Yeatman had said that they did not wish to maintain their claim. The Council stamp shows that Mr Pollard's letter and a sketch of the land claimed at Bukki were received on 2 November 1987. Mr Pollard asserts that he delivered the letter to the Council in the second half of 1986. They built the house in early 1987 and took up residence in mid-1987. On 1 April 1987 Mr Pollard attended at the Council office to complete a Form 1 application for lease which is exhibited to his affidavit. It is dated 1 April 1987. Mr Pollard remembers Mr Ludwick building a small shed on the Bukki block. This was well before he and his wife moved to Bukki. It may have been in the late 1970s. When Mr Pollard and his wife claimed their block in 1986 or 1987, the small shed was still on the Bukki block. A roof structure had been built over it. The block was fenced, and there were several fruit trees. At the time, Mr Ludwick was living at Bilma. His niece (Alberta Gibson) was living in the small shed on the Bukki block. She was there for about a year. Elaine Marina Pollard, has sworn an affidavit. She recalls there being two small sheds under the roof structure on the Bukki block. She does not recall when her mother and Mr Ludwick actually commenced living there. Roy Alfred Gray was born in Cairns on 3 October 1944 and has lived at Yarrabah for most of his life. His only period of absence was from 1963 to 1979. He was elected to the Council in about 1980 and was a member until some time after it received the deed of grant in trust over the land (27 October, 1986). He served as chairman and as deputy chairman. He understood that prior to the deed of grant in trust, the Council had the legal authority to make decisions, with the guidance of the Manager. When he was first elected to the Council some Yarrabah residents had already moved on to blocks at Bukki. There were sharefarmers on Back Beach Road. Before and during his time on the Council, articles appeared in the Cairns Post concerning the grant of ownership of Aboriginal reserves to Aboriginal councils. He remembers Mr Ludwick building at Bukki on one or two different sites and believes that he had the necessary permission. The Applicant has filed two affidavits, one by Howard Hardy Lloyd Patterson and the other by Robert Lawrence Sands. Mr Patterson said that he was raised at Yarrabah and has lived there all his life. He said that in 1983 he went to Hopevale with Irene Gibson's nephew. At that time Irene was living at Hopevale with Mr Ludwick and a number of children. On that basis he asserts that Mr Ludwick was not living in Yarrabah in 1980. Mr Sands was born in Cairns on 10 October 1945 and raised in Yarrabah, living there until 1970. He is a Gunggandji elder. Yarrabah is his traditional country. Many of his family still reside there. When he was 18, he qualified as a barge captain and ran the barge from Cairns to Yarrabah. In those days the barge was the only means of bringing materials into Yarrabah. He left Yarrabah in 1970 to work on Palm Island where he remained for about two years. He returned to Cairns in 1972 and was employed by the Cairns City Council until approximately 1984. In February 1985 he commenced a course at the Kangaroo Point College of Technical and Further Education in Brisbane. This lasted for about two years. At the end of 1986 the Queensland Government employed him as a clerk at Kowanyama. He remained there until 1992 and then returned to Yarrabah as Chief Executive Officer of the Council, a position which he held for about two years. He then worked at Kowanyama until 2006, returning to Yarrabah, again to take employment there. Whilst he was in Kowanyama he returned to Yarrabah as often as he could, including over holiday periods. He believes that jet aircraft first flew to Cairns in the mid-1960s. It was not until 1966 or 1967 that there was a rough dirt road to Yarrabah. Prior to that time the only way of bringing materials into Yarrabah was by barge or boat. Little cement was available in Yarrabah prior to the road being established. Initially, it was a rough dirt road, not easy to traverse. As to Mr Ludwick's assertion that he used his sister's utility to bring materials from Cairns, Mr Sands says that Mr Ludwick's sister was living outside of Yarrabah. In relation to para 85 of Mr Ludwick's affidavit (concerning the visit by Chris Burns), Mr Sands refers to an incident in which a girl related to the Harris family was killed and says that this event occurred near the Bukki block. I do not understand the significance of this matter. He asserts that Mr Stephen Schreiber and Mr Vincent Schreiber were both Gunggandji men but that neither, acting alone, had authority under traditional law and custom to make decisions binding on Gunggandji people. Such decisions had to be made by elders and senior Gunggandji people. Mr Sands said in oral evidence-in-chief that he had fished in the creek when he was growing up as a child, setting eel traps during periods of extra high tide and during wet weather. There were also yellow belly fish in the creek. The area contained black palm trees which were harvested to make spear heads and other weapons The State relies upon a number of affidavits. The first is by Shane Arthur O'Connor who was employed by the Department for approximately 26 years. He worked at senior management level on every State-controlled Aboriginal community and in every regional office of the Department. At one stage he was Assistant Under-Secretary, based in Brisbane. Between December 1976 and January 1982 he was Manager at Yarrabah and had approximately 20 staff and a large Aboriginal workforce. He said that the State took over control of the mission from the Church of England in 1960. The manager of the Yarrabah reserve reported directly to the Director of the Department in Brisbane. Mr O'Connor remembered members of the Ludwick family but did not specifically remember Mr Ludwick. Whilst he was at Yarrabah the area at Bukki was accessible by road. However, when the creek flooded, communications and access were severely inhibited. This influenced the Department's assessment of the suitability of the area for residential development. He does not recall there being evidence of earlier housing in the area, but there were numerous squatters' camps. They were not formally sanctioned. The presence of such residents was tolerated unless special circumstances required their relocation. If a person wished to reside on a reserve it was necessary to obtain a permit, theoretically before the person commenced such residence. Frequently people would make application after arrival. Local Councils could not grant such permits. The manager would seek its views and forward them, with the application, to the Director for approval. Mr O'Connor remembered Mr Alf Ludwick as a person who was "someone determined to make a go of it". He does not recall him farming with his brother. He was surprised at the commencing words of the letter dated 2 June 1981, apparently written by Mr O'Connor to the Director, in which he advised that the Council had given permission for Mr A Ludwick and his brother to use land in the Bukki area. He says that he understood that land at Yarrabah belonged to the State, and that neither the Council nor he could have given it to anybody. Mr O'Connor recalls that government policy at that time was to encourage residents of such communities to start businesses and become self-reliant. The Council was similarly encouraged to take responsibility for the community. A request to use land for a business would have been referred to the Department, with advice as to the Council's attitude and as to Mr O'Connor's own views. Lawrence James Glass, Sheree Sharma and Kenneth John Carse have also sworn affidavits, but it is not necessary that I refer to their content. I find that he lived there from the early 1980s until some time late in 1986 or in 1987 when he went to Bilma, intending to return. However he met Ms Yeatman and remained at Bilma until about 1990 when he returned to the Bukki block with her. To the extent that Mr Pollard suggests that Mr Ludwick lived at Bilma at some earlier time in the 1980s, I infer that it must have been a discrete period of temporary residence, prior to his relationship with Ms Yeatman. The roof of the current structure was erected over the huts in 1986 or 1987, prior to the commencement of Mr Ludwick's relationship with Ms Yeatman. At that time Mr Ludwick also extended the concrete slab on which the huts stood. I accept the Pollards' evidence that the roof was in place when they first decided to build at Bukki in late 1986 or early 1987. I do not accept Mr Pollard's evidence that the withdrawal of the Buddabadoo application and the sketch map of the proposed Bukki claim (both marked as received by the Council on 2 November 1987) were lodged in 1986. I think it more likely that they followed the form 1 application for the land at Bukki (dated 1 April 1987). It is possible that the withdrawal and the sketch were required by the Council prior to its processing the application for the land at Bukki. I am unable to find that the roof of the present house was erected prior to the date of the deed of grant in trust. However I am satisfied that the two smaller huts and the slab on which they stood were standing on that date. The slab was incorporated into the present house. I also find that Mr Ludwick's actions in occupying the Bukki block and erecting the huts were tolerated by the relevant authorities (the Department and the Council). I find that prior to the date of the deed of grant, Mr Ludwick had probably also erected fencing, gardens and a pit lavatory on the Bukki block. These improvements were still standing at that date. It is common ground that the land described therein includes the Bukki block. Pursuant to the deed of grant the relevant land was vested in the Council in trust for the benefit of Aboriginal inhabitants and for no other purpose. I have previously set out the provisions of s 361A of the Land Act 1962. That section was inserted by the Land Act (Aboriginal and Islander Land Grants) Amendment Act 1982 (Qld) (the "Aboriginal Land Grants Act"). The "repealed Act" was the Land Act 1962. The definition includes things which would normally be characterized as fixtures, usually owned by the owner of the fee simple or, in the case of Crown land, the Crown. Section 361A clearly contemplates ownership of improvements by somebody other than the Crown or the holder of the fee simple title pursuant to a deed of grant. The intention cannot have been to authorize the grant of a lease to the owner of improvements who already held the fee simple title. Whatever is fixed to the freehold is said to become part of it and is subjected to the same rights of property as the land itself ... . The presumption is said to be rebuttable and, it seems to us, it must be so when a statute empowers someone other than the owner of land to affix to or embed things in the soil and yet retain ownership of the things so affixed or embedded. As was pointed out in argument, ss 236, 237 and 238 of the Land Act 1962 also seem to have contemplated somebody other than the Crown owning improvements situated on Crown land. It has not been submitted that any person other than Mr Ludwick might own improvements erected by him on the Bukki block. Since the hearing in this matter, the Minister for Lands has indicated that he is satisfied that the two sheds stood on the land at the date of the deed of grant and that Mr Ludwick owned them. The Council is also satisfied as to those matters. The State submits that although s 520(b) of the Land Act 1994 continues the application of s 361A to deeds of grant made prior to the commencement of that Act, it does not continue the operation of other relevant provisions of the Land Act 1962. Further, it submits that pursuant to s 511 of the Land Act 1994 , references in s 361A to provisions of the Land Act 1962 are to be taken as references to the corresponding sections in the Land Act 1994 . Counsel for Mr Ludwick submit that s 20 of the Acts Interpretation Act 1954 (Qld) (the "State Interpretation Act") preserves his rights pursuant to s 361A. Section 361A provides that the terms of any lease are to be in accordance with "the provisions of this Division", prima facie referring to Division V (Reservations in Deeds of Grant) which is contained in Part XI (Grants, Reserves and Reservations for Public Purposes). Further, s 361A expressly deprives the Minister for Lands of his capacity to refuse to approve a proposed lease pursuant to s 343 of the Land Act 1962 . The State submits that s 57 of the Land Act 1994 now imposes the requirement for ministerial approval, the effect of which would, presumably, also be negated by s 361A. The State submits that the conditions of any lease will be regulated by s 61 of the Land Act 1994 , and not by the "provisions of this Division". Mr Ludwick submits that s 343 (dealing with ministerial approval) and s 344 of the Land Act 1962 (dealing with conditions) continue to apply for the purposes of s 361A. It may not matter whether ministerial approval is required pursuant to s 343 of the Land Act 1962 or s 57 of the Land Act 1994 . In either case s 361A(3) will compel ministerial consent. However the conditions permitted by s 344 of the Land Act 1962 differ from those permitted by s 61 in one potentially important respect. Section 343 provides for a maximum term of 75 years whilst s 61 provides for a maximum term of 30 years. A number of curiosities surround the terms and structure of s 361A and its location in the Land Act 1962 . Part XI deals generally with grants, reserves and reservations for public purposes including, in particular, deeds of grant in trust and reserves. It is likely that the enactment of s 361A gave effect to a policy decision to transfer from the Crown the ownership of reserves held for the benefit of Aboriginal and Torres Strait people. Such transfer was to be to Councils, primarily or solely representative of, and constituted by, indigenous people. It was probably intended that s 361A would be a mechanism for regularising regimes of informal occupation existing in such reserves. There is no reason to assume that the informal system of land occupation at Yarrabah was, in any way, unique. I draw these inferences from the enactment of s 361A as part of the Aboriginal Land Grants Act. It may have been more appropriate to include s 361A in Division II of Part XI of the Land Act 1962, dealing with appointment, duties and powers of trustees, rather than in Division V, dealing with reservations in deeds of trust. With the exception of s 361A Division V seems not to deal with leases at all. Section 361A(1) preserves ownership of improvements located on land at the time of issue of a deed of grant. Section 361A(2) addresses the question of leases of land upon which such improvements are located. The owner of such improvements is "entitled" to a grant by the trustee of a lease which accords with the provisions of "this Division". As I have observed Division V says nothing about the terms of a lease. Both Mr Ludwick and the State submit that the reference to "this Division" must be either a reference to "this Part", that is Part XI, dealing with deeds of grant, or to Division II of that Part, dealing with trustees' appointment, duties and powers, including the power to lease. In either case, Division II will regulate the terms of any lease pursuant to s 361A. Such a construction is necessary in order to give effect to the legislative intention to grant leases to the owners of improvements. Broadly speaking counsel for Mr Ludwick submit that he obtained a right to a lease upon terms to be determined in accordance with the Land Act 1962. On that basis they submit that s 20(2)(c) of the State Interpretation Act applies so as to preserve such right. That section provides that the repeal or amendment of an Act does not affect a right, privilege or liability acquired, accrued or incurred thereunder. The State submits that Mr Ludwick has no accrued right to a lease but rather a "right arising from an Act" or a "right to take advantage of an enactment", such right being the right to take action in accordance with the law as it is at the time. In support of this argument the State relies upon a line of decisions commencing with Abbott v Minister for Lands [1895] AC 425 and ending with the decision of the Queensland Court of Appeal in Australand Corporation (Qld) Pty Ltd v Johnson [2008] 1 Qd R 203. I need only make brief comments concerning those cases. In Abbott the Judicial Committee of the Privy Council, on appeal from the Supreme Court of New South Wales, considered legislation which permitted any person to tender for the conditional purchase of unsold Crown land. Such a purchase would normally have been subject to a condition requiring three years of bona fide continuous residence prior to grant of the freehold title. However, where the purchaser already held fee simple land a purchase of adjoining land would not have been subject to the condition of residence. At some stage the relevant statute was amended to remove the advantage previously available to existing landholders. The question was whether or not a landholder could purchase adjoining land upon the previous, more favourable conditions. " But the question is whether it is a "right accrued" within the meaning of the enactment which has to be construed. They think that the mere right (assuming it to be properly so called) existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed a "right accrued" within the meaning of the enactment. The law contemplated the exercise of a vice-regal discretion to permit rebuilding on land occupied by tenants of the owner. The right is then unaffected and preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. Upon a repeal the former is preserved by the Interpretation Act. The latter is not. In 1968 the legislation was amended to narrow the class of protected person. The respondent to the appeal in the High Court was the daughter of a deceased lessee who had died in 1958. There had been no grant of probate or letters of administration. The daughter claimed the right to occupy the premises pursuant to the legislation in its unamended form. The High Court upheld her claim. That right had arisen out of, and had been defined by, reference to, facts that had occurred before the Act of 1968 was passed. On behalf of the appellant it was submitted that the so-called right was in truth merely an immunity or protection from eviction which endured only so long as the statutory provision creating it remained in force. With all respect, this submission gives insufficient force to the words of s. 83A(1); that subsection purports to create and confer a right of the same kind as the lessee would have had if he had lived and I can see no justification for ignoring these words and refusing to recognize as a right that which the legislature has expressly described as such. It is true that the right was both personal and temporary --- it was not capable of assignment and endured only until representation of the estate of the deceased lessee should be granted or until a court of competent jurisdiction should make an order to putting the respondent out of possession ... However, to say ... that the right "is of a qualified, limited and transitory nature" is to define or explain the nature of the right but is not to deny its existence. Such legislation had provided that any transfer of land to an Aboriginal Land Council should be in fee simple. In May 1986 the Act was amended to provide that in certain circumstances, such land should be granted by way of lease in perpetuity. On 26 April 1984, the Land Council had applied to the Minister for the transfer of certain land. The Minister refused the claim. The Council appealed to the Land and Environment Court. On 3 September 1987 the Minister decided to approve the application to the extent of granting a lease in perpetuity under the amended legislation. In the Land and Environment Court, the Land Council sought a declaration that it was entitled to a transfer in fee simple. The Court of Appeal held that a statutory right would be preserved, notwithstanding the repeal or amendment of the statute, even if the right could only be implemented by a non-discretionary decision of an official or a court, provided that the statutory machinery for obtaining that decision had been set in force before the repeal or amendment. It is easier first to say what it was not. It was not a mere right existing in the members of the relevant class of the community "to take an advantage of an enactment, without any act done by an individual towards availing himself of that right"..., nor was it a right to set in train an application for a grant which the Minister or on appeal, the court might, as a matter of discretion, grant or refuse. On the other hand the Act does not in terms expressly confer a right in the land on the applicant at the time the claim is made. It envisages that there will be an investigation by the Minister of the facts and if the facts establish that the conditions in the definition are satisfied the Minister is then bound to grant the claim. If the Minister refuses, the court on appeal again investigates the same matters but the onus is put on the Minister. As it seems to me, assuming the conditions were in fact satisfied, the Land Council did not merely have a right to have its claim investigated; it had a right to have the claim granted. If the Minister wrongly refused to grant it, it had the right to have the court grant it. The right might be said to be a conditional one, namely, conditional upon the relevant facts being established, but the right was nonetheless a right because it was conditional. The application was refused. The applicant applied to the Administrative Appeals Tribunal for review of the decision. After application, but before determination, the relevant provision was repealed. The repealing Act provided that proceedings instituted under the earlier legislation, but not completed upon repeal, "may be continued on and after that day and, when the proceedings are so continued, the relevant authority and the Commonwealth shall be parties to those proceedings". Reliance was placed upon s 8 of the Acts Interpretation Act 1910 (Cth) (the "Commonwealth Interpretation Act") which was, in terms, similar to s 20 of the State Interpretation Act . The majority (Mason CJ, Deane, Toohey and Gaudron JJ) held that the relevant section of the earlier Act conferred substantive rights. It was not merely "a power to take advantage of an enactment"... . Nor was it a mere matter of procedure ... ; it was a substantive right ... . Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, "although that right might fairly be called inchoate or contingent" ... . This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s.8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act. They are terms that are not used "solely in any technical sense derived exclusively from property law or analytical jurisprudence" ... . I was also referred to the decision of the Queensland Court of Appeal in Australand . That matter concerned a statutory right to avoid a contract for the purchase of a prescribe interest in a managed investment scheme where the invitation to subscribe had been issued in contravention of a provision of the Corporations Law (now repealed). The provision was repealed with effect from 1 July 1998. In certain cases, the transitional provisions continued the operation of the section until 1 July 2000. On 8 September 2003 the appellants purported to avoid their contracts pursuant to the section. At first instance the primary Judge held that such avoidance was of no effect. The Court of Appeal upheld that decision. I was particularly referred to a passage in the judgment of Keane JA at [113]-[117]. That passage offers a useful commentary on the cases to which I have referred but, with great respect, it does not seem to take the matter any further. The cases contemplate at least three distinct situations in which s 20 might be engaged. Firstly, the relevant legislation might create a right which, by force of the legislation, accrues without any qualification or requirement for further action. Such a right will survive repeal of the relevant legislation. Secondly, the legislation may confer a right upon persons having certain qualifications. Such legislation may contemplate an investigation to determine whether a particular person has the relevant qualifications. Using the language of Ho Po Sang , there may be a need for investigation to ascertain whether the requirement for such qualifications is satisfied. Such a right will also survive repeal of the relevant statute. That situation is to be distinguished from that in which an investigation is carried out for the purpose of determining whether or not a right should be granted. The former situation was considered by the New South Wales Court of Appeal in the Land Council case where it was said that a right which could only be implemented "by a non-discretionary decision of an official or a court" would survive, "provided that any statutory machinery has been set in train before the repeal or amendment. " The "non-discretionary decision" seems to be the equivalent of the investigation contemplated in Ho Po Sang . Finally, where a particular procedure has been commenced, there may be a right to have the procedure completed in accordance with the statute in its unrepealed form. This was the case in Esber . Clearly, the proper characterization of the rights conferred by s 361A depends upon the proper construction of the section. In approaching that question, one should keep in mind the apparent purpose of its enactment, namely to recognize and preserve the interests of Aboriginal people who have, whilst residing on reserves, expended time, effort and money in constructing improvements thereon. In a broad sense the provision is remedial, designed to deal with an awkward situation created by changes in the non-indigenous community's attitude towards indigenous people. As I have said, the case was argued substantially upon the basis that either s 344 of the Land Act 1962 operated to allow a lease for a term not exceeding 75 years, or s 61 of the Land Act 1994 applied, allowing for a lease not exceeding 30 years. Such an approach implicitly assumes that the term is to be fixed in some way, perhaps by the Council, and subject to ministerial approval. However that approach is inconsistent with the clear statutory intention that the Minister have no discretion as to the grant of a lease. It also seems unlikely that the Council was to have a discretion to refuse a lease. In either case, power to fix or vary the term could be exercised so as to negate the benefit intended to be conferred upon the owners of improvements. There are no prescribed criteria to guide any such decision-making process. It would be clumsy to try to imply into s 361A some obligation on the Council and/or the Minister to act reasonably. Such an approach might involve a balancing exercise as between community and individual interests. There is nothing unusual about such a process, but this legislation seems to be directed at identifying, acknowledging and protecting individual rights. Whilst s 344 or s 61 may fix the maximum term of any lease, I do not consider that either section limits the actual entitlement of a relevant owner of improvements. Section 361A(1) provides that the relevant time for determining the existence and ownership of improvements is the date of the deed of grant. The improvements must have been on the land at that date. However the subsection also recognizes the possibility that the relevant enquiry may actually be made at some later date. Hence the subsection refers to an improvement which "was owned". The effect of s 361A(1) is that ownership of improvements is not to be prejudiced by such grant. In other words, the owner continues to own them. Pursuant to s 361A(2) the person "shown to own such improvements shall be entitled" to the grant of a lease. Much of the argument in this matter proceeded upon the basis that satisfaction of the Minister for Lands and the Council as to ownership of the improvements was a condition precedent to any right conferred upon the owner. However such an approach puts too much emphasis upon the form of the section and too little upon its clear intention. There can be no doubt that the intention was that the owner of improvements be entitled to a lease. It was necessary for the Council (as trustee) and the Minister for Lands to be satisfied that a particular person was the person entitled to a lease relating to the improvements in question. However that requirement seems to be a process of the kind contemplated in Ho Po Sang , namely an investigation necessary in order to give effect to an entitlement, rather than a condition precedent to such entitlement. It is true that in the Land Council case, Hope JA added the additional requirement that any statutory mechanism have been commenced in order that the entitlement should survive repeal of the relevant statutory provision. In the present case, there is no requirement that the owner take any step for the purposes of s 361A. It was assumed in argument that the owner of improvements was to undertake the task of satisfying the Minister for Lands and the Council of his or her ownership. However the section does not say that, nor does it provide for any particular mechanism to be initiated by the owner. It is possible that Parliament contemplated that the Council or the Minister for Lands would investigate the ownership of improvements with a view to regularizing the position as to ownership and occupancy. The likelihood of such a statutory intention is increased when one considers that the legislation was, as I have said, designed to remedy some of the disadvantage suffered by a severely disadvantaged group in our society. The reference in s 361A(3) to an "application" for the Minister's approval of a lease is to an application by the Council. See s 343. I should also point out that use of the present tense "stands" in s 361A(2)(a) suggests that the entitlement arises at the date of the deed of grant. In my view, the effect of s 361A is to confer a right upon the owner of improvements, subject only to satisfactory investigation of the question of his or her ownership. The right which an owner held pursuant to s 361A, prior to the repeal of the Land Act 1962, was a right to a lease in accordance with that Act. Such right would be within either the first or second category identified above. If the entitlement were to one lease for whatever period the Council decided upon, then that right would survive pursuant to s 20 of the State Interpretation Act. However I consider that s 361A should not be construed as authorizing the grant of only one lease. Section 361A confers an entitlement upon a person who owns improvements on relevant land at a particular point in time. The section does not limit the period during which such a person holds that entitlement. If so entitled as at the date of the deed of grant, an owner will be so entitled for the rest of his or her life. This case provides an example of such an entitlement being addressed many years after the date of the deed of grant. It seems to have been assumed in argument that an owner is entitled to only one lease. Such an approach might not fulfil the apparent objective of allowing the owner of improvements to continue to enjoy the benefits of his or her improvements. The shorter the term of any lease, the less would be the capacity to enjoy such benefit. Section 32C(a) of the State Interpretation Act provides that words in the singular include the plural. It would be more in accordance with the intention of the section if it were read as authorizing the grant of a lease at any time during the life of a relevant person, and regardless of whether any lease had previously been granted pursuant to the section. In the event that such a lease expires during the owner's lifetime, another may be granted. The right to receive a lease is vested in the owner of improvements as at the date of the deed of grant. It cannot be transferred or pass by will or on intestacy. However, where a lease for a fixed term has been granted, and the lessee dies during the term, the right to the balance of the term will be an asset of the estate. Given that the entitlement is to receive a lease from time to time, the better view is that such lease is to be pursuant to the law as it stands at the time at which each lease is granted, and that s 361A should now be read, pursuant to s 511 of the Land Act 1994 , as referring to the relevant provisions of that Act. Counsel for the State submits that s 361A requires that the improvements be situated on the land both at the date of the deed of grant and at the date on which any lease is granted. In my view s 361A should be construed as creating an entitlement to a lease as at the date of the deed of grant, and that subsequent removal of the improvements is irrelevant. The huts were still on the Bukki block as at date of the deed of grant. The foundation slab was, and remains, on the block, having been extended and incorporated into the larger hut. It is probable that there were also gardens, fences and a lavatory on the land at the date of the deed of grant. At least some of the fencing and gardens presently on the block probably pre-date the deed of grant. There is no doubt that there were improvements on the land on 27 October 1986, and that the slabs and, probably, some remnants of earlier fencing and gardens remain at the present time. Section 361A(2) provides that the lease be of the land on which the improvements stand and, where the improvements involve a building or structure used as a residence, a reasonable area of land, being the immediate environs of the improvement. As to the purpose for which the land was used, the relevant time is again the date of the deed of grant. At the time that the Pollards moved on to their land at Bukki in late 1986 or early 1987, Mr Ludwick's niece was living in a small shed on the Bukki block. She resided there for about a year. It is more probable than not that either Mr Ludwick was living there as at 27 October 1986, or that his niece was so residing, or about to commence doing so. Both Mr Ludwick and Ms Yeatman said that their relationship commenced in about 1987. It is reasonable to infer that as at 27 October 1986 the land was being used as a residence. It is possible that it was vacant for a relatively short time, but more probable that it was occupied on that date. In any event a period of temporary vacancy would not detract from the fact that the improvements were being used as a residence. This is particularly so, given that when he left, Mr Ludwick apparently intended to return to the Bukki block after his sojourn at Bilma. His plans changed when he met Ms Yeatman in 1987, but it seems that he (and perhaps they) always intended to move to the Bukki block eventually. The final matter is the area to be leased. It is for the Council to exercise its discretion, having regard to s 361A(2)(b). Again, I do not wish to intervene in the exercise of that discretion. However, as the matter was addressed in the course of argument, I will list some of the relevant considerations without meaning to exclude consideration of other factors. I say nothing about the weight to be given to any relevant factor. In this case, the following matters may be relevant: the sizes of other blocks in the area; access to the creek by Mr Ludwick and others, including traditional owners; the area actually occupied and cleared by Mr Ludwick; other community needs; value of the improvements on the Bukki block as at 27 October 1986 and of improvements erected since that date; and the area needed to facilitate use of the block for residential purposes, including conditions peculiar to the local community. There were similar provisions in the Land Act 1962 (s 21), but I do not understand there to be any dispute arising out of Mr Ludwick's occupation of the premises prior to the present time. A licence to occupy confers a lesser right than does a lease, particularly where the licence is terminable at will. Clearly, Mr Ludwick was residing lawfully on the Yarrabah reserve prior to the deed of grant. There seems to be no suggestion that his residence on the Bukki block was other than at least tacitly accepted by all relevant authorities including the Department and the Council. There is, however, a question as to whether, at the date of the deed of grant, he occupied any building or structure on the Bukki block as his residence. That is a different question from that posed by s 361A(2) which is whether the improvement was being used as a residence. For reasons previously given, I am satisfied that the Bukki block was probably being used as a residence as at 27 October 1986. Such use was either by Mr Ludwick or his niece. As Mr Ludwick seems to have met Ms Yeatman on the beach at Bilma in 1987, it is reasonable to infer that he resided at Bukki until shortly before such meeting. On balance that finding justifies the inference that he was living there as at 27 October 1986. His own evidence is that when he went to the beach he intended that it be only a temporary visit. When he met Ms Yeatman his plans changed. He still wished to return to Bukki but chose to live with her for a time on the beach, then in her house when it was built. However none of this suggests that as at 27 October 1986 he intended to cease residing on the Bukki block. He regularly returned to the block whilst living at Bilma and, in about 1990, returned with Ms Yeatman to live there permanently. Whilst I would infer that Mr Ludwick was occupying the Bukki block as his residence in October 1986, s 452A contemplates a licence to "continue" such occupation. It may be arguable that a break of three years makes such continuation impossible. That question was not really ventilated in argument. Given my view that Mr Ludwick is entitled to a lease, it is probably not necessary that I reach any conclusion concerning his entitlement to a licence. There has been no recent challenge to his right to remain on the Bukki block. I certainly see no point in deciding the question simply so that Mr Ludwick may submit that his occupation to date is attributable to such a licence, and that his period of occupation should not be deducted from the term of any future lease. Although submissions were made concerning that matter, I consider that it will be better to leave it until the parties have had an opportunity to consider these reasons. I will then list the matter for further directions with a view to determining whether any point will be served by resolving the question of Mr Ludwick's entitlement to a licence, and whether I should now consider the effect of his entitlement in connection with the operation of the Native Title Act . I will also receive submissions as to appropriate forms of order. I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. | deed of grant of land in trust whether lease pursuant to s 316a of the land act 1962 (qld) interpretation and effect of s 361a the land act 1962 (qld) ownership of improvements by somebody other than the crown or the holder of the fee simple title pursuant to a deed of grant whether improvements on land prior to the deed of grant whether ss 343 and 344 of the land act 1962 (qld) or ss 57 and 61 of the land act 1994 (qld) should be applied as imposing a requirement for ministerial approval of any lease and in fixing its term application of s 20 of acts interpretation act 1954 (qld) deed of grant of land in trust whether licence pursuant to s 425 land act 1994 ( qld) whether continued occupation of land native title native title |
The Tribunal had affirmed the decision of a delegate of the first respondent to refuse to grant a protection visa to the appellant. 2 The appellant is a citizen of the Philippines who arrived in Australia on 18 December 1998. She lodged an application for a protection visa under the Migration Act 1958 (Cth) (the Act) with the Department of Immigration and Multicultural Affairs on 18 January 1999. 3 In her visa application, the appellant claimed to have a fear of persecution due to her uncle's political campaigning in opposition to incumbent politicians in the Philippines. The appellant claimed that after these politicians won an election, her uncle had to move away and she and other members of her family had been subjected to threats and intimidation. She stated that she changed her name and moved to Australia to escape the threats and intimidation. On 22 January 1999, a delegate of the first respondent refused the application. 4 On 16 February 1999, the appellant applied to the Tribunal for a review of the decision of the delegate. The appellant was at that time represented by a solicitor. You are now entitled to come to a hearing of the Tribunal to give oral evidence in support of your claims. You are also entitled to ask the Tribunal to obtain oral evidence from another person. In response to the question contained in the document: "DO YOU WANT TO COME TO A HEARING? ", the appellant ticked the "NO" box. The appellant's solicitor also submitted short written submissions to the Tribunal. The Tribunal then proceeded to make a decision without holding a hearing. The Tribunal's decision affirming the decision of the delegate was issued on 22 June 1999 saying that because of the "paucity of information" and the appellant's failure to attend the hearing, it had come to the view that the threats, if they were made, were not of a nature to cause the appellant harm amounting to persecution. 8 On 1 June 1999, amendments to the Act made by the Migration Legislation Amendment Act (No 1) 1998 (Cth) (the Amending Act) became effective. The amendments affected those provisions of the Act which dealt with the entitlement of a visa applicant to attend a hearing before the Tribunal. It follows that the invitation to the hearing and the appellant's response thereto, were made before the amendments took effect, and the Tribunal's decision was made three weeks after the amendments took effect. (3) If any of the paragraphs in subsection (2) of this section apply, the applicant is not entitled to appear before the Tribunal. (2) This section does not prevent the Tribunal from rescheduling the applicant's appearance before it, or from delaying its decision on the review in order to enable the applicant's appearance before it as rescheduled. The appellant claimed that she was not aware of the Tribunal's decision until just before she filed the application. The Tribunal did not invite the applicant to appear before it to give evidence and present arguments relating to the issues arising in relation to the decision under review. However, the Federal Magistrate found that this did not result in the Tribunal again having to invite the appellant to a hearing, because the signed "Response to Hearing Offer" form stood as the appellant's consent under s 425(2)(b), to the Tribunal conducting the review in her absence. As such, s 425(1) did not apply, and the Tribunal did not act in contravention of that section in not issuing the invitation. The Federal Magistrate referred to the case of Liu v Minister for Immigration and Multicultural Affairs [2001] FCA 1362 ; (2001) 113 FCR 541 ( Liu ) in support of his finding. 13 The Federal Magistrate also found that, as s 425(1) did not apply, the requirements of s 425A were not enlivened and, therefore, no notice, as described in that section, was required. Similarly, as the appellant had not relevantly been invited to appear, s 426A had no application and was not contravened by the Tribunal. Grounds 1, 1A and 2, therefore, failed. 14 In relation to grounds 3 and 4 the Federal Magistrate found that "paucity of information" was the basis of the Tribunal's conclusions but that this did not indicate jurisdictional error. Further, such "paucity of information" had prevented the Tribunal from giving any consideration to the appellant being a member of a particular social group for the purposes of ground 4. Finally, ground 5 failed as the Federal Magistrate found that there was no evidence that extraneous material had been relied upon by the Tribunal. (b) The Federal Magistrate erred by failing to find the Tribunal committed jurisdictional error of law by non-compliance with s 425A of the Act in that the Tribunal did not give to the appellant a notice pursuant to s 425A of the Act stating the day on which the appellant was scheduled to appear. (c) The Federal Magistrate erred by failing to find the Tribunal committed jurisdictional error of law by non-compliance with s 426A of the Act in that the Tribunal failed to exercise its discretion under s 426A in deciding whether to take further action to allow or enable the appellant to appear before it. 17 As to ground 1, counsel for the appellant submitted that an important effect of the amendments was to give applicants a new right, namely, a right to make submissions at a hearing before the Tribunal. This right was additional to the pre-existing right to give evidence at the hearing. The appellant contended that after 1 June 1999, it was necessary under s 425(1) for the Tribunal, before it made its decision, to invite the applicant to attend a hearing to give evidence and make submissions. The appellant submitted that the decision of the Tribunal was attended by jurisdictional error because the Tribunal had not invited the appellant under s 425 of the Act to attend a hearing to give evidence and make submissions at that hearing. The appellant submitted that the Tribunal had thereby denied the appellant the benefit of the legislative amendments. 18 The appellant submitted that the completion of the "Response to Hearing Offer" form by the appellant could not amount to "consent" within the meaning of s 425(2)(b) of the Act. This was because the form was sent in response to an invitation to attend a hearing which did not purport to comply with the Act as amended, and failed to offer the appellant the benefits of the "substantive new rights", namely, the right to give evidence and make submissions at the hearing. 19 The appellant also submitted that the reliance by the Tribunal upon Liu was misplaced, because that case was distinguishable. In fact, said the appellant, if anything, the case supported the appellant's contention. The appellant also submitted that SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 231 ALR 592 ( SZBEL ) supported her contention that on a proper construction of ss 425, 425A, 426 and 426A of the Act, the Tribunal is required by s 425(1) to issue an invitation to the hearing before there can be any "valid" consent under s 425(2)(b). 20 In my view, the appellant's contentions are not to be accepted. 21 One of the amendments introduced by the Amending Act makes provision in s 425(2)(b) for an applicant to consent to the Tribunal deciding the review without the applicant appearing before it. The Act also provides that in circumstances where s 425(2) applies, s 425(1) does not apply. Further, the Act does not prescribe nor qualify the means by which an applicant may consent to the Tribunal deciding the review in the absence of a hearing within the meaning of s 425(2)(b) of the Act. In particular, the Act does not prescribe a procedure by which the Tribunal is to inform an applicant of his or her rights in relation to a hearing, as a precondition to the applicant giving a "valid" consent within the meaning of s 425(2)(b). Nor, in my view, does the proper construction of the Act require the issuing of an invitation to a hearing as a precondition to the giving of a "valid" consent. To the contrary, the scheme of the Act operates on the basis that an invitation to a hearing is only required to be given to an applicant, if none of the conditions described in s 425(2) is met. The Act contemplates the giving of consent as an event which precedes and exempts the Tribunal from issuing, any invitation to a hearing. Accordingly, in my view, the appellant's contention that the completion and forwarding of the "Response to Hearing Offer" form did not amount to the appellant consenting to the Tribunal deciding the review without the appellant appearing before it, cannot be accepted. 22 In Liu , each of the applicants had, prior to the amendments coming into effect, attended a hearing before the Tribunal. However, the Tribunal member resigned before deciding the review, and a new member of the Tribunal was appointed to complete the review. After the amendments had come into effect, the second member made a decision and, thereby, completed the review, without inviting the applicants to a second hearing. The Full Court decided that there was no absolute right to a hearing before the Tribunal member who makes the review decision, and that the Tribunal had not fallen into jurisdictional error by not inviting the applicants to a second hearing. 23 The appellant is correct in her contention that Liu is distinguishable on the facts from this case. However, contrary to the submissions of the appellant, the Liu case does not support the proposition contended for by the appellant. It is true that the Full Court acknowledged that the Amending Act introduced substantive new rights, including a right to make submissions at a hearing, but the Full Court did not consider the question of whether there are any conditions associated with an applicant giving a "valid" consent within the meaning of s 425(2)(b). Further, the Full Court did not find that, on the proper construction of the Act, consent could not validly be given unless there had been a prior invitation to a hearing issued under s 425(1). 24 Likewise, in SZBEL the High Court did not consider the question of whether there are any conditions associated with an applicant giving a "valid" consent under s 425(2)(b). Further, the case is not authority for the proposition advanced by the appellant that, on a proper construction of the Act, it is necessary for the Tribunal to issue an invitation to a hearing before there can be a "valid" consent under s 425(2)(b). 25 Accordingly, ground 1 of the appeal is dismissed. 26 Grounds 2 and 3 of the appeal are also dismissed for the reasons given by the Federal Magistrate. In short, each of s 425A and s 426A is only enlivened if s 425(2) does not apply. In this case, s 425(2)(b) applied. It is well established that s 425 and s 425A are to be read together and s 425A does not impose a separate obligation to that in s 425. The process described in s 425A is the mechanism by which the invitation referred to in s 425 is to be issued ( VNAA v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 134 ; (2004) 136 FCR 407 at 413; Minister for Immigration and Multicultural and Indigenous Affairs v SZFHC [2006] FCAFC 73 ; (2006) 231 ALR 630). 27 It follows, therefore, that the appeal is dismissed with 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 Siopis. | applicant declining offer to attend hearing of refugee review tribunal migration act 1958 (cth) subsequently amended to introduce right to make oral submissions at hearing whether offer to attend a hearing had to be made again whether applicant had consented to the tribunal deciding the review without the applicant appearing before it migration |
Under s 36(2) of the Act the criterion for a protection visa is that the applicant for the visa is (relevantly) a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol (meaning, in accordance with s 5(1) , the 1951 Convention relating to the Status of Refugees and the 1967 Protocol relating to the Status of Refugees). Section 474 of the Act protects "privative clause decisions" (defined to include decisions with respect to protection visas) from challenge other than on the grounds of jurisdictional error. The appellant is a citizen of Israel. He arrived in Australia on 12 November 2006. He applied for a protection visa on 8 November 2007. The first respondent's delegate refused the application on 29 November 2007. The appellant applied to the Refugee Review Tribunal for a review on 27 December 2007. The Tribunal affirmed the decision on 3 April 2008. The appellant appealed to the Federal Magistrates Court on 6 May 2008. The Federal Magistrates Court dismissed the application on 12 August 2008 on the basis that it was open to the Tribunal on the available material to reach the conclusions it did. On 2 September 2008 the appellant filed a notice of appeal to this Court from the orders of the Federal Magistrates Court. The matter came before Gray J for hearing on 19 November 2008. That judgment was subsequently followed at first instance in Applicant VCAD of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1005. On appeal, the Full Court, at the very least, cited without disapproval the judgment in Erduran . See VCAD v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 1 at [13] in the judgment of Gray J and at [33]-[34] in the joint judgment of Sundberg and North JJ. There must be some considerable doubt as to whether the Tribunal addressed the two questions: whether conscientious objection to military service itself could amount to political opinion; and whether the differential application of a law, otherwise of general application, to persons with a particular political opinion could give rise to a well-founded fear of persecution for a Convention reason. In substance, the amended notice alleges that the Tribunal asked the wrong question (and thus constructively failed to exercise its jurisdiction) by failing to follow the process laid out in Erduran v Minister for Immigration and Multicultural Affairs (2002) 122 FCR; [2002] FCA 814. It is first necessary to make a finding of fact as to whether the refusal to undergo military service arises from a conscientious objection to such service. If it does, it may be the case that the conscientious objection arises from a political opinion or from a religious conviction. It may be that the conscientious objection is itself to be regarded as a form of political opinion. Even the absence of a political or religious basis for a conscientious objection to military service might not conclude the inquiry. The question would have to be asked whether conscientious objectors, or some particular class of them, could constitute a particular social group. If it be the case that a person will be punished for refusing to undergo compulsory military service by reason of conscientious objection stemming from political opinion or religious views, or that is itself political opinion, or that marks the person out as a member of a particular social group of conscientious objectors, it will not be difficult to find that the person is liable to be persecuted for a Convention reason. It is well-established that, even if a law is a law of general application, its impact on a person who possesses a Convention-related attribute can result in a real chance of persecution for a Convention reason. See Wang v Minister for Immigration & Multicultural Affairs [2000] FCA 1599 (2000) 105 FCR 548 at [65] per Merkel J. Forcing a conscientious objector to perform military service may itself amount to persecution for a Convention reason. The Full Court did not disagree with the statements of principle in Erduran and those statements have been applied subsequently ( Applicant VEAZ of 2002 v Minister for Immigration and Multicultural Affairs [2003] FCA 1033 at [21] --- [22], VCAD v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1005 at [33] , VCAD v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 1 at [34] , and Minister for Immigration and Multicultural and Indigenous Affairs v WALU [2006] FCA 657). The parties proceeded on the common basis that resolution of the appeal required the Tribunal's reasons to be considered but that, in so doing, over-zealous scrutiny with an "eye keenly attuned to the perception of error" should be avoided (citing Minister for Immigration and Multicultural and Ethnic Affairs v Wu Shan Liang and Others [1996] HCA 6 ; (1996) 185 CLR 259 at 271 --- 272). The appellant also observed that this required consideration of the whole of the Tribunal's reasons rather than any assumption that "ambiguity in the Tribunal's reasons be resolved in the Tribunal's favour" ( SZCBT v Minister for Immigration and Multicultural Affairs [2007] FCA 9 at [26] ). Further, that this was not a case of ambiguity in the expression of reasons; rather, consideration of the whole of the Tribunal's reasons disclose that the Tribunal misunderstood and misapplied the principles set out in Erduran and thus asked itself the wrong question. (2) Because of this, Erduran identified that in a case involving refusal to perform military service it was necessary first to make a factual finding whether the refusal arises from a conscientious objection and second to consider whether the conscientious objection arises from a political or religious opinion or might itself be a political opinion or whether the appellant might be the member of a relevant social group. (3) The Tribunal referred to Erduran but misapplied it. In particular, the Tribunal's reasons disclose that the Tribunal understood that the non-discriminatory application of laws of general application to a conscientious objector could not engage the 1951 Convention if the conscientious objection is not "a significant and essential reason for motivating the persecutor to harm" the appellant. Erduran stands for a contrary proposition, namely, that the non-discriminatory application of laws of general application to a conscientious objector may itself constitute Convention related persecution. (4) Other parts of the Tribunal's reasons support this inference of error. The Tribunal did not make a positive finding about the appellant's refusal to undergo military service as constituting a conscientious objection or not. Rather, the Tribunal appears to have assumed that the appellant was a conscientious objector. Such an assumption cannot be reconciled with a proper understanding of the reasoning in Erduran . Further, the Tribunal expressed itself in terms of the appellant's actual or imputed political opinions without reference to the possibility that the appellant's conscientious objection was itself a political opinion. The Minister submitted that while the Tribunal's reasons do not precisely accord with the steps identified in Erduran , that sequential approach was not required. The Tribunal addressed the substance of the relevant issues. The Tribunal did not assume the appellant to be a conscientious objector but assumed his claims to be a fear of persecution by reason of his conscientious objection. It is implicit from the Tribunal's reasons that it did not accept that the appellant was a genuine conscientious objector. The Tribunal considered the issues of political opinions and social groups (being the only potential issues raised by the material). It did so by reference to both actual and imputed political opinions. As to the former, the Tribunal did not think the appellant's political opinions extended beyond his aversion to military service. As to the latter, the Tribunal was satisfied that the appellant would not be the subject of any adverse imputed political opinion. The Tribunal also did not consider that the material supported any finding of membership of any social group. The Tribunal's reasons, considered as a whole, cannot be reconciled with the reasoning in Erduran . The Tribunal appears to have assumed that the non-discriminatory application of a law of general application is incapable of constituting persecution for any reason within the scope of the 1951 Convention. This assumption explains: - (i) the Tribunal's focus on finding some significant and essential motivator for the persecution separate and distinct from the application of the laws themselves, (ii) the lack of any finding by the Tribunal as to whether the appellant's aversion to military service was for the reason of conscientious objection, and (iii) the Tribunal's treatment of actual and imputed political opinions. Each of these aspects of the Tribunal's reasoning is contrary to the approach in Erduran which accepts that, depending on the particular facts found, the non-discriminatory application of a general law may constitute persecution for a reason within the scope of the 1951 Convention. Given the basis on which this appeal proceeded (as set out in [5] above) I consider that the Tribunal asked the wrong question and thus constructively failed to exercise its jurisdiction. Accordingly, the appeal must be allowed. I will hear the parties on the question of costs before this Court and the Federal Magistrates Court. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | application for a protection visa appeal from federal magistrates court upholding decision of refugee review tribunal conscientious objection to military service political opinion whether tribunal asked the wrong question. migration |
The land and waters of the Determination Area described in detail in the Schedule to the Orders made today, and also illustrated as Areas 1 and 2 on the Plan annexed to the Orders, are more broadly described as the land and waters on the western side of Cape York Peninsula landward of the high water mark at mean spring tide of the sea of the Gulf of Carpentaria, bounded to the north by the Embley River and to the south by the Edward River and extending in the east to the upper reaches of the watercourses that drain into the Gulf of Carpentaria. The application is brought by Anthony Kerindun, Janine Chevathun and Allison Woolla as applicants on their own behalf and for and on behalf of the members of the Wik and Wik Way Native Title Claim Group. The parties that elected to be joined as respondents to the application are the State of Queensland; the Ports Corporation of Queensland; the Cook Shire Council; Albatross Hire Pty Ltd; 15 commercial fishing authority licence holders by their agent the Queensland Seafood Industry Association; and Rio Tinto Aluminium Limited (formerly Comalco Aluminium Limited). Although the Commonwealth entered an appearance, it elected to withdraw as a respondent on 2 September 2008. This application was commenced on 14 September 2001. On 14 March 2001, the State of Queensland, Rio Tinto Aluminium Limited ("Rio Tinto"), Cape York Land Council, the Council of the Shire of Aurukun, Mapoon Aboriginal Council, Napranum Aboriginal Council, New Mapoon Aboriginal Council and a number of traditional owners entered into an agreement known as the Western Cape Communities Co-existence Agreement ("the Co-existence Agreement"). The Co-Existence Agreement is an area indigenous land use agreement ("ILUA") under subdivision C of Division 3 of Part 2 of the Act. The ILUA Area for the Co-Existence Agreement is defined to include all the land and waters the subject of ML6024 and ML7024 which are held by Rio Tinto; the land and waters of Albatross Bay and the rivers and creeks running into it; and certain other land and waters adjacent to ML7024. On 27 August 2001, the Co-Existence Agreement was registered on the Register of Indigenous Land Use Agreements as an area agreement under the provisions of the Act. The Co-Existence Agreement cast obligations upon the traditional owners to commence determination applications under the Act in respect of any or all parts of the ILUA area, according to the terms and conditions of the Co-Existence Agreement. Such an application is regarded as a conforming application for the purposes of that agreement. Prior to the parties entering into the Co-Existence Agreement, a claim group on behalf of the Wik and Wik Way Peoples commenced a native title determination before the National Native Title Tribunal on 24 March 1994 and proceedings QG6001 of 1998 were commenced in this Court by which a determination of native title rights and interests was sought. Determination application QUD6001 of 1998 came to be described as the main application. Three determinations of the subsistence of native title rights and interests have been made by the Court in relation to the land and waters the subject of the claim in the main application. The first determination was made by Justice Drummond on 3 October 2000 in respect of what was described as Part A of the determination application. Part A of the application was confined to lands that had always been unallocated Crown lands or lands that had only ever been subject to forms of title granted for the benefit of Aboriginal peoples ( Wik Peoples v State of Queensland [2000] FCA 1443). Part B of the application comprised the balance of the lands and waters of the claim area, which contained lands held under pastoral and mining titles. The parties to the main application negotiated, through mediation processes, a resolution of the Part B claim and on 13 October 2004, Justice Cooper made two determinations of the native title rights and interests of the Wik and Wik Way Peoples in respect of those lands and waters ( Wik Peoples v State of Queensland [2004] FCA 1306). On 12 June 2003 and 4 September 2003, the present application was amended with leave of the Court. Schedule E to the application was amended on 12 June 2003 to properly and effectively describe the native title rights and interests. Schedule G was amended on that date to properly identify the details of the activities currently being carried out in respect of the land and waters by the native title claim group. Schedule H was amended on that date to re-define the land and waters of the claim so as to sit consistently with the main application. The Wik and Wik Way Peoples native title determination application (QG6001/98) had been amended on 7 September 2001 to remove from the determination application any claim for a determination of native title in relation to any part of the land and waters the subject of this application. The application was further amended to record that the Wik Peoples compensation application (QG6213/98) was discontinued on 2 September 2003 pursuant to leave granted by the Court on 25 August 2003. On 18 September 2003, the application was registered on the Register of Native Title Claims. The National Native Title Tribunal notified the claim publicly in accordance with s 66 of the Act on 7 April 2004. The notification period under the Act expired on 6 July 2004. The application as then formulated involved a sea component. On 29 April 2009, the Court gave leave to the claimants to amend the application by removing the sea component of the claim from the proposed Determination Area. Accordingly, the Determination Area in this application is not the subject of any other claim or determination by the Court. After mediation, the parties to their credit reached a final agreement in respect of this application, executed by them between 25 June 2009 and 6 July 2009 for the purposes of a Consent Determination by the Court under s 87(2) of the Act. The agreement was filed in the Court on 6 July 2009. Section 87 of the Act provides, relevantly for present purposes, that if, after a particular date, the parties to a determination application reach agreement, in writing, on the terms of a proposed order the Court might make in the disposition of the proceeding, the Court may, if the proposed orders are within the power of the Court (i.e. within jurisdiction) and, if it appears to the Court to be appropriate to do so, make orders in, or consistent with, the terms of the agreement without conducting a hearing of the proceeding. Section 13(1) of the Act provides that an application for a determination of native title may be made under Part 3 of the Act in relation to an area for which there is no approved determination of native title. The present application is made under s 61 of the Act within Part 3 and there is no approved determination in relation to the land and waters within the Determination Area. I am familiar with the material in this application having been involved in the case management of the proceedings and having conducted a number of directions hearings in the proceedings. I am satisfied that the orders sought are plainly within power. Orders made under s 87 of the Act take effect not only inter-parties in the resolution of the claims made in the proceedings but represent an independent judicial determination, in the exercise of the judicial power of the Commonwealth, that may be asserted, as a matter of law, against anyone. Although the Act by s 223(1)(c) in part defines native title or native title rights and interests by reference to the rights and interests recognised by the common law of Australia, a determination of native title expresses the recognition and protection of those rights and interests in relation to land and waters defined and described in s 223 of the Act which find their origin in traditional laws and customs, not the Act ( Members of the Yorta Yorta Aboriginal Community v State of Victoria (2002) 214 CLR 422 at [75] and [76] per Gleeson CJ, Gummow and Hayne JJ). A number of considerations are to be taken into account in determining whether the proposed orders appear appropriate to the Court. First, the Act recognises and encourages the resolution of applications by mediation, negotiation and ultimately agreement without the need for a hearing and the assessment of evidence and fact-finding by the Court necessary in the course of a resolving a controversy. Second, the Court will be concerned to understand and place emphasis upon whether the agreement is freely made on an informed basis by all parties and whether the parties are represented by experienced independent lawyers. In the case of a State party representing the public interest, the Court will consider whether appropriate consideration has been given to the issues raised by the proposed consent determination. Third, so far as the State is concerned, the Court recognises that a State has access to its own archival material and generally has had a long period of engagement with Aboriginal communities and is therefore likely to be familiar with the historical arrangements within those communities. Fourth, although it is not necessary for the Court to consider the body of material that would be available to it in the course of a contested hearing, the Court ought to have regard to sufficient material which is capable of demonstrating that the agreement and the proposed orders are "rooted in reality" (" Native Title --- A Constitutional Shift? ", University of Melbourne Law School, JD Lecture Series, Chief Justice French, 24 March 2009). In that sense, the Court ought to be satisfied that the proposed orders are prima facie appropriate in order to satisfy the test under s 87(2) of the Act. In this case, the parties are represented by independent lawyers experienced in the conduct of native title proceedings and the analysis of issues arising in such proceedings for the purposes of the Act. Negotiations between representatives of the Wik and Wik Way claim group and the State concerning the nature and extent of native title in the claim areas the subject of the main application have been taking place since 1996. There has been a long history of engagement on the nature of the traditional and customary rights and interests of the Wik and Wik Way Peoples, their connection with their country and the practice over time of those traditional laws and customs. The State of Queensland has been a participant in these negotiations arising out of the main application and in this application. Anthropological reports and affidavits supporting those reports, prepared in the course of the main application, were submitted to the State in 1997, 2000, 2001 and 2004. On 15 July 2005, the State advised the claimants that the connection material identified by the applicants was sufficient to enable the State to proceed with substantive negotiations in relation to the land component of this application. In this application, the applicants have retained Professor Peter John Sutton to assist them in isolating material in relation to connection with and occupation by the Wik and Wik Way Peoples of the land and waters of the Determination Area, the early society at sovereignty, the normative laws and customs acknowledged and observed by the society at and since sovereignty and the genealogical record. Professor Sutton is an Australian Research Council Professorial Fellow of the School of Social Sciences at the University of Adelaide and in the Division of Anthropology at the South Australian Museum. Professor Sutton is also an Honorary Research Fellow of the Institute of Archaeology at University College, London. Professor Sutton has worked with Aboriginal people since 1969, mainly in remote and rural areas of far North Queensland and the Northern Territory. Professor Sutton speaks languages from western and eastern parts of Cape York Peninsula and he is extensively published in the discipline of anthropology. Professor Sutton has been retained as a linguistic and anthropological consultant in relation to the native title claims of the Wik and Wik Way claim group since 1992. He has carried out studies of the Wik and Wik Way Peoples and worked with members of the claim group and their predecessors since 1976. Professor Sutton had regard to his own research over this long period and the research of other recognised anthropologists in formulating a report dated October 2008 described as an "Anthropological Overview" for consideration by the Court for the purposes of s 87 of the Act. Specifically, Professor Sutton has given extensive consideration to the nature and content of the rights and interests possessed by the Wik and Wik Way Peoples under traditional laws acknowledged and traditional customs observed by them, the continued acknowledgement and observance of those traditional laws and customs and the continued connection of the Wik and Wik Way Peoples to the land and waters of the main application and the land and waters the subject of the present application, through the practice of those laws and customs by the Wik and Wik Way Peoples. Professor Sutton has also had regard to significant anthropological research and investigation on the same topic conducted by Dr David Martin. I particularly note the discussion by Professor Sutton of the nature of the traditional rights practised by the Wik-Way Peoples and the "order and character" of those rights and customs. It is not necessary to set out in these reasons the details of the investigation conducted by Professor Sutton and Dr Martin. However, it is clear that there is extensive evidence of inhabitation of the Determination Area by Aboriginal people for millennia. Linguistic analysis indicates that the Wik language has evolved over at least 300 years and that these linguistic patterns developed in an area now inhabited by Wik speaking Peoples. There is firsthand evidence of Aboriginal society in the area now inhabited by the Wik and Wik Way Peoples. The evidence is to be found in the logs and journals of Captain Willem Jansz in the Duyfken as early as 1606. Captain Jansz mapped and named Cape Keerweer. The crew of the Dyufken engaged with Aboriginal people at Edward River and near Archer River. Observations of the area were made by Matthew Flinders. The Jardine brothers engaged with Aboriginal people in the course of their journey through Cape York Peninsula in December 1894. Mission and government records from as early as 1897 record the presence of Aboriginal people in a collective or organised way in connection with the land and waters of the main application and this application. The anthropological record includes the work of Ursula McConnel, Donald Thomson, Lauriston Sharp, Frederick McCarthy, John Taylor, John von Sturmer and Athol Chase. Linguistic studies were conducted by Ursula McConnel, Donald Thomson, Kenneth Hale, John von Sturmer and others. All of the anthropological reports have been provided to the State. Section 94A of the Act requires that an order for a determination of native title must set out details of the matters mentioned in s 225 of the Act which must be read together with s 223 of the Act. These sections give meaning to the terms "determination of native title" and "native title" and "native title rights and interests". In Members of the Yorta Yorta Aboriginal Community v State of Victoria (supra) at [76], Gleeson CJ, Gummow and Hayne JJ treated the statutory elements contained in s 223 as central. The mandatory requirements for a determination of native title are these. The native title rights and interests must be communal, group or individual. They must be rights and interests in relation to land or waters. They must be possessed under the traditional laws acknowledged and the traditional customs observed by Aboriginal peoples; Aboriginal people by their law and customs must have a connection with the land or waters; and the native title rights and interests must be recognised by the common law of Australia. I am satisfied that the anthropological material demonstrates that the Wik and Wik Way Peoples are descended from a society of Aboriginal people who were in occupation of the land and waters of the Determination Area at sovereignty and who formed a society united by their acknowledgement and observance of a normative body of traditional laws, customs and beliefs. Through their continued acknowledgement and observance of these normative laws and customs, the Wik and Wik Way Peoples have, since sovereignty, maintained a connection with the Determination Area. I am satisfied that the content of those native title rights and interests which derive from the practice of traditional laws and customs have been identified and established through the anthropological material. The agreement provides for consent orders entirely consistent with the anthropological material. I am satisfied the proposed orders address each of the elements of s 225 of the Act. Thus, I am satisfied that the orders appear appropriate in accordance with s 87 of the Act. Order 11 of the proposed orders provides that native title is not to be held in trust. By Order 12, Ngan Aak-Kunch Aboriginal Corporation RNTBC ("the Corporation") is to be the prescribed body corporate for the purposes of s 57(2) of the Act and is to perform the functions set out in s 57(3) after becoming a registered body corporate. Section 59 of the Act provides that regulations may prescribe the kinds of body corporate that may be determined to be a prescribed body corporate for the purposes of s 57(2)(b) of the Act. Regulation 4(1) of the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) ("the Native Title Regulations") provides that an Aboriginal and Torres Strait Islander corporation is prescribed if it is registered for the purposes of being the subject of a s 57 determination. Their intention was that it would be nominated as the prescribed body corporate for the purpose of s 57(2) of the Act for the first approved determination of native title in the main application and also for subsequent determinations of native title in which the Wik and Wik Way Peoples were determined to be the native title holders. The Corporation's Constitution was approved by the Office of the Registrar of Aboriginal Corporations on 16 October 2002. A consent order was made in QG6001/1998 by Justice Cooper on 14 April 2003 that the Corporation was to be the prescribed body corporate for the purpose of s 57(2) of the Act and to perform the functions in s 57(3) of the Act after becoming a registered native title body corporate. Orders in the same terms were incorporated into the second and third approved determinations on 13 October 2004. The Corporation became registered as a corporation under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (the CATSI Act) on 1 July 2007, when that act and the Corporations (Aboriginal and Torres Strait Islander) Consequential, Transitional and Other Measures Act 2006 (Cth) commenced and the ACA Act was repealed. The name of the Corporation was changed on 19 February 2009 to Ngan Aak Kunch Aboriginal Corporation RNTBC, as required by s 88-10(2) of the CATSI Act. On 16 April 2009 a meeting was held of the Wik and Wik Way Peoples in Aurukun. At that meeting the terms of the proposed consent determination were considered. The agreement was approved and authorised. At that meeting the Corporation was nominated as the prescribed body corporate for the purpose of s 57(2) and to perform the functions in s 57(3) after becoming a registered native title body corporate. A further meeting on that date of the directors of the Corporation resolved to accept and consent to that nomination. The name of the Corporation was further amended at a meeting on 17 June 2009 from Ngan Aak Kunch Aboriginal Corporation RNTBC to Ngan Aak-Kunch Aboriginal Corporation RNTBC. A new rule-book was also adopted and the previous constitution repealed. "Native title holders" is defined as "those members of the Wik and Wik Way Peoples who from time to time hold native title rights and interests in relation to a determination area". I am satisfied that the Corporation is a prescribed body corporate for the purposes of s 57 of the Act and Regulation 4(1), and that Regulation 4(2) is satisfied. These orders made today give recognition within the Australian legal system to the native title rights and interests of the Wik and Wik Way Peoples in relation to the Determination Area, born out of traditions honoured and customs practised by the ancestors of the claimants and observed and practised by their descendents continuously over time and recognised and protected under the Native Title Act 1993 (Cth). I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. [2] This is the subdivision which provides the "right to negotiate" procedures of the NTA. | consideration of an application for orders supported by an agreement for a consent determination of native title rights and interests in the land and waters of the determination area consideration of s 87 of the native title act 1993 (cth) consideration of whether proposed orders appear "appropriate" to the court and whether orders ought to be made as sought determining native title rights and interests in the wik and wik way peoples in land and waters broadly described as the land and waters on the western side of cape york peninsula landward of the high water mark at mean spring tide of the sea of the gulf of carpentaria, bounded to the north by the embley river and to the south by the edward river and extending in the east to the upper reaches of the watercourses that drain into the gulf of carpentaria native title |
2 His Honour dismissed, under Rule 44.12(1)(a) of the Federal Magistrates Court Rules 2001 , an application to the Federal Magistrates Court that the respondents show cause why a remedy should not be granted to the applicant in relation to a decision of the Refugee Review Tribunal ('the RRT') signed on 31 October 2005. The applicant sought that the Federal Magistrate send the matter back to the RRT to 'decide the matter afresh'. 3 Rule 44.12(2) of the Federal Magistrates Courts Rules 2001 provides that dismissal of an application to show cause pursuant to Rule 44.12(1)(a) is an interlocutory decision. Leave to appeal is therefore required before the substance of the appeal needs attention. 5 The applicant is a citizen of India. He arrived in Australia on 18 February 2005. On 31 March 2005 he lodged an application for a protection (Class XA) visa with the Department of Immigration and Multicultural and Indigenous Affairs (as it was then called) under the Migration Act 1958 (Cth). On 3 June 2005 a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs refused to grant a protection visa. On 27 June 2005 the applicant applied for review of the delegate's decision. 6 The applicant gave evidence before the RRT on 25 October 2005. He claimed that he had suffered harassment and threats from Muslim militants following his military service in Kashmir and that he feared for his life and the lives of his family and believed the Indian authorities could not protect him. 7 In a written statement before the RRT the applicant said that after completing his schooling in the mid-1970s he joined the Indian Army and had a distinguished career. In the years preceding his departure from India a terrorist group known as Laskar-e-Toiba demanded information from him about military security. One morning three people attempted to kidnap his daughter but the attempt failed when his wife screamed. Terrorists associated with Laskar-e-Toiba tried to kidnap him from a military camp in Kashmir but the attempt failed and a number of the terrorists were seriously injured. He retired from military service after this event and returned to his home state of Kerala. He stated that terrorists from Laskar-e-Toiba wanted to take revenge for the injuries sustained by their colleagues in the failed kidnapping attempt upon him. 8 In oral evidence before the RRT the applicant stated that he believed those who tried to kidnap his daughter were from both Laskar-e-Toiba and Al-Qaeda. He said that he retired from the military on 31 July 2000, six or seven months after the kidnapping attempt on his daughter. 9 According to the applicant he was thereafter harassed for information from time to time and in various places by the same Islamic militant groups until he departed for Australia in February 2005. 10 Later, before the Federal Magistrate, the applicant said his assertion that members of Laskar-e-Toiba had attempted to kidnap him was a mistake and in fact he was being pursued by Al-Qaeda terrorists. 11 The RRT found the applicant's claims 'far fetched', indeed it found the claims to have been 'fabricated'. It concluded that it was not satisfied the applicant had a well founded fear of persecution and decided he did not satisfy the criteria for a protection visa. Accordingly it affirmed the decision of the delegate not to grant a protection visa. 12 The applicant, as he was entitled to do, applied to the Federal Magistrate's Court for judicial review of the decision of the RRT. 13 The Federal Magistrate records in his Reasons for Judgment that orders were made for the filing of material, including evidence upon which the applicant might wish to rely. No evidence was filed by the applicant. 14 The Federal Magistrate concluded that the grounds advanced in the application before him were, with the exception of four, 'either an attack on the merits of the RRT decision or bald unparticularised assertions'. However, there is no supportive evidence. In the absence of evidence, those grounds must fail. To the extent that the applicant contests the merits of the RRT decision, his application must also fail. On my reading of the RRT decision, there is no jurisdictional error. 17 At the hearing before me the applicant indicated that he wished an opportunity to assemble and present some further evidence. The evidence which he indicated he would like to produce was exemplified by two documents in court which were described to me as a photocopy of his military medals and a list of the establishments at which he had worked in his military career. He said that he had 'a book full' of similar material. 18 I declined to adjourn the proceedings and I declined to receive the documents which were in court. In my view they do not bear upon the issues which arise for my decision. In any event, the applicant had an ample opportunity to bring such matters to the attention of the delegate, the RRT and the Federal Magistrate. He was directed to file evidence upon which he wished to rely before the Federal Magistrate but did not do so. 20 In the case of interlocutory decisions a distinction is normally made between those interlocutory decisions which deal with matters of practice and procedure and those which have the effect of finally disposing of an applicant's claims. In the latter class of case leave will be granted more readily. Counsel for the first respondent drew attention to this principle but submitted that the present case was an appropriate one for leave to be refused for the reason that the appeal could not succeed on any view. 21 I was urged, if I granted leave, to treat the matter as a hearing of the appeal and to determine the appeal itself. I ruled that this was the course I would follow. 22 The applicant's contentions amount to a generalised assertion that the merits of his case for a protection visa have not been appreciated. In one sense that is understandable. The applicant is not a lawyer, he is a person who wishes to remain in Australia. His argument in substance is that his case deserved a better result. 23 In answer to my invitations to advance any matters upon which he wished to rely to suggest that the Federal Magistrate was in error the applicant disclaimed any argument that the Federal Magistrate had committed an error. I would not treat these remarks as a concession having any legal significance but they are consistent with my view that the essence of the applicant's position is simply that he desires a different outcome upon an overall assessment of his claim for a protection visa and, in particular, wishes a different view to be taken of the merits of his case than that taken by the delegate and the RRT. It is not the function of this Court to make such an assessment. 24 Leaving aside dissatisfaction with the decisions on his application by the delegate and the RRT and disappointment that the proceedings before the Federal Magistrate did nothing to alter that outcome, there is no suggestion before me of any error committed by the Federal Magistrate which could justify any interference with his conclusion. 25 In my view, the present is not an appropriate case for the grant of leave to appeal. There is no case, based on the identification (or appearance) of error to be considered. The application for leave to appeal will be refused. 27 The Federal Magistrate felt that four grounds, 'might have raised legal issues requiring further consideration if there had been any evidence to support those grounds'. He dismissed the application to show cause because there was no evidentiary support for those grounds or the other grounds of challenge before him. The applicant was confused and mentally blocked at the time of hearing. The Tribunal should not have taken the nerousness (sic) of the applicant to pass orders against him. The applicant states that Tribunal seemed to have dealt with this matter with a pre determined mind and therefore the Tribunal has committed jurisdictional error. The applicant states that his matter has not been considered properly and therefore he has been denied procedural fairness and the principles of natural justice has been denied to him. The Tribunal had approached the matter with closed mind. This is evidence from the fact that the Tribunal had dissmissed (sic) case in few line, merely stating that the claims have been fabricated. They were incorporated by reference in an affidavit filed on 18 May 2006 in support of his application for leave to appeal. I will deal with them briefly. 30 As to paragraph 6 there is no evidence to support the proposition that the RRT treated the applicant unfairly because of the way he presented when he gave his evidence. Mere assertions to this effect cannot assist him. 31 Paragraph 9 involves a misstatement of the elements of procedural fairness and natural justice. It would be necessary for the applicant to demonstrate the way in which the 'matter has not been considered properly'. There is no evidentiary or other support for the proposition. 32 Paragraphs 8 and 13 in effect allege jurisdictional error arising from a denial of natural justice constituted by actual or perceived bias. Evidence was required to make such a proposition a foundation for consideration by the Federal Magistrate unless the argument could be sustained by reference to the record. Neither foundation for the proposition was available. 33 I think the Federal Magistrate was right to put paragraphs 6, 8, 9 and 13 aside as possible bases upon which to grant the applicant a remedy. Furthermore, I agree that the remainder of the grounds do not afford a foundation for a remedy under s 476 of the Migration Act 1958 . 34 Were it necessary for me to decide the appeal I would dismiss it. I can see no reason in principle why costs should not follow the result and I will order that the applicant pay the first respondent's costs. | leave to appeal no arguable case no jurisdictional error leave to appeal refused. appeal |
In that case pursuant to s 42A of the Administrative Appeals Tribunal Act 1975 (Cth) ('AAT Act'), Senior Member McCabe refused an application for reinstatement of proceedings dismissed on 2 September 2005. The appeal be allowed. 2. That the application for reinstatement filed 5 October 2005 be remitted to the Tribunal for further consideration. 3. The respondent pay the appellant's costs of and incidental to the appeal to be taxed. The respondent imposed an administrative penalty of $47 178 on the appellant pursuant to s 3 A New Tax System (Goods and Services Tax Administration Act) 1999 (Cth) as a result of the appellant having a tax shortfall amount for the period 1 January 2002 to 31 December 2002. The notice of assessment of such penalty was issued to the appellant on 11 February 2004. 2. Bourne & Romeo Accountants, of Fitzroy North in Victoria was the representative of the appellant. 3. By objection dated 10 April 2004 Bourne & Romeo objected to the decision of the respondent on behalf of the appellant. 4. By letter dated 7 September 2004 addressed to 'The Trustee of Mladenis Family Trust trading as Affinity Consulting Services C/- Bourne & Romeo', the respondent disallowed the appellant's objection. 5. By facsimile transmission dated 8 November 2004 Bourne & Romeo Accountants filed with the Tribunal an Application for Review of the decision of the respondent. The Application (since it was faxed on 8 November 2004, curiously dated 10 November 2004) provided as the address of the appellant 'c/- Bourne & Romeo PO Box 1142 Fitzroy North Vic 3068 ph 03 9482 2855 Attention Doug Bourne'. 6. On 9 February 2005 the first hearing before the Tribunal in relation to the Application for Review took place by way of telephone conference. For unknown reasons, the appellant did not attend this telephone conference. The appellant failed to file and serve those documents by 9 April 2005. 8. On 21 April 2005 (or 26 April 2005 --- there is some inconsistency between the date in the Chronology of Events submitted by the respondent before me and the date in the reasons for decision of the Tribunal, however the inconsistency is not material) the second hearing before the Tribunal took place by way of a telephone conference. It is unclear whether an officer of the appellant attended this conference or whether the attendance was by its representative, however it does not appear to be in dispute that there was attendance by the appellant. The appellant was directed to file and serve by 31 May 2005 the documents the subject of the 9 February 2005 directions. 9. The appellant failed to file and serve the relevant documents by 31 May 2005. 10. On 2 June 2005 the appellant provided some documents but did not file a statement of facts and contentions or any witness statements. 11. On or about 12 July 2005 it appears that Thiel Partners on the Gold Coast was appointed the new representative of the appellant. The responsible staff member at Thiel Partners was Mr Ashley Summerville. 12. Because of the change in representative, a directions hearing before the Tribunal in relation to the Application for Review which had been scheduled for 12 July 2005 did not proceed. 13. On 2 August 2005 the Tribunal issued a notice of listing of telephone directions for 2 September 2005. Evidence subsequently produced to the Tribunal indicates that the notice of listing was addressed as follows 'T'ee Mladenis F Tr T/A Affinity Consult. C/- Thiel Partners, Accountants, PO Box 2202, SOUTHPORT QLD 4215, Attn: H. Dimitrijevski'. 14. On 2 September 2005 the appellant did not appear at the telephone directions hearing. Senior Member McCabe dismissed the Application for Review pursuant to s 42A(2) of the AAT Act as a result of the appellant's failure to attend that hearing. 15. Tanya Cirkovic & Associates, Solicitors, commenced acting on behalf of the appellant on or about 5 October 2005. 16. On 5 October 2005 Tanya Cirkovic & Associates filed an Application for Reinstatement pursuant to s 42A(8) of the AAT Act. The grounds of the application prepared by the appellants' solicitors were, in summary, that the appellant was unaware of the hearing to be held by the Tribunal on 2 September 2005 and that the case had strong merits and a good chance of success. 17. The hearing of the Application for Reinstatement was listed for 27 October 2005 before Senior Member McCabe. Both the appellant and the respondent were represented by counsel at that hearing before the Tribunal. 18. At the hearing, evidence emerged that an officer of the respondent had contacted Mr Summerville the previous day in relation to whether Mr Summerville had received the listing notice for the 2 September 2005 Tribunal hearing and whether Mr Summerville had forwarded the notice of listing to the appellant. A copy of an email from Mr Summerville to Ms Dimitrijevski dated 4 August 2005 forwarding the notification of listing as a pdf file attached to an email to Ms Dimitrijevski was produced by the respondent. There was no dispute that contacting Ms Dimitrijevski equated to contacting the appellant. 20. Counsel for the appellant indicated that he was unaware of this information, and requested an adjournment. This adjournment was refused by the Tribunal. 21. The Application for Reinstatement brought by the appellant was dismissed by the Tribunal. 22. Reasons were given orally by the Tribunal and not recorded at the time. 23. A notice of appeal was filed in this Court on 30 November 2005. 24. On or about 3 April 2006 the appellant wrote to the Tribunal requesting written reasons for the decision of Senior Member McCabe given 27 October 2005. Written reasons for decision were made available on 13 April 2006. Did not accept that the appellant and Thiel Partners had not received notice of the hearing listed for 2 September 2005. 2. Did not accept that the appellant had a good excuse for failing to attend the original hearing on 2 September 2005 at which the case was dismissed. 3. Found that the interests of the respondent were not prejudiced by the delay attending the review, however some prejudice to the interests of the respondent could accrue if the appellant's claim was not prosecuted expeditiously. 4. Found that the appellant's interests would be prejudiced if the Tribunal did not allow reinstatement because it would be unable to continue its challenge to the decision under review. 5. Was of the view that the merits of the case had not been substantiated beyond an assertion by the appellant that it had good prospects of success. 6. Found that the failure of counsel appearing for the appellant at the hearing to explain the discrepancy between the contentions in the outline and the facts as they emerged at the hearing 'must count against the appellant' and that the appellant was treating the Tribunal with 'indifference'. 7. Found that 'the excuse [the appellant] offered for its earlier failure to attend turned out to be untrue'. 8. Was not minded to grant an adjournment to allow the appellant to provide material given the delays that had already occurred. Its reinstatement application did not address one of the important issues before the Tribunal at the hearing (the merits of the case) and the excuse it offered for its earlier failure to attend turned out to be untrue. It is fair to all the parties in all the circumstances that the application for reinstatement be refused. Whether the Tribunal erred in law in respect to the orders made 27 October 2005, in that the Tribunal has made a decision that is unreasonable. The appellant relied on s 39 AAT Act which provides that a Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case. • The Tribunal has the power to grant an adjournment at any time and that the efficient running of the court should not prevail over the injustice of preventing the appellant from responding to an adverse inference. • The email that was presented to the appellant at the application for reinstatement was information that was adverse to the interests of the appellant, and was used by the Tribunal to make very serious findings against the appellant going to its credit and integrity. • There may be several reasonable explanations that the appellant can offer in respect of the email. • Although the Tribunal has a duty to discharge its obligations in an expeditious manner (s 33(1) AAT Act), the needs of case management do not derogate from the requirements of procedural fairness: State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. • Refusal to grant an adjournment can constitute a failure to give a party to proceedings the opportunity of adequately presenting its case: Sullivan v Department of Transport (1978) 20 ALR 323. • The Tribunal wrongly denied the appellant the opportunity to fully present its case, and denied the appellant procedural fairness. • The decision of 27 October 2005 and the reasons given on 13 April 2006 in relation to reinstatement were unreasonable in that the reference to the adjournment was in relation to material supporting the merits of the case, and not in response to the email evidence that related to the conduct of the appellant. While the Tribunal must be minded to delays and prejudice caused by delay, it must not subordinate that interest to the need for procedural fairness. • The Tribunal acted in error by reaching conclusions which were not open to it, and without any reasonable or logical basis, and committed manifest Wednesbury unreasonableness. • It is relevant to enquire whether the party or its legal representative should have reasonably apprehended that the issue was or might become a live issue ( Re Building Workers' Industrial Union (Aust); Ex parte Gallagher [1988] HCA 4 ; (1988) 76 ALR 353 at 357) and in this matter the appellant did not file any material with the Tribunal in support of its application for reinstatement. • It was clear that the appellant was aware of the issue of its non-appearance at the directions hearing on 2 September 2005, that this was a live issue, and that a reasonable explanation and evidence of the reasonable explanation for this non-attendance would be required to be put before the Tribunal. • The only evidence before the Tribunal at the reinstatement hearing was the email from Mr Summerville to Ms Dimitrijevski. Although, as the appellant submits, there may be several reasonable explanations that the appellant could offer in respect of the document, the appropriate time to provide any explanation was at the reinstatement hearing. • There was no denial of procedural fairness by the Tribunal. • In this case it was open on the material before it for the Tribunal to make the findings of fact that it made, and the decision of the Tribunal was not unreasonable in the Wednesbury sense and therefore no error of law was made out. 12 The application by the Tribunal of the principles articulated in Manoli was not in dispute. 13 I propose to deal with each issue in turn. WAS THE APPELLANT DENIED PROCEDURAL FAIRNESS BY THE TRIBUNAL? 15 The appellant in this case is subject to a significant administrative penalty. It is entitled to dispute that penalty, and to receive a fair hearing in so doing. 16 There is no question that, as explained by Mason J in Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 584, there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations. 19 In this case the reason that the appellant's substantive application before the Tribunal was dismissed under s 42A(2) AAT Act on 2 September 2005 was that the appellant did not appear at the hearing on that day. 21 It therefore follows that it was obvious that issues and evidence relevant to the non-appearance of the appellant on that day would have been critical at the reinstatement hearing of 27 October 2005, and that ensuring that all appropriate inquiries had been made by the appellant, and that their Counsel was properly briefed as to this issue, would be important in the conduct of that hearing. 22 As stated by Mason J in Kioa , it is important to consider the issues of procedural fairness as appropriate and adapted to the circumstances of the particular case. Over the course of eight months, the appellant had a history of failing to attend hearings. Indeed out of four hearings listed, the appellant attended only one, and another was vacated at its request. 2. The appellant failed to comply with deadlines, including those which it had requested. 3. The notice of the hearing of the substantive matter was sent by the Tribunal to Mr Summerville, the nominated representative of the appellant, in accordance with the AAT Act. There does not appear to be any dispute that, at the time, Mr Summerville was properly served with the relevant notice of listing by the Tribunal, or that, as a result for the purposes of s 68AA(1), the appellant was properly served with that notice. 5. It is very clear that critical issues for the appellant in the reinstatement proceedings on 27 October 2005 were the merits of the substantive application which had been dismissed on 2 September 2005, and why the appellant had not appeared at the hearing of 2 September 2005. 6. Other than those assertions, no material was provided to substantiate the claim of the appellant that its case had 'strong merits and a good chance of success'. 8. However, notwithstanding these submissions, the respondent was able, seemingly without difficulty, having inquired of Mr Summerville, to produce evidence that Mr Summerville had forwarded the notice of listing of 2 September 2005 to the appellant, and had indicated that he intended send on the original notice. 24 In view of the history of this matter, that Counsel for the appellant was taken by surprise by the email was extraordinary. Neither the Act nor the common law imposes upon the Tribunal the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled. While as a general rule it may be appropriate, on the production of new evidence which surprises one of the parties, for the Tribunal to permit an adjournment for the party to have the opportunity take instructions or consider its position, in the circumstances it is difficult to find otherwise than that the appellant had been provided with a reasonable opportunity to present its case. 27 It also follows that the manner in which the litigation had been conducted by the appellant, including being taken by surprise at such a fundamental piece of evidence, was a factor which the Tribunal could reasonably take into account in finding that the appellant had treated the Tribunal with indifference (cf Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 at 396 per Wilcox and Gummow JJ and Sheikholeslami v Brungs [2006] FCA 933 per Tamberlin J at [15]-[17]). The Tribunal was, in my view, entitled to take this history into account in considering whether it was 'appropriate' to reinstate the application within the meaning of s 42A(9) AAT Act. In this respect I note comments of Professor D Pearce in his book, Administrative Appeals Tribunal , LexisNexis, Butterworths, 2003, p 122, cited by the Tribunal in its reasons for decision. 28 Accordingly, the finding of the Tribunal at par 12 of its Reasons for Decision that the excuse the appellant offered for its failure to attend on 2 September 2005 was untrue was, in my judgment, a finding of fact open to the Tribunal, and not open to review by this Court. 29 Notwithstanding submissions of the appellant that the Tribunal allowed principles of case-management to prevail over principles of natural justice, in my view the reasons for decision given by the Tribunal do not evince such priority. This was not a case where, for example, the Tribunal was unprepared to permit a delay in proceedings in order to maintain a timetable. Indeed, the Tribunal made it clear that it did not accept that the respondent's interests were prejudiced by the delay attending orderly conduct of a review, although it considered that some prejudice could accrue if the appellant's claim was not prosecuted expeditiously [par 10]. Rather, in the view of the Tribunal, this was a case where the history of the litigation indicated what the Tribunal considered to be, overall, an indifferent approach of the appellant to attendance at Tribunal hearings and to deadlines, and to the need to either appear or ensure that legal representatives were properly prepared as to key issues in the litigation before the Tribunal which the appellant was prosecuting. 30 It was open to the Tribunal to find, as it did, that in the absence of evidence to support its case the merits of the substantive case had not been properly substantiated by the appellant. 31 Contrary to submissions of the appellant, the Tribunal did give consideration to the possible prejudice to the appellant of its decision not to reinstate the application [par 10]. However at par 12, the Tribunal emphasised that the appellant's reinstatement application did not address one of the important issues at the hearing, namely the merits of the case . Accordingly, the Tribunal was not prepared to find in favour of the appellant. 32 I also note that the appellant has filed with this Court an affidavit of Ms Dimitrijevski, and a Statutory Declaration of Mr Summerville. Ms Dimitrijevski's affidavit of 26 October 2005 pre-dates the Tribunal hearing of 27 October 2005, and deposes that the appellant did not appear at the hearing of 2 September 2005 as, to the best of her recollection, she did not receive the listing and she was not aware of the need for herself or the appellant to appear. Letters received by our firm in relation to the matter are forwarded to the client for their attention. We confirm that the AAT correspondence was forwarded to the client via e-mail and the original followed via Australia Post. We did not receive a message saying the e-mail was undeliverable and the mail sent via Australia Post was not returned. As we have not been involved in this matter we had no need to follow up the client. 34 In my view there was no lack of procedural fairness in the conduct of the hearing on 27 October 2005 by the Tribunal. No errors of law in this respect are demonstrated either by the refusal of the Tribunal to adjourn the hearing on 27 October 2005 following production of Mr Summerville's email, or in the dismissal of the application to reinstate the original substantive application. That, I think, is right, but that would require overwhelming proof, and in this case the facts do not come anywhere near such a thing. I have already noted that it appears that Thiel Partners was the nominated representative of the appellant. There is also no dispute that the address of Thiel Partners was the address nominated by the appellant for service of documents within the meaning of the AAT Act, or that it was appropriate for Mr Summerville, in his communications with the appellant, to forward correspondence to Ms Dimitrijevski. There was evidence before the Tribunal that the notice of listing for the hearing of 2 September 2005 had been communicated in multiple ways to the appellant and that the appellant was not only claiming lack of awareness of the notice of listing, but apparently --- as indicated by the fact that its counsel was taken by surprise by this fact --- was unaware that its representative had forwarded the notice. I note once again that the failure of the appellant to attend the hearing of 2 September 2005 and reasons for its failure to attend that hearing were clearly likely to be key issues at the hearing of its reinstatement application. On this basis, it was in my view open to Senior Member McCabe to draw adverse inferences concerning the conduct of the appellant, it preparedness for the hearing, and its approach to the litigation as a whole, and to take those findings into account in exercising his discretion to dismiss the reinstatement application. 37 Further, on the case before me it appears that the only evidence before the Tribunal as to the merits of the substantive application were submissions by the appellant that its application had strong merits and a good chance of success, and would be supported by documentary evidence. The lack of more substantial evidence before the Tribunal is surprising, as the appellant had clearly anticipated that the merits of the substantive application would be a key issue, but had chosen not to substantiate its case with supporting evidence. In my view the Tribunal was entitled to make its findings concerning the merits of the substantive case and the scanty nature of the evidence in support of those claimed merits, and to cite this as a ground for exercising the discretion to dismiss the reinstatement application. 38 I note again that the Tribunal is vested with a discretion in s 42A(9) to reinstate applications 'if it considers it appropriate to do so'. That discretion is not unfettered, but must be exercised reasonably (Brennan CJ in Kruger v Commonwealth [1997] HCA 27 ; (1997) 190 CLR 1 at 36, cf Lord Greene in Wednesbury , Mason J in FAI Insurances Ltd v Winneke [1982] HCA 26 ; (1982) 151 CLR 342 at 368, and, for an historical perspective to this issue, the cases discussed in M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action, 3rd edn, Lawbook Co, 2004, pp 88-93. Certainly, the decision of the Tribunal to dismiss the application for reinstatement could not be described as so unreasonable that no reasonable authority could ever have come to it. 39 Accordingly, the decision of the Tribunal is not unreasonable in the Wednesbury sense. In my view, the Tribunal in this case has not acted in a manner which gives rise to an error of law, either in refusing to allow an adjournment in relation to the production of Mr Summerville's email, or in dismissing the application for reinstatement. The appeal be dismissed with costs. | appeal from decision of the administrative appeals tribunal to refuse an application for reinstatement of proceedings application for reinstatement based on substantive case having 'strong merits and a good chance of success' and the appellant having not received the notice of listing for the hearing of the substantive application whether tribunal erred in refusing an application by the appellant for an adjournment to explain the circumstances of its non-appearance before the tribunal in light of evidence of an email indicating service of the notice of listing whether given reasonable opportunity to present case whether wednesbury unreasonableness in the exercise of the reinstatement discretion by the tribunal member practice and procedure |
They enter into international intellectual property licensing programs in order to exploit the value of such rights. They also support the formation of spin-out companies. 2 On 4 May 2004 QPSX commenced proceedings against the Ericsson parties and the Longreach Group. The causes of action are principally for breach of a licensing agreement and misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) (the TP Act). The licensing agreement said to have been breached is evidenced by a Memorandum dated 27 August 2003. It relates to the licensing and use of patent rights in a particular technology used in telecommunications. The misleading or deceptive conduct is framed as an alternative cause of action based on the contention that one of the parties to the memorandum misrepresented its authority to speak for another. 3 QPSX seeks a declaration that they and the respondents are parties to the Memorandum, which binds them all. They also seek a declaration that the Memorandum contains terms, referred to in pars 51 and 52 of the existing amended statement of claim, and that Ericsson Australia and LME severally breached it. They claim an account of royalties due under the Memorandum from Ericsson Australia and LME, as well as damages for its breach. They seek orders under s 87 of the TP Act to compensate them for loss or damage suffered or likely to be suffered by the conduct of Ericsson Australia and LME. 4 The interlocutory history of the case has been protracted and somewhat convoluted. The principal outstanding interlocutory disputes at this stage relate to amendments to the statements of claim and defence, the introduction of a cross claim including a cross claim against a QPSX executive, and the provision of particulars. 5 The Ericsson parties filed a request for further and better particulars of QPSX's amended statement of claim on 9 May 2006. On 29 August 2006 QPSX filed a minute of proposed orders, being an amended version of an earlier minute filed on 15 August 2006. These orders related to outstanding discovery and the filing of expert evidence. At that time the Ericsson parties had filed their own minute seeking various directions including the filing of a further amended statement of claim and the provision of the particulars sought on 9 May 2006. Directions were made for the filing of written submissions in relation to a proposed further amended statement of claim, a proposed amended defence and cross claim and further discovery sought by QPSX's amended minute of proposed orders dated 29 August 2006. The timing for the filing of written submissions was extended by consent on 4 September 2006. Submissions were filed by both QPSX and the Ericsson parties. The last submission was filed on 13 October 2006 by Ericsson. The matters in issue were decided on the written submissions and affidavits filed in relation to them. 6 This is an interlocutory decision. I do not propose in this ruling to deal, in detail, with every argument that was put. I will endeavour briefly to outline the matters of contention and the reasons for the directions which I propose to make. Elaborate arguments were put by way of objection to proposed causes of action raised by Ericsson in its cross claim. I do not accede to these. They are best considered in the light of all of the evidence at trial. Broadly speaking, all the matters pleaded arise out of the same factual substratum. In contemporaneous submissions it was described as containing a number of minor amendments to the amended statement of claim already before the Court. It is convenient to set out the proposed further amended statement of claim in outline. The summary that follows reproduces the summary of the amended statement of claim set out in QPSX Limited v Ericsson Australia Pty Ltd (No 3) [2005] FCA 933 with adjustments to reflect the proposed additional amendments. The summary outlines the allegations made by QPSX. For convenience it is presented in narrative form. It involves no finding of fact. 8 QPSX, QPSX Communications and QPSX Europe each carry on business 'licensing and otherwise commercialising intellectual property'. That business is carried on in Australia and internationally by QPSX and QPSX Communications. QPSX Europe carries on its business outside Australia. The Ericsson parties and the Longreach parties are all involved in the manufacture and supply of communications products and services (pars 1 to 7). 9 QPSX Communications is the registered patentee of patents in the United States of America, Australia, Canada and the United Kingdom. These are known as the QPSX Communications SAR Patents. QPSX Europe holds a patent in Germany, known as the QPSX Europe SAR Patent. Each of the patents relates to a method and apparatus for segmentation and reassembly technology. This involves the transmission of variable length messages on a network from a source to a destination in fixed length slots which include a header field and a message segment. Steps involved in the method are pleaded and registration dates and numbers of the various patents are particularised (par 8). Further patents are held by QPSX Communications in the USA, Australia, Canada, the UK and Germany (QP Patents). They involve a queuing protocol for a communications network for queued transmission of information in packets. The network composition is set out and particulars of the patents given (par 9). The method and apparatus which are the subjects of the SAR Patents and the protocol which is the subject of the QP Patents are integral parts of a Distributor Queue Dual Bus Technology which is also known as a Queued Packet and Synchronous Exchange Technology. This technology has been an integral part of the international telecommunications standard approved by the Institute of Electrical and Electronics Engineers for metropolitan area networks since 1988 (par 10). Another protocol known as Asynchronous Transfer Mode (ATM) is described as the networking standard for high speed, high capacity voice, data, video and graphics transmission. The method the subject of the SAR Patents is said to be a fundamental element of the ATM protocol and to be incorporated into the International ATM's Standards set by the International Telecommunications Union (par 11). 10 Because they were the subject of submissions by Ericsson it is convenient to set out the actual text of pars 10 and 11. In its further proposed amended statement of claim QPSX wishes to include particulars of par 11. The method which is the subject of the SAR Patents, and the protocol which is the subject of the QP Patents, are integral parts of the Distributed Queue Dual Bus technology, which is also known as Queued Packet and Synchronous Exchange technology. Since 1988, the Distributed Queue Dual Bus technology has been an integral part of the international telecommunications standard approved by the Institute of Electrical and Electronics Engineers for metropolitan area networks known as IEEE 802.6. A protocol known as Asynchronous Transfer Mode (ATM) has been developed as the networking standard for high-speed, high-capacity, voice, data, video and graphics transmission. The method which is the subject of the SAR Patents is a fundamental element of the ATM protocol and is incorporated into the international ATM standard set by the International Telecommunication Union known as ITU specification I.363.5. It included terms under which QPSX Communications agreed to sell and J-Tech agreed to purchase certain intellectual property known as the QPSX Designs. These related to products known as Q6 and Q7 and three devices which are referred to collectively as the QPSX chipset. J-Tech was permitted, under the terms of the agreement, to make full use of the QPSX Designs and enjoyed a non-exclusive perpetual licence to use the SAR Patents and the QP Patents on and from 18 August 1994 (pars 12 and 13). On 5 December 1997 the contract was amended by further agreement but these are not material for present purposes (par 14). 12 Paragraphs 15 to 20 inclusive were deleted in the amended statement of claim. 13 On or about 12 July 2001 QPSX Communications, J-Tech and Ericsson Australia executed a deed of assignment and variation (par 21). By that deed J-Tech assigned to Ericsson Australia all of its rights and interests in the J-Tech Contract, and the full benefit of the covenants, representations, warranties and acknowledgments given to it under that contract by QPSX Communications. Ericsson Australia assumed the obligations, covenants, representations and warranties given by J-Tech to QPSX Communications under the contract (par 22). The deed amended the J-Tech Contract as assigned. The various amendments are pleaded in par 22. 14 Further, prior to the sale and purchase and as Ericsson Australia and the Longreach Group then well knew, Ericsson Australia purported to sell and Longreach Group purported to purchase, among other assets, Ericsson Australia's rights comprising the subject matter of the J-Tech Contract (as amended by the J-Tech amendment contract and the assignment deed) so as to enable Longreach Group to be able to exploit in Australia the method the subject of the SAR Patents and the protocol the subject of the QP Patents (par 28). Ericsson Australia was required by cl 17.1 of the J-Tech Contract, as amended and assigned to it, to seek and obtain the written consent of QPSX Communications to the assignment of the patent licences to the Longreach Group. Ericsson Australia did not seek or obtain such consent (par 29). Further, prior to the sale and purchase, and as Longreach Group then well knew, Ericsson Australia and/or a related company manufactured within Australia and sold both inside and outside Australia goods which employed the method the subject of the SAR Patents or the protocol the subject of the QP Patents. Some of these goods were goods to which the licence granted under the J-Tech Contract as amended related. LME and related bodies corporate manufactured goods of the kind outside Australia and sold, both within and outside Australia, goods of this kind (par 30). On 20 August 2003 the applicants agreed with Ericsson Australia that, in lieu of negotiating their consent to the assignment, they would negotiate new licences with Longreach Group and with Ericsson Australia, LME and its related bodies corporate. The licences would relate to the manufacture and sale inside and outside Australia of goods using the method the subject of the SAR Patents or the protocol the subject of the QP Patents (par 32). On or about 25 or 26 August 2003 Longreach Group, through its Chief Executive Officer Morris Symonds, in effect joined in the agreement. This was communicated to the applicants by email on 26 August 2003 (par 33). 17 Paragraphs 30 to 41 of the statement of claim as it previously stood were deleted in the amended statement of claim. They were replaced by new paragraphs 30 to 33. There are no new paragraphs 34 to 41. 18 On or about 27 August 2003 a Memorandum was executed between QPSX, QPSX Communications and QPSX Europe, Ericsson Australia and LME and Longreach Group and Longreach Networks (par 42). This Memorandum lies at the heart of the action. It related to the acquisition by Longreach Group of assets disposed of by Ericsson Australia pursuant to the sale of May 2003. It also concerned the placement of the patent licensing arrangements between QPSX Communications and Ericsson Australia under the J-Tech Contract. It dealt with the further and expanded global licensing of Ericsson Australia, LME, Longreach Group, Longreach Networks and related bodies corporate to make broad and unfettered use of the QPSX technology and the QPSX patents as defined in the Memorandum. (par 43 as proposed for amendment). 19 The authority of those who executed the Memorandum on behalf of Ericsson Australia, LME, Longreach Group, QPSX and QPSX Communications is pleaded (pars 44 to 48). During the course of negotiations which followed the matters pleaded earlier, Mr Darling, the company secretary of Ericsson Australia and various other Ericsson companies, informed LME of the progress of negotiations for the new licence agreement. LME provided instructions to him concerning the new licence agreement (par 44A). Paragraph 44A is proposed for amendment by deletion of 44A(c) which alleged that LME informed Mr Darling that LME had agreed to be a party to the Memorandum and approved the terms of its final version immediately prior to its execution. In the circumstances, the Memorandum formed a legally binding agreement between the applicants and the various respondents (par 49). In the alternative, if Mr Darling was not authorised to execute the Memorandum on behalf of LME then it formed a legally binding agreement between the QPSX parties, Ericsson Australia, Longreach Group and Long Reach Networks (par 50). 20 The material terms of the Memorandum are pleaded (par 51) together with terms to be implied (par 52). The proposed further amended statement of claim would also amend the definition of 'ATM Products' taken from the Memorandum. These licences were to replace the existing licence granted to Ericsson Australia under the J-Tech Contract as amended and assigned. 22 Under the Memorandum Ericsson Australia and LME, Longreach Group and Long Reach Networks were to provide quarterly reports to the applicants setting out forecast sales for the following quarter and an estimate of the actual Sales Value for the previous quarter together with a calculation showing the amount of royalty payable. The reports were also to incorporate an estimate of sales in respect of different categories of ATM products which were made during the previous quarter (par 51(e) and (f)). 23 Ericsson Australia and LME jointly and, alternatively, Ericsson Australia, the Longreach Group and Long Reach Networks jointly agreed to pay royalties to the applicants on global sales of ATM products by those entities and their related bodies corporate. The basis upon which royalties were to be calculated is set out in the statement of claim. 24 It was also a term of the Memorandum that within 30 days of its execution the parties would use their best endeavours to enter and to procure their related bodies corporate to enter a further agreement incorporating the terms of the Memorandum and necessary supplemental terms pending the execution of which the Memorandum would remain in force between the parties. The licensees would be responsible for the reasonable legal and travel costs of the applicants associated with the negotiation and execution of the Memorandum and the Further Agreement up to a maximum of $50,000. 25 Implied terms in the Memorandum were that each party would do all that was necessary to enable each other party to have the benefit of the agreement contained in it and would deal in good faith with each other party to the Memorandum, particularly in finalising the Further Agreement. 26 Ericsson Australia and LME are each said to have breached the terms of the Memorandum (pars 53 and 54). It is alleged that each has failed to provide to the applicants any of the reports required by the terms of the Memorandum. They are said to have failed to make any royalty payments on sales of ATM products inside and outside Australia by LME, Ericsson Australia or related bodies corporate. They are said to have failed to use their best endeavours to finalise the proposed Further Agreement and to pay any of the reasonable legal and travel costs associated with the negotiation and execution of the Memorandum or the costs of negotiating the Further Agreement. It is also alleged that LME failed to use its best endeavours to procure its related bodies corporate to become parties to the Further Agreement. If Mr Darling were not authorised to execute the Memorandum on behalf of LME then the authority representation was misleading or deceptive contrary to s 52 of the TP Act (par 59). Paragraphs 57 and 58 are deleted in the amended statement of claim, as are paragraphs 60 to 66 inclusive. Ericsson does, however, take issue with the opening sentence in par 51 of the proposed further amended statement of claim. Its objection is that the effect of the amendment is to treat the 'facts' pleaded in pars 10 and 11 as matters informing the construction of the Memorandum. This is said to stand in contrast to the position previously adopted by QPSX in relation to pars 10 and 11. In this respect Ericsson harked back to QPSX's submissions in opposition to Ericsson's strike out application in 2004. The pleading of the technology may be justified as a way of labelling or identifying the Patents by reference to their subject matter. It plays no other role in the statement of claim that is relevant to any cause of action. It conveys no implication as to the validity of the Patents. Although the pleading in this respect may be said to go beyond what is strictly necessary to identify the Patents, I do not consider that it has the tendency to embarrass and I would not accede to the proposition that the relevant paragraphs should be struck out. It would be sufficient, in the defences, to plead to the existence of the Patents set up in the statement of claim without giving rise to any need for inquiry into the content and nature of the technology and, in particular, without any need for discovery of documents in connection therewith. For the most part the content of the Patents themselves will either bear out or falsify the description of their subject matter. He did not, however, disavow a secondary or ancillary case based upon the claims in the QPSX Patents and Australian Standard AAL5. Ericsson submits that by reason of the proposed amendments in the first sentence of par 51 it has become apparent that QPSX now seeks to argue that the technical allegations in pars 10 and 11 inform the construction of the Memorandum. 31 I accept the Ericsson submissions that pars 10 and 11 should not be invoked in support of the construction of the Memorandum without particularisation of the facts upon which essentially argumentative terms used in those paragraphs are based. In par 10 the term 'integral part' is conclusionary in nature and Ericsson is entitled to know the basis upon which that conclusion is advanced. Particulars of the queuing protocol referred to should also be given. Expert evidence relevant to those particulars should be identified when QPSX files its expert reports. 32 Paragraph 11 is also conclusionary or argumentative in character to the extent that it uses the word 'fundamental'. I will require that QPSX provide particulars of the facts it relies upon to assert that the method which is the subject of the SAR Patents is a 'fundamental element of the ATM Protocol'. These particulars do not need to be incorporated in the statement of claim. They can be separately provided. In requiring their provision I accept the Ericsson contention that as presently framed they identify a number of common features, almost all of which are high level and general and do not disclose the basis upon which it is said that the method is 'a fundamental element' of the ATM Protocol. I will also require that QPSX specifically identify those aspects of its expert evidence relied upon to support the particulars which it is to provide. 33 Ericsson opposes the inclusion of par 30A(b) on the basis that it contains 'vague and high level allegations'. I do not accept Ericsson's submissions in this respect. Paragraph 30A(b) is limited to the fact of particular contentions said to have been made by QPSX. It identifies the documents relied upon as evidencing those contentions. The contentions are pleaded on the basis that they are known to Ericsson Australia and LME. I do not accept Ericsson's submissions that the allegation gives rise to a requirement for further discovery. The plea stands or falls on the documents particularised and the knowledge that Ericsson Australia and LME had of the contention. 34 While Ericsson does not oppose the amendment to par 44A, the deletion of one of the particulars contained in it provided Ericsson with the occasion to raise the sufficiency of particulars relied upon to support the plea of Mr Darling's authority to execute the Memorandum on behalf of LME. There is a reference in par 45 to further particulars being provided after discovery and, if leave is granted, after interrogatories. No interrogatories have been sought. 35 Further particulars were provided by QPSX in a letter dated 30 August 2006. The Ericsson parties are content with those particulars so far as they relate to par 44A, but not those supplied in relation to par 45. 36 Ericsson says that the further and better particulars provided in the letter of 30 August 2006, relating to par 45, go only to Mr Darling's conduct and his representations. There is no allegation of any conduct or representation by LME to clothe Mr Darling with authority to execute the Memorandum. In my opinion, however, the plea as presently particularised is not fatally flawed. It relies upon Mr Darling's position in the Ericsson Group as well as his representations. If, however, QPSX intends to rely upon any conduct on the part of LME through which it is said to have clothed Mr Darling and/or Mr Hermanson with relevant authority, then that conduct should be particularised. Ericsson also seek to bring a cross claim against QPSX and Mr Callahan, the general manager of QPSX Ltd and QPSX Europe. It is pointed out that the alleged representations are all based on documents rather than oral communications. Whether they were made can therefore be assessed accurately on the basis of the terms of the documents alleged. They further contend that the terms of a draft agreement being negotiated and comment, or lack of comment, by one party's in-house legal counsel to another party's in-house legal counsel, about the legal effect of the proposed contract in arms length negotiations as to its terms could not arguably be the basis for saying that there was any misrepresentation by one party upon which the other relied. 42 In my opinion, however, these are matters which can be dealt with in the context of all the evidence. I do not propose to refuse the amendment upon the basis advanced by QPSX in relation to the alleged representations. 43 QPSX further says that the absence of any pleaded express representation as to the legal effect of the Memorandum creates an insurmountable difficulty for the Ericsson parties in establishing the misrepresentations alleged. QPSX attacks the plea in par 40 of the amended defence that the QPSX parties had misrepresented the content of the proposed Memorandum. They argue, inter alia, that in order for there to have been misrepresentations as to the legal effect of the Memorandum, the Court would have to conclude that it did not objectively speaking have the effect represented. It is submitted that the only situation where a misrepresentation may be demonstrated is where the legal effect of the Memorandum was not a reasonable legal effect to attribute to its words. 44 The question of the construction of the Memorandum is a matter to be addressed in the light of its terms and such other matters as may legitimately be taken into account in construing it. Whether a material non-disclosure constitutes misleading or deceptive conduct depends upon the circumstances. These are not matters, in my opinion, to be dealt with on the pleadings. I therefore reject QPSX's objections as a basis for disallowing the proposed amended defence. 45 The Ericsson parties raise a plea of unjustified threats of patent infringement proceedings on the part of QPSX. QPSX objects to the inclusion of this cause of action on the basis that the particular communications referred to by way of telephone calls, a letter dated 16 July 2003 and various emails, do not refer to any alleged infringement of patents by the Ericsson parties. QPSX says that the letter of 16 July 2003 does not threaten litigation at all. Further, it is said, the letter makes clear that the concern by QPSX was a proposed assignment to Longreach Group Limited without the consent of the QPSX parties. If the letter did contain an indication that litigation was proposed, it would have been litigation relating to the commercial matter of the validity of the proposed assignment, not a question of patent infringement. Further, to the extent that there was any assertion of patent infringement in that letter, the assertion was not directed at Ericsson Australia. The threat was not express, but appeared from a sensible reading of the whole document in the context of a series of telephone calls in which representatives of QPSX made unspecified threats against Ericsson Australia. Ericsson submits that it would be premature for the Court at this stage to exclude the proposed claim. It is at the very least arguable and the Court's acceptance or rejection of it should await the results of a factual inquiry with respect to the pleaded matters. I accept that submission. 47 QPSX attacks the proposed amended defence that the Memorandum was entered into by mistake on the basis that there were implied conditions precedent to its formation which Mr Darling considered were satisfied, but which were in fact not satisfied. QPSX submits that there is no basis for the implication of the conditions precedent upon which the Ericsson parties rely. They were not implied by law nor were they necessary for business efficacy. They could not be deduced from the other terms of the Memorandum. Ericsson responds that misapprehensions as to various technical matters led to the Memorandum coming into existence. They were fundamental to Mr Darling's decision to execute it. The case is not based solely upon the terms of the agreement. Rather, it goes to the very basis upon which Mr Darling executed the Memorandum. Again, I accept that the plea of mistake should be allowed and assessed in the light of all the evidence. 48 Further submissions made by QPSX concern the allegations in the proposed amended defence and cross claim relating to the authority to execute the Memorandum. Additional submissions were made that the trial would be unnecessarily prolonged by false issues if various of the allegations contained in the amended defence and cross claim were to be permitted. I am not satisfied that the issues are indisputably 'false'. In any event, I doubt that they will have material implications for the conduct of these already substantial proceedings. 49 In par 22 of the defence Ericsson pleads to par 30A. QPSX complains that par 22 seeks to put in issue the truth of the matters alleged in par 30A. The truth of the matters is not asserted in that paragraph. They are alleged to show that the parties commonly knew that there were certain issues in dispute between them. This contention is not correct so far as it relates to par 30A(a). That asserts a factual matter about the AAL5 Standard as well as knowledge of that fact attributed to Ericsson Australia and LME. The defence pleaded to par 30A(b) involves a denial of the contention attributed to QPSX and the positive plea of certain things that QPSX is said to have asserted at the relevant time. I do not consider that I should refuse the plea to par 22. 50 As to the proposed cross claim against Mr Callahan, it does not seem to me that it is likely to particularly add to the complexity of the case. The question of the arguability of the representations is a matter to be assessed in the context of the evidence. I will therefore allow the proposed amended defence and cross claim. That will depend upon whether his defence raises any issue distinct from those already pleaded. It will be necessary first to timetable the filing of an amended reply to the amended defence and defences to the cross claim by QPSX. Directions will also have to be given for the service of the cross claim on Mr Callahan and for the filing of a defence by him. I would need to be persuaded that discovery was necessary by Mr Callahan. These products are identified in an annexure marked FF4 to the confidential affidavit of Farhad Fozdar. It is submitted by QPSX that there is a real question as to whether Ericsson has provided to QPSX all the revenue figures for sales of all AAL5 compliant products. 54 Mr Fozdar is an electrical engineering and software consultant providing consulting services to QPSX. Formerly he was technology manager to QPSX Ltd and employed by it from 1987 to 1991 and from 2001 to 2004. He has reviewed two product code lists provided by Ericsson. The first contains 19 separate codes and the second, 18 separate codes. There is said to be a discrepancy between the number and content of the two lists. 55 In reviewing the documents provided under discovery in DVD form by Ericsson, Mr Fozdar conducted a grammatical comparison comparing words used to describe documents in the product code description list with the words used in whatever document he was reviewing. He used knowledge gained from reviewing the discovered documents and the various documents identified in his affidavit, his knowledge and experience of the telecommunications industry generally, and his specific knowledge of the AAL5 Standard in order to come to a view as to the most likely product code or codes that would apply to each document, describing a AAL5 Standard compliant product, he was reviewing. 56 Mr Fozdar said he had not been able to determine with absolute certainty which product codes applied to each of the products identified in the AAL5 schedule. That schedule is a document which he prepared and which is exhibit 'FF4' to his affidavit. Based upon his review he formed the opinion that a number of the products identified in his schedule which, he said, are AAL5 Standard compliant, fell within product codes not identified by Ericsson as relevant in its first or second relevant product code list. He also was of the view that some products were likely to fall within more than one product code, such as a component product used within different 'end products' caught by different product codes. Accordingly, it is likely that Ericsson has not provided all relevant revenue figures to QPSX in respect of AAL5 Standard compliant products. 58 Ericsson's initial submissions on the question dealt with an earlier formulation of the orders sought by QPSX set out in the minute dated 15 August 2006. Ericsson submits that the amended form of words circulated on 29 August does not relate to any contractual definition in the pleadings. There is a discrepancy between the alleged contractual definition of the relevant products and the definition according to which discovery is supposed to be given. Ericsson poses the rhetorical question --- what is the definition of ATM products on which the QPSX parties plan to rely at trial? It is submitted that the Court should not resolve the discovery application on the papers. Assuming that the pleadings founded the amended relevant 'product test' employed in the application, the Ericsson parties say they would require time to investigate and deal with the substance of Mr Fozdar's evidence. Mr Fozdar's affidavit was filed on 17 August 2006. Ericsson's submissions in relation to the orders sought were filed on 1 September 2006 and further general submissions substantially on the pleadings matters were filed on 13 October 2006. 59 On the face of it, the products referred to in par (b) of the discovery order sought by QPSX accords with the definition of 'ATM products' in par 51(b) of the amended statement of claim. In my opinion there has been ample time for Ericsson to further respond to the orders sought by QPSX. I will direct that they provide the information sought. The question of costs will be reserved. | amendments to pleadings sufficiency of particulars viability of pleadings further discovery leave to cross claim joinder of cross respondent practice and procedure |
The appellants are a husband (SZCDA) and wife (SZCDB), and claim to be citizens of India who entered Australia on 1 May 2002. 2 The appellants' son (SZEJB) was also refused a protection visa by a delegate of the Minister. That refusal, which occurred on 30 April 2004, was subsequently affirmed by a decision of the Refugee Review Tribunal, made on the 21 July 2004, and by a decision of the Federal Magistrates Court made by Nicholls FM on the 6 April 2006. The notice of appeal to the Federal Court in relation to that proceeding contains a request that the appeal of SZEJB be incorporated with that of SZCDA and SZCDB. Consequently, the proceeding involving SZCDA and SZCDB, being numbered NSD 776 of 2006, has been treated as the precedent vehicle for the implementation of orders in relation to the proceeding involving appellant SZEJB, being numbered NSD 777 of 2006. The appellants state that the Refugee Review Tribunal and the Federal Magistrate[s] Court committed jurisdictional error in reaching the conclusion that the Appellants are not entitled to Protection Visa[s]. 2. The Refugee Review Tribunal and the Federal Magistrate[s] Court failed to note that the appellants satisfy the definition of "Refugee" as defined in Article 1A(2) of the Convention. To go further the Tribunal and the Federal Magistrate failed to see that the appellants satisfy the four key elements that are required to satisfy the Convention definition. The appellants states [ sic ] that the Tribunal refers to four key elements and since they satisfy them they are entitled to protection visa [ sic ]. The second element --- the applicant must fear persecution. If the applicants returns [ sic ] to their home country their life would be in danger. They will be chased and killed. The third element --- the persecution that the applicant fears must be for one or more reasons enumerate [ sic ] in the Convention definition --- race, religion, nationality, membership of a particular social group or political opinion. The applicant fulfils this. The fourth element --- the fear of persecution for a Convention must be a 'well founded' fear. The applicant fulfils all the four elements. 3. The Tribunal had failed to consider the facts in the correct way. If the appellant [ sic ] return to the country he [ sic ] will be targeted by the Samara group. 4. The Tribunal failed to see that Mr Samara was a cabinet Minister and he has links all over the country. The authorities and officials who have to protect the appellant and his family failed in their duty. The Tribunal miserably failed in referring to a so-called independent source in page 7 of its reasons. The Federal Magistrate[s] Court has not considered this also and has merely agreed to the Tribunal's decision. 5. The Federal Magistrate made an error by accepting that the Tribunal's finding that the applicant could relocate to any other part of India. 6. The Federal Magistrate made a legal, factual and jurisdictional error in not properly applying the principles laid down by the Full Court of the Federal Court in Randhawa v Minister for Immigration Local Government and Ethnic Affairs (1994) 52 FCR 437. 7. The Federal Magistrate failed to see that the appellant had a fear of persecution in his home country and that persecution is well founded. 8. The Federal Magistrate and the Tribunal should have seen that English is the main language used everywhere in India. Therefore the appellant feels comfortable in an English speaking country like Australia than other states in India which have other languages and culture. 9. [The] Tribunal before advising the applicant to relocate to other parts of the country should have relied on some independent source to find the truth stated in that point. The Federal Magistrate has not considered this point and made an error. 10. The Federal Magistrate failed to see that the Tribunal failed in relying on some country information provided by foreign sources. The Federal Magistrate should have seen the Tribunal had not given priority to the real factual situation and should not have relied on unrealistic third party statements. 11. The Tribunal and the Federal Magistrate have accepted the points that would be helpful to them to dismiss the case. But have conveniently by-passed the real situation. 12. A reading of the Federal Magistrate's reasons shows that the Federal Court had decided to dismiss the case even before completely hearing it. 13. As the matter has been decided by the Tribunal and the Federal Magistrate without considering the real facts and circumstances from jurisdictional error. 5 Nicholls FM recorded that '[o] nly the applicant husband made specific claims under the Refugees Convention' , and that the basis of his claim to refugee status was his influential membership of the Akali Dal Party since 1997; his election as vice-president of the local Karyana Association; and his participation at political rallies. He further testified as to divisions within his Party into two factions: the "Badal" and the "Tohra" factions, and that he supported the Tohra faction. The first appellant also claimed the police started 'to give him trouble' following the loss of the election in 2002, and the swearing in of Mr Samara as 'Cabinet Minister' in the new Government. His Honour observed that the allegations of bad faith and bias made by or on behalf of both appellants were unsupported by evidence and as not 'clearly alleged' , and as otherwise as not reflective of what occurred in the Tribunal hearing, and pointed out that '[t]he Tribunal's account shows that it clearly discussed the relevant claims with the [first appellant] and put to the [first appellant] its doubts about some of what he was saying' . His Honour emphasised the serious nature of any such allegation and the need for distinct and clear proof of pre-judgment, reference being made by his Honour to High Court authority. His Honour dismissed the existence of any basis for the suggestion that the Tribunal misled the applicant, 'or even that the Tribunal had any understanding that the [first appellant] may have some misapprehension as to the view the Tribunal was taking of his evidence' . 10 Moreover Nicholls FM dismissed the appellants' allegation of denial of natural justice, either in the statutory context or otherwise, his Honour additionally referring in that regard to the operation of s 422B of the Migration Act 1958 (Cth) ('the Act'). In the statutory context such information was excluded from any obligation to put such information in writing to the applicants by way of s 424A(3)(b) and s 424A(3)(a) respectively... I cannot see that there was any breach of s 424A of the Act, or indeed any other provisions of Division 4, Part 7 of the Act. Moreover his Honour pointed to the absence of any 'exceptional circumstances which would serve to require the Tribunal to make... enquiries... nor [are there] any such circumstances evident on the material before [the Tribunal], referring thereby to the well known observation of Wilcox J in Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 170. His Honour emphasised moreover the principle that the Tribunal is not obliged to accept an applicant's claims uncritically, citing Randhawa v Minister for Immigration, Local Government and Ethnic Affairs (1994) 52 FCR 437 at 451 (Beaumont J). Ultimately of course, a conclusion that an applicant's claims lack credibility is one falling to be made by the Tribunal, his Honour referring generally to the often cited authority of Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407. 12 Other findings and observations in his Honour's thorough review, undertaken in relation to what comprised in any view what may be fairly described as sweeping and unspecific claims as to absence of establishment of any exceptional circumstances, included the observation that '... the very basis of the Tribunal's decision was the evaluation of the applicant's position in a political party and further the circumstances arising from this situation and the evaluation of whether that participation amounted to a well founded fear of persecution' , and that the appellants had 'not put forward anything to say that he was a member of any other social group' , and further that there was not 'any other possible social group of which the applicant could have been a member evident on the material before me' . The first appellant addressed the Court in person on behalf of himself and his wife the second appellant, and also on behalf of their infant son. I will hereafter refer to the submissions articulated by the first appellant as submissions of the appellants. The appellants informed the Court that the grounds of appeal were prepared by a migration agent, whom they did not identify. The appellants' notice of appeal does not raise as a ground of appeal any breach by the Tribunal of s 424A of the Act. However, the Minister raised that particular issue in the Minister's outline of submissions and the proceedings was adjourned for further hearing on 31 August 2006 largely in order to afford the opportunity to the parties for further submissions referrable to recent authority in relation to the operation of that statutory provision. . Nothing was put forward to any material or viable extent by the appellants to the contrary of the foregoing findings. It was in reality a case of the appellants raising virtually every conceivable basis for vitiating the administrative decisions of the Tribunal without any viable basis. The Minister made the further submission that the Tribunal member had earlier made reference to the appellants' visa applications in her reasons for affirming the decision under review 'by virtue of that information being "adopted" by the Appellants in the Appellants' application for review and at the Tribunal hearing or "republished" by the Appellants in their application for review'. Thus according to the Ministers contention, the information from the application visa that was adopted by the Tribunal was 'excepted from the obligations in s 424A(1) [of the Act] by virtue of subs (3)(b)'. Okay...when you applied for a protection visa with the help of your adviser you completed these application forms. You might remember these orangey pink ones. And there's also a statement that you signed. Now, is all of that information true? All true? Is it a complete statement of your claims for a protection visa? That dictum of Jacobson J was subsequently followed by a Full Federal Court in SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 at [20] , [157] and [219] (Moore, Weinberg and Allsop JJ respectively). 20 The Minister submitted in respect to the dictum of Jacobson J in NAZY that 'the facts and circumstances of each case should be the determining factor as to whether there has been an adoption or republication by the applicant in their application for review of the contents of their application for a protection visa', and further that the 'facts and circumstances' outlined at [18] 'indicate that the appellants adopted... [the] claims made in their application for protection visa in their application for review'. 21 I do not find force in that submission by the Minister, as the combination of those 'facts and circumstances' relied upon by the Minister do not demonstrate, in accordance with NAZY , that the appellant adopted his protection visa application for the purposes of his application for review. As a consequence it appears the Tribunal did breach s 424A(1) by relying upon information contained in the appellant's protection visa application, and by not providing particulars of that information to the appellant. 22 However, I do find force in the Minister's further case on the appeal that the Tribunal's finding in respect to relocation was a separate and independent basis upon which the Tribunal affirmed the decision under review. The Tribunal member's use of the words 'in any case', prior to her finding on relocation, demonstrates that it was a separate and independent ground. The existence of such an independent ground is sufficient basis for the withholding of relief: see SZEEU at [233] (Allsop J). 23 Accordingly the appeal must be dismissed with costs. | whether breach established of s 424a(1) of the migration act concerning provision of particulars whether tribunal's decision contained a separate and independent basis migration |
The respondents are (respectively) an innovator pharmaceutical company incorporated in the United State of America, Wyeth, and its wholly owned Australian subsidiary, Wyeth Australia Pty Limited ( Wyeth and Wyeth Australia ). This decision concerns Wyeth's application for interlocutory relief to restrain Alphapharm from allegedly infringing Wyeth's patent pending the final resolution of the parties' competing claims about the validity of the patent and, if it is valid, whether Alphapharm's intended actions would infringe it in any event. Wyeth is the patentee of Australian Patent No 2003259586 entitled "Extended release formulation" ( the method patent ). The method patent is for a method of treating central nervous system disorders including depression, which comprises administering orally a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine hydrochloride over a 24 hour period with a peak blood plasma level of venlafaxine hydrochloride in from about 4 to 8 hours after administration. Through Wyeth Australia, Wyeth manufactures and sells its extended release formulation of venlafaxine hydrochloride under the name Efexor-XR . Efexor-XR has been on the Australian market since February 1999 and is the leading antidepressant medication in Australia in terms of units sold and value of sales. On the basis of bioequivalence to Efexor-XR, Alphapharm obtained registration on the Australian Register of Therapeutic Goods ( ARTG ) on 30 April 2009 of an extended release formulation of venlafaxine hydrochloride, known as Enlafax-XR . Alphapharm first became aware of the method patent on 19 March 2009. Wyeth first became aware of the registration of Enlafax-XR on 1 May 2009. On 19 June 2009 Alphapharm filed an application in which it sought an order that the method patent be revoked, alleging numerous grounds of invalidity. In its defence and cross-claim filed on 24 July 2009, Wyeth claimed interlocutory orders restraining Alphapharm from infringing claims 4 and 27 (insofar as claim 27 is dependent on claim 4) of the method patent by reason of its intended actions with respect to Enlafax-XR. On 29 July 2009, when the application first came before the Court, Alphapharm advised that it intends to commence supplying Enlafax-XR from 1 September 2009. Directions were made and a hearing date fixed in respect of Wyeth's application for interlocutory orders with the common intention that a decision about that application be made before 1 September 2009. (2) Has Wyeth established the existence of a prima facie case supporting its claim of Alphapharm's infringement of the method patent and what is the strength of that case? (3) How does this weigh against any establishment by Alphapharm of the existence of a prima facie case supporting Alphapharm's claims that the method patent is invalid and the strength of those claims? (4) Where does the balance of convenience lie, including the nature, extent and reparability of any harm likely to be incurred by Wyeth and Alphapharm, the adequacy of a remedy of damages, an account of profits or compensation, and other discretionary factors identified by each party? Before moving to these issues it is convenient to provide a brief overview of some other uncontentious facts forming a part of the background to the proceeding. On 4 March 1988 Wyeth was granted a patent for the compound venlafaxine (Australian Patent No 1983022123) ( the compound patent ). Between November 1994 and August 2003 Wyeth maintained the registration of a product known as Efexor-IR on the ARTG. Efexor-IR was a formulation of venlafaxine hydrochloride requiring oral administration two or three times a day. The letters "IR" stand for "immediate release". In May 1998 Wyeth obtained registration of Efexor-XR on the ARTG. The letters "XR" stand for "extended release". In October 2003 Wyeth applied for the method patent, with a claimed priority date of 25 March 1996 (by reference to various other related patents). Efexor-XR was listed on the pharmaceuticals benefits scheme ( the PBS ) in December 2005. The method patent was granted on 11 May 2007, with the claimed priority date of 25 March 1996. On 6 December 2007 Wyeth was granted Australian Patent No 2002250058 for a compound known as desvenlafaxine, which is a metabolite of venlafaxine ( the Pristiq patent ). On 18 August 2008 Pristiq was registered on the ARTG. Pristiq was listed on the PBS on 1 February 2009. On 6 December 2008 the compound patent expired. There is another proceeding relating to the method patent between Sigma Pharmaceuticals (Australia) Pty Ltd ( Sigma ) and Wyeth ( the Sigma proceeding ). On 26 February 2009 Sigma obtained registration on the ARTG of an extended release formulation of venlafaxine hydrochloride, known as Evelexa-XR, also on the basis of bioequivalence to Efexor-XR. Wyeth applied for interlocutory relief restraining Sigma from infringing claims 4 and 27 of the method patent by reason of its intended actions with respect to Evelexa-XR. On 3 June 2009 Sundberg J made interlocutory orders in Wyeth's favour ( Sigma Pharmaceuticals (Australia) Pty Ltd (ACN 004 118 594) v Wyeth [2009] FCA 595 ( the Sigma decision )). The parties did not object to, or cross-examine about, any document or affidavit admitted into evidence on the basis that the application was for interlocutory relief, admissibility at trial was not conceded, and submissions about the weight to be given to certain evidence could be made irrespective of the lack of objection or cross-examination. I propose to deal with the evidence in the context of the resolution of the issues. In therapeutic dosing with venlafaxine hydrochloride tablets, rapid dissolution results in a rapid increase in blood plasma levels of the active compound shortly after administration followed by a decrease in blood plasma levels over several hours as the active compound is eliminated or metabolized, until sub-therapeutic plasma levels are approached after about twelve hours following administration, thus requiring an additional dosing with the drug. With the plural daily dosing regimen, the most common side effect is nausea, experienced by about 45% of patients under treatment with venlafaxine hydrochloride. Vomiting also occurs in about 17% of the patients. In one embodiment, the drug containing formulation is coated with a mixture of ethyl cellulose and hydroxypropylmethylcellulose to provide the desired level of coating. Numerous attempts to produce single daily dosing, extended release or tablets by hydrogel technology proved to be fruitless because the compressed tablets were either physically unstable (poor compressibility or capping problems) or dissolved too rapidly in dissolution studies. Typically, the tablets prepared as hydrogel sustained release formulations gave 40% to 50% dissolution at 2 hrs, 60% to 70% dissolution at 4 hrs and 85% to 100% dissolution at 8 hrs. In the extrusion process, heat buildup occurred which dried out the extrudate so much that it was difficult to convert the extruded cylinders into spheroids. Addition of hydroxypropylmethylcellulose 2208 to the venlafaxine hydrochloride-microcystalline cellulose mix made production of spheroids practical which proved to be practical for a single daily dosing formulation useful in the methods of the invention. The apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at [416]; Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498 ; (2008) 79 IPR 261 ( Interpharma ) at [16]. While the answer to that question may be in the affirmative, it will then be necessary to consider whether that answer should be qualified by the apparent strength of the defence. In a patent case, the fact of registration constitutes prima facie evidence of validity: AB Hassle v Pharmacia (Aust) Pty Ltd (1995) 33 IPR 63 at 69-70 ( AB Hassle ); GenRx Pty Ltd v Sanofi-Aventis [2007] FCA 1485 ; (2007) 73 IPR 502 ... at [2]-[6] ... It has been said that it is for the respondent to show that want of validity is a triable question: AB Hassle at 69. This seems clear enough, but, in my opinion, the analysis needs to be taken a step further. Is it sufficient that the respondent does show a triable question on validity? In my view, if that is as far as the respondent goes, then, assuming always that the applicant has shown a triable issue on infringement, absent questions of validity, the conclusion would remain that the latter had a triable question. That is to say, as a matter of analysis, unless the case for invalidity is sufficiently strong (at the provisional level) to qualify the conclusion that, overall, the applicant has a serious question, or a probability of success, the court should move to consider the adequacy of damages, the balance of convenience and other discretionary matters. It is the applicant's title to interlocutory relief which is under consideration, and the bottom-line question, as it were, is whether the applicant has a serious question, or a probability of success, not whether the respondent does in relation to some point of defence raised or foreshadowed. In such an action the plaintiff's prima facie case must be a strong one so far as the question of validity is concerned, for he asserts a monopoly and must give more proof of the right he claims than is afforded by the mere granting of the patent : Smith v Grigg Ltd [1924] 1 KB 655 per Atkin LJ at p 659; Bonnella v Espir (1926) 43 RPC 159. The general practice in that kind of case has long been to refuse an interlocutory injunction unless either the patent has already been judicially held to be valid or it has stood unchallenged for a long period: Smith v Grigg Ltd [1924] 1 KB 655 , at p 658. Even if the patent is an old one --- which for this purpose is generally taken to mean more than six years old --- it has been said that an interlocutory injunction will generally be refused provided that the defendant shows by evidence 'some ground' for supposing that he has a chance of successfully disputing the validity of the patent at the trial: Marshall and the Lace Web Spring Co Ltd v Crown Bedding Co Ltd (1929) 46 RPC 267 , at p 269. This should be read, however, with Sir George Jessel's statement in Dudgeon v Thomson (1874) 30 LT 244 which divides into three classes the cases in which an injunction may be granted before the hearing in such a case. They are: (1) cases where the patent is an old one and the patentee has been in long and undisturbed enjoyment of it; (2) cases where its validity has been established elsewhere and the court sees no reason to doubt the propriety of the result; and (3) cases where the conduct of the defendant is such as to enable the court to say that, as against the defendant himself, there is no reason to doubt the validity of the patent. Once this is appreciated, the force of Lord Diplock's statement that the former rule of practice concerning interlocutory relief had become obsolete ( American Cyanamid Co v Ethicon Ltd [1975] UKHL 1 ; [1975] AC 396 at 405-6) becomes apparent. Thus, the shift in judicial attitude to interlocutory relief in patent cases, culminating in the recent Australian decisions to which I have referred, may be seen as bringing practice at last into step with changes in the underlying substantive law. For these reasons I do not accept Alphapharm's submission that I should depart from the approach of Sundberg J in the Sigma decision at [16], by reference to the observation of the High Court in Beecham which Alphapharm emphasised. PRIMA FACIE CASE OF INFRINGEMENT? Professor William Charman, Dean of the Victorian College of Pharmacy, Monash University and director of the Monash Institute of Pharmaceutical Science gave evidence for Wyeth by way of affidavits affirmed 28 July 2009 and 12 August 2009. Based primarily on the product information for Enlafax-XR, Professor Charman concluded that: - (i) the active ingredient of Enlafax-XR is venlafaxine hydrochloride, (ii) Enlafax-XR is to be administered orally in a single daily dose and is to be given chronically for the treatment of depression, (iii) Enlafax-XR is indicated for the treatment of major depression or social anxiety disorder, (iv) Enlafax-XR has been shown to be effective in reducing depression, and (v) after administration of Enlafax-XR the mean peak plasma concentration of venlafaxine is attained within the range of 4 to 8 hours. According to Wyeth this established a clear case that Enlafax-XR, when administered to a patient, would use the method of claims 4 and 27 of the method patent, with a consequential infringement by Alphapharm of the method patent as referred to in s 117 of the Patents Act 1990 (Cth). Alphapharm (in distinction from the position of Sigma in the Sigma proceeding) denied any infringement of the method patent. Alphapharm's submissions about infringement and validity are related. In its response to Wyeth's infringement claim, Alphapharm contended that, properly construed, the method patent excluded the use of hydrogel tablet technology from the invention. This was clear from the assertions in the specification that attempts to use hydrogel tablet technology had "proved to be fruitless" and "impossible to achieve". A person could hardly claim as an invention that which the person had found impossible to invent. The examples were examples of "this invention" defined earlier in the specification so as to exclude a formulation using hydrogel tablet technology. The references to "formulation" in the claims thus must exclude hydrogel tablet technology. Alphapharm noted that this construction is consistent with that advocated by Wyeth in other patent proceedings in the United States of America. This is particularly relevant when the question concerns infringement of a claim or the sufficiency of a claim to define the invention. However, terms in the claim which are unclear may be defined or clarified by reference to the body of the specification ( Welch Perrin at 610; Kimberly-Clark at [15]). The language of the claims may have no positive meaning when read apart from the specification but the meaning may become clear and the invention sufficiently defined when read using the body of the specification as a dictionary of the jargon and ascertaining the nature of the invention ( Welch Perrin at 616). Dr Marshall explained that Enlafax-XR uses hydrogel tablet technology, as described in the specification. ############################################################################################################. Alphapharm said that Professor Charman did not dispute Dr Marshall's evidence but simply questioned Dr Marshall's conclusions and asserted a need to undertake laboratory studies to determine whether the Enlafax-XR products modify the release of venlafaxine hydrochloride by way of hydrogel tablet technology. According to Alphapharm, this need for further assessment should be seen as a reflection of Professor Charman's lack of practical expertise in contrast to Dr Marshall's vast practical experience as a bench formulator. If Alphapharm's construction of the method patent is incorrect then, said Alphapharm, Wyeth's problem is that the method patent could not survive the challenge to its validity on the ground that the claims are not fairly based; the method patent excluded hydrogel tablet technology but the claims of the method patent, on Wyeth's construction, purported to include all methods for extended release formulations of venlafaxine hydrochloride (a submission expanded upon with respect to the fair basis claim). As these matters involved issues of construction of the method patent, which is for the Court alone to determine, the Court could reach a conclusion about these issues with a reasonably high degree of confidence. In answer to Alphapharm's contentions, Wyeth said that Alphapharm's argument that Enlafax-XR did not breach the method patent should be rejected for at least two reasons. First, the claims define a method of treatment and are not limited to the use of any particular formulation of venlafaxine hydrochloride other than insofar as the features of the claim disclose. On this basis any formulation of venlafaxine hydrochloride achieving the features identified in the claims (namely, a single daily dosing with a therapeutic blood plasma concentration over a 24 hour period and a peak blood plasma level in from about 4 to 8 hours after administration) was within the scope of claim 4. Alphapharm's attempt to read down the scope of the claims by reference to one example in the specification of an embodiment of the invention is impermissible (citing Welch Perrin & Co Pty Ltd v Worrel [1961] HCA 91 ; (1961) 106 CLR 588 at 610 and Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 ; [2001] HCA 8 at [15] , Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155 ; [2005] FCAFC 90 at [67(iv)] , Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 ; [2004] HCA 58 at [69] ( Lockwood No 1 ) and Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29 , a decision which Alphapharm also emphasised). Second, the non-infringement argument depends on the proposition that Enlafax-XR uses hydrogel tablet technology itself to modify the release of venlafaxine hydrochloride. This claim is not made good on the evidence because the evidence fails to explain the role of the capsule in the release process. Professor Charman explained that it was inappropriate to consider the attributes of each component in isolation, as Dr Marshall had done. Rather, the components in combination ((################################################# #######################################################) all had to be considered in combination, with experimentation. ########################################### ################################################################################. For these reasons, to ascertain whether Enlafax-XR uses hydrogel tablet technology itself to modify the release of venlafaxine hydrochloride laboratory assessments, including dissolution studies, visual observations and other characterisation tests are required. Insofar as Alphapharm attempted to rely on Wyeth's statements in other proceedings in the United States of America, Wyeth said the law is clear. The construction of a patent is a question of law for the Court. A party cannot make an admission about construction. In any event, a submission to the Court cannot constitute an admission of fact. Hence, this evidence is irrelevant and inadmissible. On the basis of the evidence as it stands, Professor Charman has substantial qualifications and experience enabling him to make the observations on which Wyeth relied to answer Alphapharm's hydrogel tablet technology claim. I cannot discount that evidence, or lessen its potential weight, on the ground of Professor Charman's alleged lack of practical experience as Alphapharm proposed. It follows that, at this stage, I have conflicting expert evidence in circumstances where both, prima facie , appear entitled to weight. I consider, therefore, that this aspect of the infringement debate cannot rationally be excluded by reference to Dr Marshall's evidence. Accordingly, I turn to the issues of construction. I do not accept Alphapharm's submission that, as issues of construction are for the Court alone, they may be effectively resolved on an interlocutory basis. Although Alphapharm is correct to emphasise that construction is a matter for the Court alone, the evidence of experts can assist in explaining the prior art and thus the context of, as well as scientific or technical terms used in, the method patent. In this case there is (already) a wealth of expert evidence, parts of which are potentially relevant to the issues of construction and none of which has been tested by cross-examination. Accordingly, the issues of construction, like all other issues on this application, are to be assessed on a prima facie basis. There was considerable debate between the parties as to whether or not Sundberg J considered an argument equivalent to that of Alphapharm's defence against the infringement claim in the Sigma decision. The argument in question there was framed as part of Sigma's fair basis challenge to validity on the ground that the specification, properly construed, disclosed only a formulation of venlafaxine hydrochloride comprising a spheroid core having various qualities. Hence, the argument ran, all claims not so limited are not fairly based on the specification and breach s 40(3) of the Patents Act (which provides that "(t)he claim or claims must be clear and succinct and fairly based on the matter described in the specification). The spheroid core example is just that. Sigma's contention cannot be accepted when the specification is read as a whole. The invention is not limited to the example. It relates to a method of treating patients using a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma concentration of venlafaxine within a defined period or at a defined level. These provide a description of the invention later claimed. See in particular claims 4 and 9. Nothing in the body of the specification suggests that the description of the invention it contains is wider than the invention claimed. The spheroid example is an example of one embodiment later reflected in a claim upon which Wyeth does not presently rely. See page 4B, lines 17 to 34, page 4C, line 1 and claims 18 and 19. The examples given at page 5 of the specification all deal with coated spheroids and are examples of the formulations referred to at page 4D, lines 5 to 16. Whether or not Sundberg J was considering the same or a different argument, the principles his Honour applied are apt in relation to the present issue. The problem which Alphapharm must confront is that the specification (at p 2 lines 19-24) contains a statement identical to claim 1. Read with the preceding reference to the treatment of depression (p 1b lines 13-14), the specification also discloses the same matter as contained in claim 4. Further, the words "this invention", in the context of the specification read as a whole, prima facie refer to those words as used in the description on p 2 at lines 19-24 (namely, "(i)n accordance with this invention, there is provided a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period..."). One reference on which Alphapharm relied to support its construction is at p 4C lines 31-33 where the statement is made about numerous attempts having been made to produce single daily dosing, extended release or tablets by hydrogel technology proving to be fruitless. This reference, however, appears as part of an example of one embodiment in which the extended release formulations are formed as coated beads or spheres (at p 4B lines 22-26). Another main reference on which Alphapharm relied is at p 4D at lines 18-20 ("(t)he following examples are presented to illustrate applicant's solution to the problem of preparation of the extended release drug containing formulations of this invention"). This is followed by a series of described further embodiments of the invention. This statement also appears as part of the example of one embodiment in which the extended release formulations are formed as coated beads or spheres. A similar point can be made about the statement that the desired dissolution rate had proven impossible to achieve with hydrogel tablet technology but had been achieved "with the film coated spheroid compositions of this invention" (at p 10 lines 17-19). The reference appears at the end of the example of one embodiment being the formation of the extended release formulations as coated beads or spheroids. In that context, the statement would ordinarily be read as a statement that, in that particular embodiment of "this invention", the use of hydrogel tablet technology had proven impossible, with the words "this invention" being a reference back to the invention as more generally described at p 2 lines 19-24 (that is, "(i)n accordance with this invention, there is provided a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period..."). I am reluctant to place any material weight on Wyeth's statements in other patent proceedings in the United States of America, essentially for the reasons given by Wyeth. The admissibility of those statements has not been finally determined. Wyeth foreshadowed an intention to object to their admission into evidence on the ground of relevance. The grounds articulated in support of this intended objection, at least on their face, carry weight. In summary, although the emphasis of the argument is undoubtedly different, Alphapharm's proposition is the same in principle as that considered and rejected by Sundberg J in the Sigma decision at [41]-[42]. The statements on which Alphapharm relied to construe the method patent as excluding hydrogel tablet technology (as described at p 1a of the specification) all appear as part of the text dealing with the example of one embodiment being coated beads or spheroids. The ordinary cannons of construction tend to indicate that the invention is not limited to that embodiment or any example of that embodiment. Sundberg J so concluded in support of his rejection of Sigma's fair basis argument. On a prima facie basis, I also so conclude. Accordingly and for the purposes of this application, I accept that, as the evidence currently stands, Wyeth has a reasonably strong prima facie case for infringement under s 117 of the Patents Act . According to this argument, Wyeth's problem is that if the claims do not exclude hydrogel tablet technology then the claims are not fairly based on the matter described in the specification because the specification excludes that technology. The disagreement between the parties relates to the application of principles with respect to fair basis to the method patent rather than the content of those principles. Hence, it is common ground that the fair basis requirement relates to the matter in the specification disclosing the invention ( Lockwood No 1 at [53]). The requirement is that there be a real and reasonably clear disclosure in the body of the specification of that which is claimed so that the invention is broadly, that is in a general sense, described in the body of the specification. Such a disclosure is not limited to preferred embodiments. Further, a "requirement for the best method of performing an invention does not make it necessarily a requirement for all claims". Also, material forming part of the description of the invention need not be included as an integer of each claim ( Lockwood No 1 at [69] citing Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 95 per Gummow J). Alphapharm and Wyeth both drew support from Atlantis Corporation , albeit for their conflicting positions. That proposition is correct, but it is not fatal to the Patentee's position in this case. A "coincidence of language" between a claim and part of the body of a specification does not establish fair basing if that part of the language of the specification does not reflect the description of the invention in the light of the specification as a whole. In the Atlantis Case , the specification, read as a whole, described an apparatus limited to a particular use as a sub-soil drainage system. The claims, however, were "pure apparatus" claims without that limitation on use. The Full Court of the Federal Court of Australia refused to construe them narrowly so as to conform with the description in the specification. A statement in the specification of a description of the invention in similar language to the first claim was not treated as the description of the invention. While the Full Court did not engage in close textual analysis, it did distinctly hold that the statement in the specification ( Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29 at 50, per Wilcox and Lindgren JJ. The claims, however, are 'pure apparatus claims'. They are not subject to any limitation as to use. They travel beyond, and are not fairly based on, the matter described in the specification. It relied on the parts of the specification referred to at [42] above, as well as Dr Marshall's evidence. This evidence is to the effect that while the specification excludes hydrogel tablet technology (by stating that numerous attempts to produce a single daily dosing, extended release formulation by that technology proved fruitless), the claims purport to include a formulation, being hydrogel tablet technology. In other words, the claims include what the specification says is impossible to achieve. Alphapharm submitted that no other construction of the clear statement on p 10 of the specification about impossibility is open. Alphapharm characterised this approach to the method patent as "compelling". Wyeth said that the statements in the specification about hydrogel tablet technology do not assist Alphapharm on its fair basis point, for much the same reasons as given in response to Alphapharm's infringement defence. The consistory style statements (including that quoted at [23] above) provide a clear description of the invention claimed. Nothing in the specification, said Wyeth, suggests the description of the invention is narrower than the invention as claimed. In particular, the statements on which Alphapharm relied do not indicate that the use in the methods of formulation of hydrogel tablet technology is excluded from the invention. The invention is the method of treatment. Properly understood, the evidence of Professor Charman and Dr Marshall is to the effect that it would be possible to achieve the desired dissolution rate using hydrogel tablet technology. As to the formulation consisting of a spheroid core coated with a mixture of ethyl cellulose and hydroxypropylmethylcellulose ( HPMC ), Wyeth said this is put forward in the specification as a specific example of a formulation which can be used in the claimed method of treatment. It is expressly identified as an example of one embodiment of the invention. The experimental examples are said to be illustrative not exhaustive. Hence, the fair basis argument has no prospect of success. The specification describes the invention as method of treatment involving certain key factors (the single daily dose to achieve the nominated peak and therapeutic blood plasma levels within the nominated time frames). Numerous embodiments of this invention are identified. The spheroid core coated with a mixture of ethyl cellulose and HPMC is an example of one embodiment. The statement on p 4C of the specification that attempts to produce a single daily dosing formulation using hydrogel tablet technology "proved fruitless" appears as a part of this example of one embodiment of the invention. The statement about the desired dissolution rate being impossible to achieve using hydrogel tablet technology appears as a concluding passage following a series of illustrative experimental examples of this example of one embodiment of the invention. The decision in Atlantis Corporation appears to provide Wyeth with greater support than Alphapharm. In Atlantis Corporation the narrow description of the invention appeared at the outset and was followed by a more general description of an apparatus. The first claim was for the more general description of the apparatus. That claim was unambiguous and could not be read down by reference to the specification. Hence, the claim travelled beyond and was not fairly based on the specification. In the present case the specification is structured differently. The statements of exclusion from or narrowing of the invention on which Alphapharm relied follow more general descriptions and embodiments of the invention, in parts of the specification dealing with one among a number of embodiments and an example of that embodiment. The claims are no broader than the more general descriptions and embodiments of the invention. It is therefore difficult to see how they are not fairly based on the on the matter described in the specification. For these reasons, and consistent with the equivalent conclusion of Sundberg J in the Sigma decision, I do not accept that Alphapharm has a prima facie case of invalidity on the fair basis argument. The specification identifies difficulties with both (at p 4C for hydrogel tablet technology, being that the tablets dissolved too rapidly, and at p 4D for the film-coated spheroids, being that during the extrusion process, the extrudate was too dry). The specification also identifies the solution to this problem associated with the film-coated spheroids, being the addition of HPMC to the film-coating mixture (at p 4D). After giving examples of this solution, the specification concludes with the impossibility representation about hydrogel tablet technology. According to Alphapharm, the structure of the specification discloses that the two representations are central to the assertion that hydrogel tablet technology, one of the conventional means for preparing extended release formulations, did not work for venlafaxine hydrochloride. Hence, the representations are central in asserting the existence of a problem which the method patent purported to resolve. Without the assertion of a problem with conventional technologies for the preparation of an extended release formulation, it is likely the application for the method patent would have been rejected for not being a patentable invention on the grounds of not being a manner of manufacture or for not containing an inventive step. Thus, it readily may be inferred that the representations materially contributed to the decision to grant the method patent (by analogy to WM Wrigley Jr Company v Cadbury-Schweppes Pty Limited t/as Trebor Confectionary (2005) 66 IPR 298 ; [2005] FCA 1035 at [133] ). Alphapharm contended that the representations were false and misleading. With respect to the completely unexpected representation, Alphapharm emphasised Dr Marshall's evidence that, as at 25 March 1996 (the priority date of the method patent, as presumed for the purpose of the interlocutory application), it would not have been completely unexpected that a single daily dosing formulation of venlafaxine hydrochloride could be obtained. The specification does not identify any reason for this unexpectedness other than the water- solubility of tablets produced by hydrogel technology. As to that issue, by 25 March 1996: - (i) high solubility did not exclude an extended release formulation, (ii) many texts detailed how to delay dissolution, (iii) a number of highly water soluble drugs had been formulated into extended release formulations, (iv) the method patent refers to US Patent No 4138475 which is for an extended release formulation of a highly water soluble drug, and (v) examples of other successfully formulated extended release formulations can be found in reference texts. According to Alphapharm, Professor Charman agreed with Dr Marshall insofar as Professor Charman's evidence said that the problems experienced would not have suggested to a person skilled in the art in 1996 that an extended release formulation using hydrogel tablet technology could not be obtained. Further, Alphapharm submitted that the impossibility representation is an objective statement of fact of a position of impossibility for all time and cannot be read subjectively as limited to the inventor ( Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis (2008) 78 IPR 485 ; [2008] FCA 1194 at [126] - [127] ). Enlafax-XR uses hydrogel tablet technology, which itself falsifies the impossibility representation. If limited to the priority date of the method patent, the statement is still false as Dr Marshall's and Professor Charman's evidence indicates. They both gave evidence that, in 1996, a hydrogel tablet technology formulation would be possible to be achieved by a person skilled in the art. The falsity is thus analogous to that found in Prestige Group (Australia) Pty Limited v Dart Industries Inc . (1990) 26 FCR 197 at 218-219 in that the method patent claims that using hydrogel tablet technology is impossible in the methods of the invention and yet does not exclude hydrogel tablet technology from the invention claimed. In this regard, Alphapharm again relied on Wyeth's statements in the other patent proceedings in the United States of America, referred to at [42] and [49] above as confirming the false and misleading nature of the representations. Alphapharm's written submissions also referred to International Patent Publication No WO94/25789 ( the Alza patent ). In its written submissions, Alphapharm pointed out that the Alza patent evidenced that a single daily dose formulation of venlafaxine hydrochloride in a controlled release formulation in fact existed before the priority date of the method patent. However, consistent with Sigma's approach in the Sigma proceeding, recorded at [44] of the Sigma decision, Alphapharm confirmed that it did not rely on the Alza patent in oral argument for the purpose of this interlocutory application. Hence, I do not consider the Alza patent further. Wyeth's response to Alphapharm's arguments about the completely unexpected representation emphasised that the statement is not that it was completely unexpected that venlafaxine hydrochloride could be formulated as an extended release formulation. The statement is limited to "use in the methods of the invention", those methods being the single daily dosing formulation providing the therapeutic and peak blood plasma concentrations within and over the periods prescribed. Wyeth said that Dr Marshall's evidence misunderstood the specification by failing to reflect the importance of the words "for use in the methods of the invention". In any event, statements about results being unexpected or surprising are unlikely to be capable of supporting a conclusion of false suggestion, let alone one materially influencing the grant of the patent (citing in support Apotex at [126]-127]). Wyeth's response to Alphapharm's arguments about the impossibility representation emphasised that the statement, properly construed, was limited to that which the inventor had found possible. The inventor had found it impossible to use hydrogel tablet technology in the methods of the invention, but the evidence of Dr Marshall and Professor Charman supported the inference that a person skilled in the art would not have thought it impossible to achieve. In any event, Alphapharm's submission is illogical. It is to the effect that a representation that the invention did not include a method using hydrogel tablet technology induced the grant of a patent that did extend to the use of hydrogel tablet technology. According to Wyeth the very fact that the method patent was granted for a method covering all technology demonstrates either that the impossibility representation was not conveyed or, if it was, that it was not material. It is sufficient if the representation materially contributed to the Commissioner's decision to grant the patent or was a material, inducing factor, which led to the grant. However, it is not necessary to establish that the representation was material in the sense that, without it, the patent would not have proceeded to grant ( Pfizer Overseas Pharmaceuticals v Ely Lilly & Co [2005] FCAFC 224 ; (2005) 225 ALR 416 at 495). It is not necessary to show that, but for the suggestion or representation, no grant would have been made ( Prestige Group (Australia) Pty Limited v Dart Industries Inc (1990) 95 ALR 533 at 537-538). In the absence of such evidence, it is for the Court to make a finding, based on the evidence before it. In the absence of explicit evidence that the Commissioner, or the Commissioner's delegate, was in fact misled, it may nevertheless be inferred that a representation in fact contributed to the decision to grant a patent, if the representation was objectively likely to contribute to such a decision and the patent was in fact granted (see Synthetic Turf Development Pty Limited v Sports Technology International Pty Limited [2004] FCA 1179 at [2] , and WM Wrigley Jr Co v Cadbury Schweppes Pty Limited [2005] FCA 1035 ; (2005) 66 IPR 298 at 321). In order to do so, the Court must place itself in the position of a person skilled in the art as at the priority date. Thus, the Court would have regard to evidence of what a person skilled in the art would understand from the language, information or data in a specification or what such language, information or data would disclose to the relevant skilled addressee. Ultimately, of course, the question of what representations are made in a specification is a matter for the Court to determine. While Dr Marshall was aware of the reference to "use in the methods of the invention" in the statement said to convey this representation, his evidence indicates that the significance of this limitation may not have played as significant a role in his conclusions as warranted. The statement is not about an extended release formulation of venlafaxine hydrochloride. It is about such a formulation satisfying the requirements of a single daily dosing formulation providing the therapeutic and peak blood plasma concentrations within and over the periods prescribed. In this context, the evidence available is not a sufficient basis to draw an inference that the statement is false or misleading, even if construed objectively. Accordingly, I do not consider that Alphapharm has established a prima facie case of invalidity based on the completely unexpected representation. The impossibility representation involves more difficult issues. The main problem for Alphapharm is that it is strongly arguable that, read in context, the "impossibility" is a reference back to the "numerous attempts" which had proved "fruitless" on p 4C. So read, the statement conveys nothing more than that which the inventor had not achieved. The main problem for Wyeth is that the statement is not expressly qualified as related to the inventor's attempts (unlike the completely unexpected representation) and appears absolute and unqualified. Wyeth's arguments about Alphapharm's submissions on materiality being illogical do not, at this stage, sufficiently engage with the structural argument that, in effect, the specification establishes a problem (impossibility of hydrogel tablet technology for use in the methods of the invention) and provides a solution (film-coated spheroid spheres for use in the methods of invention), and that together these matters would have been objectively material to the issues of manner of manufacture and inventive step, and thus material to the grant of the method patent. Accordingly, I consider that, as the evidence currently stands, Alphapharm has established a prima facie case of invalidity based on the impossibility representation. This is a threshold or additional requirement to that of novelty and inventive step ( Merck & Co Inc v Arrow Pharmaceuticals Limited (2006) 154 FCR 31 ; [2006] FCAFC 91 at [63] . Alphapharm submitted that the specification of the method patent did not disclose an invention and therefore was not a manner of manufacture. Based on the evidence of Dr James Rowe (director of CoPharm Pty Ltd and NxGen Pharmaceuticals Pty Ltd), Alphapharm said that at the 25 March 1996 priority date (as claimed but to be disputed) it is apparent that: - (i) venlafaxine hydrochloride was a known substance, (ii) extended release formulations of drugs were well known, (iii) control of release rate was a matter of routine variation of the delivery system, (iv) it was expected that a controlled release formulation would reach peak plasma levels in about four hours, (v) the desirable period for release of an active ingredient was known to be about six to eighteen hours, and (vi) a single daily dosing formulation of venlafaxine hydrochloride already existed (being a reference to the Alza patent on which Alphapharm did not rely for the purpose of this application). Accordingly, submitted Alphapharm, the alleged invention consists merely of a method of achieving an outcome, known to be desirable (due to the known problems with the immediate release formulation requiring multiple dosing), by known characteristics. Sundberg J so found on a prima facie basis in the Sigma decision at [34]. Wyeth acknowledged Sundberg J's finding, but noted that in the present proceeding Professor Charman's evidence was to the contrary of that of Dr Rowe. Wyeth also observed that, while Sundberg J had concluded that there was a prima facie case on this issue, his Honour obviously did not consider it to be of such strength that it negated or undermined Wyeth's prima facie case on infringement. Wyeth also relied on certain evidence of Professor Charman additional to that before Sundberg J which it described as "compelling". Wyeth said that this closer analysis by Professor Charman revealed that: - (i) the practical utility of the claimed method is clear on the face of the specification (citing National Research Development Corporation v Commissioner of Patents [1959] HCA 67 ; (1959) 102 CLR 252) , (ii) Alphapharm's assertion that the claimed invention was merely a method using a known substance with known characteristics is a gross over-simplification of the claimed invention, (iii) nothing on the face of the specification supports Alphapharm's submission (distinguishing Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 at 249), (iv) the invention is not generally inconvenient, (v) the claimed plasma profile was not obviously desirable, and (vi) the concept of a specification having to disclose an invention, as a threshold to the requirements of novelty and inventive step, is debatable and a ground of last resort (citing Bristol-Myers Squibb Company v F H Faulding & Co Ltd (2000) 97 FCR 524 ; [2000] FCA 316 at [45] and Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2007) 235 CLR 173 [2007] HCA 21 ( Lockwood No 2 ) at [106]). On its face, the answers provided are comprehensive and capable of being persuasive. However, given that neither expert was cross-examined, it is not possible to predict where the weight of expert opinion will lie. In these circumstances, the position is as concluded by Sundberg J at [34], namely, that if Dr Rowe's evidence remains the same and is accepted at trial, it "will likely lead to the conclusion that there is no new manner of manufacture". Accordingly, Alphapharm has established a prima facie case of invalidity on this basis. Section 7(2) provides that "(f)or the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3)". The information mentioned in s 7(3) is: (a) a single piece of prior art information; or (b) any combination of any two pieces of prior art information. The "prior art base" is defined in Sch 1. In summary, as Alphapharm's submissions at paragraph 89 put it, this evidence supports the conclusion that the alleged invention "describes a known drug....put in a known delivery system..., resulting in an expected extended release profile for that drug formulation" when all of those matters would have been known to a skilled addressee in light of the common general knowledge and prior art information as it existed before the priority date of the method patent. Wyeth stressed the inventive step of the invention as involving a particular plasma profile having a particular therapeutic effect. Wyeth submitted that Dr Rowe's evidence failed to address those essential elements of the invention. Dr Rowe in fact failed to identify key parameters of the plasma profile in the method. There was no way that a skilled addressee could have predicted at the priority date that the blood plasma profile of the method claimed would have achieved the therapeutic benefits of clinical effectiveness as well as reduced side effects. That is the inventive step. Wyeth noted that, as with the issue of manner of manufacture, Professor Charman has provided additional evidence not available to Sundberg J in the Sigma proceeding (in which his Honour concluded that Sigma had established a prima facie case of invalidity on this ground). Further, the test for lack of inventive step, or obviousness, is onerous ( Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411 ; [2002] HCA 59 and Lockwood No 2 ). Accordingly, the challenger would have to show more than that it was "obvious to try"; it must be that the skilled person is "directly led as a matter of course to try" in the expectation that it might well work. A "'scintilla of invention' remains sufficient in Australian law to support the validity of a patent" ( Lockwood No 2 at [52]). The issue depends greatly on expert evidence and is heavily fact dependent. Hence, the establishment by Alphapharm of a prima facie case of invalidity on this ground could not operate to deprive Wyeth of interlocutory relief based on its prima facie case of infringement. I am satisfied, therefore, that I should adopt the same approach as Sundberg J to the issue of inventive step, in short, for the reasons his Honour gave at [27]-[30]. The field of the invention is the formulation of extended release formulations of drug components. Dr Rowe is a formulation chemist. By reference to pre 1996 publications his evidence is that before the priority date the reasons for desiring an extended release formulation were well known, extended release formulations of drugs were known and available on the market, mechanisms for achieving extended release formulations were known, extended release polymers were known and commercially available, control of release rate was a matter of routine variation of the parameters of the delivery system, it was expected that a controlled release formulation would reach peak plasma levels in about four hours, and the desirable period over which an extended release formulation would release an active ingredient was known to be 6 to 18 hours. See Aktiebolaget Hassle v Alphapharma Pty Ltd [2002] HCA 59 ; (2002) 212 CLR 411 at [45] and [57]. Nevertheless, on a fair reading of his reports, he does in my view do more than list the matters that he thought could be derived from the publications to which he referred. Dr Rowe first identified the relevant skilled person. He said that during his time at Abbott Laboratories in Sydney in the late 1980s working on new pharmaceutical formulations, he headed a team of six people comprising three analytical chemists and three formulation chemists, as well as several technicians. At the time he had a PhD, and the chemists in the team all had chemistry or pharmacy degrees and between two and fifteen years experience. He said that was the team he considered to be a typical team involved in pharmaceutical formulation, including sustained release formulation, in Australia at the priority date. He went on to say that where in his affidavit he referred to a skilled person, he was referring to what he would have done and what he believed, on the basis of his experiences, other persons with similar experience would be likely to have done at the priority date. Thus, for example, when he later referred (at par 40 of his affidavit) to standard textbooks which he owned "and which would have been routinely referred to by the Skilled Person at the Priority Date", he is to be taken as saying that a team such as the Abbott Laboratories group would have routinely referred to those texts. Throughout his main report (his affidavit) he uses variants of this formulation. Accordingly, when in examining the integers of the various claims, Dr Rowe says that the claims do not "provide anything that is new or surprising or an advance over what was well known and understood by the Skilled Person as at the Priority Date", and that they provide results of routine trial and error testing (at par 78), his opinion is to be understood in the manner I have described. That is a matter for close examination at trial. Even taking into account Professor Charman's criticisms, I remain of the view that Dr Rowe's evidence, understood as I have explained it, raises a prima facie case of invalidity for want of an inventive step. Failure to do so is a ground for revocation (s 138(f)). Alphapharm contended that the specification has no description of any method of treatment using hydrogel tablet technology or any means by which it may be made. As noted, the specification describes attempts to do so as fruitless and the outcome as impossible to achieve. Alphapharm submitted that if the claims cover hydrogel tablet technology then it must follow that the specification does not fully describe the invention ( Williams Advanced Materials Inc v Target Technology Co LLC (2004) 63 IPR 645 ; [2004] FCA 1405 at [108] ). The method patent does provide an example of a formulation which can be used to achieve the method of the claims; an embodiment within the claims is thereby enabled. Accordingly, I am not satisfied that Alphapharm has established a prima facie case of invalidity on this ground. However, consistent with Sigma's approach in the Sigma proceeding (recorded at [44] of the Sigma decision), Alphapharm did not rely on this at the interlocutory stage. Alphapharm has established a prima facie case for invalidity of the method patent on the grounds of the falsity of the impossibility representation, manner of manufacture and lack of inventive step. It is necessary, therefore, to turn to the balance of convenience, including the nature and extent of the harm involved. Alphapharm, accordingly, emphasised key factors which were not in evidence before or relevant to the Sigma decision. One such factor is the identification of the status quo (given the purpose of an interlocutory injunction as being to maintain the status quo pending the final resolution of the rights between the parties) as a consequence of Wyeth's actions in relation to Pristiq. Alphapharm said the evidence available on this application established that there is no stable status quo to protect. The "established trade" in Efexor-XR, on which Sundberg J relied in the Sigma decision at [59], was a result of Wyeth's evidence when the true position is that, by Wyeth's own hand, the market is being altered so as to shift it from Efexor-XR to Pristiq. Alphapharm supported this submission by reference to affidavits from Belinda Cowell, Alphapharm's head of marketing, Peter Astles, Alphapharm's business development manager, Mark Hurley, Alphapharm's executive director, and Dr Stephen Downes, an independent marketing expert, as well as confidential documents produced by Wyeth. According to Alphapharm, Wyeth's evidence in chief presented a picture of Efexor-XR as the leading antidepressant in Australia with annual sales of $115 million or about 25% of Wyeth Australia's income. However, after December 2008 the picture has changed. The compound patent had expired. Wyeth became exposed to competition from generic venlafaxine products. According to Mr Hurley, if such a generic product is launched with a listing on the PBS, it may be able to secure 50% of the market. If launched without PBS listing, it may be able to secure about 13.5% of the market. Alphapharm said that Wyeth had altered its marketing strategy in anticipation of the ARTG approval for and PBS listing of its new product, Pristiq. Pristiq is not listed on the PBS in the same product code as Efexor-XR so that generic venlafaxine products cannot compete with Pristiq. By about January 2009 virtually all of Wyeth's marketing efforts focused on Pristiq. Alphapharm said that confidential internal documents showed this focus on Pristiq, in effect, at the expense of Efexor-XR in terms of both new and existing patients. In other words, Alphapharm said that Wyeth is attempting to switch patients from Efexor-XR to Pristiq in circumstances where the latter is not exposed to competition from generic substitutes due to the Pristiq patent. The former, however, is exposed to competition due to the expiry of the compound patent. The consequence is to reduce the market for Efexor-XR (and thus the market in which generic substitutes can compete) by Wyeth's own hand. This, , said Alphapharm, is supported by evidence about a range of measures known in the pharmaceutical industry including: - (i) frequency of detailing for Pristiq compared to Efexor-XR (that is, one-on-one visits to medical practitioners), (ii) share of voice (that is, detailing frequency for Pristiq as a proportion of the overall detailing frequency for all products), (iii) total marketing spend for Pristiq compared to that for Efexor-XR, (iv) priority given to Pristiq in visits by sales representatives, (v) provision of free samples of Pristiq compared to Efexor-XR, and (vi) Wyeth's marketing message about Pristiq. Based on this material Alphapharm said that Wyeth must be inferred to be happy to allow Efexor-XR's market share to be eroded by a competitor product (that is Pristiq). Further, evidence showed that Pristiq is in fact being prescribed by medical practitioners and, on Wyeth's evidence, is anticipated to increase to about 38% of the combined sales of Efexor-XR and Pristiq by 31 December 2010. Hence, Wyeth's conduct means that the market for venlafaxine is rapidly diminishing. Alphapharm submitted that, in these circumstances, first, Wyeth could not assert a stable status quo warranting protection by an interlocutory injunction. Second, the public interest in competition is a discretionary factor weighing in Alphapharm's favour. Third, Wyeth is seeking an interlocutory injunction for a purpose outside the scope of the protection of the method patent, namely, to shelter itself from competition, a factor which also weighed in Alphapharm's favour. Fourth, Wyeth's conduct undermined its submissions about the risk of patient confusion in the event that Enlafax-XR is permitted to enter the market, to which Sundberg J referred in the Sigma decision at [63]-[65]. Wyeth is encouraging switching from Efexor-XR to Pristiq. Further, on Wyeth's evidence, 15% of patients prescribed Pristiq had to be switched to Efexor-XR. Alphapharm referred to the evidence of Dr Julian Parmegiani which established that concerns about patient confusion are largely illusory. The vast majority of patients treated for depression lead ordinary lives and are capable of dealing with a brand change, including a brand change back to Efexor-XR should Wyeth succeed in the final hearing. In summary, Wyeth may not both approbate and reprobate by obtaining an interlocutory injunction to protect its proposed product switching from Efexor-XR to Pristiq on the basis of claims against any such switching to a generic substitute for Efexor-XR. Alphapharm described the effect of an injunction on it as irreparable. If an injunction were granted, it would remain in place until the final hearing. However, this is a type of case in which an appeal is inevitable. Even if Alphapharm succeeded at first instance, Wyeth would undoubtedly seek a stay to enable the appeal to be determined. The final result may not be available for two years or more. In that period Wyeth's actions will substantially reduce the market in Efexor-XR. Alphapharm had incurred more than $750,000 in direct costs, a large amount of executive and sales force time, and would lose its investment in purchasing stock, which was substantial. Alphapharm contended that its offered undertaking (not to take any action which would result in the Commonwealth imposing a 12.5% price reduction of Efexor-XR under the PBS), combined with its undertaking to maintain full accounts and proceeds of sale of Enlafax-XR separately, meant that damages or an account of profits would be an adequate remedy for Wyeth. The position is thus different from that before Sundberg J as summarised in [51] and [52] of his Honour's reasons. The proposed limited private launch of Enlafax-XR may cause a modest drop in sales of Efexor-XR up to about 13.5%. Wyeth's evidence grossly exaggerated the likely impact. The fact that other generic venlafaxine products may also enter the market does not make damages or an account of profits impossible. Given Wyeth's intention to restrain all alleged breaches of the method patent, those generic suppliers too could be required to maintain separate accounts on sales of their generic equivalent. A complex calculation should not deter the Court from accepting the adequacy of the remedy (contrary to Sundberg J's conclusion at [56]). Similarly it is not correct that Wyeth could never recover its position if it ultimately succeeded. In that event, Efexor-XR would be the only product on the market (apart from Pristiq). By contrast, Alphapharm's position is not adequately protected by Wyeth's undertaking as to damages if the method patent is found to be invalid. First, Alphapharm was particularly concerned that Wyeth would remove Efexor-XR from the PBS, which would negate Alphapharm's capacity to list. This prompted Wyeth to offer to undertake not to do so until further order. Second, Alphapharm's loss would be hypothetical (lost sales) in the context of Wyeth's continuing cannibalisation of the market for Efexor-XR by Pristiq. Calculating such losses would be far more difficult than the task required to protect Wyeth if an injunction were refused, particularly given that Wyeth could be expected to argue that any changes in the market were not reasonably foreseeable when it gave the undertaking (citing Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd [1981] HCA 75 ; (1981) 146 CLR 249 at 306). Third, the inroads of Pristiq into the market will continue to diminish the market within which Alphapharm, if it succeeds, will be able to compete. Contrary to Sundberg J's finding at [62] that Sigma had proceeded with its "eyes wide open" (citing Interpharma Pty Ltd v Commissioner of Patents at [77]), the fact is, as Mr Hurley said, the pharmaceutical industry involves a myriad of patents, not all of which are enforced. Alphapharm was not aware of the method patent until 19 March 2009 by which time it had made a substantial investment of time and money in Enlafax-XR. Wyeth stressed that the proposed trade in Enlafax-XR is new. To date there is only one order for the product. In contrast, Efexor-XR is Australia's leading antidepressant. Further, the method patent has been on foot since mid 2007. The application for it was published in November 2003. Any competent pharmaceutical company ought to have employed a patent searcher to keep a watch on the status reports for the relevant patents so as to be informed about any divisional applications. Mr Hurley's evidence about the efforts of the Mylan Group (the group of companies of which Alphapharm is a part) to identify relevant patents is vague and uninformative. Alphapharm could not be said to have been assiduous in its inquiries. Alphapharm was aware of the method patent from 19 March 2009 but has only recently moved to revoke it. Since then all of Alphapharm's commercial preparations have been undertaken with knowledge of the method patent. Wyeth's losses will be significant and irreparable in terms of: - (i) loss of market share (Wyeth said up to 50% if Enlafax-XR is listed on the PBS and unquantifiable otherwise), (ii) a reduction in price to compete with Enlafax-XR even if it is not listed on the PBS, (iii) a reduction in price by reason of the weighted average percentage difference under the price disclosure scheme irrespective of the 12.5% price reduction Alphapharm would undertake to avoid, (iv) loss of goodwill in the Efexor-XR brand due to patient confusion, and (v) a diversion of resources to support Efexor-XR. As to other generic products, five suppliers have or will secure ARTG approval. Competition between generic suppliers is intense and usually involves aggressive discounting to obtain rapid market share. Wyeth accepted that if Alphapharm is not enjoined, the other suppliers would follow into the market with generic formulations of venlafaxine hydrochloride (including a consequential dissolution of the injunction against Sigma). Hence, the damage to Wyeth's market in Efexor-XR will be rapid, severe, unquantifiable and irreversible. This is in circumstances where Efexor-XR represents about 25% of the total income of Wyeth Australia and Wyeth is only the ninth largest supplier of prescription products by volume in Australia. In contrast, Alphapharm is the largest supplier of prescription products by volume in Australia, with prescriptions under the PBS in the order of $325.5 million for the period ending June 2008. Hence, Enlafax-XR may be inferred to be one only of a large product range. The feared loss for Alphapharm will thus be "of a different order" to that of Wyeth, as Sundberg J found in the Sigma decision at [66]. Further, Alphapharm's set up and operational costs were incurred at a time when it was well aware these could be wasted (also as noted by Sundberg J in the Sigma decision at [66]). The public interest did not support Alphapharm's case. This is shown by the evidence of Dr John Tiller, which addressed the same matters as Dr Parmegiani (referred to at [111] above) and is concerned about patient confusion and compliance issues. The argument that only seriously ill patients might experience confusion and thus could be disregarded is not an attractive one. Those patients are the most vulnerable. If Alphapharm proceeds with the supply of Enlafax-XR, but is ultimately unsuccessful, patients will be required to switch back to Efexor-XR, thereby exacerbating the risks. In truth, Alphapharm is seeking to get the jump on other generics at the risk of patient confusion and without regard to the fact that patients might be required to switch twice if Wyeth succeeds. The argument about Pristiq cannibalising Efexor-XR is speculation and should be rejected. The evidence shows that Pristiq is a new chemical entity which adds to the available range of antidepressants. Wyeth is not promoting to medical practitioners any switching of patients who are well stabilised on Efexor-XR to Pristiq. Wyeth expects Efexor-XR to make a significant contribution to its revenues for at least the next five years. It has no intention of removing Efexor-XR from the PBS, as confirmed by its willingness to give an undertaking not to de-list Efexor-XR from the PBS. In any event, the market has its own reality as indicated by the fact that 15% of patients prescribed Pristiq have switched from that product to Efexor-XR. Examples of other products which have cannibalised an earlier product are not apt to the present case. On the evidence, once a product had become established as an antidepressant it will continue to enjoy a level of success without sales promotion. Sigma offered an unconditional undertaking not to list its product, Evelexa-XR, on the PBS. Alphapharm has not. Its refusal to do so exposes Wyeth to the risk of a reduction in the price of Efexor-XR irrespective of Alphapharm's proposed undertaking with respect to the PBS. It is also now clear that there will be at least two generic suppliers entering the market, Sigma and Alphapharm. This is to be considered together with the likelihood of others entering the market. In this context, Sundberg J's reference to the "unpredictable and irreversible" effect of a new entrant into the market (at [58] citing GenRx Pty Ltd v Sanofi-Aventis at [15]) carries even greater weight. I am not persuaded that Alphapharm's attribution of a particular marketing strategy or the motivations for that strategy to Wyeth is sound. Efexor-XR is an established product already well known in the market in which Efexor-XR is the leading antidepressant. There is evidence that an established antidepressant is capable of maintaining sales without a continued marketing push. This seems unsurprising given that the evidence of Dr Tiller and Dr Parmegiani indicates that patients who have stabilised on one product are unlikely to be switched by a medical practitioner to another product given the issues of compliance, confusion and potential side effects. Pristiq is a new product. It is not established in the market. As such, it is also unsurprising that it has been subject to an intensive marketing campaign. Alphapharm relied on selective (and older) confidential marketing documents in circumstances where a careful reading of not only those documents, but also Wyeth's most recent marketing document, indicates that the thrust of the marketing of Pristiq is to new patients or existing patients who would be better served by being prescribed Pristiq (for whatever reason, such as side effects or efficacy). Wyeth's evidence indicates also that this is in fact what is happening, with Pristiq prescriptions dominated by patients who had no treatment for at least 12 months. It is true that prescriptions of Pristiq are likely to have an impact on the market share of Efexor-XR (as the evidence of Ms Braithwaite disclosed). But those prescriptions, as the evidence shows, are also intended and will be likely to be at the expense of other antidepressants, not just Efexor-XR. It appears that Efexor-XR, perhaps due to initial side effects issues, has been perceived as a second line treatment for major depressive illness. Pristiq is intended to function as a first line or initial treatment for depression competing against the full range of selective serotonin reuptake inhibitors as well as Efexor-XR (which is a serotonin-norepinephrine reuptake inhibitor). This intended marketing strategy appears to be consistent ############################################################## ######################################################################################################################################################################. In other words, from the evidence it appears that the market for Pristiq is intended to be broader than the market for Efexor-XR. For these reasons I am not persuaded that Alphapharm's argument with respect to Pristiq can bear the weight that Alphapharm seeks to place on it. There is an established trade in Efexor-XR. Wyeth will undertake not to remove Efexor-XR from the PBS. The evidence indicates that there will remain an established trade in Efexor-XR for the foreseeable future. Although I accept the inevitably of an appeal, the period of two years before final resolution of this matter appears excessive. The first instance hearing will take place in the first part of next year. There is no reason preventing a decision being made and the appeal being determined in the same year. In any event, the issue of the time that an injunction might be in place is equally relevant to Wyeth if an injunction is not granted, as for the same period Wyeth would be exposed to the alleged infringements of its patent and the likely changes to the market as a result. The risk that the market may alter in the interim period to Alphapharm's detriment must be weighed against the evidence of the materiality of that risk (which I consider substantially overstated by Alphapharm for the reasons already given) and the reasons the risk exists. The risk exists because Alphapharm was insufficiently diligent about maintaining a watch over the compound patent and both continued to take commercial decisions to supply Enlafax-XR and (at least to some extent) failed to take action immediately to challenge the validity of the method patent on becoming aware of the method patent on 19 March 2009. The issue cannot be reduced to one about mere switching (that is, either to Pristiq or to Enlafax-XR or another generic). As Wyeth submitted, it is one thing for a patentee to obtain a patent for a new product and place that new product on the market anticipating that it may have some effect on its existing product. It is another altogether for a patentee with a reasonably strong prima facie case for infringement to be exposed to competition against its existing product by an allegedly infringing product while the claim is resolved. This is particularly so in a case such as the present where there is evidence of up to five generic suppliers likely to enter the market (if not restrained) within the period before resolution of the infringement claim. Accordingly, there is a status quo which Wyeth is entitled to seek to protect in circumstances where it has made good a prima facie case for infringement of its method patent. The potential losses for Alphapharm are of a different order from those of Wyeth. As Wyeth said, Efexor-XR is the market leader and has been for some years. It contributes 25% of the income of Wyeth Australia. The effect of Alphapharm entering the market will inevitably be for Sigma to do so and for others to follow. The market will be transformed. It is not possible to know whether the effect on Wyeth will be a reduction of 13.5% or otherwise given the likelihood of rapid and aggressive competition for market share. Further, in such a market (which includes Pristiq), it is not possible to know whether all sales would have been sales of Efexor-XR or not. It is not possible to know whether and to what extent Wyeth might have to discount Efexor-XR to retain some market share in venlafaxine products. Alphapharm's proposed undertaking cannot compensate Wyeth for such a price reduction (consistent with Sundberg J's observation at [57] of the Sigma decision). It seems most unlikely, if Wyeth is ultimately successful and the generic products are found to infringe the method patent, that the sales price could simply revert to the current price. For these reasons it is not a question of a mere difficulty in calculating Wyeth's loss. Consistent with the reasoning of Sundberg J in [56] of the Sigma decision, Wyeth's loss will be impossible to calculate. By way of contrast, Enlafax-XR is not yet in the market. The assertion that the market will be effectively eroded by Wyeth itself is difficult to accept on the evidence. Hence, Alphapharm's losses are likely to be calculable (even if not without some difficulty). Alphapharm is Australia's largest generic supplier, which supports an inference of a large product range. Alphapharm has known about the method patent since 19 March 2009. Had it been diligent it would have known about the method patent since it was granted in May 2007. In any event, since 19 March 2009, Alphapharm has acted with knowledge of the method patent and taken its commercial decisions knowing about the likelihood of an infringement claim. Mr Hurley's evidence to the contrary is not persuasive. It provides no good reason to infer that Alphapharm could not have acted earlier. It suggests that the difficulties which Alphapharm now faces are largely of its own making. Having regard to these matters, I do not accept that Wyeth is acting other than to protect its method patent, which is its right. I accept that Wyeth, if an injunction is not granted, will suffer irreparable harm for which damages are not an adequate remedy. I also consider that, as Sundberg J said at [59] of the Sigma decision, Wyeth is "much more likely to suffer from a disturbance of the status quo" than Alphapharm. I am not satisfied that the existence of the prima facie case of invalidity of the method patent, as found above, is sufficient to disentitle Wyeth from obtaining the relief sought, having regard to the balance of convenience and the strength of Wyeth's prima facie case for infringement. Accordingly, the balance of convenience weighs in favour of Wyeth and against Alphapharm. Costs may be argued. | interlocutory injunctions whether respondents/cross-claimants established prima facie case of infringement of patent to warrant injunction whether prima facie case of infringement to warrant injunction displaced in circumstances where the applicant/cross-respondent has established a prima facie case that patent is invalid question of balance of convenience. interlocutory injunctions principles applicable to patent cases. patents practice and procedure |
Renhe brings an ex parte Application for an order that leave be granted pursuant to Order 8, rules 2 and 3 of the Federal Court Rules for leave to serve an Originating Application upon each respondent in New Zealand. The applicant proposes to serve each respondent with the Application filed on 5 September 2007, the affidavits of Kenneth Philp and Gary Brian Morgan each filed on 5 September 2007, a Statement of Claim filed in the proceeding on 5 September 2007, a copy of the Notice of Motion filed 5 September 2007 and a copy of any order the court might make in dealing with the Notice of Motion. 2 The applicant in the proceeding is a company incorporated in the People's Republic of China. That company is engaged in the business of manufacture within the People's Republic of China of a building product known as a 'portable building', the principal features of which include the capacity to fold the sides of the building structure to a form capable of being transported by a standard shipping container; a form of long box construction such that the top longitudinal sides can be folded out to form a roof and the bottom sides folded out to form a floor area, and other features. 3 The applicant has appointed a distributor in Western Australia, Transformable Homes Pty Ltd , to sell its portable buildings in that State and the Northern Territory and a distributor in Queensland, Transform Global Pty Ltd for the purpose of selling its portable buildings anywhere throughout Australia. 4 The applicant's only means of selling its portable buildings in Australia is by means of distributors it appoints in this country. 5 The applicant is represented in Australia by an agent, Mr Gary Brian Morgan, authorised to act on its behalf and on behalf of a related company incorporated in the People's Republic of China, Renhe Xiamen. 6 The first respondent, Habode IP Ltd ('Habode'), is a New Zealand company which on 16 March 2005 was issued with a Certificate of Registration of a New Zealand patent by the Intellectual Property Office of New Zealand. On or about 8 March 2005, Habode made an application for international registration of its New Zealand patent pursuant to the Patent Cooperation Treaty. On 8 March 2005, that international application entered the Australian phase and on 31 May 2007 the Australian Patent Application was sealed in Australia bearing Patent No. AU 2005220275 ('the Habode patent'). The Habode patent remains a registered patent in Australia. The registered particulars for the New Zealand and Habode patents describe the second respondent, Rodney Mark Gibson, as the inventor of the invention the subject of both patents. 7 Between June to August 2007, the respondents by their New Zealand patent and trade mark attorneys, A J Pietras & Co wrote letters to Transformable Homes Pty Ltd to the effect that Habode was the patentee of the Habode patent; that patent conferred exclusive rights upon Habode; and that attempts by Transformable Homes Pty Ltd to sell, offer for sale or import into Australia for sale transportable homes would constitute an infringement of the Habode patent resulting in suit. Those letters are: letter Janet Stead & Associates (patent attorneys for Transformable Homes) to Pietras --- 28 June 2007; letter Pietras to Stead --- 4 July 2007; letter Pietras to Stead - 26 July 2007; and letter Pietras to Stead --- 28 August 2007. 8 On 8 August 2007, the applicant's solicitors, Bennett & Philp, wrote to A J Pietras & Co seeking an undertaking that the respondents would not make any claim upon the applicant or any assignee, distributor or end-user of the applicant's products that the exploitation within Australia of the applicant's portable building product infringes the Habode patent. The facts deposed to by Mr Morgan suggest that the working invention, conception, design and specification of the subject matter of Habode's New Zealand and Australian patents was the result of a collaborative engagement between Mr Morgan, Mr Gibson and engineers employed or engaged by Renhe Xiamen. 10 The applicant says that Habode's Australian patent is invalid because it lacks novelty and fails to reflect an inventive step measured against considerable known prior art; secondly, Mr Gibson's claim to be the sole inventor of Habode's Australian patent is said to be untrue. Presumably, in any action for infringement brought by Habode, the applicant would cross claim for revocation of the patent. 11 The applicant says that the respondents have made unjustified threats of patent infringement proceedings against both the applicant's Western Australian distributor and against the applicant directly by force of the letter to Bennett & Philp dated 9 August 2007 in respect of the applicant's business activities, through its distributors, in Australia. The applicant, by its application, seeks a declaration pursuant to s 128 of the Patents Act 1990 (Cth) that the threats made by the respondents to the applicant and its distributor are unjustifiable threats; an injunction to restrain the respondents from making further threats; and an Order that the respondents pay damages in respect of the loss suffered by the applicant as a result of the threats. 12 The applicant by this motion seeks leave pursuant to Order 8, rules 2 and 3 to serve the Application and supporting documents on each respondent in New Zealand. The Court, in considering an Application for Leave, must be satisfied that the Court has jurisdiction in the proceedings; that the proceeding is of a kind mentioned in Order 8, rule 2 ; and that the person seeking leave has a prima facie case for the relief claimed; among other elements. The Federal Court has jurisdiction with respect to matters arising under the Patents Act (s 154) and s 128 confers standing upon 'a person aggrieved' to apply to the Court for a declaration, an injunction and the recovery of damages in respect of an unjustifiable threat. 13 In JMVB Enterprises v Camoflag (2006) 67 IPR 68 at [208] --- [211], Crennan J identified the elements required to be satisfied in an Application made pursuant to s 128 of the Patents Act . The aggrieved party must first establish the making of a threat. The threat must be made in Australia in that it must be received in Australia and relate to an Australian patent [208]. A threat arises where the language, by direct words or implication, conveys to a reasonable person that the author of the letter intends to bring infringement proceedings against the person threatened [209]. A communication merely notifying a person of the existence of a patent is not a threat [209]. Once a threat has been established, it is prima facie unjustifiable unless the person making the threat establishes that it was justified [210]. The Court may grant the relief sought unless the person threatening infringement proceedings establishes that the relevant conduct infringes or would infringe a valid claim of a patent [210]. Ultimately, the grant of the relief is discretionary [210]. A threat can be made by means of a letter from a legal representative [211] (see also the authorities mentioned by her Honour at [208] --- [211]; see also Occupational and Medical Innovations Limited v Retractable Technologies Inc. [2007] FCA 1364 per Dowsett J at [5] --- [9] and [29] --- [40]. 14 I am satisfied that a threat of infringement has been made to the Western Australian distributor of the applicant and the applicant by letter received in Australia and that the applicant is a person aggrieved. I am satisfied that prima facie the threat is unjustifiable. I am satisfied that the proceeding is based upon a cause of action arising in Australia and thus Order 8, rule 2 is satisfied. I am also satisfied that the applicant's material demonstrates that the foreign country in which it is proposed to serve the first and second respondents is New Zealand. The affidavit of Mr Philp at paragraph 5 identifies the mode of service required in the country of New Zealand and the mode of service proposed to be adopted by the applicant in serving the material. I am satisfied that the mode of service proposed meets the requirements for service in New Zealand. 15 Having regard to all of the material, I am satisfied that the following Orders ought to be made. The time for the hearing of the Applicant's Notice of Motion filed 5 September 2007 be abridged to 2.15pm on 6 September 2007. The hearing of that Notice of Motion proceed ex parte. The Applicant be given leave pursuant to Order 8, Rules 2 and 3 of the Federal Court Rules to serve a copy of each of the Applicant's Application, Statement of Claim, Affidavit of Gary Brian Morgan and Affidavit of Kenneth Philp (all filed herein on 5 September 2007) on each of the First and Second Respondents in New Zealand. 4. A copy of this Order is to be served on each of the First and Second Respondents when they are served with the documents referred to in Order 1. 5. The costs of the motion are to be reserved. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood J. | consideration of an application pursuant to s 128 of the patents act 1990 (cth) consideration of an application for leave to serve originating proceedings upon respondents in new zealand consideration of order 8, rules 2 and 3 intellectual property practice and procedure |
(2) If a criminal justice stay warrant about a non-citizen is in force, the non-citizen is not to be removed or deported. (3) If a court issues a criminal justice stay warrant about a non-citizen, the applicant for the warrant is responsible for the costs of any maintenance, accommodation or immigration detention of the non-citizen while the warrant is in force. The notions of removal and deportation refer to removal or deportation from Australia: see the definitions of "remove" and "deportation" in s 5 of the Act. 4 It is not necessary for me to outline the history of the applicant's period of residence in Australia. What is immediately relevant is that on 22 October 2007 he was convicted in the Burwood Local Court of assault occasioning actual bodily harm (see s 59(1) of the Crimes Act 1900 (NSW)). He has appealed against that conviction and the appeal is currently for hearing in the District Court of New South Wales at Campbelltown on 22 July 2008. The applicant wishes to prosecute that appeal and to tender on the hearing of the appeal expert evidence from a psychologist and from a forensic psychiatrist. 5 It will be noted at once that s 151(1) of the Act does not purport to confer power to issue a criminal justice stay warrant or to make a declaration that a person is entitled to have one issued. The question of this Court's power to issue such a warrant occupied debate yesterday. I am of the view that s 151 does not give the Court power to grant the applicant the relief he seeks. 6 Consistently with this view, it will be noted that s 151 refers to "a court". The section assumes the existence of courts that are otherwise invested with power to issue criminal justice warrants. 7 In written submissions handed up in Court a short while ago it is stated that the applicant now resiles from an argument he advanced yesterday that the necessary power is to be found in s 151 of the Act. Nonetheless, I will address s 151 because in the course of argument today counsel for the applicant has returned to it. 8 Section 151 occurs in Div 4 of Pt 2 of the Act. Division 4 is headed "Criminal justice visitors. Indeed, the bare expression "administration of criminal justice", even independently of the definition, would, to my mind, indicate the perspective mentioned. 10 The views expressed above are supported by the scheme of the provisions in Div 4. 11 Subdivision B of Div 4 provides for the issue of criminal justice entry certificates and Subdiv C provides for the issue of criminal justice stay certificates, or, of present relevance, criminal justice stay warrants. 12 Subdivision C is concerned with unlawful non-citizens who are to be or who are likely to be removed or deported. Section 147 provides that in such a case if, inter alia, the Attorney-General considers that the non-citizen should remain in Australia temporarily for the purposes of the administration of criminal justice in relation to an offence against a law of the Commonwealth, the Attorney-General may give a certificate that the stay of the non-citizen's removal or deportation is required for the administration of criminal justice. 13 Just as s 147 provides for the issue of Commonwealth criminal justice stay certificates, s 148 provides for the issue of State criminal justice stay certificates. Predictably, whereas s 147 relates to offences against the law of the Commonwealth, s 148 relates to offences against the law of a State. Section 148 empowers an authorised official for a State, in certain circumstances, to give a certificate that the stay of a non-citizen's removal or deportation is required for the administration of criminal justice by the State. 14 Section 150 provides that if a criminal justice stay certificate (defined in s 142 as a certificate given under s 147 or s 148) about a non-citizen is in force, the non-citizen is not to be removed or deported. 15 Sections 147 and 148 are "enacted in the public interest in the administration of justice" and "are, on the face of it, not intended to create any rights or privileges on the part of the unlawful non-citizen": Goldie v Commonwealth of Australia [2002] FCA 261 at [36] per French J. Similar observations are applicable to s 151 in my view, and see, to a similar effect, In the matter of an application by Solomon Barudea for a warrant under s 151(1) of the Migration Act 1958 (Cth) [1995] VSC 55 at [22] . 16 I return now to the terms of s 151. The reference to a "court" in that section has an ambulatory operation and refers to any court otherwise seized of power to issue a warrant to stay a removal or deportation for the purposes of the administration of criminal justice in the particular jurisdiction, Commonwealth or State as the case may be. 17 The picture that emerges from the above provisions is that they are concerned with investigation, enforcement and punishment within the criminal justice system of the Commonwealth or of a State respectively. Although I was not directed to any other provision of Commonwealth or State legislation, it seems reasonable to expect that it will be a court invested with jurisdiction in respect of Commonwealth or State investigation, prosecution or punishment that will have power to issue a criminal justice stay warrant in relation to it --- in the present case a court of the State of New South Wales. 18 There are at least two other considerations suggesting that s 151 does not give this Court the power to issue a criminal justice warrant on the present application. The first is found in definitions contained in s 142. A "criminal justice entry certificate" is a certificate "given under" one or other of various specified sections, and a "criminal justice stay certificate" is a certificate "given under" s 147 or s 148. In contrast a "criminal justice stay warrant" is simply a warrant "described in" section 151. That is to say, the words "given under" are absent in the latter case. The reason is that a criminal justice stay warrant is not "given under" s 151. 19 The second consideration depends on the legislative history of s 151. Section 151 was originally s 54G of the Act. Section 54G formed part of Div 3 of Pt 2 and was inserted in the Act by the Migration Reform Act 1992 (Cth) (No 184 of 1992). Division 3 of Pt 2 became Div 4 of Pt 2 , and s 54G became s 151, following the renumbering effected by the Migration Legislation Amendment Act 1994 (Cth) (No 60 of 1994). 20 In the Explanatory Memorandum for the Migration Reform Bill 1992 , para 182 stated of the then proposed s 54G (see now s 151) that the purpose of the section was to ensure that the powers created by Div 3 (see now Div 4) did not interfere with the power of a court to issue a warrant requiring that a non-citizen not be removed or deported. In sum, the applicant does not have standing to apply for a criminal justice stay warrant under s 151. 21 It appears that the purpose of s 151 is to carve out an exception to s 153. Accordingly, paras (a) and (b) of s 153(1) are satisfied. Subsection (2) of s 153 limits the operation of the concluding words of subs (1) of that section, but one must look elsewhere to find a power in this Court to make an order of the kind referred to in subs (2). In relation to s 39B(1A) it is put that this Court has jurisdiction because the "matter" in question arises under a law made by the Commonwealth Parliament, namely, the Act. Counsel has made it clear that the relief that he seeks is final relief rather than interlocutory relief, although I do not think that the distinction is critical here. 24 In his submissions, counsel for the applicant says that the criminal justice stay warrant referred to in s 151 is, in substance, an "injunction. " I need not discuss this submission and am content to approach the matter on the assumption that the applicant seeks an injunction against the Minister. 25 Ultimately, the problem which the applicant still has is to demonstrate a case for the granting of injunctive relief. 26 Section 198(6) of the Act is mandatory in its terms. It has the effect that an "officer" (defined in s 5 of the Act) must remove the applicant from Australia "as soon as reasonably practicable". The fact that the applicant desires to prosecute his appeal on 22 July 2008 does not render it not "reasonably practicable" for an officer to remove him from Australia prior to that date. This Court does not have a general jurisdiction to relieve from the effect of s 198(6). 27 For the above reasons, the Court will order that the application be dismissed and that the applicant pay the respondent's 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 Lindgren. | application for issue of a criminal justice stay warrant applicant an unlawful non-citizen who is to be, or is likely to be, removed or deported applicant wishing to stay in australia to prosecute appeal against a criminal conviction. held : (1) s 151 of migration act 1958 (cth) does not empower court to issue criminal justice stay warrant but assumes that a court, commonwealth or state, is given that power otherwise; (2) perspective of provisions dealing with criminal justice stay warrants and certificates is that of the administrators of criminal justice system, not the individual the subject of investigation, prosecution or punishment; (3) applicant therefore lacked standing to apply for criminal justice stay warrant; (4) applicant could not show a claim for relief under s 39b of judiciary act 1903 (cth) having regard to mandatory terms of s 198 of migration act 1958 (cth) requiring officer to remove applicant from australia. migration |
The substantive application comprises causes of action founded on misleading and deceptive conduct in breach of s 52 of the Trade Practices Act 1974 (Cth) ('the TP Act') and s 945 of the Corporations Law; and on the insolvent trading provisions of the Corporations Law. 2 The progress of this application, and other related applications, to trial has been chequered. That history is described by French J in a decision dated 6 April 2005 ( Salim v Loh [2005] FCA 372). On that occasion French J heard an application by the respondents for the relief which included, the striking out of the statement of claim as it then existed. Some parts use language whose meaning and construction is at best illusive. I fear however, that taking a scalpel to particular paragraphs will simply inflate the expense and delay involved in a proceeding which should have been heard and determined some time ago. It is, in my opinion, necessary to find a way forward in the management of this case that does not involve further undue expense and delay. I propose therefore to allow the applicant's pleading to stand. The amended [substituted statement of claim] may be substituted for it. It will stand as a statement of the applicant's contentions of fact and law. However I will dispense with further pleadings. The respondents will not be required to plead to the amended, [substituted statement of claim] . That, I think, is too onerous a task, given its shortcomings. Rather I will require the respondents to file statements of the contentions of fact and law upon which they each rely in answer to the applicant's case. This will not require them to address the amended [substituted statement of claim] in the way that they would be required to if pleading a formal defence. Thus the applicant will be required to file all his affidavits and/or witness statements to be relied first and so to disclose the entirety of his case. In application WAD 9 of 2004, the son of the applicants in this application, Iwan Salim, also known as John Salim, seeks relief founded on claims that he was induced to invest monies in a project carried out by the fifth respondent, which I will call the 'ostrich scheme', by misleading and deceptive conduct engaged in by and on behalf of the fifth respondent. 5 In accordance with the directions of French J referred to above, the applicants in this case filed witness statements dated 5 December 2005. It was in response to the filing of those witness statements that this application for summary judgment was brought. 6 The applicants' claims against the third respondent in this application are based upon allegations of the accessorial liability of that respondent for the misleading and deceptive conduct of the fifth respondent. It is alleged that the third respondent was at all material times a director of the fifth respondent. The third respondent submits that as a consequence of the filing of the applicants' witness statements it is now clear that there is no reasonable cause of action disclosed in respect of the claims by the applicants based on misleading and deceptive conduct. 7 The third respondent submits that a perusal of the witness statements shows that there was no conveyance of any representation which was made by or on behalf of the fifth respondent to the applicants, who, as I have said, are the parents of the applicant in WAD 9 of 2004. Further, it is said that there was no evidence that the applicants relied on any representations allegedly made by or on behalf of the fifth respondent. It is also argued that the applicants are precluded from bringing a claim because they suffered no loss. In this regard, the third respondent submits that the applicants' witness statements disclose that the money which was provided for the investment in the ostrich scheme and which was paid to the fifth respondent for that purpose, was paid by the son and not the applicants. 8 The applicants submit the principles in Webster v Lampard [1993] HCA 57 ; (1993) 177 CLR 598 ('Webster') apply to this application. It was whether the material before the Master demonstrated that the action should not be permitted to go trial in the ordinary way because it was apparent that it must fail. ) [1964] HCA 69 ; (1964), 112 C.L.R. 125, at p. 129) and "should never be exercised unless it is clear that there is no real question to be tried" ( Fancourt v. Mercantile Credits Ltd. [1983] HCA 25 ; (1983), 154 C.L.R. 87, at p. 99). 11 Further, the applicants submit that, in accordance with the principles in the case of Janssen-Gilag Pty Limited v Pfizer Pty Limited (1992) 37 FCR 526 ('Janssen') , it is not necessary for an applicant to show that the misleading and deceptive conduct was made to him or her or that he or she relied on the misleading and deceptive conduct for that applicant to seek relief under the TP Act. It is sufficient if the misleading and deceptive conduct is relied upon by someone other than the applicant, provided that the loss suffered by the applicant was causally linked to that conduct. It was submitted that, in this case, there was arguably a sufficient link between the alleged misleading and deceptive conduct of the fifth respondent and the alleged loss of the funds, to permit the applicants to make the claims based thereon. 12 I now turn to the contents of the witness statements of the applicants. I deal firstly with the father, the first named applicant. It is an investment in farming ostriches in Perth. I want to use your name for the investment. It's going to be a surprise for your nephews and nieces. You should make sure the farm is real. The farm is very big. There are lots of ostriches in paddocks. There are many paddocks. I met one of the directors of the company. He says this is a very good investment". It will give a good return. [The son] wants the investment income distributed amongst the nephews and nieces not just his own children. The first named applicant says that he did sign that contract without reading it. The first named applicant then says that the money which was invested in the ostrich scheme came from the son. 16 It was on the basis of the first named applicant's statement that the money that was paid to the fifth respondent, as the investment in the 'ostrich scheme', came from the son, that counsel, on behalf of the third respondent, submitted that there could be no loss suffered by the applicants; and that, therefore, the applicants could not make out a cause of action in damages for misleading and deceptive conduct. 17 On the basis of the statements in the witness statements it is, in my view, arguable that the applicants became trustees of the monies supplied by the son which were invested in the ostrich scheme, and that the trust was to be for the benefit of the son's children and his nephews and nieces. 20 Further, in my view, it is at least arguable that the representations which were made by the son and which are referred to in par 9 and par 10 of the first named applicant's witness statement were representations which were originally made by or on behalf of the fifth respondent. In particular, I refer to the statement which appears in par 10 of the witness statement of the first named applicant where he says that his son told him that he had met one of the directors of the fifth respondent, who had said that this was 'a very good investment'. In my view, therefore, it is arguable that there were representations that were passed on by the son to the applicants. 21 It is also arguable, based on those paragraphs of the witness statement of the first named applicant, that the applicants relied upon those representations in becoming trustees and in investing in the ostrich scheme. 22 I also accept the submissions of the applicants that it is also arguable that this is a case where the principles which are espoused in the Janssen case could be applicable. Thus, even if there were no passing on of the representations to the applicants, it is, at least, arguable that the applicants, as trustees, would be able to recover funds that had been invested as a consequence of the son, as settlor of trust funds, being misled. 23 It follows that I do not accept the submissions of the third respondent that there is no reasonable cause of action disclosed in relation to the applicants' claims for misleading and deceptive conduct, under the TP Act and the Corporations Law. 24 In addition, counsel for the third respondent submitted that there were defects in the claim which was brought under the insolvent trading provisions of the Corporations Law which were so serious that the matter should be summarily dismissed. 25 The first argument that counsel for the third respondent raised was that the applicants were precluded from bringing a claim under the insolvent trading provisions of the Corporations Law because they had suffered no loss, in the sense that the monies that were invested with the fifth respondent were not their monies. For the reasons which I have given above and the fact that it is certainly arguable that the monies that were advanced were trust monies, I reject that argument. 26 Counsel also submitted that there had been a failure to comply with the formalities for the bringing of an action under the insolvent trading provisions. However, the third respondent advanced no evidence in support of this allegation and, in the circumstances, I am not in a position to make any finding on the submission. 27 I, therefore, dismiss the third respondent's notice of motion which was filed on 7 January 2006. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | no reasonable cause of action summary judgment applicants did not invest their own monies whether applicants suffered loss whether applicants arguably were trustees practice and procedure |
2 The proceeding which was before the Federal Magistrate was for an extension of time to seek a review of a decision of Registrar Christie made on 24 September 2004 when the Registrar made a sequestration order against the estate of the applicant. The Federal Magistrate refused the application for an extension of time. 3 The application to this Court was accompanied by a draft notice of appeal of 25 pages. He claims to be entitled to the orders sought as Managing Trustee of the Andrew Garrett Group of Family Trusts. 7 As I explained to Mr Garrett during his submissions this morning, this Court of course could not set aside a judgment made in the District Court of South Australia. Mr Garrett sought to rely on s 24 of the Federal Court of Australia Act 1976 and, in particular, s 24(1)(c) but that, of course, does not give jurisdiction to this Court to set aside any order of the kind made by the District Court. 8 In those circumstances, of course, the second order sought in the notice of motion cannot be made. Mr Garrett agreed that, in those circumstances, I could not make an order setting aside the sequestration order, however, he pursued the order sought in paragraph (1) that I should stay the sequestration order made on 24 September 2004 until such time as the matter is heard in the District Court of South Australia. 9 In my opinion, no order for a stay ought to be made. No satisfactory explanation has been made as to why this application has been made so late in a proceeding which, in any event, is incompetent. I am not prepared to make an order staying the sequestration order. The notice of motion is dismissed. 10 The proceeding also should be dismissed. Mr Garrett was told that his first application was incompetent. It was explained that he should seek leave. He has not done so. Instead, he has sought orders that, in my opinion, should not be made. The application for an extension of time to file a notice of appeal is dismissed. 11 The applicant to pay the respondent's costs of the proceeding. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | incompetent application for extension of time to appeal from an interlocutory decision of a federal magistrate application dismissed. practice and procedure |
2 The applicant is the trustee in bankruptcy of Phillip Emmanuel Bell, who became a bankrupt consequent upon his presentation of a debtor's petition on 17 May 2005. The first respondent Ruth Marina Bell ('Ms Bell') is the former spouse of the bankrupt. The second respondent Living It Up Pty Ltd ('Living It Up') is a corporation, of which Ms Bell is the sole director, the secretary and the sole shareholder. 3 In the latter stages of their marriage, the bankrupt and Ms Bell occupied a matrimonial home at 516 Neerim Road, Murrumbeena ('the Neerim Road property'), of which they were the registered proprietors as joint tenants. On 16 May 2002, the bankrupt executed a transfer of his interest in the Neerim Road property to Ms Bell. The transfer expressed the consideration for the transaction as 'natural love and affection'. The transfer was subsequently registered, so that Ms Bell became the sole registered proprietor of the Neerim Road property. 4 At the time of the transfer, there was pending in the Supreme Court of Victoria a proceeding in which the bankrupt was one of the named defendants. Two of the other defendants were the bankrupt's brother Anthony Wilfred Bell ('Tony Bell') and a corporation called The Tetley's Company Pty Ltd ('Tetley's'). The proceeding concerned alleged breaches of a contract for the acquisition by the plaintiff of a substantial interest in another corporation, which was also a defendant. On 7 June 2004, the Supreme Court gave judgment in the proceeding, in which five of the defendants, including the bankrupt, Tony Bell and Tetley's, were ordered to pay to the plaintiff damages of $810 000 plus interest of $200 522. Among the defendants, the bankrupt was ordered to pay contribution to the extent of 50 per cent. Tony Bell and Tetley's thereafter made payments to the plaintiff in satisfaction of the judgment. They claim that they are entitled to $505 261 contribution from the bankrupt, pursuant to the contribution order. 5 Tony Bell and Tetley's obtained a bankruptcy notice, based on the judgment, and served it on the bankrupt. They followed this with a creditors' petition, filed on 7 April 2005, thereby commencing a proceeding numbered VID 300 of 2005 ('the creditors' proceeding') in this Court. On 8 April 2005, application was made, without notice to the bankrupt, Ms Bell or Living It Up, for orders by way of Mareva injunctions, seeking to preserve assets which the creditors wished to pursue. On that day, Marshall J made an order joining Ms Bell and Living It Up as respondents to the creditors' proceeding. His Honour made orders against Ms Bell and Living It Up, including an order restraining Ms Bell until 15 April 2005 from disposing of, transferring, charging, encumbering or in any way dealing with a property at 8 Mariners Place, Noosa Heads, Queensland ('the Mariners Place Property'). His Honour made similar orders against Ms Bell and Living It Up, restraining them from dealing with the assets of a business known as Resort to Health ('the Resort to Health business'), otherwise than in the ordinary course of business. 6 On 15 April 2005, Marshall J extended the effect of these orders until 19 May 2005. On 13 May 2005, a firm of solicitors called Kelly & Chapman filed a notice of appearance in the creditors' proceeding on behalf of Ms Bell and Living It Up. By the time the creditors' proceeding came before the Court again on 19 May, the bankrupt had filed his debtor's petition. All parties to the creditors' proceeding consented to an order adjourning it to 6 June 2005 and extending the times specified in the orders made by Marshall J until that day. On 6 June 2005, the creditors' proceeding came before Kenny J. Counsel for Ms Bell and Living It Up gave undertakings to the Court, including undertakings that they would not dispose of, transfer, charge, encumber or in any way deal with the Mariners Place Property, and that they would not deal with or dispose of the proceeds of sale of the Resort to Health business without the consent in writing of the creditors or their solicitors. Her Honour adjourned the proceeding until 10 June 2005. 7 On 10 June 2005, the creditors' proceeding came before me as duty judge. The applicant also filed on 10 June 2005 the application that commenced proceeding no VID 572 of 2005 ('the principal proceeding') against Ms Bell and Living It Up. In the principal proceeding, the applicant applied for interlocutory orders of a Mareva injunction nature, seeking to preserve both the Mariners Place property and the proceeds of sale of the Resort to Health business, which had by then been sold. Counsel appeared for the first and second respondent to oppose the orders. In case the orders should be made, counsel for the first and second respondents relied upon an affidavit of David Ivo Chapman, a partner in Kelly & Chapman, sworn on 10 June 2005, purporting to set out the financial circumstances of Ms Bell. I also ordered that the principal proceeding be placed in the docket of a judge and adjourned to a directions hearing on a date to be fixed by the docket judge. Subsequently, after some delay, I became the docket judge. On 4 August 2005, I made an order by consent of the parties referring the proceeding to mediation, requesting that the mediation be conducted by 31 August 2005 if possible, and fixing 19 September 2005 as the date for the directions hearing. Subsequently, on 29 August 2005, by consent of the parties, I extended the date for completion of the mediation to 30 September 2005 and changed the date of the directions hearing to 24 October 2005. The proceeding did not settle at mediation. On 24 October 2005, I gave directions for pleadings and discovery of documents. In accordance with those directions, on 23 November 2005, the applicant filed his statement of claim. Despite a direction that a defence be filed by 5 December 2005, the defence was not filed until 23 January 2006. The timetable for discovery was not observed by Ms Bell and Living It Up, and it was necessary for me to make further directions for discovery by them, on 19 April 2006. On that occasion, again by consent of the parties, I referred the proceeding for mediation. Again, no settlement was achieved. 9 In the meantime, Kelly & Chapman gave notice that they had ceased to act as solicitors for the respondents in the principal proceeding. On 24 February 2006, Barclay Beirne Lawyers of Maroochydore, Queensland, filed a notice of address for service. By the time of the directions hearing on 19 April 2006, it had become apparent to the applicant that Ms Bell and Living It Up may have failed to comply with the first paragraph of the orders made on 10 June 2005. The Mariners Place property had been sold otherwise than by public auction and without giving notice to the applicant. The proceeds of sale had not been paid into the trust account to preserve them. By notice of motion filed on 18 April 2006, the applicant sought orders that Ms Bell swear an affidavit deposing to the terms of the contract of sale of the Mariners Place property, how the sale proceeds were distributed, by what means the sale was effected, why there had been no notice to the applicant, why the net proceeds of sale were not paid into the trust account and the extent to which the property was further encumbered after 10 June 2005. In a telephone directions hearing on 19 April, I received an assurance from the solicitor then acting for the respondents that Ms Bell would file such an affidavit. I made no order to that effect. No such affidavit was filed until after I had again conducted a directions hearing, this time on 4 September 2006. In the meantime, Barclay Beirne Lawyers had attempted to remove themselves from the record as solicitors for the respondents, without complying with the provisions of O 45 r 7 of the Federal Court Rules . They finally succeeded in complying with those provisions after the directions hearing on 4 September. 11 Ms Bell finally swore and filed an affidavit, which she prepared without legal assistance, on 21 September 2006. At the directions hearing on 25 September 2006, counsel for the applicant pointed out that this affidavit did not account for the sum of $73 987.57, being the difference between the net proceeds of sale of the Mariners Place property and the amount paid to the Commonwealth Bank to discharge a mortgage over that property. I ordered that Ms Bell file and serve an affidavit containing a full account of the disposition of the proceeds of sale and, in particular, of that amount of $73 987.57. The respondent filed a further affidavit, again prepared without legal assistance, on 10 October 2006. 12 At yet another directions hearing, on 23 October 2006, I ordered that any notice of motion seeking to punish the respondents for contempt of court be filed on or before 6 November 2006 and made returnable on 4 December 2006. I laid down a timetable for the filing and service of affidavit material necessary for such a motion to be heard. Apprehending that Ms Bell might be in some jeopardy, I indicated that I was prepared to grant a certificate pursuant to O 80 of the Federal Court Rules for her referral for legal representation without fee. As a consequence, counsel for Ms Bell, instructed by Hewlett Walker Lawyers, solicitors of Brisbane, appeared for Ms Bell on the return of the motion. The making of arrangements for pro bono representation took longer than expected, so it was necessary to adjourn the return date of the notice of motion until 30 January 2007. Ms Bell's third affidavit was not sworn until 18 December 2006. She also gave oral evidence and was cross-examined on the hearing of the motion. 13 In order to deal with the issues that have arisen, it is necessary to understand something of the nature of the claim put forward by the applicant and to explore in some detail the circumstances in which the admitted failure of Ms Bell to comply with para 1 of the order of 10 June 2005 occurred. His contention is that, because the bankrupt transferred his interest in the Neerim Road property to Ms Bell within five years before the commencement of the bankruptcy, and Ms Bell gave no consideration for the transfer, or gave consideration of less value than the market value of the property, then the transfer is void against the applicant as trustee in bankruptcy of the bankrupt. Section 120(1) has this effect, particularly in light of the provision in s 120(5) that love or affection have no value as consideration. Alternatively, the applicant contends that, but for the transfer, the bankrupt's interest in the Neerim Road property would probably have been available to his creditors, and that his main purpose in making the transfer was to prevent his interest from becoming divisible amongst his creditors, or to hinder or delay the process of making the interest available for division amongst the creditors. The applicant relies on the Supreme Court proceeding pending at the time of the transfer. Alternatively, the applicant asserts that it can reasonably be inferred from all the circumstances that, at the time of the transfer, the bankrupt was, or was about to become, insolvent. Again, the applicant relies on the pending Supreme Court proceeding and its subsequent resolution against the bankrupt. The applicant relies on s 121 of the Bankruptcy Act to contend that, for all these reasons, the transfer is void against the applicant as trustee in bankruptcy of the bankrupt. 15 The applicant alleges, and Ms Bell and Living It Up admitted in their defence, that on 24 February 2003, Ms Bell transferred the Neerim Road property to other parties for $830 000, part of which she used to purchase the Mariners Place property and part of which she used to assist Living It Up in its purchase of a property it used to operate the Resort to Health business. Living It Up operated the business until 5 May 2005, when it sold the property and received net proceeds of sale of $159 112.43. The applicant seeks to trace the proceeds of the sale of the Neerim Road property into the Mariners Place property and into the proceeds of sale of the Resort to Health business. less [ sic ] any amount paid by the first respondent in accordance with paragraph 2 above. There was a contention that the bankrupt's half interest in the Neerim Road property was subject to and charged with equities in favour of Ms Bell equal to or greater than the value of that interest. It was also contended that, in accordance with a separation agreement, Ms Bell in fact provided valuable consideration for the transfer to her of the bankrupt's interest in the Neerim Road property. In support of these claims, the defence pleaded a considerable amount of history of the relationship between the bankrupt and Ms Bell, and details of the acquisition and improvement of the Neerim Road property and an earlier matrimonial home. It was pleaded that, between 1978 and 1991, Ms Bell was employed full-time as a bank officer for the State Bank of Victoria. The defence also pleaded details of the separation agreement and of the claims that Ms Bell might have had against the bankrupt as his spouse, but relinquished in return for the transfer of his interest in the Neerim Road property. 19 The following account of the facts is taken largely from Ms Bell's three affidavits and her oral evidence. In part, it relies on the affidavit of Mr Chapman, to which I have referred, and on material filed by the applicant. 20 After her sale of the Neerim Road property, Ms Bell went to live on the Sunshine Coast in Queensland. She took with her the two children of her marriage to the bankrupt, a daughter who is now 17 years old and a son who suffers from Asperger's syndrome and is currently in the care of the bankrupt. She purchased the Mariners Place property, a vacant block of land with ocean views, for $460 000. Approximately $300 000 from the proceeds of sale of the Neerim Road property was taken by the bankrupt to pay his costs in relation to the Supreme Court proceeding. In order to purchase the Resort to Health business, Ms Bell and Living It Up borrowed the amount of the purchase, approximately $220 000, from the Commonwealth Bank of Australia ('the Commonwealth Bank'). The business had both a cafe and a shop selling health products. Ms Bell worked approximately 60 hours per week running the business, which also employed other staff. She also cared and provided for the children, who attended a private school, for which Ms Bell paid the fees. In the course of running the business, she became friendly with one of the regular customers, a man named Salem Rejb. From about October 2004, a relationship developed between Ms Bell and Mr Rejb. The two began to discuss the idea of entering into a business partnership to import into Australia home-wares (decorative tiles, other ceramic products and furniture) from Tunisia and to export from Australia to Tunisia health products. Ms Bell advertised for sale the Mariners Place property with an asking price of $550 000. The property was subject to a substantial mortgage in favour of the Commonwealth Bank, to secure the monies borrowed to purchase the business. The business was also advertised for sale at $250 000. These advertisements were part of the material on which the applicant relied in seeking the orders made by Marshall J in April 2005 and the order of 10 June 2005. 21 In fact, by the time Marshall J made his order of 8 April 2005, the business had become the subject of a contract of sale. The sale price was substantially less than the price asked. The net proceeds of sale were $159 112.43. Ms Bell said that this was because of an economic downturn in Noosa Heads. The contract of sale required Living It Up to continue to operate the business until settlement. Ms Bell left another staff member in charge and went to Tunisia with Mr Rejb, to explore the possibility of commencing the import-export business. 22 While Ms Bell and Mr Rejb were in Tunisia, it was necessary for him to engage in all of the negotiations with Tunisian suppliers and the Tunisian Government because, according to Ms Bell, it is unacceptable in Tunisia for a woman to be involved in business negotiations. It was clear, as between Ms Bell and Mr Rejb, that she was providing the finance for the business. While in Tunisia, Ms Bell was surprised to learn that her bank accounts had been frozen. It can be concluded that this was the result of the communication to the bank of the orders made by Marshall J on 8 April and 15 April 2005. Ms Bell learned of it when she attempted to use a credit card, which was confiscated and destroyed by the shopkeeper from whom she was attempting to make a purchase. She found that she was unable to obtain any cash. She assumed that some mistake had been made, and that she would be able to sort out the mistake on her return to Australia. She did not attempt to contact the bank. Instead, Mr Rejb borrowed some money to pay a deposit to a supplier or suppliers of goods, so that artisans could begin work on manufacturing the goods that Ms Bell and Mr Rejb intended to import to Australia. Ms Bell says that the amount so borrowed and paid was the equivalent of $25 000. Ms Bell also went ahead with what she described in one of her affidavits as a 'holiday excursion' to Egypt and Morocco, which she had previously booked and not paid for. She says that she borrowed from or through Mr Rejb the equivalent of $17 500, in order to finance this holiday and to conduct what she described as 'market research' into the feasibility of importing health products into Tunisia. This market research consisted of looking for shops selling products of that kind wherever she went in Tunisia. She did not find any. 23 At some stage after her return to Australia, Ms Bell discovered that Marshall J's orders had been made. The time at which she did this is not altogether clear. Although Kelly & Chapman entered an appearance in the creditors' proceeding for her on 13 May 2005, Ms Bell said that the bankrupt must have arranged for those solicitors to act for her. It is unlikely that Kelly & Chapman were prepared to consent on behalf of Ms Bell and Living It Up to an extension of the orders on 19 May 2005, unless they had instructions from Ms Bell on her own behalf and on behalf of Living It Up. The likelihood is that she was aware of the orders of Marshall J by that time. It is even more unlikely that Mr Chapman would swear the affidavit on which the respondents relied on 10 June 2005 without instructions from Ms Bell as to her financial situation. It is therefore certain that she was aware of the orders before that date. It is perhaps significant that Mr Chapman's affidavit contains no information at all about liabilities of Ms Bell. It refers to trading debts of Living It Up from the operation of the business. In particular, it does not refer to any liability of Ms Bell to Mr Rejb, or anyone else in Tunisia, in respect of the sums of $25 000 and $17 500. 24 In accordance with para 2 of the order of 10 June 2005, the proceeds of sale of the Resort to Health business were paid into an interest-bearing trust account operated by Kelly & Chapman. Each month thereafter until the order of 4 September 2006 was made, Ms Bell drew the maximum amount of $5127 per month for her living expenses. By 7 September 2006, there was only an amount of $27 643.71, invested at 5.75 per cent per annum and renewed at four monthly intervals, together with an amount of $6696.94 in the trust account. It is common ground that none of the proceeds of sale of the Mariners Place property has been paid into that trust account. 25 The Mariners Place property was auctioned at the Sheraton Hotel in Noosa Heads on a date that is not specified in the evidence. Only one bid of $380 000 was received. The property was passed in. After negotiations with the bidder, Ms Bell's agent obtained an offer of $406 000 and the property was sold at this price. The sale was settled in early October 2005 at the latest. Ms Bell explained the substantial reduction from the time she purchased the property, and the even more substantial reduction from the advertised price, on the basis that she had purchased on a rising market and advertised for sale in the course of a property boom, but had not acted in time to catch the tail end of that boom and had sold in a depressed market. Although the differences were such as to give rise to a suspicion that the sale may have involved some hidden payment of money, I am not able to make a finding on the evidence that such a payment was made. 26 The net proceeds of the sale, after deduction of expenses, amounted to $386 772.16. In return for a discharge of its mortgage, the Commonwealth Bank took $312 784.59, leaving a balance of $73 987.57. According to Ms Bell, $25 000 and $17 500 of the balance were paid to Mr Rejb, to recompense him for the deposit paid to the artisans in Tunisia and for the holiday excursion to Morocco and Egypt and the market research in Tunisia. She paid these amounts in cash in October or November 2005. She said that she was 'forced' or felt 'compelled' to make these payments. In truth, she was motivated by her infatuation for Mr Rejb, and her attempts to cement their relationship. The fact that she was able to give no details of these payments in her affidavits might have given rise to the suspicion that she had relied on Mr Rejb or others to take care of the money overseas, in order to put it out of reach of the applicant. Again, the evidence does not permit me to make such a finding. 27 Unfortunately for Ms Bell, Mr Rejb could not be induced to continue the relationship. So desperate did Ms Bell become that she spent $3500 more of the proceeds of sale of the Mariners Place property on airfares and insurance to travel to Tunisia in March 2006, to try to save what she still thought was her relationship with Mr Rejb. She spent approximately three months in Tunisia at that time, leaving her children in Australia, while her daughter was in her final year at school. While in Tunisia, she spent another $4500 of the proceeds of sale of the Mariners Place property. She sought out Mr Rejb in places that she knew he frequented. Whenever she found him, she endeavoured to talk to him about the relationship. She also tried to talk about the money paid to the Tunisian artisans, and what she might receive in return for it, but could make no progress. 28 The remainder of the net proceeds of sale of the Mariners Place property was expended in paying credit card debts ($12 000), paying lawyers in Tunisia ($800), and paying solicitors in Australia ($10 740). 29 When Ms Bell sold the Mariners Place property and made these payments, she was aware of the order of 10 June 2005. She admitted as much in her affidavit of 18 December 2006. The barrister who had appeared for her on 10 June 2005 explained the order to her by telephone after it had been made. She also received a photocopy of it either by mail or fax, from either Kelly & Chapman or the barrister. She says that she did not understand the order fully when it was explained to her or when she read it. The two matters of greatest importance to her were obtaining a regular monthly income, so that she could support herself and her children, and being able to sell the Mariners Place property, so that she could draw from the proceeds of that sale, as well as the sale of the Resort to Health business, that monthly income. She understood from her discussion with the barrister that she was to receive $5127 per month for living expenses and that she was able to sell the Mariners Place property. Although she had a copy of the order, Ms Bell did not show it to the agent who was selling the property, did not consult it for the purpose of determining what she could and could not do by way of sale, and did not refer to it in relation to the disposition of the proceeds. I am not satisfied that she had great difficulty understanding the order. Although it is a legal document, it is not a particularly complicated one. Ms Bell had considerable experience as a bank officer, including supervising staff. She had also run a business of her own for some considerable period. She is far from lacking in intelligence. She had lawyers acting for her at the time, and an estate agent engaged to sell the Mariners Place property, from whom she could have sought advice about the terms of the order, if she had chosen to ask. Being aware that there was an order of the Court relating to the sale of the Mariners Place property and the disposition of the proceeds of that sale, she chose not to make any reference to that order with respect to either the sale or the disposition of the proceeds. In my view, this amounted to deliberate blindness as to the terms of the order. 30 The order of 10 June 2005 was never served personally on Ms Bell. The provisions of O 37 r 2 of the Federal Court Rules , requiring service personally of a certified or office copy of the order, endorsed with a notice warning that she would be liable to imprisonment if she failed to obey the order, were not complied with. The provisions of O 37 r 2(5) are applicable, however, because Ms Bell was notified of the terms of the order by telephone and by her receipt of a photocopy of it, so the order may be enforced by committal against her. Her knowledge of the order became the knowledge of Living It Up, because she was the directing mind and will of Living It Up. The order can therefore be enforced by sequestration of the property of Living It Up, notwithstanding that service was not effected in accordance with the other provisions of O 37 r 2. 31 Service of the order of 4 September 2006 was effected personally on Ms Bell. The order so served was endorsed with the notice required by O 37 r 2 of the Federal Court Rules . The order itself was not signed by the registrar, although it bore the stamp of the seal of the Court. The order had been so stamped in consequence of it having been filed electronically, pursuant to O 1 r 5A(1)(e) and O 1 r 5AC of the Federal Court Rules . In accordance with O 1 r 5AC(5)(b), the document served had attached to it a notice of filing bearing a facsimile signature of the registrar. There is a question whether the appearance of the signature of the registrar on that notice, attached to the copy of the order served, is sufficient compliance with the requirement for signature imposed by O 37 r 2. See Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 (2006) 152 FCR 129 at [64] ; and see O 36 r 7 of the Federal Court Rules . The question need not be answered in the present case, because O 37 r 2(5) clearly applies in the case of the order of 4 September 2006 to both Ms Bell and Living It Up; Ms Bell was aware of the terms of the order, and Living It Up is fixed with her knowledge. In any event, it is clear that, by the time the order of 4 September 2006 was made, Ms Bell had already put it out of her power, and that of Living It Up, to comply with the order, by disposing of the proceeds of sale of the Mariners Place property in the manner I have described. He did contend, however, that on any issue as to whether either of the respondents lacked the capacity or the ability to comply with an order of the Court, the onus fell on that respondent to prove that lack of capacity or inability. This contention was based on somewhat obscure authority, Lewis v Pontypridd , Caerphilly, and Newport Railway Company (1895) 11 TLR 203. The judgment of the English Court of Appeal in that case, delivered by Lord Esher MR on behalf of himself and Lindley and Rigby LJJ, is apparently not reported in any mainstream series of law reports. It is reported, not verbatim but in indirect speech, in the Times Law Reports. Apparently, the defendant company in that case had been ordered forthwith to make a junction connecting its railway line with the plaintiff's works, a junction it was obliged by Act of Parliament to create. Having failed to do the work, the company was prima facie in the position of having disobeyed a judgment. The company denied having wilfully disobeyed the judgment. Wilful disobedience was an essential element of the charge of contempt under the relevant rule of court applied in that case. If from the time when the judgment was given they had always been unable, through want of funds, to do the work, probably they could not be said to have wilfully disobeyed the judgment. But it was necessary for the directors to make that out. They said that they had never had any funds out of which they could do the work, because they had paid away all the money which they earned in the ordinary expenses of carrying on the railway. It might be that they were entitled to keep the railway going. But, in [ Lord Esher MR's ] opinion, they were bound, so long as this obligation was lying upon them, to keep down their expenses to the lowest point possible. They failed to show that they could not have obeyed the judgment if they had used proper economy. His Lordship may simply have been drawing attention to the obvious need for the company to rely on evidence available from within it if it wished to contest the issue of wilfulness in that case. In my view, it would be contrary to principle to cast onto an alleged contemnor the onus of proving lack of capacity or ability to comply with a court order. It would be unthinkable that a person should be found guilty of contempt of court for failing to do something that could not be done. In my view, it lies upon anyone making an allegation that a contempt of court has been committed by a failure to perform an act required by a court order to prove that the alleged contemnor could have performed the act. 35 This view was applied by the English Court of Appeal in Re Bramblevale Ltd [1970] 1 Ch 128. In that case, the managing director of a company had been ordered to produce the company's books to its liquidator. At first instance, he had been found guilty of contempt of court on the basis that he was shown to have had the books in his possession on a particular date, so that it could be presumed that he still had them in his possession more than a year later. The Court of Appeal overturned the finding, holding that the managing director could not be found guilty of contempt of court unless it were proved beyond reasonable doubt that he still had the books in his possession after the order had been made. Bramblevale was cited in Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 529 --- 530 per Brennan, Deane, Toohey and Gaudron JJ. In Witham , the question was whether the appropriate standard of proof was beyond reasonable doubt or the balance of probabilities. The case itself did not involve any issue of capacity or ability to obey the order. Nonetheless, no reservation was expressed in the citation of Bramblevale , on the basis that any onus could lie upon the alleged contemnor on any issue. See also Chelvarajah v Global Protection Pty Ltd [2004] FCA 1661 (2004) 142 FCR 296 at [61] --- [68]. 36 It is clear in the present case that the applicant is unable to prove that the respondents had the capacity to comply with the order of 4 September 2006. Paragraph 1 of that order had the effect of requiring compliance with para 1 of the order of 10 June 2005, once the Mariners Place property had been sold, by a specific date. As I have said, by the time that order was made, Ms Bell had put it out of her power to comply with that order by disposing of the proceeds of sale of the Mariners Place property in a variety of ways. It is clear that she had no other resources on which she could call in order to make the payment required. The evidence also is that Living It Up had no assets (other than the remaining proceeds of the sale of the Resort to Health business, which it could not access because of the order of 10 June 2005) and therefore no capacity to make the payment. It is true that Ms Bell's inability to comply with the order of 4 September 2005 was the result of her failure to comply with para 1 of the order of 10 June 2005. It is also true that her inability to pay on and after 4 September 2006 was the result of her choice to discharge other debts and perceived obligations, and to expend some of the money in her fruitless attempt to revive her relationship with Mr Rejb. She is not to be found guilty of contempt of court for failure to comply with the order of 4 September 2006 because of choices that she made before that order came into existence, however ill-advised those decisions might have been. This would offend the principle that someone should not be punished for not doing something they cannot do. It would also be contrary to the strong presumption against retrospective liability. 37 This leaves the question of contempt by failing to comply with para 1 of the order of 10 June 2005. It should be noted that the statement of charge in the notice of motion alleges contempt against both respondents, but only in one respect. There is no charge of disposing of, transferring or dealing with the Mariners Place property without first giving notice in writing to the applicant no less than 14 days prior to such dealing. There is no charge of failing to sell the property by public auction. The only charge is failing to pay the proceeds of sale (after deduction of the reasonable costs and expenses of sale) into the trust account kept by Kelly & Chapman. In the absence of a specification in para 1 of the order of 10 June 2005 of the time within which such a payment was required, Ms Bell was obliged to pay the proceeds of the sale into the trust account within a reasonable time of receiving them. See Natural Floor Covering Centre Pty Ltd v Monamy (No 1) [2006] FCA 518 at [13] and [41] --- [42]. In any event, the time may not be crucial because, at least by June 2006, when Ms Bell returned from her second trip to Tunisia, she had clearly disposed of all of the proceeds of sale otherwise than by paying them into the trust account, and thereby put it out of her power to comply with the order. 38 As I have said, Ms Bell knew of the order of 10 June 2005 throughout the time she was disposing of the proceeds of sale of the Mariners Place property. She conceded that she had the opportunity to consult the terms of the order had she chosen to do so, to ascertain what her obligations were. She chose not to do this. As I have said, this amounted to deliberate blindness on her part about the obligations the Court had imposed on her. There is no doubt that it constituted wilful disobedience of the order of the Court. It is necessary to make a finding that Ms Bell was guilty of contempt of court in relation to the failure to comply with the order of 10 June 2005. 39 The charge against Living It Up is more difficult. Living It Up was not the registered proprietor of any interest in the Mariners Place property. Its relationship to that property was that the property had been used as security for a loan from the Commonwealth Bank that enabled Living It Up to purchase the Resort to Health business. It is clear from the respondents' defence that both Ms Bell and Living It Up were liable to repay the monies borrowed from the Commonwealth Bank for this purpose. In para 47 of the defence, the respondents plead that, in order to complete the purchase of the Resort to Health business by Living It Up, 'the First and Second Respondents borrowed the sum of $240,000 from the CBA'. At the time, according to the pleading, the advance was secured over the assets of the business and the Neerim Road property. Following the sale of the Neerim Road property, according to para 50 of the defence, Ms Bell refinanced liabilities, including that liability, so that they were 'solely the liability of the First Respondent and/or the Second Respondent', and were secured over a cash deposit in the name of Ms Bell. Upon the purchase of the Mariners Place property, according to para 52 of the defence, Ms Bell again refinanced the liabilities, including the money borrowed to purchase the business, so that they were 'solely the liability of the First Respondent and/or the Second Respondent', and secured over the Mariners Place property. It is unlikely that, in the refinancing, Ms Bell would have been able to persuade the Commonwealth Bank to release either her or Living It Up from liability to repay the amount borrowed, in favour of the other. It is therefore clear that, at the time when the Mariners Place property was sold, both respondents were liable to repay the amount borrowed from the Commonwealth Bank and secured on that property. 40 Living It Up being a corporation, I am obliged to treat it as a separate person from Ms Bell. There is some unreality about that requirement in the circumstances of the present case, since Ms Bell had total control over Living It Up. There can be no doubt that she was Living It Up's directing mind and will, to the exclusion of anybody else. Nevertheless, treating Living It Up as an entirely separate person, it is necessary to determine whether it had any capacity to ensure compliance with para 1 of the order made on 10 June 2005. In my view, it did not. Even as a person jointly liable with Ms Bell to repay the loan secured on the Mariners Place property, Living It Up could have done nothing more than to exhort Ms Bell not to sell the security for that loan. Even if it had been motivated by desire to ensure that the Court's order was complied with, it could have done nothing more than to urge Ms Bell to comply with it once the property had been sold. Ms Bell could have replied that the property was hers to deal with as she pleased, and that she chose not to obey the order of the Court, either as to the manner and time of its sale or as to the disposition of the proceeds. Living It Up had no power to direct Ms Bell not to sell, not to sell in a particular way, or to comply with the order after she had sold. She controlled Living It Up, rather than it controlling her. To the extent to which Living It Up had any assets, it appears that its only asset was what remained of the proceeds of the sale of the Resort to Health business, which were held in the trust account kept by Kelly & Chapman and were subject to the Court's control. Living It Up could not even have chosen to use that money to fulfil its obligation to pay into that trust account the proceeds of sale of the Mariners Place property. In the absence of any other assets, Living It Up had no capacity to make any such substitute payment. 41 For these reasons, it is impossible to find that Living It Up is guilty of any contempt of court. Only Ms Bell is guilty of such contempt, and only in respect of the first charge, of failing to comply with the order of 10 June 2005 by failing to pay into the trust account of Kelly & Chapman the proceeds of sale of the Mariners Place property. 43 There is a question as to the range of penalties for contempt of court in this Court. This Court is a creature of statute, created by Parliament pursuant to Ch III of the Constitution . Rule 11.04.1(a) of the High Court Rules 2004 (Cth) presently provides that, in the case of a natural person, the order may be 'that the contemnor pay a fine, be committed to prison, or both pay a fine and be committed to prison'. In Siminton at [74], the Full Court relied upon r 11.04 of the High Court Rules as removing any doubt as to whether this Court could impose a fine for contempt of court, and as making it clear that both a fine and committal to prison were available penalties. Given that it is possible to include in the one order both a fine and a term of imprisonment, there appears to be no sound reason why the two powers should not be exercised by imposing a fine, with a term of imprisonment in default of payment of the fine, or part of the fine, in order to enforce the payment. In Viner v Australian Building Construction Employees' and Builders Labourers' Federation (No 3) (1982) 63 FLR 242, Keely J made such an order. The order was set aside by the Full Court in Australian Building Construction Employees' and Builders Labourers' Federation v Viner (1982) 63 FLR 253, but not on the ground that it was beyond power. In Australian Industrial Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Australia & Ors [2001] FCA 774 (2001) 188 ALR 653 at [17] Merkel J suggested that, as a matter of practice in an order fining a contemnor, the Court ought always to make provision for enforcement of that order, in the event that the fine is not paid. His Honour suggested that, in most cases, it would be sufficient for the order to provide that, in default of payment, the district registrar must apply to the Court for directions concerning the enforcement of the order. If that were done, there seems little doubt that the Court would have power to impose a sentence of imprisonment upon the application for directions for enforcement. If that be the case, there seems to be no reason why the Court could not impose a sentence of imprisonment in default of payment of the fine, or part of the fine, in the first place. I am not to be taken as suggesting that the Court ought to do this in every case. There will undoubtedly be many cases in which the Court takes the view that a contempt is insufficiently serious to warrant imprisonment, and that the contemnor's means are such that other enforcement methods will be sufficient to enable the fine to be collected, if it is not paid in accordance with the order. I am satisfied, however, that a sentence of imprisonment in default of payment of a fine, or part of a fine, is a course within the powers of this Court. 46 As to the possibility of other forms of penalty, the position is less clear. For the purposes of that part, s 16(1) defines 'federal offence' to mean 'an offence against the law of the Commonwealth. By majority, the High Court held that, for the purposes of s 35 of the Family Law Act 1975 (Cth) (the Family Court's equivalent provision to s 31 of the Federal Court Act), contempt of court did not fall within the phrase 'any offence against any law of the Commonwealth' in s 80 of the Constitution . See Colina at [16] --- [25] per Gleeson CJ and Gummow J and [108] --- [113] per Hayne J. McHugh J at [35] --- [50] and Kirby J at [70] --- [81] expressed the contrary view. The judgment of Callinan J, especially at [119] --- [136], focused more upon the words 'trial on indictment' in s 80 of the Constitution . It therefore appears that the majority view is that contempt of a court created by Parliament under Ch III of the Constitution is not an offence against any law of the Commonwealth, for the purposes of s 80 of the Constitution . If that be the case, then it is likely to follow that contempt of such a court does not fall within the meaning of the phrase 'an offence against the law of the Commonwealth', despite the use of the definite article in that phrase, as against the indefinite article in s 80 of the Constitution . 48 Section 20AB of the Crimes Act 1914 (Cth) therefore appears to have no application to such a contempt, and the range of sentencing alternatives specified in s 20AB(1) is not available. To the extent to which Moore J suggested to the contrary in Reches Pty Ltd v Tadiran Limited [2001] FCA 1486 at [22] , I respectfully disagree. His Honour's statement that a community service order fell within the range of penalties for contempt was obiter, in that his Honour did not make a community service order in the particular case. What his Honour said was based on Registrar of the Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309. In that case, the New South Wales Court of Appeal expressed the view that the Supreme Court of New South Wales had power to impose a community service order in respect of a contempt of court, constituted by disobedience of an order of the court in refusing to respond to a subpoena to attend as a witness. See at 319 per Kirby P, 320 per Mahoney JA agreeing with Kirby P and 320-321 per Hope A-JA, again agreeing with Kirby P. An examination of what Kirby P said indicates that his Honour saw the power as arising from the inherent power of the Supreme Court of New South Wales. The actual order was for the imposition of a fine, suspended on condition that the contemnor undertook to the court that he would perform a certain number of hours of voluntary service of a particular kind. The court did not therefore impose directly an order that the contemnor perform community service. It accepted his undertaking to do so in lieu of payment of a fine it imposed. There is no doubt that it could not have taken this step if it did not have the power to make a community service order in the first place. This Court certainly does not have the power to accept undertakings that it would not have the power to enforce by injunction: Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48 ; (1981) 148 CLR 150. As a creature of statute, pursuant to the power of Parliament in Ch III of the Constitution , this Court has a different character from the Supreme Court of a State. There is a need for caution when talking of inherent powers, particularly where specific powers are conferred on the Court by statute. The terms of s 31 of the Federal Court Act and s 24 of the Judiciary Act are so specific as to make it clear that this Court is restricted to common law penalties for contempt of court. Those penalties are limited to a fine, a term of imprisonment or a combination of the two. 49 That is not to say that all forms of orders ancillary to fines and imprisonment are beyond the power of the Court. For this purpose, resort may be had to the general power to make orders in relation to matters in which it has jurisdiction, granted by s 23 of the Federal Court Act. It has been recognised that the power to impose a sentence of imprisonment includes a power to suspend that sentence on conditions. See Australian Competition and Consumer Commission v Goldstar Corporation Pty Ltd (unreported, Federal Court of Australia, Drummond J, 6 November 1998) and Australian Securities & Investments Commission v Matthews [1999] FCA 803 (1999) 32 ACSR 404 at [29] . 50 There may also be other courses that the Court can take, in addition to the limited range of penalties, which themselves can have an effect on whether, or on the extent to which, the Court will exercise its penalty powers. An order against a contemnor for the payment of the costs of the party bringing the application for punishment for contempt of court is not itself a penalty, but the fact that such an order is made can mitigate the severity of the penalty that would otherwise be imposed. Orders for costs on an indemnity basis are often made against persons found guilty of contempt, although the making of costs orders on an indemnity basis is not an inflexible rule of practice. 51 The contention of the applicant in the present case that the Court could debar the respondents from defending the proceeding, and strike out their defences, is based on a comment of Lord Donaldson of Lymington MR in Derby & Co Ltd v Weldon (Nos. 3 and 4) [1990] 1 Ch 65 at 81. In that case, the English Court of Appeal was considering whether it was appropriate for a court to grant a Mareva -type injunction in respect of assets beyond the jurisdiction of the court. Relevant to that question was the question whether such an injunction could be enforced in any event. This is not a consequence which it could contemplate lightly as it would become a fugitive from a final judgment given against it without its explanations having been heard and which might well be enforced against it by other courts. Each went on to deal with the issues in the case, with Neill LJ at 95 expressing specific agreement with what the Master of the Rolls had said about enforceability. Butler-Sloss LJ did not comment specifically on that issue. It is unnecessary in the present case to debate the question whether barring the right to defend a proceeding falls within the range of penalties the Court could impose for contempt of court. Order 35A of the Federal Court Rules contains specific provisions about the powers of the Court in the event of default of a party in complying with an order. Order 35A r 2(2)(d) provides that a respondent is in default by failing to comply with an order of the Court in a proceeding. Order 35A r 4 specifically provides that O 35A does not limit the power of the Court to punish for contempt. It must be the case, however, that, if the Court exercises its power to give judgment against a respondent, on the ground that the respondent has failed to comply with an order of the Court, and the giving of judgment has significant consequences for the respondent, those consequences could be taken into account as factors mitigating the exercise of the Court's powers to punish for contempt. It involved a significant sum of money, $73 987.57. As I have said, Ms Bell was well aware that an injunction had been granted, restricting her freedom of action in relation to the sale of the Mariners Place property, and her freedom of action to deal with the proceeds of sale if a sale were effected. She chose not to have regard to the terms of that order. She preferred to satisfy her obligations, or perceived obligations, and to spend the money for her own purposes, instead of complying with the injunction. In short, she preferred her own interests, and even her own whims, to her duty to comply with the injunction. The effect of the contempt on the administration of justice is also of major significance. If Ms Bell had complied with the injunction, the applicant would have been secure in the knowledge that he could bring the proceeding to its conclusion and, if he were to be successful, there would be a substantial asset available to satisfy the judgment and to augment the estate of the bankrupt, for the benefit of the bankrupt's creditors. There is now a powerful disincentive to the applicant in proceeding to a conclusion, because the execution of any judgment is much less likely to prove fruitful. This consequence can be ameliorated to some extent by exercising the power to give judgment summarily against Ms Bell, thereby saving the applicant from the need to expend further costs in the proceeding, but it still renders the proceeding largely fruitless for the applicant if, as appears to be the case, Ms Bell has no means of satisfying a judgment. The effect of the contempt, therefore, is to tilt the balance in the litigation heavily against the applicant. 53 There can be little doubt that a contempt of this magnitude, coupled with the degree of culpability of Ms Bell (amounting to wilful blindness as to the terms of the order, as I have said, and to preferring to satisfy her own needs and desires) would warrant a significant term of imprisonment. Only if there are powerful mitigating factors would it be appropriate to consider a course other than imprisonment as a minimum step. It is therefore necessary to turn to the mitigating factors. She has expressed her contrition for her failure to comply, and has apologised to the Court. I accept that she did not in fact understand the terms of the order, although they had been explained to her by her then counsel, and she was in possession of a copy of the order. Although I do not consider that the order is a particularly complex one, I can accept that legal terminology and drafting techniques can make an order less than wholly comprehensible to some people. 55 The fact is, however, as I have found, that Ms Bell did not pay any heed to the order at all. She did not take the trouble to read it in the context of the conduct of the auction of the Mariners Place property, or in the context of her disposal of the proceeds of sale. She did not provide the agent responsible for the sale, or the auctioneer, with the copy of the order that she had, either for the purpose of guiding their conduct, or for the purpose of seeking guidance from them as to her own. She did not seek advice from Kelly & Chapman, who were then acting for her in the principal proceeding. She simply decided not to have regard to the order. Even when her contravention of it was pointed out to her, she took no immediate steps to remedy the contravention. Her initial explanation, in her affidavit of 21 September 2006, was anything but frank as to what had happened to the proceeds. It was necessary for me to make a further order on 25 September 2006, requiring Ms Bell to make an affidavit, explaining specifically the manner in which the sum of $73 987.57 had been expended. Even then, in her affidavit of 9 October 2006, she was vague about a number of the payments she had made. Both of these affidavits were prepared by her without legal assistance, which is a partial explanation for their inadequacy. Even when she swore her affidavit of 18 December 2006, prepared with the assistance of her pro bono lawyers, no further detail was provided. Only in her oral evidence, and under cross-examination, was further detail about the payments obtained. Her expression of contrition and her formal apology to the Court only came about after she had received the advice of her counsel as to the seriousness of her position. 56 Ms Bell is impecunious, and was so at the time she received the proceeds of sale of the Mariners Place property. Her impecuniosity on both of these occasions must be taken into account in mitigation of penalty. Again, however, the extent of the mitigating effect is somewhat modified. Ms Bell was impecunious in part because she had made the decision after the sale of the Resort to Health business that she would not seek employment. In the words of Mr Chapman, in his affidavit of 10 June 2005, she had sold the business and was selling the Mariners Place property 'to take a break from work, downsize her house and spend more time with her daughter'. Ms Bell was quite prepared to accept the monthly payment of her living expenses, for which the order of 10 June 2005 allowed, rather than to take responsibility for her economic well-being and that of her children, by working. In addition, her impecuniosity, and her consequent wish to use the proceeds of sale of the Mariners Place property to reduce her liabilities, can be traced to a substantial extent to her ill-advised decision to enter into a business, as well as a personal, relationship with Mr Rejb, in which she was to be the only party providing the finance for the proposed business. The business itself was of a speculative nature, involving the import to Australia and the export to Tunisia of products for which there appears to have been no clearly-established demand of any significance. It may be that, in retrospect, Ms Bell would accept that her financial judgment was clouded by her feelings for Mr Rejb. Her decision to incur a debt of $17 500 to Mr Rejb, to undertake the planned 'holiday excursion' and the market research, was taken without her taking the obvious and relatively simple step of contacting her bank to ask why her accounts had been frozen while she was in Tunisia. She was certainly not taking proper care of her own financial well-being by proceeding with her holiday regardless of her inability to access her own funds. 57 Ms Bell is responsible for the care of her children. In fact, her son currently lives with his father, the bankrupt. Ms Bell communicates with him by telephone on a regular basis. She does have her daughter living with her. The daughter has now finished her schooling. Ms Bell and her daughter live in a three-bedroom rented apartment on the Sunshine Coast. There are also two other girls, former school-mates of her daughter, who live in the house. Ms Bell says they are otherwise homeless, and that she has taken them in at her daughter's request. The arrangement appears to be motivated, from Ms Bell's point of view, by economic need as much as anything. Each of the girls pays some $70 per week towards rent and board, which assists Ms Bell in maintaining the household. Her impecuniosity has become more acute because she was retrenched in December 2006 from a job she had finally undertaken, owing to a down-turn in the business. She is now in receipt of social security benefits of some sort. She is pursuing other employment opportunities, but has become somewhat hampered in doing so because of the order I made on 30 January 2007, that she surrender any passport in her possession or power and not be permitted to apply for or to obtain any further Australian passport until further order. Effectively, this prevents her from travelling overseas until further order. Her counsel informed me that she had been seeking employment of a kind that might involve some overseas travel. Her options will therefore be limited until the order is modified or discharged. 58 The need to care for others is undoubtedly a factor to be taken into account when considering whether to impose a term of imprisonment. In the present case, however, that need must be viewed somewhat less seriously than it might in the case of younger children, or others who need greater care. The fact that Ms Bell was prepared to travel back to Tunisia in March 2006, and to remain there until June 2006, while engaging in a fruitless attempt to win back the affections of Mr Rejb, leaving her daughter to fend for herself in her final year of schooling, suggests that Ms Bell's commitment to caring for her daughter is not as strong as it might be. She suffers from Ménière's syndrome, a disease of the internal ear. She has suffered from that disease for the past 10 years and says that it is brought on by stress and is quite debilitating at times. She also claims to have been suffering from stress anxiety with panic attacks for the last five years, and that her condition has deteriorated in the last 12 to 18 months. The medical certificate on which she relies in support of this claim indicates that she has made only one visit to a general practitioner in Maroochydore in respect of this condition. Her counsel's explanation for this is that Ms Bell has been treating herself with natural remedies. The medical practitioner's opinion refers to 'a mild form of depression and anxiety' and to 'generalised anxiety symptoms', which the medical practitioner feels are significantly contributed to by the stresses in her life as a result of this litigation. It is no surprise that Ms Bell would find this litigation stressful, especially recently, having regard to the position in which she finds herself as a consequence of her contempt. I accept that stress can exacerbate her Ménière's syndrome, and that it can cause depression and anxiety, but neither condition appears to be particularly serious. Even with her background in the sale of health products, Ms Bell would have sought medical assistance for serious conditions. Neither her physical nor her mental condition is such that a relatively short term of imprisonment would cause her harm significantly more serious than is normally inflicted upon anyone imprisoned. I am of the view, however, that if Ms Bell does not pay the fine after having been allowed a substantial opportunity to acquire the money, I should impose a sentence of imprisonment in default of payment. If Ms Bell can find sufficient money to pay part of the fine, she should be given the benefit of a reduction in the default term of imprisonment commensurate with the payment she makes. I am aware that her impecuniosity may well prevent her from paying any fine. She is very likely to be made bankrupt in consequence of other orders I propose to make, particularly as to judgment against her and costs of the proceeding and of the contempt application. It can be said that to fine her with a default term of imprisonment is tantamount to imprisoning her directly. Bankruptcy would certainly put paid to any chance she might have of raising the money to pay the fine by borrowing, even assuming that she could find anyone to lend her money in her current circumstances. Nevertheless, I think that the order ought to involve imprisonment only in default of payment of the fine. 61 As to other orders, I am of the view that I should exercise the powers given to the Court by O 35A of the Federal Court Rules , and terminate the proceeding as against Ms Bell, by giving judgment against her. Because I am unable to find Living It Up guilty of contempt of court, I am not able to bring the proceeding to an end completely. This is a significant reason for exercising the power to fine, with a default term of imprisonment. It is possible for me to give judgment against Ms Bell, as a result of which she will probably be made bankrupt, if the applicant or the creditor or creditors indemnifying the applicant in this proceeding consider that it is worth expending further monies to make Ms Bell bankrupt, in circumstances in which the recovery of any asset is unlikely. 62 Because I take the view that the money currently held on trust by Kelly & Chapman is an asset of Living It Up, not of Ms Bell, it seems to me that I am unable to order the payment of that money to the applicant in part satisfaction of a judgment against Ms Bell. The effect of this is that Ms Bell will have the ability, if she chooses to do so, to continue to defend the proceeding through Living It Up, to see if she can make good the contentions in the defence. Of course, she will have great difficulty in obtaining any form of legal assistance to do so. It is unlikely that pro bono legal assistance will be found for a corporation. In the absence of leave of the Court, the corporation will have to be represented in the proceeding by a solicitor, because of the provision to that effect in O 9 r 1(3) of the Federal Court Rules . Living It Up has outstanding debts, but I do not know the value of them. It may be that one or more of its creditors might take the view that there is possible advantage to them by defending the proceeding, because a successful defence would result in the amount held by Kelly & Chapman being available to those creditors if Living It Up were to be placed in liquidation. Even if Ms Bell and Living It Up's creditors were to do nothing, the applicant would still have to make a decision as to whether it was worth proceeding, and to endeavour to prove its case, in order to have a chance of executing against the monies held by Kelly & Chapman. This will involve the further expenditure of legal costs in the proceeding. The alternative of discontinuance would require the applicant to pay Living It Up's costs, so the applicant has little choice about continuing. The net effect of this is that the giving of judgment against Ms Bell is by no means as great a disadvantage to her as it would have been if I had been able to terminate the entire proceeding by giving judgment against both respondents. The defence of the proceeding by Living It Up will depend upon the evidence of Ms Bell and she may well decide that it is worth her while to give this evidence. 63 As to judgment against Ms Bell, it is open to me on the statement of claim filed to give the applicant the declaration sought in para 1 of the application, and the order sought in para 2. I can of course also order that Ms Bell pay the applicant's costs of the proceeding up to the time of entry of that judgment. As to the quantification of the amount to be paid, I am of the view that I can act on the admission made in the defence that the bankrupt and Ms Bell were registered proprietors of the Neerim Road property as joint tenants, to conclude that the interest of each is to be valued as a half-interest. Accepting the allegations in the statement of claim (as I am bound to do when applying the powers in O 35A, which requires that any defence be disregarded for this purpose), I am bound to find that the proceeds of sale of the Neerim Road property can be traced into the Mariners Place property. In turn, the Mariners Place property was used as security for the purchase of the Resort to Health business. On the basis that the interests of the bankrupt and Ms Bell in the Neerim Road property were equal, it is appropriate to regard the applicant as entitled to trace the bankrupt's interests into the proceeds of sale of the business and the proceeds of sale of the Mariners Place property to the extent of half of each of those sums. The proceeds of sale of the business were $159 112.43 (as alleged in para 24 of the statement of claim). The proceeds of sale of the Mariners Place property are now known to be $73 987.57. The total of these two amounts is $233 100. Half of that sum is $116 550. I should therefore give judgment for the applicant against Ms Bell in the sum of $116 550 with costs. As part of that judgment, there should be interest on that sum from the date of sale of the Neerim Road property until the date of judgment. In accordance with the usual practice of the Court, interest will be at the penalty interest rate applicable in Victoria under s 2(1) of the Penalty Interest Rates Act 1983 (Vic), currently 12 per cent per annum, non-cumulative (see Victorian Government Gazette no G38, 21 September 2006 at 2005). The total amount of interest from the date of commencement of the principal proceeding to the date of judgment is $66 519.71. 64 Although commenced by notice of motion entitled in the principal proceeding, the application for punishment for contempt of court is to be regarded as a separate proceeding in its own right. See Viner v Australian Building Construction Employees' and Builders Labourers' Federation (No 1) (1981) 5 FLR 5 at 27 --- 32 and Australian Building Construction Employees' and Builders Labourers' Federation v Viner (1982) 63 FLR 253 at 266 per Evatt and Deane JJ. Having been found guilty of contempt of court, Ms Bell should be ordered to pay the costs of that proceeding. No occasion appears for departing from the usual order that costs follow the event, particularly as the impecuniosity of the losing party is not regarded as a ground for refraining from making an order as to costs in most circumstances. Further, it is appropriate that the order for costs in respect of the contempt proceeding be on an indemnity basis. In effect, the applicant applies for punishment for contempt of court to vindicate the authority of the Court. He, or the creditors indemnifying him in the principal proceeding, ought not be out of pocket for costs for performing their function on behalf of the Court. Although it is clear that the proceeding for contempt is to be regarded as a separate proceeding from the principal proceeding, for the avoidance of doubt, I should make an order pursuant to O 62 r 3(2) of the Federal Court Rules that the costs of the contempt proceeding be paid forthwith. 65 In determining the appropriate amount of a fine for contempt of court, it is necessary to have regard to the magnitude of the contempt. In a case such as the present, in which the contempt consists of a failure to pay a sum of money in a particular way, the amount of the money involved must be taken into account. The imposition of a fine bearing no relationship to that amount of money might have the effect, in a case like this, of allowing a discount for payment of a fine, as against payment of the amount required. This is not to say that the amount of the fine must necessarily be equivalent to, or greater than, the sum required by the order to be paid. In the present case, the fact that judgment will be given against Ms Bell for an appropriate amount, together with the fact that Ms Bell will be ordered to pay a substantial sum in legal costs, coupled with her impecuniosity and the consequent likelihood that she will be made bankrupt, suggests that a significantly lower fine is appropriate. In the circumstances, having regard to the seriousness of the contempt, the mitigating factors and the other orders I propose to make, the appropriate amount of a fine is $20 000. 66 The length of a sentence of imprisonment in default of payment of the fine is also a very difficult matter. There appears to be no uniformity of practice in this Court as to the relationship between the amount of a fine and the length of a term of imprisonment in default of its payment. By s 63(1) of the Sentencing Act 1991 (Vic), the relationship is fixed at one day's imprisonment for each penalty unit or part of a penalty unit remaining unpaid, with a maximum of 24 months. The value of a penalty unit is currently fixed at $107.43, by notice in the Victoria Government Gazette no G14, dated 6 April 2006 at 680. For a fine of $20 000, if the appropriate length of a term of imprisonment were determined on this basis, the result would be approximately 186 days, or slightly over six months. I consider that to be excessive in the circumstances of this case. Accordingly, I do not propose to use the Victorian sentencing provisions, which are applicable to criminal offences in any event, as a guide. In my view, it would be appropriate to sentence Ms Bell to a term of imprisonment of 40 days in default of payment of the fine of $20 000. This equates to $500 per day. Further, because of Ms Bell's financial circumstances, if she can pay part of the fine, she should get a reduction in the term of imprisonment on the basis of two days' reduction for each $1000 of the fine she pays. This will provide her with a real incentive to endeavour to raise the money to keep out of prison as much as possible. 67 Before the orders for judgment against Ms Bell, a fine and imprisonment in default of payment of the fine take effect, I am of the view that I should give Ms Bell one further opportunity to purge her contempt. She may be able to locate a source of funds that would enable her to do this, in order to avoid the unpleasant consequences of her default. I propose that she should have a period of 21 days from the date on which the order is pronounced to purge her contempt by paying into Court the sum of $73 987.57, which she was obliged to pay to the trust account held by Kelly & Chapman, according to para 1 of the order made on 10 June 2005. If she can find a way of doing this, the only consequence that should be visited upon her in respect of her contempt of court should be the payment of the costs of the proceeding concerned with contempt, on an indemnity basis. Otherwise, the principal proceeding can continue, and Ms Bell, as well as Living It Up, can continue to defend it. If Ms Bell does not purge her contempt in this fashion, then the other orders should come into operation. That is to say, judgment should be given against her in the manner I have described in [61] --- [63]. She should be ordered to pay the applicant's costs of the principal proceeding, and the costs of the contempt proceeding, the latter on an indemnity basis and payable forthwith. In order to give her a reasonable chance of remaining out of prison, I propose to give Ms Bell a period of six months, following the expiration of the 21 day period after the pronouncement of the order, to pay the fine. If she is unable to pay it by that stage, then she will have to serve the term of imprisonment, to the extent to which she has not paid off the fine. I shall, of course, reserve liberty to apply. 68 It is also necessary to make some provision with respect to the orders I made on 30 January that the respondent forthwith surrender to the Registrar of the Court any passport, including any Australian passport, in her possession or power, and not be permitted to apply for or to obtain any further Australian passport. If Ms Bell purges her contempt, she should be entitled thereupon to the return of her passport and to apply for any further passport. Similarly, if she pays the entirety of the fine within the six-month period, the same consequences should follow. If it is necessary for her to serve a term of imprisonment, she should be entitled to the return of her passport, and to apply for any further passport, once she has completed serving the term of imprisonment. In case it is necessary, I should reserve liberty to apply. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | injunction failure to comply first order requiring payment of proceeds of sale of named property into designated trust account first respondent dissipated proceeds of sale otherwise than in accordance with order whether non-compliance with order within reasonable time whether wilful disobedience whether second respondent had any capacity to comply with order second order requiring same payment by a particular date respondents without means at that date whether either respondent in breach of order they were unable to comply with whether onus of proof of inability to comply on respondents penalty range of penalties available whether community service order can be made whether power to order term of imprisonment in default of payment of fine appropriate level of fine relevance of other orders made judgment in principal proceeding against party in default order for costs of contempt proceeding indemnity costs appropriate length of default term of imprisonment reduction for partial payment of fine "an offence against the law of the commonwealth" contempt of court contempt of court words and phrases |
Centrelink had determined that he was not eligible because he had declined various treatment options recommended by medical practitioners. 2 Counsel addressed full and helpful arguments on the merits of the proposed appeal, I would think to no less extent than would have been the case on a substantive appeal. I shall first consider the issue of merits before turning to the question of delay and Mr Jansen's explanation therefor. 3 Before the Tribunal Mr Jansen gave evidence that he was born in 1966 and had held various manual jobs including working at a timber yard, vineyard and sawmill. His last full time job was twenty years ago. He is currently unemployed. He described a history of anxiety, depressive disorder and panic attacks since he was fifteen. He sought treatment from a psychiatrist in Healesville some years ago but did not find it helpful so discontinued the sessions after several months. He has tried various medications including anti-depressants but found them of little value. They caused side-effects. He now self medicates with alcohol, which he find eases his tension. He occasionally takes Murelax, an anti-depressant, but is reluctant to take this more frequently because he understands it may be addictive. He has engaged in excessive alcohol consumption since age 15. He has never had any treatment for alcohol problems. 4 Mr Jansen noted the various treatment options suggested by various medical practitioners, but told the Tribunal that he would not be able to attempt detoxification at present because he was not ready to give up drinking. Similarly he doubted that tests on his liver etc. would be useful, however he said that he would seek advice from his general practitioner. He reiterated his reluctance to take prescribed medication for depression/anxiety without an assurance from his doctor that there would be no serious side-effects. Mr Jansen explained that in the past he has attended counselling arranged by his church, and found it helpful. He said he would consider resuming this in an effort to address the many issues in his life; however he did not see the desirability of undertaking other forms of counselling. Clearly alcohol abuse and dependence and possible ongoing gambling and cannabis abuse are complicating his presentation and the severity of his illness at present. It would be my view that Mr Jansen at present is not capable of performing sustained work as result of his illness, and is likely to use gambling and various substances to try to self-medicate his primary psychopathology. 7 In oral evidence before the Tribunal Dr Katz said that the treatment of Mr Jansen's excessive alcohol consumption was fundamental to the treatment of the other conditions. He emphasised that any treatment program should be designed to meet Mr Jansen's needs, but accepted that Mr Jansen had declined his offers of assistance. 8 Dr G Stephens, a treating doctor, in a report dated 11 April 2005, said that he expected Mr Jansen's condition would impact on his ability to function for more than 24 months and that this impact would fluctuate during that time. In his view Mr Jansen may require further anti-depressant and/or counselling. 9 Dr J Lane of Health Services Australia, in a report dated 3 May 2005, said that Mr Jansen was likely to be unfit for work for award wages for approximately six to twelve months until his psychiatric condition is fully treated. Rehabilitation, psychological counselling and retraining may help with a return to suitable full time (low stress initially) work if he cannot return to his usual job. He is motivated to do suitable work when he is well enough. Review in six to twelve months was suggested if he has not been able to return to full time work. A rating is only to be assigned after a comprehensive history and examination. The condition must be considered to be permanent. Once a condition has been diagnosed, treated and stabilised, it is accepted as being permanent if in the light of available evidence it is more likely than not that it will persist for the foreseeable future. This will be taken as lasting for more than two years. A condition may be considered fully stabilised if it is unlikely that there will be any significant functional improvement, with or without reasonable treatment, within the next 2 years. The Tribunal accepts the medical evidence from Dr Katz and Dr Lane that treatment options comprising a range of therapeutic measures would be appropriate to Mr Jansen's particular needs. The Tribunal notes that his treating doctor sees possible value in medication and counselling. The Tribunal acknowledges that some time ago Mr Jansen experienced serious side-effects from medication for depression/anxiety, and accepts that he may be reluctant to undergo similar treatment involving medication without an assurance from his treating doctor that there will be no serious side-effects. He stated that he retains the option of occasional use of Murelax for depression/anxiety. Clearly Mr Jansen is not prepared to consider detoxification or other measures to address his alcohol consumption because he does not want to cease drinking, and he is not willing to consider counselling other than that organised by his church. He would consult his treating doctor about tests such as liver function etc. before agreeing to undertake them. The Tribunal concludes that the risks to Mr Jansen from undertaking the range of treatment options are slight and do not constitute a real risk of harm to him. The recommended treatment is reasonable in the circumstances and is in his best interests. Despite his particular fear of serious side-effects from depression/anxiety medication, Mr Jansen has not demonstrated a genuine reason for refusing other treatment options. The Tribunal finds that, in all the circumstances, Mr Jansen's refusal to undertake the range of treatment options is not genuinely based on grounds that compel him, acting honestly, to refuse. Therefore his conditions are not fully documented, diagnosed conditions which have been investigated, treated and stabilised, and could not be assigned an impairment rating under the Impairment Tables, and he does not satisfy the qualification requirements of s 94(1)(b) of the Act. Consequently he cannot satisfy s 94(1) of the Act, and the Tribunal does not need to consider whether he had a continuing inability to work under s 94(1)(c) of the Act. Implicitly, the Tribunal declined to apply par 6[d] and consider the condition stabilised. It would seem the Tribunal considered this was not a case where there was "a medical or other compelling reason for a person [ie Mr Jansen] not undertaking further treatment". 16 On behalf of Mr Jansen, Mr Geale of counsel said that the Tribunal erred in not applying a subjective test to the refusal of medical treatment. The question was whether the refusal was subjectively genuine. Ms Macdonnell on behalf of the respondent pointed out that the Tribunal had referred to a "range of treatment options". Mr Jansen had given reasons for refusing some, but not others. In reply Mr Geale said that the treatment for which no reason was advanced went "hand in hand" with his alcoholism; in other words because he declined medication he continued the "self-medication" with alcohol. 17 It is true, as Ms Macdonnell pointed out, that Dragojlovic and Koutsakis were concerned with different statutory criteria. In Dragojlovic the Tribunal, confirming an order for the cancellation of an invalid pension, had found as a fact that the applicant had unreasonably refused to undergo a lumbar laminectomy. Smithers J dealt first with the general provision in s 23 of the Social Security Act 1947 (Cth) (originally the Social Services Act 1947 but title amended by Act No 37 of 1982). Section 23 provided that a person shall be deemed to be permanently incapacitated for work if the degree of permanent incapacity for work is not less than 85 per cent. His Honour at 302 quoted with approval a decision of Todd DP in Re Korovesis v Director General of Social Security (1983) 6 ALD 244 to the effect that a claimant for a pension "cannot be compelled to have an operation". He remains so whether his fear is reasonable or unreasonable. In the latter case, objectively unreasonable refusal to undergo medical treatment may bring to an end the liability of employer or defendant to compensate. Those provisions relate to the objective provision of a minimum level of support, to determining whether a 'safety net' should be placed under a person in crisis. In the case of invalid pensions, such support is to be given where he or she is, for the foreseeable future, incapacitated for work. Common sense suggests that it would be unfair that the community should pay a pension to such a person. As a result, it has been thought proper to import, by analogy, the notion that incapacity which is curable by the adoption of measures which it is objectively reasonable to take, is not permanent incapacity. Under the Act qualification for a pension depends upon a state of fact. The Act does not lay down as a condition of the qualification that there be a reasonable cause for its existence. At the same time, to treat an incapacity as permanent, simply because a claimant will not take steps to be cured would be unacceptable from any point of view. Suffice to say Smithers J construed that provision consistently with his views on the policy and purpose of the Act. In our opinion, the mere fact that the appellant's fears are groundless does not make them unreasonable if they are genuine". Such is not the case. In par 6[d] the expression "a person" is clearly a reference to the particular person contemplating the treatment in question. It imports a subjective criterion. 23 Paragraph 6[e] is directed towards ensuring proper recording of the decision by the medical officer. It necessarily assumes that the officer thinks the proposed treatment is reasonable but that the person has chosen not to undergo it. No doubt such circumstances will be "exceptional". For the protection of all concerned, not least the medical officer, the refusal should be clearly documented. Paragraph 6[e] read with par 6[d] assumes that "generally" persons will wish to pursue reasonable treatment but, exceptionally, there may be circumstance when such persons do not, ie where (i) significant functional improvement is not expected, (ii) there is a medical reason for the person not undergoing further treatment, or (iii) there is "other compelling reason" for the person not undergoing medical treatment. If a person falls within par 6[d], his or her condition is to be taken as "stabilised" notwithstanding the absence of the "further reasonable treatment" specified in par 6[a] and [b]. 24 The Tribunal's emphasis on the lack of "grounds" indicates that it was treating the test as objective. While the Tribunal cited a passage from Dragojlovic , read as a whole Smithers J is not saying that the person seeking to obtain, or maintain, a pension must show some reason or fact external to his or her decision not to undergo the treatment in question. On the contrary, the emphasis is on subjective good faith, or the lack thereof, in the person's decision, however irrational it may seem. This view of Dragojlovic is confirmed by what the Full Court said in Koutsakis . This is consistent with the first two sentences which look objectively at the risks of harm and whether the treatment is "reasonable in the circumstances and ... in his best interests". 26 If the Tribunal came to the view that Mr Jansen was not acting bona fide but rather, in the words of Smithers J as "the result of a tactical exercise designed to obtain a pension" ( Dragojlovic at 305), fairness would demand a clear finding to that effect, with reasons. The lack of such a finding points to a conclusion that the Tribunal misunderstood the correct test. 27 McKinnon had nothing to do with social security. It was a claim for damages for personal injuries allegedly caused by the negligence of the Commonwealth and New South Wales Governments (proceeding NG 518 of 1996). The question before Hill J was whether the proceeding should be stayed until the applicant attended a medical examination arranged by the respondents. The Tribunal's citing of McKinnon strongly suggests that it misunderstood the question for its decision. A point made at some length in Dragojlovic is that the objective reasonableness of proposed medical treatment will be relevant for common law in workers compensation claims but not under a social security regime. 28 I conclude that the proposed appeal would not only have reasonable prospects of success; it would succeed. 29 As to delay, the decision of the Tribunal was handed down on 27 April 2006. The last date for lodging an appeal was 25 May. In early May, Legal Aid Victoria advised Mr Jansen that his application for legal aid for an appeal had been refused. Legal Aid referred him to Public Interest Law Clearing House (PILCH). After some delay due to PILCH moving address, Mr Jansen made contact with that organisation. PILCH advised it was seeking the opinion of a barrister. Throughout May, Mr Jansen contacted PILCH several times. It said it was still considering his request. 30 The barrister retained by PILCH did not give his advice until 3 July. Mr Jansen does not say so, but it may be inferred that the advice was unfavourable. In any event, PILCH referred Mr Jansen to The Micah Law Centre. He met with representatives of that body on 26 July, the first available date. There was further delay because The Micah Law Centre had to obtain the file from Legal Aid. Apparently Legal Aid was unable to provide a copy of the file. 31 Finally the application for an extension of time and affidavit in support were filed on 21 September 2006. 32 In my opinion, Mr Jansen has demonstrated a consistent determination to prosecute his appeal, despite delays and frustrations which cannot be attributed to him. The respondent does not assert any particular prejudice as a result of the delay, although I accept there is a general public interest in recourse to this Court by persons seeking the reversal of administrative decisions being sought within a reasonable time. 33 Extension of time should be granted. The respondent pay the applicant's costs of the application and the appeal. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey . | application to extend time for appeal from administrative appeals tribunal applicant suffered anxiety/depression and self-medicated with alcohol and occasional anti-depressants applicant denied disability support pension under s 94 and schedule 1b of the social security act 1991 (cth) because of applicant's refusal to adopt recommended treatments social security |
The company was deregistered because it neglected to pay its review fees within 12 months of the date for payment. There is no impediment to the reinstatement of the company. It is solvent and neither ASIC nor the other defendants, Paladin Group Pty Ltd, Michael Humphris and Jeffrey King (who are defendants in a suit brought by the company in the County Court of Victoria), contend there are any discretionary factors that stand in the way of an order being made. The only issue is whether the order can be made on the application of Mr Brereton. 2 An application for reinstatement can only be made by "a person aggrieved" by the deregistration or by the company's former liquidator: Corporations Act 2001 (Cth), s 601AH(2). Mr Brereton claims to be a "person aggrieved" by the company having been deregistered. The expression "person aggrieved", which is of wide import, has been interpreted to mean a person who has a genuine grievance because of prejudice suffered to his interest from the act complained of: Attorney-General of Gambia v N'Jie [1961] AC 617, 634. His interest must be a real and direct interest in the act or in the consequences of the act and he must be dissatisfied with it: Day v Hunter [1964] VR 845, 847, 849. The expression does not include a mere busy-body who is interfering in things that do not concern him: Deputy Commissioner of Taxation v Lanstel Pty Ltd (1996) 2 ACSR 314, 315-316. On the other hand, a person who is deprived of something or is adversely affected by the act is a "person aggrieved": Re Formcrete Services Pty Ltd (1976) 2 ACLR 46, 48. 3 Mr Brereton's claim for standing has four bases. The first is that he was a director of the company, indeed its only director, at the time it was deregistered. At present the cases say this is not good enough. The point was first considered in Re Waldcourt Investment Co Pty Ltd (1986) 11 ACLR 7. There Olney J said [at 12] that "a shareholder or director of a company which, as in the present case, has no assets other than a claim against another for the payment of a sum of money which at its best will only be sufficient to satisfy the secured creditors of the company, could not be said to have an interest sufficient to justify the shareholder or director claiming the status of being a person aggrieved by the cancellation of registration". He went on to say that if the shareholder or director was also a creditor, the position would be different. My reading of the reasons suggests the judge was confining his remarks to the case of an insolvent company where only the secured creditors would be paid. One can readily understand in that circumstance why a creditor has no grievance about the deregistration. He is not going to recover his debt whatever happens to the company. The judge did not explain why a director of an insolvent company is not aggrieved by its deregistration. Perhaps the reason is that there is nothing to be gained by the resurrection of a company that in reality should be wound up. 4 The second case is Re Waterbury Nominees Pty Ltd (1986) 11 ACLR 348 a case decided by Olney J three months after his decision in Re Waldcourt Investment Co Pty Ltd. This time the company whose registration had been cancelled was solvent. It was a trustee of a family trust. The application to reinstate the company was made by a former director who was also a former shareholder. On the question of standing Olney J said (at 349) "In Re Waldcourt Investments Co Pty Ltd I expressed the opinion that the applicant's former status as a director and/or shareholder of the company is an insufficient basis per se to claim to be a person aggrieved for the purposes of [the predecessor of s 601AH(2)] and I adhere to that view". I make the following observations about this passage. First, Olney J did not explain why a shareholder of a solvent company is in the same position as a shareholder of an insolvent company. In my view there is a stark difference. On the deregistration of an insolvent company shareholders lose nothing for all they have invested has already been lost. On the other hand, if the company were solvent shareholders stand to lose at least their capital (subject to the possibility of getting some back under s 601AE(2)). That is a sufficient basis for standing in my opinion. Thus I would not follow Re Waterbury Nominees on this aspect. In any event the case is inconsistent with Re J J Weeks Constructions Pty Ltd (1982) 7 ACLR 102, 105. 5 The position of a director of a solvent company is more troubling. To my mind there is a strong argument in favour of holding a former director of a solvent company to be a "person aggrieved" by the company's deregistration. He is aggrieved, first, by reason of the loss of his office and, second, by reason of the loss of profit in cases where the director receives a fee. Support for this view comes from England. There the Companies Act 2006 (UK) provides that a former director can apply both for an administrative and curial restoration of a company to the register: see ss 1024(3) and 1029(2)(b). It is not necessary to decide whether Olney J is plainly wrong. That question can await another day. 6 The second basis to Mr Brereton's claim is that he is a creditor of the company. If he is a creditor it is undoubted that he has standing to apply for the company's reinstatement. Mr Brereton's claim to be a creditor is contentious. That may not matter. It is, I think, sufficient for an applicant to show that he is "at least arguably ... a creditor of the company": Pacanowski v Australian Securities Commission (1995) 17 ACSR 203, 205 per Moore J. Moore J did not cite any authority for this proposition, but it is in line with Re Harvest Lane Motor Bodies Ltd [1969] 1 Ch 457, a case decided under the Companies Act 1948 (UK). Section 353(6) of the UK Act provided that a petition to restore a company to the register could be presented by a "company or any member or creditor thereof [that felt] aggrieved by the company having been struck off the register". Megarry J held that the administratrix of a deceased estate who wished to prosecute against the deregistered company a claim for negligence that had resulted in the death of her husband, was a creditor for the purposes of the section. The judge did not enquire whether the action was likely to succeed. See also Donmastry Pty Ltd v Albarran (2004) 49 ASCR 745. The principle that can be taken from those cases is that a person who has a bona fide claim (that is a claim that is not frivolous or vexatious) that he wishes to pursue against a company is a "person aggrieved" by its deregistration. 7 This makes sense. An application to reinstate a company is hardly an appropriate vehicle in which to test the validity of a disputed claim. True it is that there will be occasions when it is appropriate to enquire into the merits of a claim on the reinstatement application, as happened in Re Kenneth Wright Distributors Pty Ltd (in liq) [1973] VR 161. But those cases will be rare. 8 The third basis upon which standing is claimed is that Mr Brereton himself has a claim against the company. I note that the acts which are said to give rise to the claim against the company arose after Mr Brereton brought the application for reinstatement. There is authority for the proposition that the facts that establish standing may arise after the company has been struck off the register: Re Prospine Pty Ltd [1980] 5 ACLR 603, 606. On the other hand, it is difficult to accept that a plaintiff can rely on events that post-date the application to establish standing to bring the application. Standing should be assessed at the time the application is filed. In reality, however, nothing turns on the point. As I pointed out during argument, Mr Brereton could overcome the problem by abandoning his existing application and filing another, asking for all necessary abridgments so that the new application could be heard instanter. 9 Turning to the claim, I only propose to consider whether it is fanciful. If it is not fanciful Mr Brereton's standing will be established. The claim is in restitution at common law and is based on unjust enrichment. Put very briefly, it is said that the company has, or on its reinstatement it will have, benefited from or been enriched by, Mr Brereton's payment to ASIC of the unpaid fees and it would be unjust to allow the company to retain that benefit. The argument assumes, I think, that upon its reinstatement the company will ratify the payment made in discharge of its debt to ASIC. If the payment is not ratified the debt to ASIC will not be discharged, in which case it would be difficult to contend that the company obtained any benefit from the payment. It is safe to assume that upon its reinstatement the company would ratify the payment. The ratification will be either express (by Mr Brereton who will gain control of the company) or to be inferred from the fact of the company going on with its corporate life. 10 Mr Brereton's claim does not want for novelty. Usually only a person who is under an obligation to discharge the debt of another, or who discharges the debt at the other party's request, is entitled to reimbursement. That is, a voluntary payment in discharge of another's debt does not ordinarily entitle the payee to reimbursement. But this rule may not be absolute. There is an argument that a right of restitution would exist if the payment amounts to a "necessitous intervention". See generally Mason & Carter, "Restitution Law in Australia" (1 st ed, 1995) ch 8; Goff & Jones, "The Law of Restitution" (5 th ed, 1998) ch 17. The relevant factors are these. Mr Brereton was a director. In that capacity he was under an obligation to ensure the company paid its annual fees. He has breached that duty and is taking steps to put matters right. It would, in that circumstance, be unjust, so the argument goes, for the company to take the benefit of its reinstatement and yet not pay for that benefit by reimbursing the fees. There is the possibility of an analogy between this kind of case and the case of a compulsory payment. It is accepted that where a person has been compelled by law to pay money on behalf of another from which the latter obtains a benefit (usually by the discharge of his liability) the payee is entitled to recover the amount of the payment. The basis of this right is similar to that which underlies the right to contribution. It is true that Mr Brereton was not obliged to pay ASIC. It might be said, however, that he was obliged to take reasonable steps to overcome the consequence of his failure to ensure that the company paid its review fees. That Mr Brereton paid the fee so as to obtain the reinstatement is a factor against his claim. But it may not be fatal, for otherwise the company could be reinstated on other grounds and in the event never pay the fee, which would be a somewhat absurd result. 11 The fourth basis upon which standing is claimed is that Mr Brereton's company is the beneficial owner of all the shares in FTV Tweed Finance. This fact, if it be a fact, does not give Mr Brereton standing. It would be necessary for his company to make the application. 12 I propose to order that ASIC reinstate the registration of the company. Mr Brereton will have to pay ASIC's costs. So far as Mr Brereton's costs of the application are concerned, they should be borne by the second, third and fourth defendants. The costs should include those reserved before the registrar before whom those defendants succeeded leading to this review. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | reinstatement of company standing whether director or creditor "person aggrieved" "person aggrieved" corporations words and phrases |
The first respondent opposes the grant of such an extension. For the reasons to be stated, I would grant the extension application and allow the appeal. 2 Under O 52 r 15 of the Federal Court Rules , the applicant was required to file and serve any notice of appeal within 21 days after 21 January 2005. That is, excluding the date of judgment and allowing until the next day the Court Registry was open, the relevant deadline was 14 February 2005. The notice of appeal was filed 2 days late on 16 February 2005. Order 52 r 15(2) provides that the Court or a Judge may, for special reasons, give leave to file and serve a notice of appeal. That is, the applicant is required to establish grounds of appeal sufficient in the circumstances to justify a departure from the prescribed time period. The appellant set out his case in his affidavit filed in support of his application. I refer to it hereafter. 3 In opposing an extension of time, the first respondent did not argue that she would be prejudiced by the two day extension. Instead, the first respondent submitted that the Court ought not to grant the extension because the applicant's prospects of successfully prosecuting this appeal were negligible. 4 The history of the matter is as follows. The applicant, a citizen of Sir Lanka, arrived in Australia on 11 January 2002. On 23 January 2002, he applied for a protection (class XA) visa on the basis that his life was in danger in Sri Lanka because of Sri Lankan government attacks due to his background as a half-Tamil who used to live in Jaffna. 5 A delegate of the first respondent refused his application on 10 May 2002. The applicant applied to the Refugee Review Tribunal ("RRT") for review of that decision. Before the RRT, the applicant claimed that he was at risk of persecution from both the Liberation Tigers of Tamil Eelam ("LTTE") and the Sri Lankan governmental authorities. The applicant told the delegate that he was considered suspect by the Sri Lankan authorities because of his mother's involvement with the LTTE. At the hearing before the RRT, the applicant claimed, for the first time, that he had also been involved with the LTTE. In a decision dated 20 January 2004, the RRT affirmed the decision of the delegate. The RRT did not find the applicant's account credible and concluded that neither the applicant nor his mother had been involved with the LTTE. 6 Prior to the RRT's hearing, there had been no suggestion by the applicant that he had any direct involvement with the LTTE. The applicant's claim that he had spied for the LTTE, and that he knew the LTTE leaders in his area and some of their secrets and the attacks they were plotting was a claim made for the first time, orally, before the RRT. 7 On 23 March 2004, the applicant filed an application in the Federal Magistrates Court for review of the RRT's decision. The applicant claimed that the RRT's decision was affected by jurisdictional error because the RRT asked the wrong question and identified the wrong issues when determining whether the applicant had a "well founded fear" of persecution. In a judgment delivered on 21 January 2005, a Federal Magistrate dismissed the application for review. His Honour concluded that the applicant's claims were simply a challenge to the RRT's credibility finding and amounted to an impermissible attempt to reargue the matter on its merits. 8 On 15 April 2005, the applicant filed an affidavit in support of his application for an extension of time. In that affidavit, he stated that he was not notified of the judgment date in the Federal Magistrates Court and was therefore not present when judgment was delivered. His evidence was that he was not aware of the judgment until 27 January 2005, when he received the Federal Magistrate's reasons for judgment by post. The applicant's evidence was that, on receiving his Honour's reasons, he was "dissatisfied with the order and intended to file an appeal". He did not have legal representation and, accordingly, performed internet research which indicated that he had 28 days for filing his appeal against the orders of the Federal Magistrate. His appeal was filed on 16 February 2005 (which was within 28 days of his Honour's decision). It was not until he received a letter from the respondent's solicitor on 28 or 29 March 2005 that he became aware that his notice had been filed out of time. 9 I accept that the applicant was late in filing his appeal on account of an inadvertent error and that there would be no relevant prejudice if an extension were granted. This circumstance can constitute special reasons for the purpose of the Rules. In determining whether an extension should be granted, however, it is also necessary to consider the prospects of the proposed appeal. If the applicant has no prospects of success, then the extension would be futile and should not be granted. Before the hearing on 10 March 2006, the applicant had neither filed written submissions nor given any particulars of his grounds of appeal. 11 At the hearing on 10 March 2006, the applicant submitted as follows. As such, he was regarded with suspicion by both the LTTE and the Sri Lankan governmental authorities. (2) His mother had sacrificed a great deal for him to come to Australia and he had lost contact with her. (3) The RRT had relied on country information in reaching its decision and, in breach of s 424A of the Migration Act 1958 (Cth) ("the Act "), the RRT had not told him about the country information before making its decision. (4) Sri Lanka remained a dangerous place, especially for poor people, including himself. Counsel also addressed a further point, which, as he observed, would probably have been raised had the applicant been represented. This concerned the RRT's reliance upon a standard letter that the first respondent's department ordinarily sent an applicant for a protection visa ("the standard letter"). At the hearing before the Federal Magistrate, the applicant had challenged the RRT's reliance upon the standard letter upon the basis that he never received such a letter. 13 The first respondent's counsel submitted that the standard letter did not constitute information that s 424A of the Act required the RRT to give to the applicant before making its decision. Counsel further contended that the standard letter constituted only one of three separate bases for the RRT's rejection of the applicant's explanation for failing to mention his own LTTE involvement until the oral hearing before the RRT. Counsel also argued that the RRT's rejection of this explanation constituted one of two separate grounds stated by the RRT for rejecting the applicant's account of his association with the LTTE. In the first respondent's submission, even if the RRT's first ground disclosed error, an alternative ground remained to support the RRT's rejection of the applicant's account on credibility grounds. 14 After hearing the parties on 10 March 2006, the court adjourned upon the understanding that judgment would be delivered later that day. In the interim, however, the first respondent faxed further submissions, drawing attention to SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 at [216] per Allsop J and [155] per Weinberg J (" SZEEU "). As a result, a further hearing was rescheduled for 24 April 2006 to enable the applicant to obtain assistance from pro bono counsel on these further submissions. did not fall within the exception in s 424(3). She submitted that both pieces of information constituted "information" within the meaning of s 424A(1) of the Act ; and were part of the reasons for affirming the decision under review. It followed, so she said, that the RRT breached s 424A when it failed to provide particulars of these pieces of information to the applicant in accordance with the Act . Further, counsel for the applicant contended that there was no alternate basis for the RRT's decision that was unaffected by the s 424A error. 17 As counsel for the applicant acknowledged, the proposed ground of appeal raised a basis for a claim of jurisdictional error on the RRT's part that had not been argued before the Federal Magistrate. The court may allow such a ground to be argued on an appeal if it is satisfied that it is expedient in the interests of justice to allow the new ground to be argued and determined: see VAAC v Minster for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 74 ; (2003) 129 FCR 168 (" VAAC ") at 177 [26] per North, Merkel and Weinberg JJ. It is only at this late stage in this proceeding that the applicant has had the benefit of counsel and this provides part of the explanation for the applicant's failure to raise the ground earlier. There is also the further fact that SZEEU was only delivered on 24 February 2006. In addition to this consideration, whether or not leave ought be granted depends on such matters as the prospects of success of the proposed new ground, the prejudice to the first respondent in allowing the ground to be raised, the possible serious consequences to the applicant if the leave sought is refused, and the integrity of the appellate process: see VAAC at 177 [26]. 18 Since I could form no view on the prospects of success without hearing argument, I have heard counsel for the applicant and the respondent on the proposed new ground, without ruling on the application for leave. This argument covered both the significance, for these purposes, of the RRT's reference to the standard letter (foreshadowed at the 10 March hearing) and the significance, for these purposes, of the RRT's reference to the form and content of the applicant's evidence to the delegate. The first respondent's counsel did not oppose this course and, in particular, he did not submit that he was unable to deal with both aspects of the proposed new ground of appeal at the hearing of 24 April 2006. The information and invitation must be given by a prescribed method: s 424A(2). Section 424A does not apply to certain kinds of information, being information that is not specifically about an applicant and is just about a class of persons, or information that the applicant gave for the purpose of the application, or non-disclosable information: s 424A(3). 20 I will deal first with the issue of country information, which the applicant raised on 10 March 2006. In its reasons for decision, the RRT referred to country information in support of its finding that, "in current circumstances and the foreseeable future", "the applicant does not face a real chance of harm, or interest from either the LTTE or the Government because of his mixed ethnicity or the fact that he had moved to Colombo from Jaffna in 1983". This country information referred to the ceasefires announced by the LTTE and the Sri Lankan Government, peace talks, and other changes in internal security in Sri Lanka. It is worth noting, however, that the RRT also recognized that, since the publication of the report containing this country information, "the ceasefire negotiations have continued although not without some violent incidents continuing and uncertainties on both sides of the conflict that have caused some concern about the long term viability of the process". 21 It is clear from the RRT's reasons that the country information to which it referred was not specifically about the applicant and was just about a class of persons, however that class is defined. In consequence, by virtue of s 424A(3) , the RRT was not obliged to give particulars to the applicant of such information. There was, therefore, no breach of s 424A of the Act arising from the fact that the applicant was not given the country information referred to in the RRT's reasons before the RRT made its decision. Further, the RRT's reasons, taken as a whole, do not disclose any breach of the rules of procedural fairness involved in the RRT's reliance on this information. Even if there were, given the RRT's cautious approach to the country information, it cannot be said that it might have reached a different decision had the applicant been able to submit (as he said he would have done) that there remained real risks, especially for the poor. 22 I now turn to the arguments advanced by pro bono counsel on the applicant's behalf at the 24 April 2006 hearing. 23 The RRT's knowledge that the standard letter contained an assurance of privacy can be regarded as 'information' for the purposes of s 424A. The Court in SZEEU treated the discussion of the word 'information' in VAF v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 206 ALR 471 (" VAF ") as a point of departure for its own consideration of the appeals before it. 25 I accept that the RRT's knowledge that the standard letter contained an assurance of privacy constituted knowledge of relevant facts or circumstances communicated to or received by the RRT and therefore 'information' for the purposes of s 424A of the Act . It was common ground that the RRT had not given the applicant particulars of such information as s 424A of the Act would require. 26 On a fair reading of the RRT's reasons for its decision, the RRT's knowledge that the standard letter contained an assurance of privacy was knowledge that the RRT considered was a part of the reason it affirmed the decision under review. The cases suggest that this expression should be read benevolently, in favour of an applicant for review. If there is any doubt as to whether information that is adverse to an applicant did form a part of the reason for decision, that doubt should generally be resolved in favour of the applicant. Although the Tribunal dealt with the matter as though it simply bolstered a conclusion that it had already arrived at, rather than an element in the decision-making process, it does not follow that it did not play "a part" in its reasons for decision. ... The actual process by which a decision is reached is, of course, a complex matter. It is not always as neat as the reasons themselves may suggest. The reasoning may not proceed in a linear fashion, and the Tribunal's reasons must, of course, be read as a whole. To the extent that the reasons of the relevant majorities in [Paul v Minister for Immigration and Multicultural Afairs [2001] FCA 1196 ; (2001) 113 FCR 396] and VAF can be seen to require that the relevant part of the reason have a stature or importance, or be of a character, which would make it unfair not to invoke the procedures of s 424A , I think SAAP requires that such an approach be rejected. It is only necessary that the information be a part of the reason. One always needs to analyse and interpret the reason s of the Tribunal in order to understand the reason for the ultimate reason or conclusion of the lack of satisfaction of the existence of protection obligations. Merely because something is contained in the text of the reasons of the Tribunal which involves "information" does not conclude the question whether it was (and, in the relevant sense, would be) a part of the reason for affirming the decision. The whole of the written reasons must be analysed and interpreted in their context to assess why it was that the Tribunal acted as it did (and so, in the relevant sense, to assess what would be, prior to making the decision, the reason or a part of the reason). Having thus ascertained the reason or reasons (if there be more than one) why the Tribunal was not relevantly satisfied, any information that was (and thus, in the relevant sense, would be) a part of the reasoning process to explain such reason engages the operation of s 424A , without any additional requirement (for which Paul and VAF appear to call) that the relative importance of the information to the reasoning process be assessed to form a judgment as to whether fairness requires the engagement of s 424A. The above tasks of assessment or interpretation of the Tribunal's reasons, of ascertaining what was any reasoning process and of assessing the relevance of any information thereto may not be straightforward and may lead to conclusions about which minds may differ. As previously noted, before the RRT, the applicant claimed that he feared persecution based on his own association with the LTTE, although he had not mentioned these claims until he gave evidence at the RRT hearing. 30 The RRT rejected this claim about his own involvement with the LTTE as "not credible", because, if genuine, the applicant would have mentioned the claim to the delegate or in his statement seeking review of the delegate's decision. The RRT rejected the applicant's explanation for his failure to mention the claim earlier on the joint bases of importance and confidentiality. In relation to confidentiality, the RRT referred to the assurances given both at the interview with the delegate and in the standard letter. The reference to the standard letter was apparently intended to take account of the fact that the applicant said that he could not recall being given such an assurance at the interview with the delegate. In effect, the standard letter was a part of the RRT's reasons for its decision because it provided a part of the reason for rejecting the applicant's explanation as to why he gave an account of personal involvement so late in the piece and thus for disbelieving this account. There were not, as the respondent maintained, three separate bases for the RRT's rejection of the applicant's explanation for failing to mention his own LTTE involvement until the oral hearing before the RRT. The matter of the standard letter was intertwined with the RRT's view that the applicant's explanation for his late claims should be rejected because of earlier assurances of confidentiality. 31 As noted earlier, the first respondent also contended that, even if there were a breach in this regard, the decision of the RRT was supportable on an independent basis that was not affected by the breach. This was that the RRT would have found the applicant's account not credible also on the basis that it did not find his evidence plausible. I reject this submission because, read fairly and as a whole, the RRT's finding that the applicant was not credible flowed from its determination that, if true, the applicant would have made his personal involvement claim earlier and its assessment that his evidence was vague, unresponsive and implausible. That is, the RRT treated these two considerations as supporting, together or cumulatively, its credibility finding. The RRT expressed the idea of cumulation when it said that it "also gives weight to the fact" that the applicant's evidence was general, unresponsive and implausible. Reading the RRT's reasons as a whole, it is plain enough that it relied on 'recent invention' and 'implausibility' as jointly founding its credibility finding. The RRT did not treat implausibility as a stand-alone basis for rejecting his claim on credibility grounds. 32 The effect of SAAP Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162 is that s 424A of the Act requires the RRT, at the hearing stage, to give the applicant 'particulars' in writing of any information that would be the reason, or a part of the reason, for affirming the decision under review; and any breach of this requirement constitutes jurisdictional error. 33 In view of this conclusion, it is unnecessary to consider the applicant's counsel's further submission concerning the form and content of the applicant's evidence given to the Department. I observe that the first respondent's counsel noted, in argument, that he had no notice of this latter submission prior to the 24 April hearing, although no blame attaches to pro bono counsel for this apparent fact. 34 If leave to amend the notice of appeal were granted and an extension of time were granted, the appeal would succeed. The first respondent has not argued that, if the court so concluded, then it should not grant leave because of any countervailing considerations. Accordingly, I would grant leave to amend the proposed notice of appeal in the terms sought by pro bono counsel. I would also grant the extension of time the applicant sought and I would allow the appeal, with costs. 35 The Court is indebted to counsel for the first respondent and the applicant for their assistance in this case. Counsel for the first respondent acted through-out the case as befitted a model litigant in this Court. In this case as in other cases, pro bono counsel rendered to the Court and to litigants in person a very great service in agreeing to act without fee as counsel in the presentation of argument. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | application for extension of time to file notice of appeal s 424a of the migration act 1958 (cth) whether contents of letter constituted "information" under s 424a whether there was an alternative basis for refugee review tribunal's decision extension of time granted and appeal allowed migration |
The class action is being funded by a litigation funder. Initially the funder was 2117980 Ontario Inc, the second defendant, a company incorporated in the Province of Ontario, Canada. Now, following a purported assignment, the action is being funded by International Litigation Funding Partners PTE Ltd, the first defendant, a company incorporated in the Republic of Singapore. The plaintiffs have brought this action to stop the funding. They contend that the arrangement pursuant to which funding is provided is illegal. 2 The arrangement is described in the statement of claim and counsel's outline of argument. In brief it works this way. Persons (group members) who have a claim against the plaintiffs agree to retain Maurice Blackburn Pty Limited, the third defendant, to prosecute those claims. They agree to pay any money they might receive by way of judgment or settlement into a common account maintained by Maurice Blackburn from which payments are to be made in accordance with the relevant funding agreement. For their part, the funders agree to fund the action by meeting the fees of Maurice Blackburn and any costs that may be awarded against group members in favour of the plaintiffs. Maurice Blackburn's fees for the provision of legal services are only to be recovered from the funder. 3 It is alleged that the arrangement constitutes a managed investment scheme which was required to be, but was not, registered under s 601EB of the Corporations Act 2001 (Cth). Section 601ED(5) provides that a person must not operate in Australia a managed investment scheme that is required to be registered under s 601EB unless it is so registered. Injunctions restraining the operation of a managed investment scheme which is not registered may be obtained under s 1324. 4 Subject to certain exclusions, a managed investment scheme is defined in s 9 to be a scheme that has the following features: "(i) people contribute money or money's worth as consideration to acquire rights (interests) to benefits produced by the scheme (whether the rights are actual, prospective or contingent and whether they are enforceable or not); (ii) any of the contributions are to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in property, for the people (the members) who hold interests in the scheme (whether as contributors to the scheme or as people who have acquired interests from holders); and (iii) the members do not have day-to-day control over the operation of the scheme (whether or not they have the right to be consulted or to give directions). They explain how in the statement of claim. First, group members are required to contribute money's worth (the promise to pay money received on their claims into a common account) as consideration to acquire benefits (the funding of the action) produced by the scheme. Second, the money's worth (the promises) is used in a common enterprise (the scheme), or alternatively the promises are pooled, to produce financial benefits for group members (the funding or the ability of group members to pursue their claims against the plaintiffs without any liability for costs). Third, the group members do not have day to day control over the scheme because they do not participate in decisions regarding the prosecution of the class action. According to the retainer agreements each group member is bound by decisions made by the named plaintiff, Maurice Blackburn and the funders. 6 There is nothing straightforward about many of these allegations. Without in any way wishing to be exhaustive the following difficult issues arise: (a) assuming that there is a "scheme", is the promise by the litigation funders a benefit "produced by the scheme"; (b) assuming that the promises the group members make have the character of a contribution of "money's worth", is what has occurred a "pool[ing]" of those contributions or the use of them "in a common enterprise"; (c) if yes to (b), does this "pool[ing]" or "common enterprise" produce a "financial benefit" for the group members? There is a further issue. Section 601ED is concerned to prohibit conduct that has occurred within the jurisdiction. The litigation funders are foreign corporations. It is not alleged that they carry on business (ie the scheme) in Australia, although that may be inferred. (Somewhat surprisingly, nothing is made of the fact that if these foreign companies are carrying on business in Australia they are not registered as required by s 601CD). At any rate, in Australian Securities and Investments Commission v Edwards [2004] QSC 344 it was said that: "The concept of the operation of a managed investment scheme does not require the identification of but one place, as the place where the scheme is operated. Nor does it require the identification of but one operator ... [What is required is a] consideration of the nature and extent of the activities carried on within the jurisdiction in the context of the scheme as a whole. " The statement of claim simply assumes that sufficient relevant activities are carried on within the jurisdiction. That may or may not turn out to be so. 7 Putting these difficulties aside, the plaintiffs wish to serve the originating process on the litigation funders. To obtain leave under O 8, the court must be satisfied that: (a) the court has jurisdiction in the proceeding; (b) the proceeding is a proceeding to which O8 r 2 applies; and (c) the applicant has a prime facie case for the relief which he seeks: O 8 r 3(2). Then the applicant must show why the discretion should be exercised in his favour. In England, comity requires this discretion to be exercised with circumspection: Amin Rasheed Shipping Corp v Kuwait Insurance Co [1984] AC 50 , 65. The position in Australia is more robust. In Agar v Hyde [2001] HCA 41 ; (2000) 201 CLR 552 Gaudron, McHugh, Gummow and Hayne JJ said at 571 that: "[C]ontemporary developments in communications and transport make the degree of "inconvenience and annoyance" to which a foreign defendant would be put, if brought into the courts of this jurisdiction, "of a qualitatively different order to that which existed in 1885"". Now, in practice, if the three conditions are satisfied it usually follows that leave will be granted. It then falls upon the foreign defendant to show why service should be set aside. 8 There can be no issue that two of the conditions stipulated in O 8 r 3(2) are satisfied. First, the court has jurisdiction in the proceeding because the plaintiffs seek to enforce an Australian statute. Second, the proceeding is one to which r 2 applies. Rule 2 item 11 permits service out of the jurisdiction in a proceeding that is based on the breach of a provision of a federal statute that is committed in Australia. The only issue that I need to consider is whether the plaintiffs have shown a prime facie case for the relief they seek. This task is not a difficult one. In WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 , 476 Beaumont J said that the need to establish a prime facie case "should not call for a substantial inquiry". He went on to say that: "The kind of evidence adduced on the preliminary inquiry of this kind should be in proportion to the nature of such an interlocutory issue". Nor would it, in my opinion, be appropriate to go into much detail on what is, after all, an ex parte application. 9 Bearing these strictures in mind, I think the plaintiffs have shown enough to justify an order for service out of the jurisdiction. What is involved here is, in large measure, the construction of the definition for a managed investment scheme and how that construction should be applied to the facts, most of which will not be in dispute. It is relatively easy to put a case that a statute should be read in a particular way, even if it is not the plain meaning of the words used. It is often much harder to hold that reading after a full analysis of the purpose and object of the provision, such as occurs at a trial. 10 Accordingly I will make the orders sought by the plaintiffs. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | service out of the jurisdiction litigation funding agreement whether illegal managed investment scheme need to show prima facie case practice & procedure |
These proceedings are VID 1033 of 2005 ("proceeding 1033") and VID 1050 of 2005 ("proceeding 1050"). Proceeding 1033 was initiated by G & J Gears Australia Pty Ltd ("G & J Gears") on 30 August 2005. It is an application under the Trade Marks Act 1995 (Cth) alleging, amongst other things, infringement of Australian Registered Trade Mark No. 1004154 for LITTLE ROCK 44R (the "Little Rock mark"). Brobo Group Pty Ltd ("Brobo") was initially named as the sole respondent. Rock Solid Products Pty Ltd ("Rock Solid") and Daniel Sidney Milton have since been joined as the second and third respondents respectively. G & J Gears filed proceeding 1050 on 2 September 2005. It is an application made under s 459G of the Corporations Act 2001 (Cth) ("Corporations Act") to set aside a statutory demand. Brobo is the sole respondent in that proceeding. For the reasons stated below, I would dismiss the motions and interlocutory application. 2 In 2003, G & J Gears engaged Brobo to manufacture parts for four wheel drive vehicles. Brobo manufactured parts that G & J Gears wanted to sell in the United States. In late 2004, G & J Gears began to have difficulties with its United States distributor and, in early 2005, it began to have difficulties paying for products machined by Brobo. On 12 August 2005, pursuant to s 459E of the Corporations Act , Brobo served a statutory demand dated 9 August 2005 ("the statutory demand") on G & J Gears. An affidavit sworn by Daniel Sydney Milton on 4 August 2005 accompanied the demand. These two proceedings followed. 3 In proceeding 1050, G & J Gears made an application under s 459G to set aside the statutory demand. This came before a registrar on 10 November 2005. In a decision of 11 November 2005, the registrar varied the demand (which had been for $397,062) to $233,427.46. He did not set the demand aside, but ordered that the time for compliance with the demand, as varied, be extended to 2 December 2005. There were consequential costs orders. 4 On 2 December 2005, G & J Gears filed a notice of motion to review the decision of the registrar. At that time, G & J Gears also filed an interlocutory application, pursuant to s 459F(2) of the Corporations Act , seeking an extension of the period of compliance with the statutory demand. 5 On 6 February 2006, G & J Gears filed a notice of motion in proceeding 1033, seeking leave to join Rock Solid and Milton as respondents (which has been granted) and interlocutory relief restraining Rock Solid and Milton from infringing the Little Rock mark or the "Rockcrusher 60R" mark or the "Rockcrusher" mark. 6 On 7 December 2005, Brobo commenced winding up proceedings in the Supreme Court against G & J Gears. 7 At the hearing of 7 March 2006, G & J Gears also sought leave to amend its Application and Statement of Claim in proceeding 1033 to add new causes of action against Brobo, Rock Solid and Milton. These included claims for breach of contract, inducing breach of contract and conversion. The Court granted this leave, which was unopposed. These are: (1) an application to review the registrar's decision of 11 November 2005; (2) an application for an order that the statutory demand be set aside; (3) an application for an extension of time in which to comply with the statutory demand; (4) an application for leave to make application for an injunction restraining Brobo from proceeding with its winding up application; and (5) an application for an interlocutory injunction restraining Rock Solid and Milton from dealing in certain goods and intellectual property said to be owned by G & J Gears. 10 G & J Gears relied upon numerous affidavits filed in proceeding 1050. These were the affidavits of Grant Shirley sworn on 2 September 2005, 3 October 2005 and 6 February 2006; and Lawrence Davis sworn on 8 November 2005. G & J Gears also relied upon affidavits filed in proceeding 1033, namely, the affidavits of Grant Shirley sworn on 6 February 2006 and Gary Needham sworn on 6 February 2006 . They were the affidavits of Daniel Milton sworn on 24 February 2006 and 27 February 2006; Michael Witt sworn on 24 February 2006; and John Boydston sworn on 7 October 2005 and 23 February 2006, as well as a further affidavit filed on 7 March 2006. The respondents relied on the affidavits filed in proceeding 1050, namely, the affidavit of Jim Kealey sworn on 14 September 2005, which corroborated the affidavit of Daniel Milton of 14 September 2005; the affidavits of Daniel Milton sworn on 14 September 2005, 16 September 2005 and 11 October 2005; and the affidavit of John Boydston sworn in October 2005. Each party relied on the affidavits filed in one proceeding as supportive of its position in the other proceeding. The respondents contest much of this evidence. 13 G & J Gears is a manufacturer and exporter of products for four wheel drive vehicles. The company began as an importer. In late 2002, Grant Shirley, together with another director of G & J Gears, Barry Rowe, developed a drive line (named the "Rockcrusher 60R") for export to the United States. 14 In early 2003, G & J Gears began discussions with Brobo about the possibility of Brobo machining parts for G & J Gears. These discussions were mostly between Shirley and Daniel Milton. In mid 2003, Shirley and Rowe began developing other four wheel drive products for manufacture. Shirley deposed that he returned from the United States after a visit there in April/May 2003 with orders for several hundred differentials. Around September 2003, G & J Gears engaged Brobo to manufacture hubs to fill the orders that G & J Gears had procured in the United States. Over the following six months, G & J Gears engaged Brobo to manufacture more products until Brobo was effectively performing all of the machining required by it. By about August 2004, G & J Gears had effectively only one distributor in the United States. This distributor was John Boydston, operating through a new company, Rockcrusher-USA LLC ("Rockcrusher-USA"). Of the 100 issued shares, 75 were issued to Boydston, 24 to Davis and 1 to Shirley. In a 6 February 2006 affidavit, Shirley referred to the fact that G & J Gears "encountered problems with [its] first shipment" to Rockcrusher-USA, but said that these difficulties were ironed out by January 2005. 15 In April 2005, G & J Gears had a container load of goods at its premises that had been manufactured by Brobo. Jim Kealey, General Manager of Brobo, told Shirley that he had concerns about payment and wished to hold onto the goods until payment. According to Shirley, G & J Gears agreed to release the goods to Brobo on this basis. However, Shirley said that a contact of his in the United States, Larry Conville, had told him that there were two shipments of G & J Gears products "on the water" in transit to America. Shirley claimed that these shipments had been sent by Brobo without authorisation. Shirley said that Rockcrusher-USA had not placed any order with G & J Gears since about February 2005. 16 In an affidavit that was before the registrar, Shirley deposed that G & J Gears owed Brobo $258,661.26 for the manufacture of goods prior to 9 February 2005 and presently owed Brobo $349,185.76, which included an amount for the goods that Brobo had taken in April 2005. Shirley's evidence was that the "unpaid monies are all due from John Boydston ... who is the de facto distributor of the plaintiff's products in the United States. ... The whole of the unpaid monies concern two shipments of product ordered by the plaintiff from [Brobo]. According to Shirley, this mark is cast on differentials machined by Brobo for G & J Gears. 18 In an affidavit of 3 October 2005, Shirley said, in reply to Milton (see below) that, when Barry Rowe first asked Milton whether Brobo could do machining for the plaintiff, Rowe took with him an original Dana 60 differential. As stated by Shirley, this was "simply to give Brobo an idea of the basic shape and size of a part which the plaintiff desired to have machined". Shirley deposed that he and Rowe designed their own differential, which they called the "Rockcrusher 60R" or "Rockcrusher". In a 6 February 2006 affidavit, Shirley said that G & J Gears "gave Brobo ... designs and the pattern drawings to assist them in machining the prototype 'Rockcrusher 60R'". Also according that affidavit, G & J Gears supplied Brobo with pattern drawings and patterns for other products. 19 In his affidavit of 3 October 2005, Shirley claimed that G & J Gears had an offsetting claim against Brobo in the sum of $343,217 for the goods for which Boydston had not paid, alternatively, $425,000 by way of damages for defective goods. Shirley also claimed an additional offsetting claim of $480,000 to $500,000 against Brobo for breach of intellectual property rights, including use of the name "Rockcrusher". 20 G & J Gears sought to support its case that, in effect, Brobo was seeking unlawfully to take over its business by reference to the affidavit of Lawrence Davis of 8 November 2005. Davis was the director of a company that manufactured and sold parts for off-road four wheel drive vehicles. Davis deposed to first meeting Shirley, Rowe and Milton in November 2003, and Shirley and his brother again in mid 2004. He said that, at that time, Matt Martin was his business partner and Boydston was a business associate of both Davis and Martin. As a result of discussions between these individuals, they formed Rockcrusher-USA to distribute Rockcrusher products. Davis deposed that "things did not go smoothly" between G & J Gears and Rockcrusher-USA. Amongst other things, there were "difficulties getting supply of the product ordered". He added that "when product did arrive in December 2004, there were disputes as to who was liable for inbound freight, and also Rockcrusher products arrived which had not been ordered". Davis further deposed to conversations in which Milton told him and Boydston that Milton was deliberately causing the supply problem, because Shirley owed him money. According to Davis, at meetings in Youngstown Ohio in February 2005, Milton "stated that he wanted to cut Grant Shirley out completely" and that "unless we were willing to purchase Rockcrusher products directly from him then he would continue manufacturing the Rockcrusher products, but sell them through others and by-pass us too". Davis deposed that "Martin stated that his claims to Grant Shirley's intellectual property rights were legally dubious". According to Davis, Milton said that he would "'tip in Grant'". Furthermore, Davis said that "Milton told us that we should take Grant to court in the United States to claim that the rights were ours [and] that he would take care of things in Australia". According to Davis, "Milton stated that what we should do was not pay the money we owed for the products received from Australia and that would financially squeeze Grant". Davis and Boydston subsequently fell out with one another and Martin joined up with Boydston. 21 In an affidavit of 6 February 2006, Shirley deposed that he "did not discover that Milton had these conversations with Boydston and Davis until October 2005, when in support of an application to set aside a statutory demand served by Brobo on G & J Gears, G & J Gears' solicitor and [Shirley] contacted Davis". 22 Also in an affidavit of 6 February 2006, Shirley asserted that, since about July 2003, G & J Gears had manufactured products "under the name "Rockcrusher", and in particular under "Rockcrusher 60R" and the Little Rock mark. He deposed that the "Rockcrusher" logo was applied to all "Rockcrusher" products manufactured by G & J Gears. This logo was, he said, also used on promotional material, invoices and the like, as well as on a web site. Shirley stated that, from 10 January 2005, G & J Gears was the proprietor of the Little Rock mark, with effect from 28 May 2004; and, on 13 October 2003, G & J Gears lodged an application for registration of the trade mark "Rockcrusher 60R", which was pending. 23 According to one of Shirley' s 6 February 2006 affidavits, a related company, Rockcrusher Diffs 4 x 4 Axle Assemblies Pty Ltd ("R-Diffs"), was in receivership because it fell into default under loan facilities with the bank after Rockcrusher---USA refused to pay for goods. He added that, from August to December 2005, the web site for Rockcrusher---USA offered for sale the products of G & J Gears. He also deposed that after February 2005, G & J Gears made no significant sales of Rockcrusher products. Brobo said, in substance, that G & J Gears did not have the intellectual property rights that it asserted and that Brobo was entitled to manufacture and ship the products to the United States. 25 According to Milton, Rowe approached Brobo in late 2002 or early 2003, asking whether Brobo could machine an original Dana 60 differential. Brobo prepared drawings of the part by measuring and copying the Dana design. Brobo provided G & J Gears with a quote for the cost of machining the part. Some two or three months later, G & J Gears (through Rowe and/or Shirley) requested Brobo to undertake the work. Brobo built the first prototype jig and commenced machining parts. By the end of 2003, Brobo was making three different parts. According to Milton, G & J Gears designed none of them. 26 In affidavits before the registrar, Milton stated that Brobo went on to copy and machine various other parts. It did this by preparing copy drawings of parts already on the market. Milton's evidence was that G & J Gears had not paid the bulk of the tooling costs. Milton claimed that Brobo prepared the drawings, which remained its property. He also claimed that Brobo undertook all the pattern work. 27 Milton deposed that the principal reason for the difficulties between Rockcrusher-USA and the Australian supply company (said not to be G & J Gears) was that the US company "had paid for goods in advance and was consistently given different reasons why the product was not being shipped". Also in affidavits before the registrar, Milton claimed that Boydston had told him that he had not paid Rockcrusher for some products, because he held them on a consignment basis and they remained unsold. Boydston corroborated Milton. 28 In an affidavit before the registrar, Milton said that, as at 11 October 2005, one shipment of products had left Brobo's premises for transportation to Boydston and that no item in this shipment carried the Little Rock mark. These products were not the products recovered from G & J Gears in April 2005 but were stock that Brobo had manufactured for G & J Gears in or prior to February 2005. In an earlier affidavit, Milton said that the products recovered from G & J Gears remained in Brobo's custody. 29 In affidavits before the registrar, Milton deposed that, between late 2004 and early 2005, Brobo became concerned about monies owing to it by G & J Gears. Milton agreed that Kealey arranged for the return of goods because payment for them had not been made. He claimed that the value of these goods was $115,758, for which allowance had been made in calculating the amount claimed in the statutory demand. He denied that any goods were "on the water" and that Brobo was intending to manufacture G & J Gears' products. According to him, Brobo was not intending to sell goods marked with the Little Rock mark. He added that the Little Rock mark was only on one of the 66 parts manufactured by Brobo for G & J Gears. Further, Milton asserted that R-Diffs sold the products to the United States and that this company had gone into receivership because it was not being paid by its customers in the United States. 30 In his 24 February 2006 affidavit, Milton said that Brobo had stopped manufacturing parts for G & J Gears about February 2005 because G & J Gears had not paid for its work. He also deposed that the Rockcrusher logo was not applied to all Rockcrusher products. He said that it was applied to 3 of the 36 products that Brobo manufactured for G & J Gears. The Little Rock mark was applied to only one product and only 100 items. Further, the Little Rock mark was not assigned to G & J Gears until 26 August 2005. He denied that there was a contract between Brobo and G & J Gears to the effect alleged by G & J Gears and that he had any conversations with Boydston and Davis as alleged by Davis. 31 Also in his 24 February 2006 affidavit, Milton said that, in November 2005, he and the other director and shareholder of Brobo decided to separate. He bought that part of Brobo's business that dealt with the products the subject of this proceeding. He decided to trade through Rock Solid. Accordingly, Brobo no longer had patterns, tools, fixtures or the like relating to Rockcrusher products. Milton also said that neither Brobo nor Rock Solid had manufactured a Rockcrusher product since Brobo stopped supplying products to G & J Gears. He said that the only products currently held or in any way dealt with by either company since February 2005 were recovered from G & J Gears or undelivered stock. Since this time, Milton reiterated that Brobo had made only one shipment of 11 boxes to Rockcrusher-USA, upon which it made a profit of $11,797.53. None of the products in the shipment bore the Little Rock mark. Some of the product had the Rockcrusher logo. Milton was proposing to fill a new order from remaining stock. Brobo never delivered any product with the [Little Rock mark] on it to G & J Gears as these were only manufactured in late 2004/early 2005 and by the time they were ready for delivery G & J Gears had been placed on 'stop supply' on account of no [sic] paying Brobo amounts that were due. All product with the [Little Rock mark] on it that has ever been manufactured by Brobo remains at Rock Solid's premise and has not been sold". He added that he had since spoken to Boydston, who informed him that his companies had never possessed any product with the Little Rock mark on it. This was confirmed by Boydston in an affidavit filed in court on 7 March 2006. Brobo's solicitor deposed that R-Diffs' receiver stated that he did not give his consent to the assignment. In support of this contention, it referred to Equuscorp Pty Ltd v Perpetual Trustees WA Ltd (1997) 25 ACSR 675 (" Equuscorp ") at 701 per French, Kiefel and Sundberg JJ. G & J Gears contended that the court should exercise the discretion it had in its favour, amongst other reasons, because the review would otherwise be nugatory. 36 Further, G & J Gears also relied on s 459F(2)(a)(ii) of the Corporations Act in support of its submission that the Court could and should make an order extending the time for compliance with the demand, notwithstanding that the time allowed under the registrar's order had passed. It argued that s 459F(2)(a)(ii) meant that the period for compliance with the statutory demand did not terminate until "7 days after the application under section 459G is finally determined or otherwise disposed of" and that the application was not finally determined by the registrar's decision. Counsel for G & J Gears contended that there was no final determination until after the review of the registrar's decision had occurred. 37 G & J Gears did not dispute the amount of its indebtedness to Brobo as found by the registrar. It contended, however, that the statutory demand should be set aside because the company had offsetting claims within the meaning of s 459H of the Corporations Act . These claims were: (1) a trademark infringement claim in respect of the Little Rock mark; (2) a claim that Brobo had unlawfully induced Rockcrusher-USA to breach its sole distribution agreement with G & J Gears; (3) a breach of contract claim; and (4) a claim that Brobo had unlawfully converted G & J Gears' designs, patterns and tools to its own use. The trademark infringement claim was the subject of Shirley's affidavit of 2 September 2005, whilst the other claims were not raised prior to Davis's affidavit of 8 November 2005 and were dealt with substantially in an affidavit sworn by Shirley on 6 February 2006. The affidavit of 6 February 2006 was not, of course, before the Registrar. Further, only the trademark infringement claim was raised as a ground in the company's initial affidavit filed pursuant to s 459G(3) of the Corporations Act . That is, the only basis for an offsetting claim initially disclosed in the application made by G & J Gears under s 459G was the alleged wrongful sale by Brobo of two containers of G & J Gears' goods and the consequential breach of the Little Rock mark. 38 G & J Gears contended that it should be permitted to rely on evidence that was not before the registrar because a review under s 35A(6) of the Federal Court of Australia Act 1976 (Cth) was by way of a hearing de novo. It acknowledged that it could not rely on an affidavit in so far as it identified a ground that was not raised within the 21 day limit referred to in s 459G of the Corporations Act , but contended that the Court had an overriding discretion to extend the time limit in order to permit it to raise its additional claims if the justice of the case so required. It submitted that the discretion was enlivened in this case because it was unaware and could not have known of the facts material to these claims until Davis informed it of his meeting in February 2005 with Milton and Boydston. G & J Gears contended that the Court should be satisfied that there was a genuine dispute as to whether Brobo infringed its rights in respect of the Little Rock mark. It also submitted that the Court should be similarly satisfied in respect of the other claims. 39 In the alternative, because of perceived difficulties with its application to extend time, G & J Gears sought leave to apply for an interlocutory injunction restraining Brobo from continuing with its winding up proceeding until the trial and determination of proceeding 1033. The evidence that it relied on in support of this application was the same evidence that it relied on in support of its application to set aside the statutory demand and, in particular, the Davis affidavit. G & J Gears contended that this affidavit constituted evidence of a deliberate attempt by Brobo, through its director, Milton, to interfere with the exclusive distributorship agreement between G & J Gears and Rockcrusher-USA; to take control of G & J Gears' intellectual property; and to put G & J Gears out of business and take G & J Gears' business for itself. This in turn showed, so counsel contended, that the statutory demand was an abuse of process of the kind discussed in Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 (" Spautz ") at 526-7. Counsel also relied on the fact that Milton had separated from Brobo, taking that part of Brobo's business that was relevant to these proceedings, and had established another company under the name "Rock Solid", being an adaptation of the logo used in G & J Gears' business. Counsel submitted that the authorities showed that an application for an injunction might be made in proceedings separate from winding up proceedings to restrain a winding up on the basis of a statutory demand that was bad in form or otherwise contestable although incapable of being set aside. Counsel further contended that the evidence raised a serious question to be tried and the balance of convenience favoured the grant of this interlocutory injunctive relief. 40 Finally, as already noted, G & J Gears sought an interlocutory injunction to restrain Rock Solid and Milton from using, without its authority, any of its intellectual property. In making this application, the company relied particularly on a 6 February 2006 affidavit of Shirley, as well as on the 24 February 2006 affidavit of Milton. Counsel submitted that the evidence taken as a whole supported the proposition that there was a serious question to be tried as to the respondents' continuing infringement of G & J Gears' intellectual property rights. According to counsel, the balance of convenience favoured the grant of an injunction because "the respondent is depriving effectively the applicant of the income from these products". Whilst counsel conceded that there was no evidence as to the financial position of any of the respondents, he submitted that it could reasonable be assumed that Rock Solid "has very little by the way of assets in the sense that it is a recently established company". He added that, if the Court were not minded to grant injunctive relief of the kind sought, G & J Gears sought an order that "there be a proper accounting by the second and third respondents of such sales and the proceeds of such sales". 41 Brobo contended that the Court had no power to extend the time for compliance with the statutory demand because the time for compliance had expired. G & J Gears was, so it said, deemed to be insolvent because it failed to comply with the demand within the time required, as extended by the registrar. The appeal from the registrar's decision was, so it submitted, nugatory. 42 Brobo further argued that G & J Gears should be confined to the material relating to the offsetting claim as raised in its original application. According to Brobo, all the products bearing the Little Rock mark in the respondents' possession were manufactured by it at the request and direction of G & J Gears. Brobo noted that G & J Gears had not quantified any loss arising from the alleged trademark infringement. It observed that, in any case, the retail value of the products to which it had applied the Little Rock mark (at G & J Gears' request) amounted to no more than $34,500. Thus, even if allowed as an offset, G & J Gears would be indebted to it in the sum of almost $200,000. 43 Brobo also contended that the Court should not grant any injunctive relief in respect of the Little Rock mark or any other alleged intellectual property rights because there was no serious issue to be tried and damages were an adequate and proper remedy. Further, the Court should not be satisfied that G & J Gears (or the natural persons behind it) would be able to comply with any undertaking as to damages if the Court were to grant the injunctive relief sought. Brobo submitted that there had been a lack of candour on the part of G & J Gears in relation to the ownership of the "Rockcrusher" trademarks. In support of this submission, it relied on Witt's affidavit of 24 February 2006. 44 At the hearing, counsel for Brobo did not dispute G & J Gears' lawful entitlement to the Little Rock mark. He contended, however, that the evidence did not establish a serious question to be tried with respect to its infringement, because, in his submission, G & J Gears had consented to past production of products, which was, in any event, "very little"; and the respondents had not otherwise dealt with the relevant products in the past or since the dispute arose with G & J Gears. At the hearing, counsel also contended that G & J Gears had not demonstrated a lawful entitlement to the "Rockcrusher" logo. He referred to evidence that the logo bears the R-Diffs name; R-Diffs, not G & J Gears, obtained the finance to develop the products with the "Rockcrusher" logo; G & J Gears did not disclose the time when the logo appeared on its invoices; G & J Gears withdrew its trademark application in February 2005; and R-Diffs applied for the trademark in March the same year. R-Diffs went into receivership in April 2005 and, since the receiver has not apparently given consent to a subsequent purported assignment of rights to G & J Gears, the assignment was, so counsel said, ineffective. Moreover, accordingly to Brobo, most of the products in question did not bear the Rockcrusher logo. 45 Brobo also contended, for the reasons referred to below, that the court had no jurisdiction to grant the injunctive relief that G & J Gears desired to seek by way of amendment to its notice of motion in proceeding 1033 and that the court should not grant leave to amend. Again for the reasons set out below, it further argued that, if leave were granted, the application would nonetheless fail. The Court has no power to extend the time for compliance with the statutory demand because the time for compliance has expired. G & J Gears is deemed to be insolvent because it has failed to comply with the demand within the time required, as extended by the registrar. A review of the registrar's decision is therefore nugatory. 47 Section 459F(2) provides that, where application is made under s 459G to set aside a statutory demand, the "period for compliance with [the] statutory demand" is, if the Court "makes an order that extends the period for compliance with the demand", the period specified in the order of the Court (s 459F(2)(a)(i)) ; or "otherwise ... the period beginning on the day when the demand is served and ending 7 days after the application under s 459G is finally determined or otherwise disposed of [(s 459F(2)(a)(ii))]". The word "otherwise" in s 459F(2)(a)(ii) is a "laconic" expression of the condition that none of the conditions in s 459F(2)(a)(i) has been fulfilled: see Livestock Traders International Pty Ltd v Bui (1996) 22 ACSR 51 (" Livestock Traders ") at 53. Once one of these conditions in s 459F(2)(a) is fulfilled --- here, by the registrar's making of the order extending the time for compliance --- then s 459F(2)(a)(ii) can have no operation. Jenkinson J reached the same conclusion in Livestock Traders where, as in this case, a registrar of the Court dismissed an application to set aside a statutory demand and extended the time for compliance with the demand. There was no compliance with the demand within the extended time, although there was an application on foot to review the registrar's decision. His Honour held at 53, that "once an exercise of the power to extend the period for compliance has occurred no operation is left to subpara 459F(2)(a)(ii)" of the Corporations Law as it then was. This provision is identical to s 459F of the Corporations Act . His Honour said, also at 53, that "[t]he use of the word 'otherwise' in that subparagraph ... compels that conclusion". I agree. 48 Upon G & J Gears' application, the Court would have had power to extend time further at any time after the registrar made the order extending time until the expiry of that time. It would have been open to the company to have made such an application before the end of this period had there been grounds, but it did not do so: see Equuscorp at 701 per French, Kiefel and Sundberg JJ; Graywinter Management Pty Ltd v Deputy Commissioner of Taxation (1996) 22 ACSR 636 at 638 per Finn J; Shakespeares Pie Co Australia Pty Ltd v Multipye Pty Ltd [2005] NSWSC 1201 (" Shakespeare Pie ") at [7] per Barrett J; Australian Beverage Distributors Pty Ltd v Cranswick Premium Wines Pty Ltd [2004] NSWSC 877 (" Australian Beverage Distributors ") at [12] per Barrett J; and Livestock Traders at 54. Once the time for compliance has passed, however, the Court has no such power. 49 This limitation upon the power to extend time is implicit in the terms of ss 459F and 459C . Section 459F(1) operates to fix the time when a company on which a statutory demand has been served is taken to fail to comply with the demand. The significance of a failure to comply with a statutory demand is the subject of s 459C(2)(a) , which provides that the Court must presume that a company is insolvent if, during or after the 3 months ending on the day when the application is made, the company fails to comply with the statutory demand. The effect of ss 459F(1) and 459C (2)(a) is that the Court can only make an order under s 459F(2)(a)(i) extending the time for compliance prior to the end of the period for compliance, i.e., before the company is presumed to be insolvent. Within this period, an order extending the time can be made where a s 459G application has been rejected and that rejection is the subject of review or appeal. This is now well-settled: compare Vista Commercial Construction Pty Ltd v Deputy Commissioner of Taxation (1997) 25 ACSR 285 at 293 per Burchett, Hill and Emmett JJ; Graywinter Management Pty Ltd v Deputy Commissioner of Taxation (1996) 22 ACSR 636 at 638 per Finn J; Graywinter Properties Pty Ltd v Dyer (1997) 15 ACLC 302 at 306 per Ryan J; Buckland Products Pty Ltd v Deputy Commissioner of Taxation [2003] VSCA 85 (" Buckland Products ") at [8] per Phillips JA; Shakespeares Pie at [7] per Barrett J; and Australian Beverage Distributors at [5] per Barrett. As Jenkinson J said in Livestock Traders at 54, ss 459F and 459C (2)(a) of the Corporations Law "premise unalterability of the time as at which a company is to be taken to have failed to comply with a statutory demand once the period for compliance has ended at a time when the demand is still in effect". This is equally true of the equivalent sections of the Corporations Act . The power to extend time after the end of the period for compliance would introduce a degree of uncertainty incompatible with the statutory regime: see also Buckland Products at [8] per Phillips JA. 50 Equuscorp is not authority to the contrary. Although a passage at 701 might be construed in this way, the references in this passage to some of the cases cited above make it clear that it is not to be so understood. 51 In this case, pursuant to s 459F(1) , G & J Gears is taken to have failed to comply with the statutory demand at the end of the period specified in the registrar's order of 11 November 2005. It is therefore presumed to be insolvent. The fact that G & J Gears made an application for a further extension of time within the period specified in the registrar's order is immaterial because the company had to have been granted an extension of time within that period. Accordingly, the application for an order extending the time for compliance with the statutory demand must be dismissed and so too must the application for review of the registrar's order dismissing the application to set aside the statutory demand. 52 Once G & J Gears is taken to have failed to comply with the statutory demand and to be insolvent, the application to set the demand aside is fruitless and the application to review the registrar's decision, nugatory: compare Livestock Traders at 55. Without it, there could be no point in the continued prosecution of the appeal, for, the period of compliance having ended before the appeal was heard and determined, the consequence prescribed by s.459F(1) attached, with all that followed under the statute. I would observe, however, that there was nothing put in argument that would lead me to differ from Jenkinson J, who said in Livestock Traders at 53, that he was "inclined to think that 'the application is finally determined' when an order determining the application is made, notwithstanding that the order is, if made by a registrar, reviewable, and that the order is, if made by the court, subject to appeal. " See also Buckland Products at [5]-[9] per Phillips JA. 54 In view of this conclusion, it is also strictly unnecessary to consider whether there was any error in the registrar's decision. But as this was the subject of extensive argument, I set out my views briefly. 55 A review of a registrar's decision under s 35A of the Federal Court of Australia Act 1976 (Cth) is by way of a hearing de novo in the sense that it is a hearing at which the parties may adduce fresh evidence as of right: see Mazukov v University of Tasmania [2004] FCAFC 159 at [24] per Kiefel, Weinberg and Stone JJ and Cottrell v Wilcox [2001] FCA 866 at [8] per Sundberg, Emmett and Finkelstein JJ. Absent any limitation deriving from another source, G & J Gears is entitled to adduce additional evidence on review of the registrar's decision. Apart from the more fundamental objection to the review discussed above, this was not, however, the only difficulty that it faced with respect to the evidence that it wished to adduce on the review. There was a further limitation consequential upon s 459G. That is, the authorities establish that the recipient of a statutory demand cannot apply to have the demand set aside on a ground not raised within the 21 days allowed in s 459G: see Energy Equity Corporation Ltd v Sinedie Pty Ltd [2001] WASCA 419 at [29] per Wallwork J, with whom Steytler J and Olsson AUJ agreed. Under the regime established by the Corporations Act , the Court has no discretion to extend time: compare David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43 ; (1995) 184 CLR 265 (" David Grant ") at 277-278 per Gummow J. Brisbane South Regional Health Authority v Taylor [1996] HCA 25 ; (1996) 186 CLR 541, which was relied on by G & J Gears, is not authority to the contrary since it concerned a relevantly different statutory scheme that expressly conferred discretion to enlarge time. Thus, even if a further extension of time had been obtained, it would not have been open to G & J Gears to rely on any claim other than its trademark infringement claim. Providing its initial affidavit satisfied s 459G(3) , it would have been open to G & J Gears to rely on evidence additional to that filed within the 21 day period to support this ground, being a ground that was raised within this period: see Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 14 ACLC 1703 at 1709 per Sundberg J, applied in Meadowfield Pty Ltd v Gold Coast Holdings Pty Ltd (in liq) [2001] WASCA 360. 56 The trademark infringement claim did not, however, disclose an offsetting claim. Sections 459H and 459J of the Corporations Act set out the grounds on which a statutory demand may be set aside. G & J Gears relied on s 459H(1)(b). The expression "offsetting claim" is defined in s 459H(5). It has been said that a "genuine" claim requires that (1) the claim "be bona fide and truly exist in fact"; and (2) the grounds for alleging its existence are "real and not spurious, hypothetical, illusory or misconceived": see Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 542 at 464 per Northrop, Merkel and Goldberg JJ. Only a claim that can be quantified in money can constitute an "offsetting claim": see Chase Manhattan Bank Australia Ltd v Oscty Pty Ltd (1995) 17 ACSR 128 at 135 per Lindgren J. In Intag Microelectronics Pty Ltd v AWA Ltd (1995) 18 ACSR 284 at 289, Young J said, "[t]he claim must be one which the court can see, without looking too deeply at the issues that may arise, has some real chances of success. " The trademark infringement claim made by G & J Gears does not meet this threshold. 57 The evidence sufficiently established that G & J Gears was the registered owner of the Little Rock mark. For present purposes, however, the evidence showed to the requisite degree that past production of goods bearing the mark was not only with the consent of G & J Gears but also very limited. Further, even though there was evidence that Rockcrusher-USA offered the products for sale on its website, the evidence did not show that these products in fact had any distribution beyond Brobo and G & J Gears. The evidence of Milton and Boydston was that these products had not been the subject of sale. It appears that Brobo recovered them from G & J Gears in April 2005. Whilst there was evidence that up to December 2005, Brobo, and subsequently Rock Solid, held the designs, patterns and tools to fabricate these products and apply the mark, there was no evidence that the respondents were intending to use the mark or otherwise deal with the products bearing the mark during the currency of these proceedings. 58 Having regard to the evidence presently before the Court, I am not satisfied that the claim for damages and/or account of profits in respect of the Little Rock mark infringement constitutes an offsetting claim for the purposes of s 459H. In addition, sales figures and forecasts put forward by G & J Gears were contested by Milton in his 24 February 2006 affidavit and Boydston in his 23 February 2006 affidavit. The evidence presently before the Court did not bear out the claim made by G & J Gears that it had an offsetting claim in excess of or equal to the amount of the statutory demand. 59 I would also dismiss the application by G & J Gears for an interlocutory injunction to restrain the use of intellectual property rights. As indicated above, on the evidence now before the Court, there is no serious question to be tried with respect to the alleged infringement of the Little Rock mark. Furthermore, I accept the respondents' contention that G & J Gears has not demonstrated to the requisite degree that it has any lawful entitlement to the "Rockcrusher" logo or, indeed, any intellectual property rights in the designs, patterns and tooling (for the greater part of which it seems that G & J Gears have not paid). It suffices to refer to the matters on which counsel for Brobo relied in this regard. As the evidence currently stands, the assignment of relevant rights from R-Diffs to G & J Gears would appear to be ineffective because R-Diffs' receiver did not give his consent: see, e.g., Deangrove Pty Ltd v Commonwealth Bank of Australia [2001] FCA 173 ; (2001) 37 ACSR 465 at 471-2 per Sackville J. 60 Further, I am not satisfied that G & J Gears has established that there is a serious question to be tried with respect to any other matter that would support the grant of the interlocutory relief it seeks. Although the threshold is low and the account given by Davis, if accepted, is indicative of an attempt by Milton to induce Davis and Boydston to depart from an alleged agreement or arrangement with G & J Gears, the rest is little more than speculation at this stage. G & J Gears conceded that it is indebted to Brobo in the amount that supports the statutory demand by virtue of the registrar's order. It is not suggested that Brobo desires other than to achieve the company's winding up in the winding up proceedings. Moreover, it must be borne in mind that Davis' account is denied by Milton (who says that he was not in the US at the relevant time) and Boydston. There was no evidence that the alleged plan was given effect. For example, there was no evidence that the statutory demand, which was served months after the alleged conversations, was intended to give effect to anything allegedly discussed in these conversations. Indeed, there was no evidence that the alleged plan met with any agreement (with Boydston or otherwise) and that Milton set out to implement it. Counsel for G & J Gears asked the Court to infer that the demand was part of Milton's alleged stratagem to put it out of business. I would not draw this inference on the evidence presently before me. 61 Even if there were a serious question to be tried, I would not grant the relief sought. First, in a case such as this, as counsel for G & J Gears virtually conceded, damages would be an appropriate remedy. Secondly, on the evidence before the Court, particularly as set out in the 24 February 2006 affidavit of Milton and the affidavit of Witt, it seems unlikely that G & J Gears or the natural persons behind it would be in a position to satisfy any order for damages for breach of any undertaking given to the Court. There is also Boydston's evidence that his company or companies would suffer permanent injury if an injunction in the terms sought were granted. And there is also the fact that, as the respondents submitted, there has been an apparent lack of candour on the issue of entitlement to the "Rockcrusher" logo. I accept that, as the respondents submitted, the evidence for G & J Gears created an impression that it was its application on 11 March 2005 that was still pending whereas this was not the case. There is no basis shown for the making of any alternative order of the kind sought by counsel for G & J Gears. 62 Finally, I would not grant G & J Gears leave to amend the motion to seek injunctive relief restraining the winding up proceeding. Counsel for G & J Gears referred to decisions concerning applications for injunctive relief in winding up proceedings, as for example, Perpetual Plantations of Australia Ltd v United Tree Farmers Ltd (1993) 10 ACSR 82 (" Perpetual Plantations ") and Shanefield Pty Ltd v McLaren [1999] QSC 366. As these authorities recognize, a court, on a winding up application, may refuse a winding up order where the alleged ground for winding up is deemed insolvency and the court is satisfied that the debt is genuinely disputed as relevantly defined. Any such statement is subject to the Corporations Act , including s 459S. 63 First, Brobo's counsel submitted in reply that, whilst a court may have inherent jurisdiction or, in this court, implied incidental power to protect its own process against an abuse, this jurisdiction did not extend to protecting the process of another court. This may state the relevant proposition of law too broadly, although, for present purposes, I accept that the implied incidental power of this court to protect misuse of its process does not extend to protecting the process of the State's Supreme Court. That is a matter for the Supreme Court. See, generally, Sea Culture International Pty Ltd v Scoles (1991) 32 FCR 275 at 279, where French J referred to this court's "implied incidental power to control its own process and to prevent misuse of it"; also Hunter v Leahy [1999] FCA 1075 ; (1999) 91 FCR 214 at 219-220 per French J; Burton v President, &c., of the Shire of Bairnsdale [1908] HCA 57 ; (1908) 7 CLR 76 at 94-95 per Isaacs J; Walton v Gardiner [1992] HCA 12 ; (1993) 177 CLR 378 at 392-4; and Spautz at 519-520. 64 Secondly, counsel for Brobo submitted, that it was not open to the court to grant what G & J Gears referred to as interlocutory injunctive relief on its motion because there would be no occasion for an application for a permanent injunction to be considered in the proceeding in this Court. Presumably, counsel for G & J Gears had in mind that any permanent injunction would fall for consideration at the conclusion of the trial in proceeding 1033. It suffices to say that proceeding 1033 is not, in my view, an appropriate vehicle in which to seek to enjoin the winding up proceedings in the Supreme Court on an interlocutory basis or otherwise. 65 Finally, Brobo's counsel submitted, and I accept, that if a litigant commences separate proceedings to restrain a winding up ( ex hypothesi , in the same court as the winding up proceeding) there will always be a question as to whether the litigant should have presented its defence to the winding up in the winding up proceeding itself: see Perpetual Plantations at 85-6 per Burley J; also David Grant at 279; and Marlan Financial Services Pty Ltd v New England Agricultural Traders Pty Ltd [1999] VSC 435 per Byrne J. According to Brobo, there were numerous matters that indicated that G & J Gears should present its defence case in the winding up, including that the Davis affidavit was in non-specific terms and did not show that the purpose of the statutory demand was other than to achieve a winding up (see the discussion at [60] above). I accept Brobo's submission. It would appear likely that G & J Gears will have an opportunity, at the hearing of the winding up petition, to rely on the matters in opposition to the winding up that it could not put forward on its application to set aside the statutory demand. These matters would not appear to fall within the prohibition in s 459S of the Corporations Act . In proceeding 1033, I would dismiss, with costs, the application for interlocutory injunctive relief and refuse the application for leave to amend the motion in that proceeding in order to include a further application for injunctive relief. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | review of registrar's decision pursuant to s 35a(6) of federal court of australia act 1976 (cth) application made pursuant to s 459g of the corporations act 2001 (cth) to set aside statutory demand whether offsetting claim existed application to extend time for compliance with statutory demand after registrar's order extending time had expired court had no authority to set aside statutory demand or extend time for compliance after time for compliance had expired request for leave to amend notice of motion to include application to restrain winding up proceedings on the basis of an abuse of process whether court had authority to restrain an alleged abuse of process of another court interlocutory injunction application to restrain use of intellectual property no serious question to be tried balance of convenience did not favour grant of injunction corporations practice and procedure |
The applicant is Feofaaki Epenisa and the respondents are Minister for Immigration and Multicultural Affairs ('the Minister') and the Administrative Appeals Tribunal ('the Tribunal') respectively. 2 The Tribunal considered an application by the applicant for review of a decision of a delegate of the Minister under s 501(2) of the Migration Act 1958 (Cth) ('the Act') to cancel the applicant's special category visa. The Tribunal decided to affirm the decision under review. 3 The first respondent submits that the purported appeal under s 44 of the AAT Act is incompetent. There is no challenge to the competency of the application under s 39B of the Judiciary Act 1903 (Cth). It is convenient to deal with the competency point first. 4 It is common ground that this application or appeal is governed by the Act as amended by the Migration Litigation Reform Act 2005 (No 137 of 2005) (Cth). Section 44 of the Administrative Appeals Tribunal Act 1975 does not apply to privative clause decisions or purported privative clause decisions. Nor is it necessary to pursue the definition of a privative clause decision; there can be no doubt that if made within jurisdiction this was a privative clause decision. If the decision was a purported privative clause decision, that is, a decision resulting from a failure to exercise jurisdiction or an excess of jurisdiction, then this Court has jurisdiction to entertain the challenge (s 476A(1)(c)) and, if appropriate, grant prerogative relief under s 39B of the Judiciary Act 1903 (Cth). There would be no right of appeal under s 44 of the AAT Act because of s 483 of the Act. He referred to Plaintiff S157/2002 v The Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476 and Minister for Immigration v Bhardwaj [2002] HCA 11 ; (2002) 209 CLR 597. 10 It is not clear to me how, if I was to accept this argument, it assists the applicant. First, if there is no decision then there is no right of appeal under s 44(1) of the AAT Act because the right of appeal in that section is from a decision of the Tribunal. Secondly, if there is no decision, arguably there is no jurisdiction in this Court under s 476A. Thirdly, if a decision is infected by jurisdictional error there appears to be no need for the applicant to rely on s 44 of the AAT Act. 11 In any event, I do not accept the argument. Constitutional constraints affecting Parliament's power to exclude prerogative relief aside, there is nothing to stop Parliament identifying a decision made in excess of jurisdiction or as a result of a failure to exercise jurisdiction and attaching legal consequences to that decision in terms of the right of appeal on a question of law under the AAT Act. Bearing in mind that the right of appeal in s 44 of the AAT Act is a statutory right of appeal, there is nothing to prevent Parliament from excluding from its purview a certain class of decision, namely, decisions made under the Act within jurisdiction or in excess of jurisdiction or as a result of a failure to exercise jurisdiction. 12 The appeal under s 44 of the AAT Act is incompetent. The application under s 39B of the Judiciary Act 1903 (Cth) is within the jurisdiction of this Court. To qualify for relief the applicant must show a jurisdictional error. He came to Australia on 30 November 1996 when he was 16 years of age. He was the holder of a subclass TY444 special category visa and he came to Australia with his mother, father, three brothers and one sister. In 2006, his brothers were 9, 10 and 12 years of age respectively and his sister was 23 years of age. The family settled in Melbourne. The applicant had completed Year 11 at high school and thereafter he undertook various forms of employment, including fruit picking, carpentry, shop fitting, disassembling and assembling chairs and car spray painting. 14 The applicant has two uncles and at least one aunt in New Zealand. He has no uncles or aunts in Australia. 15 The applicant has committed a number of criminal offences. Details are set out in the decision of the Tribunal member. It is not necessary for me to set out details of all the offences and a summary will suffice. Between 1999 and 2003 the applicant was convicted of a number of serious offences in Victoria, using 12 aliases. The most serious offences, for which he was convicted in the Melbourne County Court on 16 May 2003, were intentionally causing serious injury and robbery. He assaulted a taxi driver to the point of unconsciousness and then robbed him of a sum of money. For those two offences he was sentenced to a term of three years' imprisonment with respect to the first offence and one year and six months' imprisonment with respect to the second offence, one year of which was to be served concurrently with the first sentence. On three separate occasions he was sentenced to custodial terms totalling 14 months in youth training facilities. On six separate occasions he was sentenced to terms of imprisonment respectively of six months, seven days, six months, three years six months, three months and two months. The first six-month sentence was to be served by way of an intensive correction order --- the applicant was required to attend Ringwood Community Correctional Services by 9 August 2002 and to attend for a period of six months. He was released on 24 March 2005 but was detained by the immigration authorities three months later. The applicant acknowledged receipt of the letter on 20 August 2004. On 22 October 2004 the Department advised the applicant of certain material the delegate might take into account in reaching a decision and the applicant was invited to comment on it. The applicant indicated that the applicant wished to stay in Australia and by an undated statement he made a submission to the delegate. His parents also made a submission to the delegate by letter dated 24 August 2004. They asked that the applicant's visa not be cancelled. On 14 June 2005 the delegate made his decision to cancel the applicant's visa but the applicant was not advised of the decision until 23 January 2006. On that date he applied to the Tribunal for a review of the decision. 19 In reaching his decision the Tribunal member made a number of important findings of fact. The applicant did not pass the character test in s 501(6). That point was not in dispute. The issue related to the discretion not to cancel the applicant's visa. 2. The applicant's criminal record was 'a very bad record by any standards'. Although it had been three years since his last conviction, for most of that time he has been in prison or immigration detention. The applicant's criminal record was 'very serious'. 3. In the context of considering the applicant's prospects of re-offending, the Tribunal member appears to have accepted that the applicant had complied with his parole conditions and stayed out of trouble during the three-month period after he was released and before he was taken into immigration detention. 4. The applicant accumulated his criminal record while living with his parents. They did not visit him while he was in prison or while he has been in immigration detention. That threw considerable doubt on any assertion they would be able to persuade him to stay out of trouble. 5. There is a significant risk that the applicant will re-offend. 6. Considerations of general deterrence weighed against interfering with the delegate's decision and the applicant did not submit to the contrary. 7. The Australian community would expect that a non-citizen who had displayed such a consistent contempt for the law and the rights of Australians and who had on balance made himself an unmitigated burden to society would be removed. 8. The applicant's relationship with his three younger brothers was not a close one and if he were living in New Zealand he would still be able to maintain the kind of telephone contact with his brothers that he has had in recent years. The best interests of his younger brothers 'did not substantially weigh against visa cancellation in this case'. 9. The applicant was quite familiar with life in New Zealand having been educated there to year 11. He would be able to make a fresh start in New Zealand. Living in that country rather than Australia could not be regarded as a hardship calling for compassion. 10. The applicant was struck by a motor vehicle in late 2001 and he was admitted to hospital. His uncorroborated assertions of continuing pain and disability could not be accepted. 11. The applicant's parents and siblings would suffer some emotional hardship if he was removed to New Zealand. However, they have done little to maintain contact with him in recent years, 'even when they were readily able to do so'. They would be able to maintain the same sort of contact that they have had even if he is in New Zealand. 12. The applicant has no marital, quasi-marital or business links with Australia. Although he has made some steps towards rehabilitation, it could not be said that he had reformed. First, he submitted that s 501(2) could not be used to cancel the applicant's visa. He was a citizen of New Zealand and he held a special category visa. He had committed an offence for which he had been sentenced to a term of imprisonment of not less than one year. If he was to be dealt with under the Act, it should have been under s 200 which gives the Minister the power to deport a non-citizen. Secondly, the applicant submitted that the Minister, or the Tribunal on an application for review, could not use the power in s 501 to punish him. That would be to exercise the judicial power of the Commonwealth. The Tribunal member had exercised the power of cancellation for the purposes of punishment and, as a result, the exercise of power was invalid. Thirdly, the applicant submitted that the Tribunal member made an important error of fact and that led him to adopt the wrong approach and thereby commit a jurisdiction error. Furthermore, he failed to give proper and genuine consideration to a relevant matter, namely, the expectations of the Australian community. 21 As to the first submission, the submission is that s 501(2) must give way to s 200 because the former is a general provision dealing with a particular subject matter and the latter is a specific provision dealing with the same subject matter. On the face of, it the Minister might have exercised the power under s 200 and deported the applicant. In a number of cases which have considered the submission advanced by the applicant in this case, an offence of the nature identified had not been committed within the 10-year period in s 201 and the power to deport under that section was not available to the Minister. That factual difference does not affect the resolution of the submission. 24 The applicant's first submission must be rejected. The High Court considered a similar submission in the recent case of Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 ; (2006) 81 ALJR 1 (' Nystrom '). That was a case unlike the present because the visa holder in that case was not liable to deportation under s 200 of the Act. However, the observations of the Court do not turn on that fact. The power under s 200, as restricted by s 201, to deport non-citizens is a power in respect of the continuing presence in Australia of non-citizens convicted of certain crimes. The power under s 501(2) to cancel a visa of a non-citizen on character grounds (based on a "substantial criminal record") and thereby remove that non-citizen is a much wider power, although it is also for the protection of the Australian community. The powers are distinct and cumulative. The criteria in respect of a person's criminal record in s 201(c) and s 501(7) are not co-extensive, although there is some overlap between s 201(c) and s 501(7)(a), (b) and (c). Criteria in s 501(7)(d) and (e) give s 501(2) a wider field of operation than that which is covered by s 201(c). A person who is subject to a deportation order is subject to discretionary rather than mandatory detention during any challenge (ss 253(8) and (9)), but will then be deported unless the Minister revokes the order. A person who has a visa cancelled is subject to mandatory detention and removal (s 189) but may apply for a protection visa (s 501E). The power in s 501(2), construed as it must be, together with ss 501(6) and (7), is not a vague or general power. The line of authority beginning with Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia , upon which Mr Nystrom relied, has no application here as there is no repugnancy between the two powers. In fact, they are consonant with each other. The Act contains two separate but consonant statutory systems for deportation and removal which operate differently, although the final outcome of removal may be the same. Section 201 does not in terms, confer on an alien any "statutory protection" from removal, consequent upon the cancellation of a visa under s 501(2). To that extent, the facts here raise the issue of the interaction between s 200, as restricted by s 201, and s 501(2), more squarely than the facts in Jia Legeng . This distinction provides no reason to reconsider the statement in Jia Legeng that s 501 contains a separate statutory power. In fact, the distinction is an illustration of the discrete nature of the powers in question. The contention that ss 200 and 201 give a person in the position of the respondent a protection or immunity from the exercise of the power conferred by s 501 is a statement of a conclusion, rather than an expression of a reason for reaching that conclusion. If there is such a reason, it must be found in a process of statutory construction. The provisions of s 501(2), on the one hand, and ss 200 and 201 on the other, are not repugnant, in the sense that they contain conflicting commands which cannot both be obeyed, or produce irreconcilable legal rights or obligations. They create two sources of power, by which a person in the position of the respondent may be exposed, by different processes, and in different circumstances, to similar practical consequences. There is nothing novel, or even particularly unusual, about that. It does not of itself mean that only one source of power is available. If, however, by reason of the apparent exhaustiveness with which one provision, or group of provisions, dealt with the position of a person such as the respondent, there were an incompatibility of a kind that required a conclusion that only one provision or group of provisions was intended to apply, then that would be a reason for accepting the respondent's contention. Again, if one provision, or group of provisions, were directed with particularity to the case of a person such as the respondent, and the other were merely of general application, the same could be said. As explained by Heydon and Crennan JJ, and also by Gummow and Hayne JJ, neither proposition can be made good when regard is had to the legislative history and context. In the result, the respondent's contention amounts to an assertion; a statement of an outcome that would be supportive of his freedom to remain in Australia, and in that sense protective of his interests, but without a convincing argument of statutory construction which sustains that outcome. Therefore, it fails. I applied this reasoning in the recent decision of Pull v Minister for Immigration and Multicultural and Indigenous Affairs [2007] FCA 20 at [31] - [33] (' Pull '). That case was also a case where the visa holder was not liable to deportation under s 200 of the Act. 25 The power in s 501(2) is in no way qualified or curtailed by s 200 of the Act and the applicant's first submission must be rejected. 26 As to the second submission, the High Court has held that s 501(2) is a valid law with respect to aliens: Shaw v Minister for Immigration and Multicultural Affairs [2003] HCA 72 ; (2003) 218 CLR 28. In Djalic v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 151 ; (2004) 139 FCR 292 the Full Court of this Court held, after it had identified the relevant considerations to the exercise of the power in s 501(2), that the section did not infringe or contravene Chapter III of the Constitution . I will not repeat what I said in Pull at [35]-[37]. 27 It remains open to an applicant to submit that a particular exercise of the power to cancel was motivated by an improper purpose. The submission that in this case the power was exercised for the improper purpose of punishing the applicant must be rejected. The Tribunal member took into account the protection of the Australian community, the expectations of the Australian community, the best interests of the child and other considerations. These are matters identified in the Ministerial made under s 499 of the Act (Direction No 21 'Visa Refusal and Cancellation under s 501' 23 August 2001). He did refer to general deterrence and in that context he said that considerations of general deterrence weighed against disturbing the reviewable decision and he noted that the applicant made no submissions to the contrary. He did not treat general deterrence as the sole reason for his decision. To my mind there is no evidence of improper purpose, and it is not made out, as the applicant sought to do, simply by reference to some of the consequences of the decision. 28 As to the third submission, the applicant submitted that the Tribunal member did not give proper and genuine consideration to two important matters to the exercise of the discretion on s 501(2), namely, the best interests of the child and the expectations of the Australian community. In the case of the first matter, that resulted from the fact that the Tribunal member made an important error of fact. 29 In relation to the best interests of the child, the applicant submitted to the Tribunal member that that was relevant here because of his relationship with his three younger brothers who are all children. It is submitted that the Tribunal member overlooked unchallenged evidence that the applicant stayed with his family from the date of his release on parole in March 2005 to the time he was taken into immigration detention in June 2005. He stayed out of trouble during that time. Furthermore, it was submitted that the fact said something about his relationship with his family during that time. There were no details in the evidence as to what happened during that three-month period other than the fact that he stayed with his family. 30 The Tribunal member referred to the fact that the applicant was in the community for that three-month period. It is not clear to me whether that was because he overlooked the fact, or because he did not consider it to be of any significance. 32 The Tribunal member concluded that the relationship between the applicant and his three brothers was not a close one, and that if the applicant was sent to New Zealand they would be able to maintain the same sort of contact with him as they had had in past years. The Tribunal member concluded that the best interest of the applicant's younger brothers did not substantially weigh against visa cancellation. The Tribunal member accepted that the applicant's parents and siblings would suffer some emotional hardship if he were removed to New Zealand 'but the evidence shows that they have had done [sic] little to maintain contact with him in recent years, even when they were readily able to do so'. 33 In making these findings the Tribunal member referred to the evidence of the applicant's father that there was a close relationship between the applicant and his younger brothers and that they would suffer distress if he was removed to New Zealand. For much of the children's lives the applicant has been in prison, immigration detention or juvenile institutions. The applicant could not remember the ages of any of his brothers, even approximately. He referred to the decision of the High Court in Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1164. 35 The applicant pointed to particular factual errors that followed from the Tribunal member's failure to consider the evidence of his stay with his family. For example, the Tribunal member said that the applicant's parents had not seen him since his release in early 2005. Furthermore, his finding that the applicant's family could maintain the sort of contact they had had with him even if he was removed to New Zealand could not, it was said, stand. 36 An error of fact is not a jurisdictional error if there was some evidence upon which the finding of fact could be made. An error of fact might, depending on its nature, indicate that the decision-maker did not give proper and genuine consideration to a matter he or she was bound to consider. That would be a jurisdictional error: Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40 ; (1986) 162 CLR 24. If there is error here, it is not of that nature. The Tribunal member clearly considered and considered thoroughly the best interests of the child and the applicant's relationship with his parents. The finding that his parents had not seen him since his release in early 2005 may or may not be an error, but if it is it is an error of fact. Taking into account the applicant's stay with his family in 2005 might lead one to qualify the finding that if in New Zealand the applicant could still maintain the sort of contact with his family that he had had in the past but, even if it did, that would amount to no more than an error of fact. 37 I reject the applicant's submission that there was a jurisdictional error because the Tribunal member failed to take into account the applicant's three-month stay with his family in 2005. 38 The other aspect of the applicant's third submission is his assertion made in his written submissions that the Tribunal member failed to give proper and genuine consideration to the relevant consideration of the expectations of the Australian community. There is no doubt that that is a relevant consideration: Djalic v Minister for Immigration and Multicultural and Indigenous Affairs (supra); Direction No 21. Where a non-citizen has breached, or where there is a significant risk that they will breach this trust or where the non-citizen has been convicted of offences in Australia or elsewhere, it may be appropriate to refuse the visa application or cancel the visa held by such a person. Visa refusal or cancellation and removal of the non-citizen may be appropriate simply because the nature of the character concerns or offences are such that the Australian community would expect that the person would not be granted a visa or should be removed from Australia. Decision-makers should have due regard to the Government's view in this respect. He referred to the arguments put on the applicant's behalf to the effect that the Tribunal should take a broader view of community expectations. It was put to him that if a person had been in Australia for almost 10 years, the community would expect that he would not be 'dumped' on another country and he should be regarded as Australia's problem. It was put to the Tribunal member that the applicant had been punished by imprisonment and should not be further punished by deportation, and even if he were, the visa cancellation process should be completed while he was still in prison. It was put to the Tribunal member that the community would also expect that the applicant would be rewarded for his attempts at rehabilitation and for a reasonable work history before he was sent to prison. It was put to the Tribunal member that evidence of the applicant's personal circumstances was also relevant to any assessment of expectations. While the categories laid down in Direction No 21 cannot be regarded as rigid or inflexible, the approach laid down by the Direction is prima facie the one that the Tribunal should follow. He said that that proposition rests on deterministic theories of crime causation that no longer command general acceptance and that the contemporary approach attributes a much greater role to the concept of criminal choice. 42 The Tribunal member concluded his consideration of this matter by saying that the community would expect that a non-citizen who had displayed such consistent contempt for the law and the rights of Australians and who had, on balance, made himself an unmitigated burden to society, would be removed. The applicant has been a resident of almost 10 years and it is proposed that he be deported to a country where he has no significant ties and is likely to lead a destitute lifestyle. 2. The applicant is a person who has significant ties in Australia. 3. The applicant has been punished by the Australian courts for offences committed in Australia whilst present here as an absorbed person. 4. The applicant was released on parole for 3 months whilst residing with his family without further offending and then was detained by the respondent under the Migration Act . He was aware of the submissions put by the applicant but of course he was not bound to accept them. Furthermore, it is clear that he was aware of the fact that the applicant had not offended in the three-month period and took that into account and that he was aware of and took into account the applicant's family ties in Australia. 45 I do not think the Tribunal member erred and the second aspect of the applicant's third submission must be rejected. The applicant must pay the first respondent's costs of the application. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | appeal from decision of administrative appeals tribunal affirming decision of delegate of first respondent minister to cancel applicant's visa where applicant citizen of new zealand holding special category visa in australia where applicant convicted of serious criminal offences where minister cancelled applicant's visa pursuant to s 501(2) of migration act 1958 (cth) where applicant purported to appeal under s 44 of administrative appeals tribunal act 1975 (cth) whether appeal under administrative appeals tribunal act competent whether power conferred by s 501(2) of migration act 1958 (cth) limited or supplanted by terms of s 200 and s 201 of the act whether power to cancel visa exercised used for punitive purpose whether tribunal member failed to give proper consideration to relevant matters whether tribunal member took expectations of australian community into account. migration |
His Honour summarily dismissed the application under r 13.10 of the Federal Magistrates Court Rules 2001 . No application for leave to appeal from this decision has been made. 2 The first respondent submits that summary dismissal under r 13.10 is an interlocutory decision and therefore s 24(1A) of the Federal Court of Australia Act 1976 operates to require the appellant to obtain leave from this Court before an appeal can be brought. The Federal Magistrate was of the view that summary dismissal under r 13.10 may "arguably" be regarded as a final, and not interlocutory, decision. 3 In NAGM v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 395 , Sackville, Allsop and Jacobson JJ said at [6] that "an order dismissing an application for want of jurisdiction is interlocutory in character, at least where the order does not necessarily finally dispose of the rights of the parties. " However in two recent cases, single judges of this Court have specifically considered the nature of summary dismissal under r 13.10 and concluded that it is final in nature: NADZ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 975 at [29] per Graham J; MZXEF v Minister for Immigration and Multicultural Affairs [2006] FCA 507 at [18] per Kenny J. 4 I consider it appropriate to follow the more recent and directly relevant decisions of Graham J and Kenny J. In those circumstances the appellant does not require leave to appeal. Both are citizens of Bulgaria who arrived in Australia in October 2005 and shortly thereafter applied for protection visas. On 4 January 2006 an officer of the Tribunal wrote to the each of the appellants stating that the Tribunal "has considered the material before it in relation to your application but is unable to make a decision in your favour on this information alone. " The letters then invited the appellants to attend a hearing and provided details of the hearing. It also stated "for assistance in your language, please contact the Translating and Interpreting Service" and provided a telephone number. 7 The letters enclosed, among other things, a "Response to Hearing Invitation" form. The appellants filled out this form, including ticking a box marked "I do not want to come to a hearing". Also enclosed with each letter was a document described as multilingual advice. If you do not understand this letter please call the Translating & Interpreting Service (TIS) on 131 450 so they can help you to contact the Tribunal. 8 The appellants did not attend the hearing before the Tribunal. In its decision records, the Tribunal noted the questions it would have asked the each of the appellants in order to verify their alleged fear of persecution. In the case of each claim, it concluded that since it could not be satisfied on the material before it that the claim was made out, it therefore found the claim not to be made out. I would have asked him when his great grandfather became a policeman, what ranks he had held in the police force and where he had been posted during his service as a police officer. I would also have asked the applicant what, if anything, had happened to his great grandfather after the fall of the Communist regime. Based on the limited evidence before me, including the lack of information regarding the applicant's great grandfather and the nature of this man's alleged involvement in the Communist Party, I am not satisfied that the applicant's great grandfather had ever been a member or official of the Communist Party or had ever been a police officer during the Communist era. I therefore find that the applicant's great grandfather had never been a member or official of the Communist Party and had never been a police officer during the Communist era. However, given it is for the appellants to prove the matters they assert, the result in this case is the same. His substantive reasons are contained in the son's judgment. The mother's judgment merely notes the minor differences in the two cases and otherwise adopts and applies the reasoning in the son's case. 10 His Honour summarily dismissed both appellants' applications under r 13.10 of the Federal Magistrates Court Rules 2001 . Due to the above stated reasons, my life is seriously endangered in Bulgaria, one of the most dangerous countries in the world. He found that there was no material before him to make out jurisdictional error on the part of the Tribunal. 14 The Federal Magistrate recorded a submission made by the appellants that they were unaware of the significance of marking the box indicating that they did not wish to be present at a hearing, and that the documents they were provided by the Tribunal did not clearly set out the consequences of failing to attend. His Honour was also alert to an argument regarding the sufficiency of the materials to assist a non-English speaker. If the Applicant had chosen to arrange interpretation of the letter, then I am further satisfied that the letter itself very clearly stated that the Tribunal is unable to make a favourable finding on the information it then had available. If translated, then at the very least the first sentence of the letter would have alerted the Applicant to the distinct possibility that an adverse decision would be made in the absence of further material and/or the attendance of the Applicant at a hearing. It also does not accept the reason, because of which I am a subject of a discrimination in my home country, the fact that I come from a family, which is known to have communist convictions. Due to the above stated reasons, my life is seriously endangered in Bulgaria. The Federal Magistrates Court of Australia by not accepting my last reason my son, who is discriminated as a homosexual. These complaints seek merits review, which is not available in this Court. They complain that the Federal Magistrate did not conduct merits review, which he was not able to do. No error of law is raised by the notices of appeal. 18 I therefore agree with his Honour that no reasonable cause of action was disclosed and that the applications had no reasonable prospects for success. There was no error in his Honour summarily dismissing the applications under r 13.10(a). It is not necessary for me to express a view on whether the applications were also frivolous or vexatious. The appeals that have been brought must be dismissed. If in fact summary dismissal under r 13.10 is interlocutory in nature, then leave to appeal would be required and, any application for such leave now being out of time, an extension of time is also required. Since the appeal has no prospects of success, I would not have granted an extension of time. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | application summarily dismissed by federal magistrates court no reasonable cause of action disclosed application frivolous or vexatious whether summary dismissal interlocutory or final in nature whether leave to appeal required migration |
One is in proceeding NSD 1120 of 2005 and the other in proceeding NSD 1870 of 2005. Both motions relate to inspection of discovered documents. 2 In proceeding NSD 1120 of 2005, Alphapharm seeks an order revoking Australian Patent No 623144 ("the Patent") held by H Lundbeck A/S ("Lundbeck") in respect of which Lundbeck Australia Pty Ltd ("Lundbeck Australia") is the exclusive licensee in Australia. I will call the two Lundbeck companies "the Lundbecks". The Lundbecks cross claim for infringement of the Patent. 3 In proceeding NSD 1870 of 2005, Lundbeck Australia is the applicant and the Secretary of the Department of Health and Ageing of the Commonwealth of Australia ("the Secretary") and Alphapharm are respondents. In this proceeding, Lundbeck Australia seeks a declaration that information that it provided to the Secretary in respect of the registration of therapeutic goods containing the active substance escitalopram oxalate is "protected information" within the meaning of s 25A(2) of the Therapeutic Goods Act 1989 (Cth). In addition, Lundbeck Australia seeks prohibition or an injunction preventing the Secretary from using or permitting the use of this information when evaluating any application by a person other than Lundbeck Australia for the registration of therapeutic goods pursuant to s 25(1) of the Therapeutic Goods Act . 4 In both proceedings, discovery has been given by, relevantly, the Lundbecks. The only issue to be resolved at this stage on the motions is whether Dr Frank Traugott, internal counsel of Alphapharm, is to have access to documents that have been discovered by the Lundbecks and designated by them, "Confidential --- External Counsel Only". Those words reflected the Lundbecks' view that inspection should be confined to Alphapharm's external legal representatives only --- Mallesons Stephen Jaques ("Mallesons"), and counsel and senior counsel briefed by them. 5 According to the affidavit of Matthew Guy Swinn, sworn 20 September 2006, in proceeding NSD 1120 of 2005 there are 49 documents so labelled comprising 1,921 pages, and in proceeding NSD 1870 of 2005 there are 888 documents so labelled comprising 115,364 pages. Accordingly, the total is 937 documents comprising 117,285 pages. 6 Dr Traugott is Alphapharm's internal general counsel and therefore not within the expression "External Counsel". In substance, Alphapharm seeks to broaden the range of documents available to be inspected by Dr Traugott. 7 The categorisation of such a large number of documents as "Confidential --- External Counsel Only" could be described as a "blanket claim" and the motions as seeking, in respect of Dr Traugott, "blanket relief" against that categorisation. 8 In proceeding NSD 1870 of 2005, the Secretary, as well as Lundbeck Australia, is a respondent to Alphapharm's motion. The Secretary appeared by solicitor, whom I excused from further attendance. 9 In an affidavit filed in NSD 1120 of 2005 and sworn 20 September 2006, Matthew Guy Swinn, solicitor and partner of Corrs Chambers Westgarth, the solicitors for the Lundbecks, states that in the time available since service of the notices of motion, there has not been an adequate opportunity for the Lundbecks to review each discovered document with a view to justifying, on a document-by-document basis, their claim to confidentiality. 10 The affidavit of Lynne Elizabeth Ann Peach, solicitor of Mallesons, sworn 18 September 2006 in support of Alphapharm's motions, describes the role and qualifications of Dr Traugott. He has been employed as general counsel of Alphapharm since February 2006. Ms Peach describes him as "the first and only lawyer employed by Alphapharm". 11 Annexed to Ms Peach's affidavit is a diagram showing the relationships between companies within the "Merck" group of companies, the ultimate parent of which is Merck Generics Holding GmbH (incorporated in Germany). Alphapharm is the Australian subsidiary and Generics (UK) Limited is the United Kingdom subsidiary. 12 Dr Traugott graduated with a Bachelor of Science degree with Honours in 1975 from the University of New England. In 1984 he graduated with a PhD in physiology and pharmacology from the Faculty of Medicine at the University of Newcastle. Dr Traugott graduated with a Bachelor of Laws degree in 1991 from the University of New South Wales and was admitted as a legal practitioner at the Supreme Court of New South Wales in 1992 and of the High Court of Australia in 1999. He holds an unrestricted practising certificate to practise as a legal practitioner in New South Wales. 13 Prior to his employment with Alphapharm, Dr Traugott was employed as a Senior Associate in Mallesons' Intellectual Property and Technology group. During his employment by Mallesons, and both prior to and after the commencement of these proceedings, Dr Traugott assisted the solicitor for Alphapharm at Mallesons in the day-to-day carriage of these two proceedings. 14 As internal general counsel for Alphapharm, Dr Traugott is responsible for, inter alia , advising Alphapharm in respect of Australian legal issues that confront the company and instructing external solicitors retained by Alphapharm in respect of Australian and foreign legal proceedings in which Alphapharm is a party. 15 In the context of any patent issues affecting Alphapharm, Dr Traugott is responsible, in conjunction with Dr Howard Rosenberg and Dr Paul Jenkins of the Merck group, for ensuring that Alphapharm's legal strategy is consistent with the Merck group's global strategy as determined by the Patents and Raw Material Support Group. Dr Rosenberg is the head of that group. 16 The documents in question, or at least those discovered in proceeding NSD 1120 of 2005, are quite old, having come into existence in the period 17 October 1979 to 17 June 1988. 17 The onus is upon the Lundbecks to establish the claim for confidentiality, that is to say, that Dr Traugott should not be permitted to inspect the numerous documents labelled "Confidential --- External Counsel Only". 18 I do not think that the Lundbecks have discharged this onus. 19 I have referred to some of the reasons already. I take into account Dr Traugott's position as Alphapharm's general legal counsel and, in particular, that he is a solicitor and the holder of an unrestricted practising certificate. I also take into account the age of the documents and the fact that applications for marketing approval in relation to goods containing escitalopram oxalate have already been made by companies within the Merck group in other jurisdictions, including the United States of America and Australia. 20 No doubt it is true, as Ms Howard SC for the Lundbecks submitted, that there is the possibility that, as a result of his inspection, Dr Traugott will become aware of ways of approaching problems that have been tried by the Lundbecks, including avenues of inquiry which did not prove fruitful. It is true that he will not be able to banish from his mind the knowledge he acquires by seeing the documents. However, bearing in mind that Dr Traugott is based in Australia, and the focus of his work is in Australia, it would probably require a deliberate effort on his part to use the information he acquires to assist Dr Rosenberg and Dr Jenkins, or other members of the Patents and Raw Material Support Group overseas, to the prejudice of Lundbeck. 21 Accordingly, the balancing exercise which is always required in a case of this kind leads me to think that the Lundbecks have not discharged the onus which they bear and that the documents in the category of "Confidential --- External Counsel Only" discovered by them should be disclosed to Dr Traugott upon his first giving an undertaking in a suitable form. 22 It is conceivable, however, that there is a particular document, or that there are particular documents, in respect of which the Lundbecks would wish to make a specific application seeking orders that that document or those documents not be made available to Dr Traugott. I emphasise that, because the reasons why I think Dr Traugott should have access are of a general kind, at the moment I do not see on what basis a particular document or documents should be kept from him, so I do not wish to encourage an application by Lundbeck. On the other hand Mr Catterns QC, who appeared for Alphapharm on the hearing of the motion, did raise this possibility, that is, that a particular document or documents might be identified so that Alphapharm could consider, through its external counsel, a claim that it or they should not be made available to Dr Traugott. 23 Accordingly, I will make an order generally in terms sought in the notice of motion in each proceeding, but will add an order that the documents are not to be disclosed to Dr Traugott until Friday 13 October 2006, and that in the event that within that period the Lundbecks file a notice of motion seeking relief from the order in respect of a particular document or documents, the order will not apply to it or them until the motion is determined. Again, I emphasise that I do not mean to imply that such a motion would be likely to succeed. 24 The Lundbecks should pay Alphapharm's and the Secretary's costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | inspection of discovered documents whether documents discovered should be made available for inspection by internal counsel of other party confidentiality whether discovering party claiming confidentiality established that numerous documents marked "confidential external counsel only" should not be inspected by other party's internal counsel internal counsel a solicitor holding a current unrestricted practising certificate who had been previously employed by the external solicitors for the party seeking the order permitting inspection by him onus of proof. held : claim to withhold inspection of the documents as a class not made out, but leave reserved to apply in respect of particular documents. practice and procedure |
Primus also alleges that Kooee made a false representation to it and breached an implied duty to act in good faith in relation to the performance of a contract between Primus and Kooee. 2 Primus filed its application in the Victoria District Registry of the Court on 21 December 2007. By motion filed on 3 March 2008 Kooee applied for an order pursuant to O 20 r 5 of the Rules of Court that Primus' application be stayed or dismissed. In essence, Kooee contends that the claims made by Primus in the current proceeding should have been raised in an earlier proceeding between the two companies in the New South Wales Supreme Court. Kooee submits that the two proceedings arise out of substantially the same facts and that the current proceeding will give rise to the possibility of a judgment inconsistent with that obtained in New South Wales. Kooee further contends that no special circumstances apply to avoid the conclusion that it was unreasonable for Primus to have refrained from raising its current claims in the earlier proceeding. The question for determination in the current proceeding is whether the Anshun principle applies to require Primus' proceeding in this Court to be dismissed without adjudication of its merits. 4 Before embarking on an examination of the relevant facts which are said to give rise to the operation of the Anshun principle, it is important to bear in mind the parameters of the principle guided by Anshun itself and subsequent judgments of the Full Court of this Court and various State Courts of Appeal. I now turn to those matters. I do so mindful of the fact that whether the principle applies depends on the particular circumstances involved: see Egglishaw v Australian Crime Commission (2007) 164 CLR 224 and Gibbs v Kinna (1999) 2 VR 19 at [23] per Kenny JA (with whom Phillips JA agreed). 5 The invocation of the Anshun principle is a serious step and a power which should not be exercised without a scrupulous examination of all the circumstances. It is to be applied only in the clearest of cases as it ends a litigant's right to have the merits of a claim adjudicated and may result in a serious injustice if applied too readily. To do otherwise would be to hamper free access to the courts without careful consideration of the consequences: see Ling v Commonwealth [1996] FCA 1646 ; (1996) 68 FCR 180 at 182 per Wilcox J and Gibbs v Kinna at [33]. 6 No estoppel arises unless the new claim relied on was so relevant to the subject matter of the first proceeding that it would have been unreasonable not to rely on it in that proceeding: Anshun at 602-603. However, the concept of relevance is more helpful when considering the failure to raise a defence than a failure to advance a claim: see Gibbs v Kinna at [24] and Egglishaw at [28]. Further, the mere fact that each proceeding is closely related is an insufficient basis to invoke the principle, given that it is concerned with substance and not form and technicalities: Bazos v Doman [2001] NSWCA 347 at [44] per Stein JA (with whom Priestly JA and Beazley JA agreed). 7 Other than in special circumstances, the principle applies if it was unreasonable for a claimant to have refrained from raising the new claim in the earlier proceeding: Anshun at 602; Egglishaw at [21]. The issue is not whether it would have been reasonable to advance the claim beforehand because it was possible to do so but whether it was unreasonable to defer reliance: Egglishaw at [24] and [34] and Gibbs v Kinna (per Ormiston JA) at [2]. 8 In considering the issue of unreasonableness, it is first necessary to determine whether the subject matter of the subsequent claim could have been raised in the earlier proceeding: Anshun at 598; Gibbs v Kinna at [23] and Wong v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCA 422 ; (2004) 146 FCR 1 at [37] , per Lindgren J. Next, to invoke the principle, it must be shown that the same or substantially the same facts will arise for consideration in the new proceeding as arose in the earlier proceeding: Gibbs v Kinna at [23]. These two factors were described by Kenny JA in Gibbs v Kinna at [23] as "...necessary but not sufficient considerations for the application of the principle...". 9 Another factor indicative of unreasonableness is whether any judgment or order made in the later proceeding would conflict with any judgment or order made in the earlier proceeding: Anshun at 604; Gibbs v Kinna at [25] and Egglishaw at [32]. Putting to one side this factor and the two factors examined in the preceding paragraphs, there still remains a question whether the failure to raise the claim in the earlier proceeding was unreasonable: Egglishaw at [37]. 10 In considering the issue of unreasonableness one must consider all the facts of the case, including the nature of the proceeding, the pleadings, the length and complexity of the foreshadowed trial and the explanation, if any, for the failure to raise the claim in the previous proceeding: Egglishaw at [33] and Gibbs v Kinna at [28]. 11 Unless the alleged unreasonableness is manifest (such as the likelihood of plainly inconsistent judgments) considerable caution should be exercised in summarily dismissing the subsequent application at an early stage of the proceeding when it may be more appropriate for the issue to be considered upon "meticulous examination [of] precisely pleaded defences": Custombuilt Homes Pty Ltd v Dowell [2005] WASCA 221 at [9] per Wheeler JA (with whom Steytler P agreed). 12 A finding of relevant unreasonableness is not to be made lightly. It is a severe test different from a test of severe inconvenience. The starting point should be free access to the courts: R & J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232 per Bryson JA. Primus carried out functions in Kooee's name such as billing, revenue collection, call centre support and customer relations. A written agreement known as the Virtual Service Provider Agreement or the VSPA regulated the commercial relationship between Primus and Kooee. Amongst other things, the VSPA provided for the distribution of revenue collected by Primus between Primus and Kooee resulting from the re-sale of telecommunications services to Kooee's customers. The parties entered into the VSPA in July 2000. A "letter agreement" dated 14 April 2003 extended the operations of the VSPA until 1 August 2006. 14 During the operation of the VSPA, Primus and Kooee had a difference of opinion about the operation of the provisions of the VSPA which dealt with the distribution of income between Primus and Kooee and, in particular, the amounts owing to Kooee by Primus out of the revenue collected by Primus. 15 Under the VSPA, in general terms, Kooee was entitled to see if the carriage services provided by Primus could be made available more cheaply to Kooee from another source. If this occurred, Kooee was obliged to inform Primus to give it an opportunity to match that offer. On 19 October 2004, Kooee wrote to Primus advising it that Kooee had received an offer from DigiPlus Pty Ltd, a subsidiary of B Digital Limited, for the supply and re-sale of B Digital carriage services to Kooee. The letter invited Primus, in essence, to match the offer (known as the Purchase offer). After the receipt of the purchase offer, Primus commenced negotiations with Kooee with a view to terminating the VSPA. 16 The parties terminated the VSPA by entering into an agreement which they called "the Separation Deed". They executed the Separation Deed on or about 27 April 2005. The Separation Deed provided the terms for the cessation of the commercial relationship between the parties including issues concerning revenue share, outstanding accounts, settling of accounts and outstanding obligations between the parties. Later in 2005, Primus made written demands on Kooee for monies which it alleged to be owing under the Separation Deed. Kooee denied liability. This led Primus to institute a proceeding in the New South Wales Supreme Court to recover monies owing under the Separation Deed as a contractual debt. It is unnecessary to consider the terms of the Separation Deed which were the subject of the dispute. It is sufficient to say that the parties differed in their interpretations of how various aspects of the Separation Deed ought to be construed. Each aspect of the debate concerned the determination of the extent of Kooee's liability to Primus under the Separation Deed. Those damages were reduced after Kooee appealed to the New South Wales Court of Appeal. In addition, some cross-examination of Kooee's Chief Executive Officer traversed the Digiplus offer and the B Digital/SP Telemedia Deed. That cross-examination was not extensive and appeared to be by way of background to the contractual issues at the heart of the litigation. It is said that this occurred by Kooee leading Primus to believe that B Digital was prepared to provide carriage services as described in the Purchase offer when such services on these terms were not available to Kooee and were never made available to it. 20 Primus accepts that the New South Wales proceedings (being the Supreme Court and Court of Appeal matters) determined the parties' rights under the Separation Deed. It says that entirely distinct and unrelated issues arise concerning whether the VSPA should have been terminated in April 2005. It further says that a resolution of that issue requires a detailed examination of Kooee's conduct from about October 2004 until April 2005, such examination not being relevant to the ascertainment of rights under the Separation Deed. Primus says that if it was induced to enter the Separation Deed by misleading and deceptive conduct it will have suffered a loss of on-going revenue entirely unrelated to its rights under the Separation Deed. It disputes Kooee's assertion that some of the evidence led in New South Wales will need to be "recreated" in this proceeding. It says that although the purchase offer was tendered in the New South Wales Supreme Court at first instance, it was only admitted as part of the historical background to that proceeding. It further says that cross-examination of Kooee's Chief Executive Officer about the Purchase offer and the deed between B Digital and S P Telemedia (Kooee's parent company) was confined to assisting the New South Wales Supreme Court's understanding of Primus' contentions about construction of certain provisions of the Separation Deed by way of objective factual background. 21 Kooee points to Primus' application for a declaration in the proceeding in this Court for a declaration that the release provisions of the Separation Deed are void and of no affect against it with respect to the matters the subject of this proceeding. Primus says that in New South Wales it relied on the release provisions to defeat an argument by Kooee that Primus had been negligent in the provision of information required under the Separation Deed. Primus says that, in this Court, it wishes to allege that the release provisions are ineffectual to protect Kooee from allegations that it misled and deceived Primus, and made misrepresentations which led to Primus entering into the Separation Deed. It relies on the principle referred to in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (New York Deli case) [1988] FCA 40 ; (1988) 39 FCR 546 at 560-561 to the effect that exclusion clauses can't operate to defeat claims made under s 52 of the Trade Practices Act . Primus contends that a ruling to that effect would not lead to a judgment inconsistent with that in New South Wales which concerned an examination of entitlements under the Separation Deed itself and not any claims based on a statutory remedy or allied contractual claims. In a letter to Primus' solicitors dated 30 January 2008, the solicitors for Kooee said that the Federal Court proceeding came as a surprise to Kooee as it arose out of the same series of transactions that were the subject of the New South Wales case. The letter asked for the reasons why the subject matter of the "Victorian proceeding" was not raised in the "NSW proceedings". In a reply letter, dated 15 February 2008, the solicitors for Primus took issue with the suggestion that the current proceeding arose out of the same series of transactions as in the New South Wales litigation. Having sought and received legal advice as to its rights, our client determined to initiate the current proceedings promptly. 24 The quotation from the letter referred to in the preceding paragraph is more significant for what it does not say than for what it does say. It is entirely consistent with that statement to say that Primus became aware of the potential availability of the current claims during the currency of the New South Wales Supreme Court trial but took no action to seek to amend its application in that Court to encompass these issues. It also leaves unanswered the extent of the gap between seeking and receiving legal advice. However, the fact that the New South Wales litigation and this proceeding are closely related is insufficient to invoke the Anshun principle. The question remains whether it was unreasonable for Primus to defer reliance on its current claims. 26 Based in large part on the inadequacy of the response of Primus' solicitor when asked why he did not raise the current issues earlier, the subject matter of the current claims could have been raised in the New South Wales Supreme Court at first instance. This may have been done by way of an amendment to that proceeding; with the original New South Wales claims raised in addition or in the alternative. 27 Although there are documents such as the VSPA, the Separation Deed, the Letter Agreement, the Purchase offer, the Digiplus offer and the B Digital/SP Telemedia Deed, which were referred to in evidence in New South Wales and are relevant to the current proceeding, the facts which are relevant to the instant proceeding are not substantially the same as those admitted in New South Wales. The critical facts in the current proceeding will concern the conduct of Kooee from about October 2004 until July 2005 with respect to the circumstances of the Purchase offer and the availability or otherwise of the services referred to in it. Those issues were not relevant to the monetary entitlement of the parties under the Separation Deed. It is not to the point that some of the evidence tendered in the New South Wales case will, in all likelihood, be sought to be relied on in this proceeding. The focus of this proceeding is different in nature to the focus of the litigation in the New South Wales Supreme Court. In Gibbs v Kenna at [23], Kenny JA observed that there would be "a good deal of overlap" in the evidence in the two cases her Honour examined, however that concept is not necessarily the same as the concept that the factual material will be substantially the same. Here the critical facts required to make out the current application did not require examination in the earlier litigation. On that basis alone it was not unreasonable for Primus to defer raising the current claims. 28 There is a further consideration in support of the view that Primus did not act unreasonably in not raising the issues in the current application in the New South Wales Supreme Court proceeding. That reason would defeat the current motion even if the view that the facts are not substantially the same is in error. The reason is that no judgment or order can be made in the current proceeding which will conflict with any judgment or order made in New South Wales. The judgments in New South Wales give effect to the Separation Deed by interpreting the rights of the parties under it. Any judgment in this proceeding will focus on the conduct of Kooee in the six month or so period leading up to the termination of the VSPA to examine whether Kooee engaged in conduct of the kind which caused compensable damage to Primus. It is likely sufficient for present purposes to do no more than to set out the recitals and some detail from the schedules. 29 An examination of the entirety of those reasons gives no cause for concern of any likely embarrassment in the sense that this Court will be required to consider taking a contrary view on any issue to that taken by Einstein J or the Court of Appeal. On this ground alone the motion must be dismissed. It is not unreasonable to defer the bringing of a claim which could have been brought in an earlier proceeding if there is no likelihood of inconsistent orders or judgments. In this context the submissions of Primus on the deed of release issue referred to at [21] above are persuasive. 30 The alleged unreasonableness is not manifest. No doubt it would have been more convenient for the issues raised in the current proceeding to have been advanced in New South Wales, but that is not the question. It is not appropriate when considering the Anshun principle to say what a party could reasonably have done. The proper question is, was it unreasonable to do as that party did? In any event there is much force in the view expressed by Wheeler JA in Custombuilt Homes that one should exercise considerable caution in summarily dismissing an application before the issues are crystalised after the filing of a defence. To this one might add "and/or contentions of fact and law". A judgment dismissing the matter before the Court is interlocutory in nature. It would still be open to Kooee to advance its submissions based on the Anshun principle at the trial of the proceeding when the issues will be more clearly defined. The critical facts will differ substantially from the essential facts which were relevant in New South Wales, where the Separation Deed was the main focus of the Court's analysis as distinct from the conduct of Kooee over a confined period. There is no risk of inconsistent judgments or orders. It was not unreasonable for Primus to refrain from advancing its current claims before the Supreme Court of New South Wales. It based that submission on the judgment of the High Court in Walton v Gardiner [1993] HCA 77 ; (1993) 177 CLR 378 where at 392-393 Mason CJ, Deane and Dawson JJ held that it would be an abuse of process to allow a party to litigate afresh a matter which has already been disposed of in earlier proceeding. That is because it would be manifestly unfair to do so. No such abuse of process arises here. The matter sought to be now litigated is entirely different in character to that disposed of in the earlier proceeding. The earlier litigation resolved a dispute about the meaning of the Separation Deed. This proceeding concerns a dispute about the circumstances which led to its making. The respondent's motion of 3 March 2008 is dismissed. 2. The respondent pay the applicant's costs of and associated with the motion. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | motion to stay or dismiss application anshun estoppel whether unreasonable not to have pursued present claim in previous proceeding in the new south wales supreme court whether present application arises out of substantially the same facts as previous proceeding whether risk of inconsistent judgments whether special circumstances justifying decision not to raise claim in previous proceeding practice and procedure |
The determination is sought in respect of a block of 104 square kilometres (10,400 hectares), which was constituted as the Town of Yulara in the Northern Territory by a proclamation made on 29 July 1976 and published in the Gazette on 10 August 1976 (the 'Application Area'). The members of the compensation claim group are almost exclusively Yankunytjatjara or Pitjantjatjara people who, according to the applicants, held native title rights and interests in the Application Area and are entitled to compensation by reason of the extinguishment of those rights and interests. 2 The proceedings were commenced on 12 June 1997 by six applicants, one of whom has since died. The applicants concede that one of the five remaining applicants, Mantatjara Wilson, does not satisfy the criteria for holding native title rights in the Application Area. 3 The Application Area incorporates the Yulara Tourist Village, which provides accommodation and other services for the tens of thousands of tourists who visit Ayres Rock (Uluru) and the Olgas (Kata Tjurta). (The spelling of Kata Tjurta varies; I have adopted this form rather than Kata Tjuta, except where the latter is used in a name, such as the Uluru-Kata Tjuta National Park. ) The Application Area also incorporates Connellan Airport, which is the point of arrival for tourists travelling by air to visit the area. 4 The Application Area is located in the far south of the Northern Territory, just north of the South Australian border. It is in the eastern part of a large area generally described as the Western Desert, which encompasses northern parts of South Australia, southern parts of the Northern Territory and eastern parts of Western Australia. 5 Because the Application Area is 'land in a town' it has not been available for a claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (' Land Rights Act '): see s 50(1)(a) and the definition of 'unalienated Crown land' in s 3(1). The Application Area is bounded on three sides by land held by the Katiti Aboriginal Land Trust, pursuant to a grant made under the Land Rights Act . On the south, it abuts the Uluru-Kata Tjuta National Park, which includes within its boundaries Uluru and Kata Tjurta. The location of the Application Area is shown on Map 1 by reference to Uluru and Kata Tjurta. The precise co-ordinates are recorded in the proclamation constituting the Town of Yulara. Map 2 is a Tenure Map which shows, among other things, the current location of the Yulara Tourist Village, the Lasseter Highway and Connellan Airport (Lot 101) within the Application Area, together with lot numbers. 6 No native title determination has been made in relation to the whole or any part of the Application Area. There is no dispute that all native rights and interests that otherwise might have existed over the Application Area have been extinguished, although the parties disagree as to whether any native title rights and interests existed at the relevant times and, if they did, precisely when and how the extinguishment took place. It is agreed, however, that the acts extinguishing native title were, in the language of the NTA , 'acts attributable' to the Northern Territory. The applicants seek compensation from the Northern Territory in respect of the acts extinguishing native title rights and interests over the Application Area (the 'compensation acts'). They do so on behalf of holders of native title rights and interests who were alive when the various compensation acts took place. 7 The applicants accept that native title rights and interests over the Application Area were extinguished as the result of the compensation acts, which took place from 1979 to 1992. These acts included grants of freehold and leasehold estates over parts of the Application Area and the construction of public works on the Application Area, notably Connellan Airport, certain roads and a series of water bores. On the applicants' case, native title rights and interests were not necessarily extinguished by the compensation acts themselves when they were done, but in consequence of the provisions of the NTA and of the Validation (Native Title) Act (NT) (' Validation Act '). (The latter comprises the Validation of Titles and Actions Act 1994 (NT), as subsequently amended, and was enacted by the Legislative Assembly of the Northern Territory under the authority of the NTA . ) The applicants say that until the statutory extinguishment, the members of the compensation claim group held native title rights and interests over the Application Area under the traditional laws and customs of the Western Desert bloc observed and acknowledged by them. They contend say that members of the compensation claim group are entitled to compensation under the NTA in respect of the extinguishment of their native title rights and interests. The applicants characterise the claim as a group claim, the group comprising those who are able to establish that they held native title rights and interests immediately prior to the extinguishment of those rights and interests by the compensation acts. 8 The cornerstone of the applicants' case is that they and their predecessors held native title rights and interests over the Application Area under the traditional laws and customs of the Western Desert bloc, from before the time the Crown asserted sovereignty until the time the compensation acts extinguished native title. It is common ground that the only acts prior to 1979 that could have extinguished any subsisting native title rights and interests over the Application Area were two pastoral leases granted over the land, respectively, in 1882 and 1896. The applicants accept that the leases (both of which were determined after a short period) extinguished the most extensive of the native title rights and interests which survived the acquisition of sovereignty over the area by the Crown in 1824 or 1825. They contend, however, that the pastoral leases left most native rights and interests unaffected. 9 It is no part of the applicants' case that the claimants themselves are a cohesive or discrete community. They rely on the traditional laws and customs of the Western Desert bloc to which they say they adhere. They contend that the people of the Western Desert can be regarded as a society with traditional laws and customs that have remained intact and have been observed since sovereignty. The applicants say that those traditional laws and customs apply to the people of the eastern Western Desert, of which the Application Area forms part. 10 The evidence adduced by the applicants did not appear to be directed at establishing the existence of native title rights and interests at any particular date. For the most part, the evidence did not distinguish between the position at the date of the trial and the position at any particular earlier date. In final submissions, it became clear that the applicants' preferred position is that, generally speaking, the native title rights and interests over the Application Area were extinguished on 10 March 1994, the date the Validation Act came into force, and that, accordingly, the claim group's right to compensation accrued on that date. One consequence of selecting this date is that, if the applicants' arguments are accepted, members of the compensation claim group are entitled to compensation for the improvements erected on the Application Area before 1994. These improvements presumably include Connellan Airport, the construction of which was completed in 1981. 11 Later in this judgment I explain the compensation regime established by the NTA . It is enough at this stage to note that the Court has jurisdiction to determine a compensation application: NTA , ss 50(2), 61(1), 81, 213(2). 12 The applicants seek compensation from the Northern Territory, the first respondent to the proceedings ('the Territory') (see NTA , s 84(4)). They do not seek relief against the third respondent ('the Commonwealth'). However, it appears that the Commonwealth has a practical interest in the proceedings, because it has agreed to provide financial assistance to the Territory to enable it to satisfy any liability to pay compensation for acts affecting native title: see NTA, s 200(1). In any event, the Commonwealth has been a party to the proceedings and has played an active role throughout, without objection from the applicants. 13 The second respondent ('GPT') has interests in the Application Area as a freeholder and leaseholder. The applicants seek no relief against GPT and it has not played an active part in the proceedings. Accordingly, when I refer to 'the respondents' in this judgment I intend, unless the context indicates otherwise, to refer only to the Territory and the Commonwealth. 14 Although the respondents raise many issues, their primary submission is that, regardless of the dates of the compensation acts relied on by the applicants, they have failed to establish that members of the compensation claim group held traditional native rights or interests in the Application Area when the compensation acts occurred. They say that it is essential to focus on the case pleaded by the applicants in the Third Further Amended Points of Claim ('Points of Claim'), to which the applicants adhered in final submissions. On that basis, the respondents contend that the applicants have not established that members of the compensation claim group acknowledged and observed the traditional laws and customs pleaded in the Points of Claim. In any event, the respondents contend that the laws and customs so pleaded have not been shown to be the traditional laws and customs of the Western Desert bloc, as required by s 223(1) of the NTA . 15 In addition, the respondents dispute many of the applicants' contentions relating to extinguishment of native title by reason of the compensation acts. They do so on the assumption (contrary to their primary submissions) that the applicants can establish that they held native title rights and interests in the Application Area in accordance with the traditional laws and customs of the Western Desert bloc when the various compensation acts took place. The respondents submit that, even on that assumption, the applicants' claim for compensation must fail. Although the arguments of the Commonwealth and the Territory are not identical, they say that native title rights and interests were extinguished prior to the NTA coming into force, in circumstances not giving rise to any rights to compensation under the NTA . In the alternative, they say that the extinguishment of native title is taken to have occurred earlier than the applicants suggest and that, therefore, members of the compensation claim group are not entitled to compensation for the value of buildings or works constructed on the Application Area. 16 This judgment is not concerned with the amount of compensation payable to, or for the benefit of, members of the compensation claim group, should the applicants' claim ultimately succeed. Although that evidence has been received, this judgment does not make findings concerning the impact of the compensation acts on individual members of the compensation claim group. 18 In his final submissions, Mr Basten QC, who appeared with Mr Parsons SC, Ms Keely and Mr Blowes for the applicants, emphasised that although the applicants seek compensation on behalf of the compensation claim group, they had not yet made a final decision as to whether they wish to press for monetary compensation. Mr Basten pointed out that s 51(6) of the NTA permits a person claiming to be entitled to compensation to request that the whole or part of the compensation should consist of the transfer of property or the provision of goods or services. In such a case, the Court may recommend that the person liable to pay compensation transfer property or provide goods or services in accordance with the recommendation. 19 The applicants' written submissions state that at this stage of the litigation, assuming they succeed, they are not asking the Court to identify each person entitled to compensation. The applicants say that they would be satisfied with a description of the class or classes of persons who are entitled to compensation, framed with reference to the particular laws and customs of the eastern Western Desert. However, in final submissions, Mr Basten applied to amend the pleadings to incorporate an alternative case whereby the compensation claim group consists of a number of identified persons. I deal with that application later (section 10.5, below). 2. 21 I doubt whether the arguments founded on s 50(1) of the Self-Government Act present matters arising out of the Constitution or involving its interpretation. The mere fact that s 50(1) of the Self-Government Act is expressed in similar terms to s 51(xxxi) of the Constitution would not seem to raise a question involving the interpretation of the Constitution . As events transpired, the third argument was not developed in any detail. 22 Whether or not they were necessary, the notices were duly served. No Commonwealth, State or Territory Attorney-General sought to intervene in the proceedings. 3. This was well before the commencement, on 30 September 1998, of certain provisions of the Native Title Amendment Act 1998 (Cth) (' NTAA 1998 ') which amended the NTA in important respects. Section 50(2) of the NTA at that time provided that an application could be made to the Native Title Registrar under Part 3 for a determination of compensation. 26 The NTAA 1998 contains transitional provisions addressing the case where a compensation application has been lodged before the amending legislation commenced, but not resolved by that time. The effect of these provisions is that an application notified to the Native Title Registrar before the date of commencement 'is taken to have been made to the Federal Court' and ' is to be treated as if it were made to the Federal Court under the relevant provisions of the new Act': NTAA 1998 , Table A, Sched 5, Items 6, 36. 27 The applicants filed an amended application on 1 September 2003 (the 'Application'). The Application states, in apparent compliance with s 61(1) of the NTA (as amended), that the applicants were authorised by the compensation claim group to make the compensation application. Some affidavit evidence was apparently directed to establishing this proposition, presumably in purported compliance with s 62(3) of the NTA (which now requires a compensation application authorised by a compensation claim group to be accompanied by an affidavit attesting to certain matters). 28 However, a Full Court of this Court has held that the transitional provisions of the NTAA 1998 do not require a claim made before the commencement of that Act to comply with the new authorisation requirements, at least in the absence of a material change in the composition of the compensation claim group: Bodney v Bropho [2004] FCAFC 226 ; (2004) 140 FCR 77, at [84], per Stone J; De Rose v South Australia [2003] FCAFC 286 ; (2003) 133 FCR 325 (' De Rose (FC) (No 1) '), at [26]-[28], per curiam . The respondents do not suggest that the Application changed the compensation claim group in a manner that required the applicants to comply with s 61(1) and s 61(3) of the NTA (as amended). Nor has any suggestion been made that the applicants' attempt in final submissions to further amend the Points of Claim requires compliance with s 61(1) and s 00061(3) of the NTA. Accordingly, no issue arises concerning authorisation of the compensation claim. 4. The preamble recites the factors that led Parliament to enact the NTA . Section 7(1) states that the NTA is intended to be read and construed subject to the provisions of the Racial Discrimination Act 1975 (Cth) (' RD Act '). Section 7(3) qualifies this statement, however, by providing that s 7(1) does not affect the validation of past acts in accordance with the NTA. By that prima facie sterilisation, s 11(1) ensures that the exceptions prescribed by other provisions of the Act which permit the extinguishment or impairment of native title constitute an exclusive code. Conformity with the code is essential to the effective extinguishment or impairment of native title. The Native Title Act thus governs the recognition, protection, extinguishment and impairment of native title. Such an act neither needs nor is given force and effect by the Act'. (Emphasis added. The amendments include the insertion of Div 2B of Part 2 into the legislation, which provides for confirmation of past extinguishment of native title. In its original form, s 11(2) provided that legislation enacted after 1 July 1993 by the Commonwealth, a State or a Territory, could only extinguish native title in accordance with Div 3 of Part 2 (which deals with future acts) or by validating past acts in relation to native title. Following the 1998 amendments, s 11(2) provides that legislation enacted in accordance with Div 2B of Part 2 of the NTA is one of the permissible means by which native title can be extinguished after 1 July 1993. 36 In any claim for determination of native title, or for compensation for loss or impairment of native title rights and interests, the NTA is 'determinative': Members of the Yorta Yorta Aboriginal Community v Victoria [2002] HCA 58 ; (2002) 214 CLR 422 (' Yorta Yorta (HC) ') , at [32], [70]. Accordingly, even if native title was extinguished under common law rules which are taken to have applied prior to the commencement of the NTA , it is still necessary to consider the application of the statute (and its State and Territory counterparts) to any act said to have extinguished native title: Wilson v Anderson [2002] HCA 29 ; (2002) 213 CLR 401 , at [45]-[47], per Gaudron, Gummow and Hayne JJ. 37 The key concept under the NTA is 'native title', which is defined and described in s 223: Yorta Yorta (HC) , at [75]. Until the NTAA 1998 substituted a new s 82 for the original version, s 82(3) provided that the Court, in conducting proceedings under the NTA, was not bound by 'technicalities, legal forms or rules of evidence'. Section 82(1) of the NTA now provides that the Court is bound by the rules of evidence, except to the extent it otherwise orders. Regrettably, as I observed in an interlocutory judgment in the present case, the applicants paid insufficient attention to the laws of evidence, especially in relation to the so-called Yulara Anthropology Report prepared by Professor Peter Sutton and Ms Petronella Vaarzon-Morel: see Jango v Northern Territory (No 2) [2004] FCA 1004 (' Jango (No 2) '), at [8]. Among other consequences, this has led to an unnecessary increase in the costs of conducting the case. 5. In this section of the judgment I outline the compensation regime, referring to the validation and extinguishment provisions only to the extent necessary to understand that regime. In any event, the parties agree that if a determination of compensation is made, the appropriate determination for the purposes of s 13(2) of the NTA is that all native title rights and interests in respect of the Application Area have been extinguished. Division 2 also sets out the effect of such validation on native title: s 13A(3). The past act regime is based on the assumption, which the authorities have established is correct, that some past acts were invalid when done because they were inconsistent with native title rights and interests and thus would have extinguished native title in a discriminatory fashion in contravention of s 10(1) of the RD Act. Division 2 also provides that certain past acts attributable to the Commonwealth extinguish native title: s 15(1)(a), (b), (c). In the case of other past acts, s 17(2) of the NTA provides for compensation if certain conditions are satisfied. The compensation is payable by the Commonwealth: s 17(4). 45 Section 19(1) of the NTA permits a law of a State or Territory, if it contains provisions corresponding to ss 15 and 16 of the NTA , to provide that 'past acts' attributable to the State or Territory are valid and are taken always to have been valid. In effect, s 19 of the NTA carves out an exception to the blanket protection accorded to native title by s 11(1) of the NTA (which provides that native title cannot be extinguished contrary to the NTA ): Native Title Act Case , at 456, 469. As such, it is a valid law of the Commonwealth. 47 Section 20(4) of the NTA provides that a State or Territory may create additional rights to compensation for a past act or the validation of a past act. The Territory has not legislated to create any such entitlement. 48 The Territory has enacted legislation of the kind permitted by s 19(1) of the NTA . That legislation is the Validation Act which is authorised by s 19 of the NTA , but is an exercise of the legislative power of the Territory. Section 4 of the Validation Act provides that every past act attributable to the Territory is valid and is taken always to have been valid. 49 As I have noted, two pastoral leases were granted over the whole of the Application Area, the first in 1882 (which was forfeited in 1886) and the second in 1896. Neither of these leases was affected by Div 2 of Part 2 of the NTA, since they pre-dated the RD Act and each was valid when granted by the Crown. Division 2 is, however, relevant to certain acts that were done after the enactment of the RD Act and that affected any native title rights and interests then existing over the Application Area. Division 2B is intended to confirm past extinguishment of native title by certain acts which were valid and which were not struck at by the RD Act : Western Australia v Ward [2002] HCA 28 ; (2002) 213 CLR 1 (' Ward (HC) ') at [8]. Such acts include those which predated the RD Act, such as the pastoral leases over the Application Area, and those which have been validated by the NTA (including by the operation of Div 2 of Part 2 and its State and Territory analogues). Division 2B confirms that certain acts attributable to the Commonwealth that were done before 23 December 1996 completely or partially extinguished native title: s 23A(1). The Territory has enacted such legislation: Validation Act , Parts 3B, 3C. ' (Emphasis added. The evident purpose of s 23J is to limit, so far as possible, the entitlement to compensation under s 23J, to cases where the "act" is invalid by reason of the Racial Discrimination Act 1975 (Cth) ... and is subsequently validated by s 14 of the NTA or s 8 of the State Act [equivalent to s 4 of the Validation Act ]. However, s 23J also may be attracted in respect of a valid "act" which, although satisfying the definition of "previous exclusive possession act", would not completely extinguish native title at common law. That a different result may be reached under Div 2B of Pt 2 of the NTA or Pt 4 of the State Act [equivalent to Parts 3B and 3C of the Validation Act ] emphasises the point that it is the statutory criteria provided for by those provisions which are to be applied when determining issues of extinguishment. ' (Emphasis added. For example in Ward (HC) , the High Court held (at [253]) that s 10(1) of the RD Act conferred a right to compensation on native title holders for the loss of their rights by the creation of a reserve pursuant to a State statute. The RD Act conferred a right to compensation because under State law the only interests that were destroyed without compensation by the creation of the reserve were those of the native title holders. In such circumstances, the creation of the reserve was valid and could not be a 'past act' validated by legislation corresponding to Div 2 of Part 2 of the NTA . The effect of s 10(1) of the RD Act , however, was that the native title holders were entitled to compensation. 55 Section 45 of the NTA is concerned with a right to compensation which arises in such circumstances. Section 48 provides that compensation payable, inter alia , under Div 2 or 2B in relation to an 'act' is only payable in accordance with Div 5. Section 50(1) reiterates that a determination of compensation may only be made in accordance with Div 5. Section 49 provides that compensation under the NTA is only payable once for acts that are essentially the same. 57 An application for compensation may be made to the Federal Court under Part 3 (which includes s 61) for a determination of compensation: s 50(2); see, too, ss 81 and 213(2) of the NTA , each of which confers jurisdiction on the Federal Court to hear and determine matters relating to native title. As I have noted, the present compensation claim was instituted pursuant to s 61 of the NTA , as it stood before the NTAA 1998. Similarly, s 253 defines 'paragraph 51(xxxi) just terms' to mean 'just terms within the meaning of paragraph 51(xxxi) of the Constitution '. However, Mr Hughston SC, who appeared with Dr Perry for the Commonwealth, accepted in argument that even if the applicants succeed in establishing that the members of the compensation claim group are entitled to compensation, it is not necessary to comply with s 94 at this stage of the litigation. 64 Section 94A states that an order in which the Federal Court makes a determination of native title must set out the details of the matters mentioned in s 225. The applicants' position is that s 225 of the NTA is not relevant to the present proceedings, because they seek compensation and not a determination of native title. The term 'act' is defined very broadly in s 226 (see par 60, above). 67 Both ss 14 and 15 use the expression 'attributable to the Commonwealth'. In the present case, no acts of extinguishment are said to have occurred after that date. 70 Past acts are divided into four categories, identified respectively in ss 229 to 232 of the NTA . Only category A and category D past acts are relevant to the present case. A 'category C past act' is a past act consisting of grant of a mining lease: s 231. A 'category D past act' is any past act that is not a category A, category B or category C past act: s 232. As I have noted, s 4 of the Validation Act was enacted in reliance on s 19(1) of the NTA . There is no dispute that the Validation Act was enacted in conformity with the requirements of the NTA. Section 3C of the Validation Act, which has no counterpart in the NTA, states that to avoid doubt native title or native title rights and interests may have been extinguished otherwise than by the Validation Act. (As will be seen, Parts 3B and 3C of the Validation Act contain the Territory legislation corresponding to Div 2B of Part 2 of the NTA. Where an act affects native title but the non-extinguishment principle applies, native title is not extinguished, either wholly or in part: NTA, s 238(2). In such circumstances, native title continues to exist in its entirety, but the rights and interests have no effect in relation to the particular act: s 238(3). If the act or its effects are later removed, or otherwise cease to operate, the native title rights and interests again have full effect: s 238(6), (7). The native title rights and interests again have full effect after the "past act" ceases to operate or its effects are wholly removed. Division 2B allows States and Territories to legislate, in respect of certain acts attributable to them, to extinguish native title in the same way as Div 2B provides for acts attributable to the Commonwealth. 84 Section 23C of the NTA confirms that previous exclusive possession acts attributable to the Commonwealth extinguish native title in relation to the land affected by the acts. As I later set out the corresponding provisions of the Validation Act (par 97, below), it is not necessary to set out the terms of s 23C. Section 23D provides that nothing in s 23C affects a reservation contained in a previous exclusive possession act where the reservation is for the benefit of Aboriginal people. An 'exclusive pastoral lease' includes a pastoral lease that confers a right of exclusive possession over the land covered by the lease: s 248A. A non-exclusive pastoral lease is a pastoral lease that is not an exclusive pastoral lease: s 248B. 88 Section 23G(1) of the NTA confirms what the heading describes as the 'partial extinguishment' of native title by previous non-exclusive possession acts attributable to the Commonwealth. 90 Section 23G(2) provides that if the act is the grant of a pastoral lease to which s 15(1)(a) applies (that is, a category A past act attributable to the Commonwealth, other than a public work), s 23G does not apply to the act. The purpose of this provision, according to the Explanatory Memorandum to the Native Title Amendment Bill (' 1997 Explanatory Memorandum '), at par 5.24, is to ensure that 'the effect of the confirmation provisions is not to undo extinguishment that has already occurred under the NTA '. 91 Section 23H preserves a reservation or condition for the benefit of Aboriginal peoples contained in a previous non-exclusive possession act and does so in similar terms to s 16. 92 If a law of a State or Territory contains provisions to the same effect as ss 23H and s 23HA (which are not presently relevant), the law of the State or Territory may make provision to the same effect as s 23G of the NTA in respect of all or any previous non-exclusive possession acts attributable to the State or Territory: s 23I. The Amendment Act ( NT ) came into force on 1 October 1998. The enactment of these provisions allows the Territory to legislate to the same effect as s 23C of the NTA in respect of previous exclusive possession acts attributable to the Territory: NTA , s 23E. 94 The Validation Act adopts the meaning of 'previous exclusive possession act' given in s 23B of the NTA , 'which meaning in so far as it relates to the Territory is set out in Schedules 1 and 2 to the [ Validation Act ]': s 3A(1). In the event of any inconsistency between the Schedules to the Validation Act and s 23B of the NTA, the latter prevails: s 3A(2). 95 Schedule 1 to the Validation Act provides that an act is a 'previous exclusive possession act' if 'it is valid (including because of Division 2 ... of Part 2 of the Commonwealth Act' ). This definition is identical to s 23B(2)(a) of the NTA, except for the addition of the bolded words. It will be seen that Schedule 1 does not refer to an act which is valid because of the operation of s 4 of the Validation Act . According to the applicants, it follows that a past act which was invalid because of the existence of native title, but was validated by s 4 of the Validation Act , is not a previous exclusive possession act. The respondents take a different view of the effect of the definition in Schedule 1 (see section 26.1.1, below) . For the purposes of Part 3B, if a previous exclusive possession act took place before the establishment of the Territory and the act affected land or waters now within the Territory, the act is taken to be attributable to the Territory: s 9JB. Thus if the previous exclusive possession act took place before the Northern Territory Acceptance Act 1910 (Cth) (' Acceptance Act ') came into force, it is nonetheless an act attributable to the Territory for the purposes of Part 3B. 97 Part 3B of the Validation Act contains provisions which correspond with s 23C(1) and (2) of the NTA. However, as has been noted, s 4D of the Validation Act provides that Part 3 of the Validation Act (which corresponds to Div 2 of Part 2 of the NTA ) applies to past acts to which Parts 3B and 3C do not apply. Accordingly, the Validation Act may make provision to the same effect as s 23G in respect of previous non-exclusive possession acts attributable to the Territory: NTA , s 23I. 100 The Validation Act adopts the definition of 'previous non-exclusive possession act' in s 23F of the NTA : see Validation Act , s 3B and Schedule 3. The effect of previous non-exclusive possession acts on native title is dealt with in ss 9K to 9M, which are to the same effect as s 23G(1) of the NTA. On the applicants' case, these acts were subsequently validated by s 4 of the Validation Act . The members of the compensation claim group, according to the applicants, are entitled to compensation under the NTA insofar as the compensation acts extinguished native title rights and interests. The legislation, at least in large measure, is an exercise of the power of the Commonwealth Parliament to make laws with respect to external affairs pursuant to s 51(xxix) of the Constitution ( Koowarta v Bjelke-Petersen [1982] HCA 27 ; (1982) 153 CLR 168), although its application to the Territories is supported by s 122 of the Constitution : Ward (HC), at [129]. 105 The RD Act binds the Crown in right of the Commonwealth and of each of the States and Territories: s 6. The RD Act is not intended to exclude or limit the operation of a law of a State or Territory that furthers the objects of the Convention and is capable of operating concurrently with the RD Act : s 6A(1). 8. I deal later with the tenure history of the Application Area from and after the proclamation of the Town of Yulara in 1976, including the construction of public works on the land (see section 20, below). On that date, Captain John Bremer, Commander of HMS Tamar took possession of the 'North Coast of New Holland or Australia' between longitude 129deg.E and 135deg.E: see M H McLelland, 'Colonial and State Boundaries in Australia' (1971) 45 ALJ 671, at 672-673; Yarmirr (HC) , at [54], per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 108 The Territory's submissions date the acquisition of sovereignty to 16 July 1825, when Governor Darling received his commission as Governor of New South Wales by letters patent. The letters patent substituted 129deg.E for 135deg.E as the western boundary of New South Wales. As the Solicitor-General for the Territory pointed out, Captain Bremer had merely claimed the 'North Coast of New Holland or Australia', while Governor Darling's commission extended the northern and southern prolongations of New South Wales to the 129 th meridian. Although the Solicitor-General's point has force (see Alyawarr Case, at [22]), nothing turns on whether Great Britain acquired sovereignty in 1824 or 1825. It is common ground that at the date of sovereignty the rights and interests held by Aboriginal people in the Application Area and nearby land, in accordance with their traditional laws and customs, were recognised by and became enforceable under the common law. 109 As explained in Ward (HC), at 187-188, the land mass that was later to become the Northern Territory was annexed to the Colony of South Australia in 1863. It remained under the control of the Colony and, subsequently, the State of South Australia until surrendered to the Commonwealth in 1911. They were competing for the honour of being the first European to cross the western half of the continent, from the overland telegraph line to the west coast of Australia. Gosse saw and named Ayres Rock on 19 July 1873 (after Sir Henry Ayres). Thereafter, Gosse travelled west along the Mann and Tomkinson Ranges before turning back. Giles entered the Musgrave Ranges in September 1873 and proceeded further west until forced to return when one of his travelling companions, Gibson, disappeared. In the following year, John Forrest led the first successful expedition across central Australia from west to east, but he does not seem to have passed by Uluru. 111 The day after naming Ayres Rock, Gosse 'discovered' a strong spring coming from the centre of the Rock. These caves are formed by large pieces breaking off the main rock and falling to the foot. The blacks make holes under them, and the heat of their fires causes the rock to shell off, forming large arches. They amuse themselves covering these with all sorts of devices --- some of snakes, very cleverly done, others of two hearts joined together; and in one I noticed a drawing of a creek with an emu track going along the centre. ... The rock is certainly the most wonderful feature I have ever seen. In that book, he related an encounter in late March 1874 with hostile Aboriginals, when he was camping about sixty miles to the west of Mt Olga. No doubt the Aboriginal people formed as unfavourable a view of Giles and his companions as Giles did of the local 'wretches'. 113 In an earlier publication, Giles recorded his first visit to Ayres Rock itself on 9 June 1874. He found a 'fine, deep and shady cave' which was 'ornamented in the usual aboriginal fashion'. I considered that these marks were the native representations of their notions of depicting Mr Gosse's dray-track... though they may have been there when Mr Gosse visited this mount'. 114 Pastoralists began to move into central Australia relatively soon after the explorers. Erldunda, which is about 200 kilometres to the east of the Application Area, had been established by the late 1880s and Tempe Downs, slightly closer to the northeast, existed in 1885: Report of the Aboriginal Land Commissioner (Toohey J), Uluru (Ayers Rock) National Park and Lake Amadeus/Luritja Land Claim (Report No 4, 1980) (' Uluru Land Claim Report '), at [48]. 115 On 20 June 1882, Pastoral Lease 456 ('PL 456') was granted by the Crown to the Musgrave Range and Northern Territory Pastoral Land Co Ltd. The lease commenced on 1 January 1882 and was expressed to be for a term of 25 years. The lease was of an area of 289 square miles and included the whole of the Application Area and a small portion of what is now the Uluru-Kata Tjuta National Park. PL 456 was subject to an exception, in favour of the 'present Aboriginal Inhabitants', the terms of which are reproduced in par 530, below. 116 PL 456 was forfeited for non-payment of rent on 21 January 1886. There was no evidence that any development or pastoral activities took place on the leasehold land prior to forfeiture of the lease. 117 In 1889, W H Tietkins, who had accompanied Giles on his 1874 expedition, undertook another expedition to central Australia. In early July 1889, Tietkins spent some time at Mt Olga. The party travelled to the southeast of Ayres Rock and surveyed an area which included the Everard, Musgrave, Mann and Tomkinson Ranges: J C Carruthers, Triangulation of NW Portion of South Australia (SA Parl Pap 179, 1892). Norman B Tindale, the long-serving curator of Ethnology at the South Australian Museum, reported in 1957 that field work he had conducted in 1934 among older Yankunytjatjara people indicated that the Carruthers survey had resulted in the first effective contact between Aboriginal people and Europeans in the area surveyed, other than the brief encounters with earlier explorers: N B Tindale, 'Totemic Beliefs in the Western Desert of Australia' (1957) 13 Records of the South Australian Museum 305, at 307. This tends to reinforce the conclusion that no steps were ever taken to occupy the land included in the grant of PL 456. The Musgrave tribes made friends with us early, and as they had been in communication with whites before our arrival they were not so much to be feared as the tribes farther south and west. There have been as many as a hundred in the Ernabella depot at one time, and although I left only two men to look after the camp, they experienced no difficulty in keeping order. Their only weapons consist of the spear and wommera; they use the yamstick and cooleman to dig out the honey ant and edibles. The hair which is worn in the form of a chignon, is allowed to grow very long, and is fastened in position by long bone (kangaroo) hair pins. In the published report of the expedition, edited by Spencer, he recorded seeing a 'family of the native sandhill blacks making their way around the base of the mountain [Ayres Rock] towards our camp'. 121 The next day members of the expedition located Tietkin's old camping ground at Mt Olga. These sandhill blacks had never seen a white man before, and in their alarm one or two of the men seized their spears and poised them on their woomeras or spear-throwers, but fortunately Lungkartitukukana's powerful voice was heard just in time'. He thought this to be 'by no means an appetising sight': ibid, at 94. 122 In a book published sixteen years later, Spencer recounted the same events. These had evidently been used for shelter by the natives for long years. Spencer's account includes a detailed description of cave paintings at Ayres Rock. 123 On 25 March 1896, the Crown granted Pastoral Lease 1804 ('PL 1804') to J C Lovely pursuant to the Northern Territory Crown Lands Act 1890 (SA). The lease was for a term of 42 years from 1 April 1896 and covered a leasehold area of approximately 3,136 square miles. Remarkably enough by modern standards, PL 1804 included not only the whole of the Application Area but all of Uluru and Kata Tjurta. PL 1804 contained in substance the same terms, conditions and exceptions as PL 456. The parties accepted that the grant of PL 1804 had no greater effect on then existing native title rights and interests than did the grant of PL 456. The effect of the surrender of the Northern Territory by South Australia and its acceptance by the Commonwealth was to confer on the Commonwealth Parliament exclusive power to make laws for the government of the Territory: Constitution , s 122 ; Kruger v Commonwealth [1997] HCA 27 ; (1996) 190 CLR 1, at 49-50, per Dawson J; Ward (HC), at [390]. The Acceptance Act continued all laws in force in the Territory at the time of the acceptance, but provided that all such laws could be altered or repealed under any law of the Commonwealth: s 7. All estates and interests held by any person from the State of South Australia within the Northern Territory continued to be held from the Commonwealth on the same terms and conditions: s 10. 125 The Northern Territory (Administration) Act 1910 (Cth) (' Administration Act ') empowered the Governor-General to make ordinances having the force of law in the Northern Territory, although either House of Parliament could disallow an ordinance: s 13. This was essentially the position until 1947, when the Administration Act was amended to create a Legislative Council for the Northern Territory. The Legislative Council was given power to make ordinances for the peace, order and good government of the Territory, subject to the assent of the Administrator and a power of disallowance vested in the Governor-General: Administration Act , ss 4U, 4V, 4W. In 1978, the Northern Territory was established as a body politic under the Crown and the Legislative Assembly was given power to such laws for the peace, order and good government of the Territory: Self-Government Act , ss 5, 6. 126 In 1914, according to Mr Tindale, a vast area of South Australia extending north-west from the Victorian border for over 3,200 kilometres, was in a severe drought that lasted until mid-1915. However, because of local summer thundershowers, the situation in the eastern Musgrave Ranges was nearly normal. The drought forced Pitjantjatjara people to the west to shift eastward. By 1916 they had usurped the territory of some Yankunytjatjara people in the eastern Musgraves, in turn forcing them southwards: N B Tindale, Aboriginal Tribes of Australia: Their Terrain, Environmental Controls, Distribution, Limits and Proper Names (Uni of California, 1974), at 69. 127 In March 1920, the Application Area was included in a reserve for Aboriginal people. Part of the reserve, including that part covering the Application Area, was revoked in October 1940. It is common ground that the creation of the reserve did not extinguish native title rights and interests to any greater extent than the 1882 and 1896 pastoral leases. 128 In 1926, an expedition was undertaken to 'fill in a blank that remained in the south-western corner of the map of the Northern Territory': D Mackay, 'The Mackay Exploring Expedition, Central Australia, 1926' (1929) 73 Geographical Journal 258, at 258. Just north of Mt Olga, the members of the expedition were joined by 35 Aboriginal people who accompanied them to Kulipurra Hills and showed them a water-hole. Two of the Aboriginal men accompanied the expedition to the Petermann Ranges, but refused to go further. The men rejoined the expedition when the members returned to the Pottoyu Hills, to the west of Mt Olga, and guided the members to another water-hole. Later, several parties of Aboriginals arrived, including some old men in charge of boys about to undergo an initiation rite. The Aboriginals were sullen and the expedition members thought that trouble was brewing. Hence the expedition kept watch during the night and left the next day, followed by a few of the Aboriginals: ibid, at 261-263. 129 Mr Tindale reported that in 1928-1929 drought was again intense in the Western McDonnell Ranges, including the Lake Amadeus area. This drought drove Aboriginal people eastwards and in August 1929 they appeared for the first time at the Hermannsburg Mission settlement. Their arrival coincided with a visit of the University of Adelaide Anthropological Expedition to the area. 130 In 1930, Professor A P Elkin carried out extensive field work in order to study 'the social organization of the remaining tribes of South Australia'. For the first six months he was based at Oodnadatta, but travelled widely. His travels included camping at what he termed the 'Ernabella Soak' in the Musgrave Ranges, at a time before the Ernabella Mission had been established. Although Professor Sutton appears to have accepted that Professor Elkin spent seven weeks at the Ernabella Soak, it seems that he may have actually spent a shorter time at that specific location: A P Elkin, 'The Social Organization of South Australian Tribes' (1931) 2 Oceania 44, at 44-46. 131 From May to July 1933, Mr Tindale undertook an anthropological expedition to the Musgrave and Mann Ranges under the auspices of the University of Adelaide and the South Australian Museum: see N B Tindale, 'Preliminary Report on Fieldwork Among the Aborigines of the North West of South Australia' (1933) 4 Oceania 99. Mr Tindale collected data from Yankunytjatjara and Pitjantjatjara men and made a 'first attempt ... to learn the language of the Western Desert people and to collect their stories': N B Tindale, 'Totemic Beliefs in the Western Desert of Australia --- Part I' (1959) 13 Records of the South Australian Museum 305, at 306. 132 In late 1934, Mr Tindale continued his field work at Ooldea. He worked, among others, with Yankunytjatjara people whose memories went back to the times preceding the Carruthers survey of 1888 to 1890. 133 In 1934 or 1935, Paddy Uluru's brother was shot and killed at Murtitjulu or Angus Downs (the evidence is not clear) by a police expedition. (Paddy Uluru was Reggie Uluru's father. ) This event led Paddy Uluru, who was born in the late 1890s, to leave the area and live elsewhere for many years. When he left Uluru he took with him sacred objects from caves at Uluru and hid them at a location in the Everard Ranges. He died in 1979 and was buried at Mutitjulu. Both Aboriginal and non-Aboriginal witnesses reported that Paddy Uluru and his brother had been regarded by Aboriginal people as 'the Number One man' for the country around Uluru. 134 In 1937, the Ernabella Mission was established as a direct result of efforts by Dr Charles Duguid, the then Moderator of the Presbyterian Church of Australia. According to Mr Edwards, the former Superintendent of the Mission, Aboriginal members of the Mission community were encouraged to maintain links with their traditional lands and to use their own languages. Dr Duguid recorded in 1939 that at that time there were about 150 people at Ernabella Mission and that contact had been made with about 500 people during the year: see W H Edwards 'Patterns of Aboriginal Residence in the North-West of South Australia' (1992) 30 Journal of the Anthropological Society of South Australia 2 (' Patterns of Aboriginal Residence ') , at 8-9. A school was opened at Ernabella in 1940. 135 In 1939, R M Berndt, later Foundation Professor of Anthropology at the University of Western Australia, visited Ooldea as a junior member of an anthropological research expedition. Two years later Professor Berndt and his wife, Dr Catherine H Berndt, also an anthropologist, conducted more intensive field work at the same location. This field work, together with later extensive field work with other Western Desert peoples, provided the basis for a large segment of their published works. The reservation was made pursuant to s 103 of the Crown Lands Ordinance 1931 (NT). The care, control and management of the reserved land was committed to the Northern Territory Reserves Board, pursuant to s 13 of the National Parks and Gardens Ordinance 1955 (NT): Uluru Land Claim Report, App 1, at 34. 137 At about this time, Bill Harney was appointed the first Curator of the Ayres Rock-Mount Olga National Park, apparently on a part-time basis. Initially he was the only officer employed by the Board at the Park and he remained the sole Curator until the end of the 1962 season. During this period, Barbara Tjikartu (one of the Aboriginal witnesses) and her husband, Nipper Winmati, worked with tourists at Bill Harney's camp. They were 'paid' with tea and sugar. Previously Barbara Tjikartu had worked at Ayres Rock for a man whom she identified as Len Tuit. The evidence suggests that Len Tuit conducted tour groups to Ayres Rock from Alice Springs. 138 According to several Aboriginal witnesses, Bill Harney told the Aboriginal people not to hunt rabbits, goannas and kangaroo in the Park. He also forbade them from cutting trees in the area. These Aboriginal witnesses, however, were unanimous in reporting that they would ignore Bill Harney's strictures about hunting and would go out bush to cut quandong trees and mulga. 139 Also at about this time, Reggie Uluru first came to Uluru with his father, Paddy Uluru. He was then a 'big boy just starting to grow a beard'. He and his father hunted in the area, including Yularra Purlka and Kata Tjurta. Reggie Uluru was taught the stories for the country by his father. 140 By 1960, approximately 4,300 tourists visited Ayers Rock each year although there were very limited and basic tourist facilities in the area. The Ayers Rock Chalet accommodated 12 guests, while the Red Sands Motel, operated by Len Tuit, accommodated 25. Other motels were built later. 141 In 1961, the South Australian Aborigines Protection Board established a settlement known as Musgrave Park in South Australia, about 80 kilometres to the south of Uluru. The intention was to give a few Aboriginal men from Ernabella the opportunity to train for work on nearby cattle stations. The more or less permanent Aboriginal population at Musgrave Park (later renamed Amata) increased to 150 by 1962 and 300 by 1968: Patterns of Aboriginal Residence, at 14. 142 Shortly after Amata was established, Fregon (to the southwest of Amata) was set up as an outstation of Ernabella. Again the intention was to provide training for Aboriginal men in cattle management. 143 In 1963, Bob Gregory was appointed the first full-time Curator of the Park. At about this time, according to the evidence of Ian Cawood (who set up the Ayers Rock Chalet), a small number of Aboriginal people started to live at Ayers Rock permanently. Initially they camped in the public camp ground, but later they moved to an area just behind the chalet. The members of this group included Captain No 1 and his family, Harry Bigfoot, Toby Nangina and his wife, Ada. Later, Captain No 2 and his wife, Mavis, joined them, as did Nipper Winmati and his wife, Barbara Tjikartu, and Nyinga Stuart. The Aboriginal camp remained at the chalet until about 1970 when it moved to a site near the base of Ayers Rock. He was joined shortly afterwards by Ian Cawood, who took up duties as the Assistant Ranger at the Park. According to Derek Roff's evidence, by 1968 the Park was attracting some 14,000 visitors per annum. (Mr Cawood's estimate was somewhat higher. ) At about this time, construction of the Docker River settlement commenced. Mr Roff's recollection was that in 1968 the only Aboriginal person resident at Ayres Rock was Nui Minyintirri, who worked as a yardman at the motels. 145 Shortly after Derek Roff's appointment, the Northern Territory Reserves Board, in co-operation with Aboriginal members of an Advisory Committee, investigated establishing a program of Aboriginal Rangers. Reggie Uluru became a Ranger, as did Toby Nangina and Nyinga Stuart. At about this time (the early 1970s), Reggie Uluru returned to Uluru with his father, Paddy, and camped at Bore No 29, where the Mutitjulu cemetery is now located. Derek Roff was told by a number of Aboriginal people that Paddy Uluru was the rightful owner of Ayers Rock (although not the only owner) and that he was the person able to speak for the place more than others. 146 Ian Cawood's recollection was that both before and after he became a Ranger, hunting in the National Park by Aboriginal people was 'commonplace'. This continued until the early 1970s when it became obvious that hunting was having an impact on wildlife, much to the disappointment of tourists. 147 In 1970-1971, Professor Annette Hamilton carried out field work with Yankunytjatjara people at the Everard Park cattle station (now known as Mimili). 148 In 1971, the Northern Territory Reserves Board called for tenders to establish a store and other facilities for campers and visitors to the Ayres Rock area. The call was made after a meeting attended by Aboriginal people, including Captain No 1 from Ayres Rock, Toby Nangina from Docker River and an old man, Proku (or Lankey) from Ayres Rock. The successful tenderer was the Docker River Social Club, which set up the Ininti Store. At the time, the facilities near Ayres Rock were essentially limited to the Red Sands Hotel, the Inland Hotel, a Ranger's house and a tourist camping ground. There was also a small Aboriginal camp. 149 On 12 or 13 February 1972, extensive men's ceremonies were held in Kantju Gorge at Ayres Rock. Paddy Uluru led about 20 to 30 Aboriginal participants in dancing and other ceremonies. Derek Roff, Ian Cawood and Bill Edwards (among other non-indigenous men) attended by invitation. The event included a Mala (rufous hare wallaby) ceremony. 150 By the early 1970s most of the Aboriginal people in the extreme northwest of South Australia (to the south, southeast and southwest of Ayres Rock) lived in one of five settlements: Ernabella (about 350 people); Fregon (about 200); Amata (about 330); Indulkana (about 200); and Everard Park (about 80): Patterns of Aboriginal Residence , at 16. In 1973, the lease of Everard Park station was purchased by the Aboriginal Land Fund Commission and transferred to the local people, who renamed the property Mimili. In 1974, control of Ernabella and Fregon was handed over to Aboriginal community councils by the missions which had previously run the settlements. At about the same time, the South Australian Government transferred control of Amata and Indulkana to community councils. 151 In 1973, a cemetery was opened at Ernabella. Before this development, it was usual for deceased Aboriginal people associated with Ernabella to be buried in unmarked graves, in accordance with traditional customs. The function of ARAC was to advise the Northern Territory Reserves Board on the management of the Ayres Rock-Mount Olga National Park. ARAC, as originally established, included only one Aboriginal representative, Yami Lester, a nephew of Paddy Uluru and a Yankunytjatjara man. 153 ARAC met formally on nine occasions between 13 March 1974 and 25 February 1977, although its activities were not confined to those formal meetings. Apparently at Mr Lester's suggestion, Aboriginals 'with personal involvement in the Ayres Rock area' were invited to attend some of the meetings. These people included Paddy Uluru, who is recorded in a file note prepared for the Department of Environment and Conservation as having been recognised by his people (the Yankunytjatjara) as the 'Keeper of the Rock'. 154 In early 1974, a meeting took place between Derek Roff, Ian Cawood and Nicholas Browning (a Project Officer with the Department of Aboriginal Affairs) and Paddy Uluru, Toby Nangina and Reggie Uluru. The purpose of the meeting, according to the evidence of Mr Browning, was to introduce the idea of establishing a village and airstrip at Ayres Rock, but away from sacred sites. In about August 1974, a small group of Aboriginal men, including Paddy Uluru and Toby Nangina, was shown proposed sites for the airstrip and village. Shortly thereafter, a meeting took place at Ayres Rock, involving a large group of Aboriginal men, to discuss the proposal. The men were taken to the site for an inspection and for what was described in the evidence as 'consultations' about the proposed development. 155 In early 1975, Paul Browning took Paddy Uluru (whom Mr Browning understood to be the main person for Ayres Rock) to the Everard Ranges where he retrieved certain sacred objects. The two returned to Uluru, where Paddy placed the objects in a cave and performed a ceremony. As I have noted, Paddy Uluru died in 1979, aged about 82, and was buried at Uluru. 156 On 23 September 1975, the Central Land Council advised ARAC that it had endorsed a proposal to close off certain sites of significance at Uluru and that it supported a recommendation to adopt 'Yulara' as the name of the new village. 157 On 29 July 1976, the Application Area was proclaimed as the Town of Yulara. The proclamation was published in the Gazette on 10 August 1976. 158 At the final ARAC meeting, held on 25 February 1977, it was agreed that a new tourist village was required to service visitors to the Ayres Rock --- Mount Olga National Park 'because of the extent of environmental damage being caused by the increasing number of visitors to the Park'. The village was to be located in the proclaimed Yulara town site within the general area previously selected by ARAC. The minutes note that the site was acceptable to the Aboriginal community and that the environmental effects of constructing a new village were 'tolerable'. It was resolved that the Australian Government be requested to provide in principle support for the concept of a new tourist village. 159 On 1 December 1978, the Central Land Council lodged what was then described as the Lake Amadeus/Luritja Land Claim under the Land Rights Act . The claim was to an area of unalienated Crown land southwest of Alice Springs, which was bounded by Tempe Downs to the north and Mulga Park to the south. The claim was later amended to include the Uluru (Ayres Rock - Mount Olga) National Park, but the Aboriginal Land Commissioner (Toohey J) held that the Park was not 'unalienated Crown land' and was therefore outside his jurisdiction. The witnesses before the Commissioner included Barbara Tjikartu and Cassidy Uluru, both of whom gave evidence in the present proceedings, and Nipper Winmati, Tjikartu's husband. The Commissioner reported in 1979 (although the report was published in 1980) and found that there were 'traditional Aboriginal owners' for the purposes of the Land Rights Act for most of the unalienated Crown land covered by the report. The report identified the traditional owners: Uluru Land Claim , at [117]. For what was described as the 'Ayres Rock estate' the traditional owners included Nipper Winmati and his son Colin Nipper, Reggie Uluru, Cassidy Uluru and Ngoi Ngoi Donald. 160 On 26 October 1985, the Handback/Leaseback Ceremony took place at Uluru, in the presence of the Governor-General and some 4,000 people. The ceremony, which was universally described by the Aboriginal witnesses as the 'Handback', involved the ceremonial transfer of the title to the Park to the traditional owners and the leaseback of the Park by them. Yami Lester became the Chairman of the first Uluru-Kata Tjuta Board of Management. Members of the first Board included Reggie Uluru, Barbara Tjikartu, Nellie Patterson and Tony Tjamiwa. 161 On 25 February 1986, the Central Land Council requested an inquiry into claims to certain land which had been excised from the Uluru (Ayers Rock) National Park and Lake Amadeus/Luritja Land Claim. The claim area covered about 2246 square kilometres southwest of Alice Springs, and was bounded on the north by Kings Canyon National Park. The claimants included Nipper Winmati and an elderly lady known as Tjintjiwarra, to whom reference was made in the evidence in the present case. The witnesses included Yami Lester, Barbara Tjikartu, Nellie Armunta, Bessie Liddle, Julie Clyne and Ngoi Ngoi Donald, all of whom gave evidence in the present case. The Commissioner (Maurice J) found that there were 'traditional owners' within the meaning of the Land Rights Act for two small portions of the claim area, but not for the balance: Report of the Aboriginal Land Commissioner (Maurice J), Lake Amadeus Land Claim (Report No 28, 1989), at [430]. 162 On 1 January 1994, the NTA came into force; the Validation Act came into force on 10 March 1994 . As I have noted, each enactment was substantially amended in 1998. 163 On 14 June 1996, the Construction Agency of the Department of Transport and Works applied to the Aboriginal Areas Protection Authority for a clearance certificate in relation to the proposed extension of the runway and other works at Connellan Airport. On 26 August 1996, Ms Julia Munster, a Native Title Anthropologist with the Central Land Council, wrote to the Authority advising that consultations for the clearance request had been completed. The accompanying report noted that 'custodians' Reggie Uluru, Alec Forrester, Millie Okai and Barbara Tjikartu had inspected the affected areas. Moreover, the absence of tjukurrpa and sites in the area meant that the clearances sought were non-contentious and did not require consideration by a greater number of custodians. Rehabilitation to involve revegetation of area, under supervision of custodians. 9. In this respect there are some disparities between the Application and the Points of Claim. It is convenient to refer principally to the Points of Claim, since the case pleaded there appears to be closer to the case actually presented by the applicants in their final submissions. (The holders of native title at the time of extinguishment are referred to in the Points of Claim as the 'native title holders'. ) The compensation acts are pleaded in detail in Parts 5 and 6 of the Points of Claim. For present purposes it is enough to note that the applicants' preferred position, as pleaded, is that the native rights and interests of the compensation claim group were extinguished either on 1 October 1998 (the date of commencement of ss 9H and 9J of the Validation Act ) or 10 March 1994 (the date of commencement of the Validation Act, as originally enacted by the Territory). 169 The Points of Claim allege (par B1.9) that it is not appropriate, practicable or necessary to determine who the native title holders are by reference to a definitive list of named individuals. In their final submissions, the applicants adhered to the contention that it is sufficient for the Court merely to set out a method for determining the persons entitled to compensation. However, as an alternative they sought to amend par B1.8 to substitute a definitive list of members of the compensation claim group. I deal with the application to amend later (section 10.5, below). The dialects of the language of the Western Desert include Yankunytjatjara and Pitjantjatjara. The eastern Western Desert is one such sub-region. The people of the sub-regions are not readily separable from the people of their neighbouring sub-regions. They interact, intermarry and share most cultural features. Nor do those laws and customs identify "clans" or other discrete bounded territorial groupings of people. Personal choice and a level of unpredictability, negotiability and contestation are features of the indigenous laws acknowledged and customs observed by the people of the Western Desert. Rather, the particulars to par B1.6 allege that the present day people of the eastern Western Desert are 'the biological and socially recognised descendants of people of the Western Desert at sovereignty'. The body of laws and customs is said to have been passed down through the generations of the people of the eastern Western Desert by word of mouth and common practice, from the society at sovereignty until the time the compensation acts occurred and thereafter. It is also pleaded (par 2.10(1)) that pursuant to those laws and customs the relationship between eastern Western Desert people and particular areas of land involves rights, powers, privileges, obligations and responsibilities which collectively define the relationship between individuals and particular areas. These elements of connection are said (par 2.10(2), (3)) to be inalienable and indestructible, while the body of persons having a connection with particular land is said to have a fluctuating membership over time. Moreover, the 'elements vested in any particular person will change over time' (par 2.10(5)). 175 Section 2 of the Points of Claim provides more detail of the laws and customs of native title holders. This adaptation has led to a greater emphasis being placed on parental and grandparental connections to country, and on long association with an area'. It may not be the exact place where the event occurred but rather the closest site to the event, or even a bigger site on the same Dreaming track. For example, descent from a parent or grandparent recognised as having rights in the area because of his or her birth, knowledge, or long association with the area. The more close relatives one has who are identified with an area, the stronger is the case for claiming an interest, or a particular set of interests in the area. There is some tendency for men to have a special relationship to their father's father's places, and for women to have a similar connection to those of their mother and mother's mother. Accordingly, I proceed on the basis that par B1.10 of the Points of Claim contains only four criteria. This concept explains the creation of the land and is evidenced by particular features of the landscape. Importantly, it is said to lay down the rules or principles by which people both relate to and conduct themselves in relation to land and by which they otherwise conduct themselves. The Points of Claim identify (par 4.3) a large number of Tjukurrpa 'associated with the area'. 181 The applicants say (par 2.2) that the indigenous laws acknowledged and customs observed by the people of the eastern Western Desert are given normative force by the widespread commitment to the Tjukurrpa, and the fear of punishment or ostracism in the event of breach of the laws or customs. The laws and customs are said to include rules and principles for recognition of a person as the holder of rights and interests in relation to an area and for determining the nature and extent of those rights and interests. Section 2 refers (par 2.7) to other laws and customs relating, for example, to ceremonies, foraging for and distributing food, restricting access to or knowledge of songs, stories and ceremonies and imposing sanctions on strangers whose presence on or use of country is wrongful. The rights and interests are said to have comprised the total of all available rights and interests exercisable in relation to the land from time to time. Although the Points of Claim suggest (par 2.11(4), (5)) that the applicants seek the establishment of a body corporate to receive compensation payments, particulars subsequently provided by them indicate that they do not ask the Court to establish such a body. 184 Section 3 of the Points of Claim pleads that prior to the occurrence of any compensation acts, the native title holders had a right as against all others to possess, occupy, use and enjoy the land ('original native title'). After the grants of the pastoral leases in 1882 and 1896, it is alleged that many 'elements' of the original native title remained unextinguished. These unextinguished elements are said to have continued in existence until the compensation acts occurred. They left signs of their presence and something of their spiritual essence. The features of the landscape made or shaped by the Tjukurrpa, and the places where they left signs of their presence or essence were (and remain) sacred to the native title holders. They include places such as rockholes, soakages, rock shelters, sources of ochre, particular trees, patches of vegetation, boulders. It extends to use of the land by other Aboriginal people who acknowledge the laws and customs of the eastern Western Desert and also people who do not have rights conferred by or arising under statute. Minerals are not included. Rather, the rights and interests held by a native title holder were dependent upon the application of the conditions and additional factors. 188 The spiritual elements of the connection are said (par 4.2) to include the beliefs of the people of the eastern Western Desert that the Tjukurrpa are responsible for the existence and form of the landscape and that the Tjukurrpa continue to be a presence or influence in the area. They also include the ceremonial and ritual life of the native title holders celebrating the Tjukurrpa associated with the area and the responsibility to prevent improper disclosure of beliefs and practices covering such matters as mythic narrative events, song verses and ceremonial actions. The Points of Claim identify (par 4.3) 31 separate Tjukurrpa associated with the area. 189 The physical elements of the connection are alleged (par 4.4) to have comprised the native title holders' physical presence in the area, their use of the resources of the area and their actions to protect places in the area. The historical elements comprised the considerable time depth of the spiritual, physical, legal, economic and social elements of connection maintained by the native title holders (par 4.5). 10. Certain matters only became clear in the course of final submissions. Accordingly, it is convenient to outline in some detail the submissions made on their behalf. 193 The applicants point out, by reference to De Rose (FC) (No 1), at [267]-[268], that account can be taken of post-sovereignty alterations to traditional laws and customs, at least if they are of a kind contemplated by those traditional laws and customs. They warn against the notion that indigenous societies are essentially static, contending that such societies have often been characterised by an ability to adapt to changing circumstances. They also rely on the recognition by the High Court in Yorta Yorta (HC) , at [84]-[85], that interruption to the use and enjoyment of native title rights and interests is not necessarily fatal to establishing present (or in this case recent) possession of such rights and interests under the traditional laws acknowledged and customs observed by the relevant people. They particularly rely on an expert report prepared by Professor Peter Sutton ('the Sutton Report') to support the pleaded case that the people of the Western Desert share certain cultural characteristics, such as dialects based on a single language, a particular kinship system, a distinctive approach to male initiation and an emphasis on place of birth or conception as the source of rights and interests in land. 195 The applicants also rely on the Sutton Report to support their contention that the Western Desert has sub-regions corresponding to social, cultural and linguistic variations, including variations in the way that the relationships between people and country are recognised. They submit that the eastern Western Desert is one such sub-region. Somewhat optimistically, they also suggest in their written submissions that the proposition is not controversial. It is a largely artificial exercise to separate laws and customs in relation to country from laws and customs in relation to people. It is also a largely artificial exercise to attempt to demarcate or neatly separate each law or custom from each other law or custom. They are closely interrelated and inextricably linked --- forming a body or system. They attribute the departure from the pleadings to the difficulty of placing traditional laws and customs in discrete categories. They explain that their intention, guided by the analysis in the Sutton Report, is to 'identify a model that better reflects the evidence'. 198 Anticipating criticism by the respondents of the probative force of evidence as to the actual conduct of Aboriginal people in recent times, the applicants submit that a pattern of observable behaviour may 'provide normative force in the form of social pressure or expectation'. Evidence of such behaviour, so they argue, need not be supported by 'articulated prescription'. Nor is it realistic to expect 'unwavering consistency in articulation of law and custom'. 199 The applicants, once again anticipating a line of attack by the respondents, submit that the existence of non-conforming behaviour does not mean that there has been a substantial change in, or a breakdown of, traditional laws and customs. This, so they argue, is particularly the case where the society has always accepted a substantial level of choice, contestation and disputation and where the unwritten law is held in 'many people's heads'. It is the Tjukurrpa that not only explains the creation of the land and features on the landscape, but lays down the principles by which people relate to land and provides a framework for country through constellations of sites associated with particular Tjukurrpa . It pervades every aspect of the laws and customs of the people of the eastern Western Desert and of their everyday life. The notion of Tjukurrpa is so pervasive that it facilitates travel around country. The system is said to include an emphasis on 'alternative generation moieties', whereby a person's own moiety is that of his or her siblings and other persons classified as such, along with the children of those classified as siblings and the person's own grandkin. The opposite moiety is that of the remaining alternate generations. The kinship system includes marriage rules and incest taboos. Similarly, they urge adoption of Professor Sutton's contention that groupings of people associated with country cannot be described as 'clans' or other discrete bounded traditional groupings of people. Notwithstanding references in the anthropological literature to local traditional groups or 'hordes', they argue that the population of the eastern Western Desert has never been subdivided into named landholding descent-based groups. The (arbitrary) location of the claim area merely draws attention to a point in the landscape at which these tracts overlap. However, they describe the term as 'label' which is used to describe a relationship to country that may have a variety of bases. They accept that the people who are ngurraritja for an area of the eastern Western Desert are not a group united by common descent from a particular ancestor. Nor is any country to which the ngurraritja relate to be regarded as a 'neatly bounded area recognisable for all purposes as a unit of country'. 204 The applicants also assert that there is no simple equivalence between ngurraritja and the holding of all native title rights and interests in land. They maintain that being ngurraritja for land involves having powers and responsibilities in relation to the land, but that others may also have some powers or responsibilities 'by virtue of a lesser relationship or by delegation or permission'. 205 The applicants emphasise the differences in the perspectives of the claimants and non-indigenous people. The latter would regard the Application Area as a geographically and legally discrete entity. From the claimants' perspective, however, 'non-indigenous notions of place, area and country do not represent adequate translations of the spatial distribution of people and landscape'. According to the applicants, the evidence shows that the claimants usually identify themselves as ngurraritja for an area embracing a number of sites or areas of land. They argue that the composition of the set rests on individuals asserting one or more relevant significant forms of connection to the Application Area and the manner in which such assertions are received by others. Its composition is systematic and derived on the basis of the application of law and custom, though individuated pathways to the holding of rights and to the achievement of authority and status as against other members of the set are involved. The applicants adopted what they describe in their written submissions as 'the notion of multiple and accretive factors' which, they claim, was accepted by the Full Court in De Rose (FC) (No 1) , at [280]. As has been noted, the Points of Claim identify in par B1.10 five conditions (ultimately reduced to four) and plead that the presence of at least one is a necessary precondition for holding rights in country. The presence of one or more of the 'additional factors' identified in par B1.11 is said to activate or strengthen the extent of the rights holder's personal authority in relation to country. With some justification, the respondents complained that it was unclear how far, if at all, the applicants were departing from their pleaded case. 217 As I have noted, the applicants frankly acknowledge that their written submissions depart from their pleaded case. The major point of departure appears to be that the eleven criteria set out in par 5.114 of the written submissions, unlike pars B1.10 and B1.11 of the Points of Claim, do not distinguish between 'conditions' and 'additional factors'. On the contrary, those eleven criteria, which broadly correspond to the 'conditions' and 'additional factors' specified in pars B1.10 and B1.11, are said in the written submissions to be the 'principal bases' for regarding any individual as having a strong connection with and rights in an area. This approach would seem to imply that a person who satisfies one or more of the eleven criteria may acquire rights and interests in land, although the nature and extent of those rights may depend on the number and significance of the criteria that are satisfied. The approach appears to be consistent with that of Professor Sutton, who does not divide the criteria specified in Proposition 7 into 'conditions' and 'additional factors'. His view is that 'the capacity to assert a relationship of belonging to an area is accretive' --- that is, a person with several 'bases of claim' has a stronger case for asserting rights in land than a person with only one basis. 218 On the other hand, the formulation in par 5.119 of the applicants' written submissions, while hardly a model of clarity, seems to revert to the primacy of the first four criteria specified in par 5.114. Even so, par 5.114 appears to contemplate that a person satisfying at least one of the 'additional factors' (that is, those specified in par 5.114 (e)-(k)) can acquire rights and interests in land under the traditional laws and customs of the Western Desert. The somewhat opaque qualification is that such rights and interests are 'dependent upon the existence of native title rights' held by persons who satisfy one of the four primary criteria. (A further complication is that the fourth criterion specified in par 5.114(d) seems to incorporate one of the 'additional factors' identified in par B1.11(e) of the Points of Claim. It seems therefore to have been elevated by par 5.119 of the written submissions to a position of primacy. He said that the applicants' position is (and, he implied, always had been) that pleaded in the Points of Claim. It would seem to follow that the 'additional factors' identified in par B1.11 of the Points of Claim become relevant to the applicants' case only when a connection to land has been established by reason of a claim satisfying at least one of the four conditions in par B1.10. In other words, the additional factors are relevant only to the 'closeness' of the connection to land, while the existence of a connection depends on satisfying one of the four conditions in par B1.10. I mean, it's said that nobody articulated these rules as such, but if one goes to the material in the annexure, one finds people citing precisely these criteria. They include father's country, they include mother's country and they include place of birth as explanations of why they are Ngurraritja for a particular country or this is their ngurra. So that in one sense, the debate is between the level of flexibility which we are told was not there at sovereignty and between the flexibility which appears to be here today rather than, as it were, between one factor and another. The applicants do not put forward, for example, an alternative case that the only criterion under traditional laws and customs for acquiring rights and interests in land is whether the claimant has a 'borning place' on or in close proximity to the relevant area (par B1.10(a)). Their case is based on the 'package' of 'conditions' and 'additional factors'. Accordingly, the applicants' contention is that a person acquires native title rights and interests in land if he or she satisfies one or more of the four criteria identified in par B1.10 of the Points of Claim and pressed by the applicants. (The applicants say that these criteria correspond to subpars (a), (b) and (c) of Proposition 7 in the Sutton Report. ) The nature and extent of the rights and interests held by the person, and his or her seniority and authority in relation to others, depends on the number of conditions satisfied and the extent to which the additional factors pleaded in par B1.11 are also satisfied. 223 One consequence of the applicants' approach is that they reject the hypothesis that the acquisition and recognition of rights and interests in land under the traditional laws and customs of the eastern Western Desert are governed by a patrilineal system of land tenure, whereby a person takes interests in his father's or father's father's country. They expressly reject the hypothesis advanced by Mr Norman B Tindale (and supported by other anthropologists), that the people of this area historically followed a patrilineal system. Indeed, Professor Sutton devoted considerable effort to reanalysing Tindale's surviving fieldwork data from his 1933 expedition to the Mann and Musgrove Ranges in order to refute the latter's hypothesis. 224 The important point for present purposes is that the applicants accept that, if the evidence supports the proposition that the traditional laws and customs of the eastern Western Desert adopt a patrilineal model of land tenure, their claims cannot succeed. This is despite the fact that some members of the compensation claim groups might well be able to establish that they hold rights and interests in the Application Area in accordance with a patrilineal model of land tenure, as expounded by Tindale. Mr Basten acknowledged in final submissions that not only did the applicants not run their case in this way, but the effect of the evidence is that the indigenous witnesses do not claim rights to country on the basis of a patrilineal model. For much of the trial the applicants maintained this stance. The respondents complained from time to time that the applicants' refusal to identify the members of the compensation claim group hindered their ability to understand and meet the case against them. Whether to meet that complaint or for other reasons, the applicants ultimately retreated from the stance taken in the Points of Claim, although they continue to maintain that it is not necessary at this stage of proceedings (assuming that they succeed in establishing an entitlement to compensation) to identify the members of the compensation claim group. To understand the position ultimately taken by the applicants it is necessary to follow a somewhat twisting path. Mr Basten accepted in the course of his final submissions that the language of par B1.8 is 'infelicitous' in a number of respects. The list of native title holders does not include, for example, Nellie Armunta who gave evidence as a claimant, although it includes her children and grandchildren. The list also refers to people who claim to be descended from Wati Ngiyari, rather than those who are actually descendants. 228 The applicants address the definition of the compensation claim group in Annexure 2 to their written submissions in chief. Annexure 2 contains a chart which lists, on my count, the names of 115 persons (plus unnamed offspring of some of those people). The chart includes, in respect of each named person, a very brief summary of the evidence concerning his or her relationship with country; a notation of those factors advanced in par 5.114 of the applicants' written submissions that the person is said to have satisfied; and transcript and exhibit references to the evidence relating to that person. Of the 115 named persons, only 24 gave substantive evidence. 229 According to Mr Basten, some 96 of the 115 named persons are included in the categories of claimants identified in par B1.8 of the Points of Claim, although he acknowledged that cross-referencing is not always easy. He accepted that the remaining 19 persons (of whom 7 gave evidence) have not been expressly incorporated within par B1.8, although at least one (Nellie Armunta) was apparently intended to be included. Mr Basten also accepted that if these 19 people (or some of them) were to be included among the members of the compensation claim group, it would be necessary to amend the pleadings. 230 In the end, the applicants chose not to seek an amendment that would accommodate the additional 19 persons. Instead Mr Basten applied to amend par B1.8 to substitute for the bullet points appearing therein a list of 55 named persons, of whom eight are said to have died (in each case after the compensation acts took place). In addition, the list includes the unnamed children of some of the named persons. The relevant descendents of Wati Ngiyari (now deceased). Similarly, the second column relates each proposed member to par B1.8 of the Points of Claim. The third column simply states whether the person (or persons) has or has not been added to those mentioned in par 5 of the Application and par B1.8 of the Points of Claim. 232 It is important to appreciate that, although the proposed amendment does not alter the introductory words to par B1.8 of the Points of Claim, Mr Basten made it clear that the proposed amendment is intended to be an exhaustive statement of the membership of the compensation claim group. Thus, although the applicants' preferred position is that any order at this stage of the proceedings should merely set out criteria for identifying persons entitled to compensation, the amendment would facilitate the formulation of a complete list of such persons should the view be taken that such a list is required. 233 It must be said that it is a pity that the proposed amendment was not put forward earlier in the proceedings, since it may have narrowed the issues and encouraged the applicants to focus more closely on the critical questions. Given that the amendment was proposed on the last day of the trial it is perhaps not surprising that the respondents opposed leave being granted. In view of the short notice of the proposed amendments, I gave the respondents the opportunity to file further written submissions elaborating on their grounds of opposition. The Territory took advantage of that opportunity, but the Commonwealth chose not to file any further submissions on the question. 234 The Territory correctly points out that there is an inconsistency between par B1.9 of the Points of Claim and the proposed par B1.8. Paragraph B1.9 asserts that it is neither appropriate, practicable nor necessary to determine who the native title holders are by reference to a defined list of individuals. Nonetheless, the proposed par B1.8, as explained by Mr Basten, provides such a list. The Territory also says that there is no evidence that the proposed list is likely to be an exhaustive statement of all those who, at the appropriate time, met one or more of the criteria stated in par B1.10. 235 I interpret the proposed amendment as putting an alternative to the applicants' preferred position. Their primary submission, reflecting par B1.9 of the Points of Claim, is that it is not appropriate, at least at this stage of the litigation, to specify the native title holders by name. (Their view of s 94 of the NTA is that it does not require any definitive list of names to be prepared. ) However, they also wish to say that if, contrary to their primary submission, a list is required, the proposed amendment sets out the names of the persons who are the native title holders. 236 Subject to three matters to which I refer below, I do not consider that the proposed amendment would cause the respondents to suffer any significant prejudice. It seems to me that it is a matter for the applicants to determine the members of the claimant group on whose behalf the compensation claim is advanced. Section 94(a) of the NTA contemplates that an order for compensation might set out the name of each person entitled to the compensation. Therefore I do not think that it is inconsistent with the structure of the NTA for applicants to prepare a definitive list of those said to be entitled to compensation. 237 The three matters are these. First, I think that the amendment should reflect Mr Basten's assurance that par B1.8 is intended to be a complete list of persons entitled to compensation. Thus the word 'include' in the opening line of par B1.8 should be replaced by 'comprise'. 238 Secondly, the relationship between pars B1.8 and B1.9 should be clarified. This can be done by reversing the order of the two paragraphs and inserting the words 'In the alternative to par B1.8' at the commencement of what is now B1.8 (but will become par B1.9 if the order of the paragraphs is reversed). 239 Thirdly, in my opinion, leave should not be granted to amend par B1.8 to include the deceased persons who were not included in the unamended version of par B1.8. I put to one side the difficulty that, as Mr Basten accepted, it seems that only the estate of each deceased person could be part of the compensation claim group. More importantly, as Mr Basten also acknowledged, there is no evidence that the traditional laws and customs of the eastern Western Desert make any provision for the award or allocation of compensation to a deceased person or his or her 'estate'. Accordingly, the applicants cannot establish that the 'estates' of the deceased persons are entitled to share in any compensation that might be awarded. Although Mr Basten did not abandon an alternative submission that the estates of these persons might be entitled to a share of the compensation under the general law of probate and succession, no argument to that effect was developed and no application was made to join the legal personal representatives of the deceased persons. 240 The result is that I am prepared to grant leave to the applicants to amend par B1.8 of the Points of Claim as they propose, subject to the qualifications I have mentioned. I shall proceed on the assumption that the applicants wish to amend their pleadings in this manner. Of course the proposed amendment becomes significant only if the applicants can make out their case that members of the compensation claim group, at the time the compensation acts occurred, had native title rights and interests in the Application Area under the traditional laws and customs of the Western Desert bloc. They also doubtless have in mind the warning in Ward (HC) , at [94] against beginning the examination of native title from the common law expression of those rights and interests (as distinct from their expression under traditional laws and customs). The applicants accept that the 1882 pastoral lease was similar to the Northern Territory pastoral leases dealt with in Ward (HC) . Those rights were inconsistent with the right of the pastoral lessee to use the land for pastoral purposes'. They identify 28 traditional rights, the existence of which (so they argue) is supported by the evidence. They contend that the rights were possessed under the traditional laws acknowledged and the customs observed by the compensation claim group for the purposes of s 223(1)(a) of the NTA . They also contend that the native title rights and interests survived, other than the exclusive rights to possession, occupation, use and enjoyment, until extinguished by the various compensation acts which, as I have noted, took place between 1979 and 1992. 245 Although the rights are said to be 'distinct', there is considerable duplication and overlap among them. The applicants' submissions explain the overlap on the basis that some rights are more general than others. However, the applicants contend that changing circumstances on the ground led to 'some shift in the application of the factors [identified by them as traditional]'. It was the circumstances that had changed, not the laws and customs themselves. The applicants place considerable reliance on the opinions expressed by Professor Sutton and Ms Vaarzon-Morel to support the proposition that the 'multiple pathways' identified by individual witnesses reflect the traditional laws and customs of the Western Desert. However, they also rely on the evidence of individual Aboriginal witnesses who cite one or more of the eleven factors identified in par 5.114 as the bases for claiming traditional rights and interests in country. This approach seems to reflect Professor Sutton's contention that the body of laws and customs observed by people of the eastern Western Desert do not include notions of discrete bounded areas or 'estates', nor any territorial grouping of people (Proposition 5.3). 248 Under the heading of 'Use and enjoyment of country', however, the applicants identify evidence relating to the use and enjoyment, by the compensation claim group and their predecessors, of country in and around the Application Area. This includes evidence about travel over and use of the Application Area in historic and recent times. Some of that evidence, for example the testimony of Frank Djana, concerns hunting and gathering on the Yulara block. But most evidence of this kind concerns the site known as Katartitja, which is located next to the Connellan Airport runway. Katartitja is said by a number of witnesses to be a sacred women's site on the Kungka Kutjarra (Two Sisters) Dreaming Track. 249 The applicants' evidence as to the spiritual significance of Katartitja is vigorously disputed by the respondents. The applicants do not seek to refute seriatim the respondents' criticisms of the evidence relating to the status of Katartitja under traditional laws and customs. They respond to the criticisms by submitting that even if the respondents' submissions are factually correct, they do not prevent the applicants from successfully claiming that the laws and customs recognised and observed by the compensation claim group give rise to a connection with the Application Area. According to the applicants, the respondents' criticisms perhaps might raise questions about 'the nature and extent of particular forms of connection' with the land. But once it is accepted that a 'my country' relationship is founded on the laws and customs of the relevant society (so the applicants argue), no more is needed. 11. Nor does the Commonwealth dispute that for many of the Aboriginal people, the practices they were taught by their parents and grandparents remain alive and of importance to them. Indeed, the Commonwealth expressly acknowledges that the older people, in particular, continue to maintain, observe and teach many of the traditional customs and beliefs. Nonetheless, the Commonwealth says that the evidence is insufficient to support the applicants' claim that native title rights and interests existed when the compensation acts occurred. 251 The Commonwealth's detailed written submissions closely analyse the applicants' evidence with a view to identifying gaps and inconsistencies. The Commonwealth submits that the applicants have failed to establish their pleaded case that members of the compensation claim group acknowledged and observed traditional laws and customs of the Western Desert at the relevant dates. Mr Hughston stressed in oral argument that this submission does not necessarily mean that native title claims to other parts of the Western Desert, even claims involving some members of the compensation claim group, cannot succeed. Indeed, so he implied, the Commonwealth's position does not necessarily mean that some members of the compensation claim group might not have been able to establish native title rights and interests in the Application Area had they conducted their case differently. But, he said, the Court's task is to determine the applicants' case on the terms on which it has been advanced. On this basis, so he argued, the evidence adduced by the applicants fails to satisfy the requirements of s 223(1) of the NTA . 252 The Commonwealth's written submissions are structured as a response to the applicants' submissions in chief. Although the Commonwealth makes some concessions, it takes issue with many of the applicants' contentions. The principal arguments, as I understand them, are briefly summarised below. 253 First, the Commonwealth submits that the concept of a Western Desert cultural bloc, on which the applicants rely heavily, is 'an anthropological, and not an Aboriginal, construct'. Furthermore, the evidence does not support the concept of the 'eastern Western Desert', either as a geographical area or a discrete cultural bloc. Accordingly, so it is argued, the foundation for the applicants' case that members of the compensation claim group acknowledged and observed the traditional laws and customs of the Western Desert, is lacking. 254 Secondly, the Commonwealth says that even if the Western Desert society did exist at one stage, it has not enjoyed a continuous, uninterrupted existence since sovereignty. On the contrary, it has 'fractured'. The disconformity indicates that the Western Desert society had ceased to exist at the relevant times as a body of people acknowledging traditional laws and customs, especially those relating to interests in land. • European settlement of the Western Desert, especially the establishment of the missions in the early years, caused Aboriginal people to leave their traditional countries. This in turn led to depopulation or the displacement of the original people by newcomers. The consequence was that the traditional Western Desert society had been supplanted by a new society or, alternatively, by an unstable social order and a mixing of hitherto largely separate populations. 255 In relation to the latter proposition, the Commonwealth submits that the advent of white settlement in central Australia and the creation of missions caused Aboriginal people to leave their traditional countries for the relative security of reliable rations and permanent shelter. This in turn led to the establishment of permanent communities at places such as Ernabella, Amata, Docker River and Mutitjulu. These communities comprised people from many different traditional countries and language groups. 256 According to the Commonwealth, patterns of migration were noted by the early observers, such as Tindale, Elkin and Berndt, who described the region as being in a state of flux. What they had described was not a picture of orderly or traditional migratory movements, nor of a traditional transfer of rights in land. The migratory patterns amounted to a dislocation and dispersal of Aboriginal people away from their traditional lands. It follows, so the Commonwealth argues, that if there were a society that existed at sovereignty, it had ceased to exist by the time the compensation acts occurred. 257 Thirdly, the Commonwealth submits that the laws and customs under which members of the compensation claim group are said to have possessed rights and interests in, and to have had a connection with the Application Area, cannot be described as 'traditional' laws and customs within the meaning of s 223(1) of the NTA. The Commonwealth contends that the applicants' reliance on the expert evidence is misplaced. Professor Sutton and Ms Vaarzon-Morel had merely undertaken a statistical analysis of the practices followed recently by people of the region. In effect, the experts had described 'observable patterns of behaviour', not normative principles derived from traditional laws and customs. They had failed to consider, or at least consider adequately, whether the practices they had described reflected the traditional laws and customs of the Western Desert. 258 The Commonwealth's submissions devote much attention to criticising Professor Sutton's reworking of Tindale's field data, compiled during the latter's 1933 expedition to the Mann and Musgrave Ranges. Mr Hughston pointed out that the applicants' case is that the laws and customs followed by the people of the eastern Western Desert do not identify country as aggregates of bounded areas or 'estates' and do not identify 'laws' or other discrete territorial groupings of people. It follows, so he argued, that this position represents a break from the laws and customs of the past, as evidenced by the published works of anthropologists and the evidence of senior Aboriginal witnesses. 260 Fourthly , even if the applicants establish that they observe and acknowledge the traditional laws and customs of the Western Desert, they have not shown that any members of the compensation claim group had any connection with the Application Area under those traditional laws and customs. The evidence as to the persons who were ngurraritja for the Application Area (so the Commonwealth submits) is both incomplete and contradictory. According to Mr Hughston, the applicants had assumed that it was sufficient to adduce evidence that some people are ngurraritja for, or have rights or interests in areas near the Application Area. But the evidence does not explain why that is so. For example, with two possible exceptions (leaving aside the evidence relating to Katartitja) none of the witnesses had said that they or any of their ancestors had actually been born in the Application Area or on a Tjukurrpa track passing through the Application Area. 261 The Commonwealth submits that the evidence of association or occupational history, except in the case of Katartitja, relates almost exclusively to places or areas outside the Application Area. The witnesses who visited the areas as children generally went to Uluru, Kata Tjurta and nearby sites, but not the Application Area itself. Furthermore, the movement of people to Uluru or Mutitjulu was in order to obtain work with people like Bill Harney, Derek Roff or Ian Cawood, or as a result of the 1985 Handback. 262 The Commonwealth relies on the site clearance conducted by ARAC in the 1970s to support its submission that the applicants have not shown that members of the compensation claim group had a connection to the Application Area by their traditional laws and customs. The evidence establishes, so it is argued, that the Aboriginal people, in particular Paddy Uluru, were content for the Airport and tourist complex to be erected on the Application Area and that they had accepted that no sacred sites would be affected by the proposed development. For this and other reasons, the Commonwealth invites me to find that the applicants have not established that Katartitja was a site of significance to members of the compensation claim group prior to its excavation in 1996 for the purpose of extending the runway at Connellan Airport. 12. For the most part, the Solicitor-General and Ms Kelly confined themselves in argument to emphasising or elaborating on a few critical issues. The following summary omits reference to certain arguments that the Territory does not press. 264 The Territory contends that the applicants have failed to address the correct question, namely the identification of the laws acknowledged and the customs observed by the compensation claim group which connect them to the Application Area and which confer on them rights and interests in the land at the relevant time. Instead (so the Territory argues), the applicants have attempted to produce an 'anthropological model' which describes the social behaviour of people in the region surrounding the Application Area. Indeed, according to the Solicitor-General, the applicants' evidence does not even address the question of who held native title rights and interests when the compensation acts occurred (on the applicants' preferred case, either in 1994 or 1998). Instead their evidence was directed to establishing that certain people held native title rights and interests in the Application Area at the time of the hearing. 265 The Territory repeats the Commonwealth's contention that the anthropologists have merely described the actual behaviour of the people they interviewed in the course of preparing their reports. This description, so the Territory argues, is of little or no assistance to the Court. Merely observing behaviour gives no indication of whether the people concerned feel compelled to behave in a particular way; nor does the analysis explain or elucidate the beliefs of the people about the legitimacy of their conduct. Professor Sutton's Proposition 7 comprises 'descriptive' rules, not 'legal' norms acknowledged by the claimants as prescribing the legitimate bases for claims to rights and interests in country. 266 The Territory submits that the evidence of the aboriginal witnesses is of little assistance because they were generally not asked to identify the laws governing interests in land nor to specify who is entitled to rights and interests in land. The Territory argues that the fact that people assert claims to country on a variety of bases does not establish that the society as a whole acknowledges that all these methods are legitimate pathways to acquiring rights in country. The Territory also submits that not one of the Aboriginal witnesses has given evidence that under Arnangu law the proper ways to acquire interests in land are those set out in Proposition 7 or in pars B1.10 and B1.11 of the Points of Claim. There is therefore no evidence that the 'rules' identified by the applicants are laws and customs acknowledged and observed by members of the compensation claim group. The evidence shows, in essence, a 'chaotic' set of practices which is not rule-governed. 267 The Territory submits that the proper conclusion on the evidence is that, whatever the situation in the past, the applicants have failed to show that the members of the compensation claim group observe and acknowledge laws and customs which connect them to the land. The Solicitor-General suggested that this conclusion is hardly surprising, since people have retained their language and much of their culture, but have neither been born on nor lived on the traditional country of their ancestors. According to the Solicitor-General, belief in the Tjukurrpa cannot, of itself, constitute a sufficient connection to the Application Area for the purposes of s 223 of the NTA . 268 The Solicitor-General pointed out in his final address that if a finding is made that the practices relating to rights and interests in land are not 'normative', it is not necessary to determine whether the practices identified in the evidence can be regarded as 'traditional'. Nonetheless, the Territory submits that any laws and customs acknowledged and observed by the Aboriginal witnesses are not 'traditional', in the sense of having their genesis in the laws and customs observed by indigenous people of the region at sovereignty. 269 The Territory does not dispute that the Western Desert comprises a cultural bloc of people speaking mutually intelligible dialects and adhering to broadly similar beliefs and customs. It submits, however, that the weight of evidence favours the view that the people of the Western Desert followed either a patrilineal system of land ownership or acquired rights to land by virtue of their birthplace. According to the Solicitor-General, it is of no moment which view is correct. There is simply no evidence, whether from Mr Tindale's cards or otherwise, that the traditional laws and customs of the Western Desert allow people to acquire rights and interests in land by the multiple pathways identified by the applicants. 270 The Territory also submits that the present 'system' cannot be described as an adaptation of traditional laws and customs. According to the Solicitor-General, the developments described by the anthropologists are not of a kind contemplated by those traditional laws and customs. Indeed, so the Territory submits, the evidence suggests that the traditional laws and customs cannot be changed by any human agency. Be that as it may, the Territory says that none of the witnesses put forward any mechanism to explain how traditional laws and customs can be adapted to the changed circumstances of settled living and births in hospitals. 13. Of these, three (Jacob Puntaru, Kunmarnarra Nyukurti and Richard Kulitja) did not provide a statement and gave oral evidence of only tangential relevance to the proceedings. Each of the remaining 24 indigenous witnesses prepared a written statement of his or her evidence, but the respondents required any contentious material to be led orally. Mr Parsons led the evidence from the male witnesses, while Ms Keely led the evidence from the female witnesses. Each of the 24 witnesses was cross-examined on behalf of one or both respondents. 272 The Aboriginal witnesses ranged greatly in age and seniority, although there were relatively few younger indigenous people among them. Only four of the Aboriginal witnesses (Bessie Liddle, Donald Fraser, Nicola Forrester and Peter Wilson) gave oral evidence without the assistance of an interpreter. The remainder gave their evidence in either the Yankunytjatjara or Pitjantjatjara dialect. A female interpreter, Ms Lena Taylor assisted the female witnesses, while Mr Leroy Lester interpreted for the male witnesses. 273 Most of the evidence from the Aboriginal witnesses was given at the Yulara Education Centre, which became a temporary courtroom for the purposes of the proceedings. However, some evidence was taken from the Aboriginal witnesses 'on-site'. This procedure had the advantage that the Aboriginal witnesses could point out important features of the landscape or describe their Tjukurrpa in a familiar environment and, subject to the necessary constraints involved in recording evidence, in a setting in which they felt relatively comfortable. Taking evidence on-site also had the advantage of enabling me to observe both the physical characteristics of the country and the so-called 'demeanour' of the Aboriginal people. This was particularly useful as the people described or demonstrated their attachment to and knowledge of the land, including their spiritual association with particular sites or tracks. 274 The on-country sites visited for the purpose of taking evidence included Mantarurr, an amphitheatre and rockhole about 60 kilometres to the southwest of Yulara (Day 10); Yularra Purlka Outstation and nearby sites close to Kata Tjurta (Day 11); Ampiyarra and other sites on the Application Area itself (Days 11 and 19); Katartitja, the site adjacent to Connellan Airport (Days 12 and 13); and a number of sites at or very close to Uluru (Day 20). In addition, the Court was taken to the Uluru Cultural Centre (Day 3). Curiously enough, I was not taken to Mutitjulu, the settlement where most members of the local indigenous community now live. It appears from the evidence that Mutitjulu is afflicted with social problems of the kind that unfortunately affect many indigenous communities. 275 I set out below the names and brief biographical information concerning the Aboriginal witnesses, based primarily on their own evidence. I refer to these witnesses by their preferred names or by the names used by counsel for the applicants. All but four of the witnesses are identified by the applicants in their proposed amendment to the pleadings as members of the compensation claim group (see par 230, above). The four witnesses who have not been included in the group are Barbara Tjikartu, Dora Haggie Walkabout, Pantjiti Mckenzie and Donald Fraser. I also include some information relating to Yami Lester, a knowledgeable and senior Aboriginal man, who was called as a witness by the Commonwealth. • Johnny Jango (Jingo) . Mr Jango was Chairperson of the Mutitjulu community at the time of the hearing. He was born between 1939 and 1944 at Maratjurra (Lyndavale Station), roughly 150 kilometres to the east of the Application Area. Mr Jango speaks both Yankunytjatjara and Pitjantjatjara, but also understands a number of other dialects. His father, Mick Wilyarti, was a Yankunytjatjara man, born near Yularra Purlka in the Kata Tjurta area. (Professor Sutton acknowledged that he had received contradictory information from Aboriginal people on Mick Wilyarti's birthplace. ) Mick Wilyarti's father (Mr Jango's tjamu (father's father)) was Ngiyara and Mick's mother (Mr Jango's kami (grandmother)) was Tjintjiwarra. According to Mr Jango, his mother was born at Kulal, northeast of Docker River, approximately 200 kilometres to the west of the Application Area. His sisters are Millie Okai and Judy Kunmarnarra (Trigger), both of whom gave evidence. Mr Jango met his wife, Elsie Wunatjura, at Areyonga, where he went to school and lived for some time. Mr Jango and Elsie married according to Arnangu law. They have two surviving children, Todd and Rita. (Rita gave evidence, but Todd did not. ) Mr Jango first visited Uluru as an unmarried wati (initiated man), when he travelled there with a group of watis. At the time there was no community, but Ian Cawood was operating the Ayres Rock Chalet. Mr Jango left Uluru and worked at many stations in the region, including Erldunda, Jay Creek and Docker River. He returned to Uluru before the 1985 Handback with his wife and two children. At one point in his evidence Mr Jango said that he was ngurraritja for Mutitjulu through his grandmother and also because he had lived there for some time. Later, however, he said that he was ngurraritja for Lyndavale Station and was 'local' for Mutitjulu. • Judy Kunmarnarra (Trigger). Judy Kunmarnarra (Trigger) is Johnny Jango's sister. She was born in 1954 on the old Palmer Valley Station, which was located near the Stuart Highway east of the Application Area. She grew up on the new Palmer Valley Station, but later moved with her parents to Tempe Downs Station. Like Johnny Jango, she said that her mother, Eunice Nyunitju Intjipati, was born near Docker River and was a Pintjantatjara woman. Her father, Mick Wilyarti, was sometimes called Mintjwarra because he carried a long spear. Judy speaks Pitjantjatjara from her mother and Yankunytjatjara from her father. She married Derek Trigger (deceased), a Luritja man from Haasts Bluff whom she met at Areyonga. Judy has one son, born in 1976, and one grandchild. Judy moved to Mutitjulu in 1985, at about the time of the Handback. She worked for a long time at the Mutitjulu Primary School. • Millie Okai. Millie Okai is Johnny Jango's 'big sister'. She was born at Lyndavale Station when her parents were working there. Her father, Johnny Nyukarli, was born at Karlaya, near Docker River. Her mother, Wirrika, was born at Pulari (Uluru) and grew up in that area (encompassing Yularra Purlka, Pirurrpa Karla and Ampiyarra). Wirrika was Mick Wilyarti's sister. Millie's maternal grandmother, Tjintjiwarra, was a Yankunytjatjara woman who was born at a place between Mantarurr and Pirurrpa Karla. Tjintjiwarra's first husband was Ngiyarri. After Ngiyarri's death, Tjintjiwarra married Mirruwanti (Ngiyarri's brother). Millie speaks Yankunytjatjara from her mother's side and Pitjantjatjara from her father's side. Millie's first husband was Nelson Okai. Nelson Okai's father was Hawkeye, who had two brothers, Minawara and Carbine. According to Millie, the three brothers' country was at Uluru. Millie first came to Uluru with her first husband. After he died, Millie moved eventually to Mutitjulu, where she married her second husband, Pastor Ezekiel, a Pitjantjatjara man from the Docker River area. • Rita Jingo. Rita Jingo is Johnny Jango's daughter. Rita was born in 1971 in Alice Springs Hospital. At the time her parents were living at Jay Creek. Rita regards herself as a Yankunytjatjara woman through her father and paternal grandfather, Mick Wilyarti. Rita grew up speaking Pitjantjatjara because people around her spoke that language, but she can still speak Yankunytjatjara. Rita came with her family to Mutitjulu when she was about nine years of age. She attended school at Alice Springs, but visited her parents at Mutitjulu and Yularra Purlka during school holidays. She left school at 15 and has resided at Mutitjulu ever since. Rita's first husband (deceased), with whom she had two children, came from Snake Well in Western Australia. She is now married to Ashley Paddy from the Amata region and they have two children. Rita has worked as a Ranger in the National Park for several years. • Reggie Uluru . Reggie was born in the late 1930s or early 1940s at Parramita, northwest of Indulkana, in South Australia, on what are now the Arnangu Pitjantjatjara Lands. Reggie's mother, Nancy, was a Yankunytjatjara woman, born at Mimili (Everard Park), to the south of Fregon (which itself is southeast of the Application Area). His father, Paddy Uluru, a Yankunytjatjara man, appears to have been born near Ernabella in South Australia, to the southeast of the Application Area. Reggie's paternal grandfather, Lungkarta, was born at Uluru and is buried there. Reggie's first language is Yankunytjatjara, but he also speaks Pitjantjatjara, Luritja and Arrernte. Reggie's siblings include his younger brother, Cassidy Uluru. Reggie met his wife, Sarah Goodwin, when she was working at Ernabella. Reggie has three children of whom the oldest is Sandra. (Sandra did not give evidence although she is named as a member of the compensation claim group. ) From the time he was a young child, Reggie worked at stations with his father. He first went to Uluru as a boy, in the company of his family who hunted and collected food in the area. At that time Bill Harney was working as a Ranger. Reggie returned to Uluru to live long before the Handback, for which he signed many important papers. He worked with Derek Roff as a Ranger for a time. Reggie was a member of the first Board for the Uluru-Kata Tjuta National Park and has served as a member of the Mutitjulu Council. • Cassidy Uluru. Cassidy Uluru, Reggie's brother, was born in about 1949 at Tjinawakanta, south of Wallatinna in South Australia. Cassidy's father was Paddy Uluru. His mother, Munyi (Molly) Breaden, was born at Mimili in South Australia. Like Paddy Uluru, Munyi Breaden spoke Yankunytjatjara. Cassidy grew up at Mimili where his parents were working, but he attended school for brief periods at Ernabella and Fregon. He first visited Uluru with his family when he was about five years old. At that time, Bill Harney lived in a tent at Uluru and tourists visiting the area overnight stayed in tents. Cassidy met his wife, Tiku, when both were camping at Murtitjulu as children. Tiku was born in Alice Springs and her first language is Pitjantjatjara. Cassidy's language is Yankunytjatjara but he also speaks Pitjantjatjara at home. As a young man and as an initiated man, Cassidy worked on cattle stations including Mimili, where he worked with his father. Cassidy moved to Uluru to live after his mother's death at Mimili, but before his own marriage. At the time, Derek Roff was the Ranger and Cassidy worked with him for wages. Cassidy participated in the Handback ceremonies and still works with the National Park. • Bessie Liddle. Bessie Liddle was born at Iltjiltjarri near Tempe Downs Station. Her maiden name was Bessie Breaden. Her father, Jason Breaden, was born at Henbury Station. Jason Breaden's father was Alan Breaden, a white man. Bessie's mother, Tjanguwa Okai (also called Glenda Breaden), was born near Tempe Downs Station. Tjanguwa Okai's father was Kanakana Hawkeye, whose main language was Yankunytjatjara. Hawkeye's siblings included Mick Minawara and Carbine, both of whom were born around Uluru, and Ngui Ngui Tjalumi. Hawkeye got his name because he worked as a police tracker. Bessie's family moved around a lot when Bessie was young, as her father was a stockman. Bessie had some schooling at Alice Springs and Hermannsburg. Her father died when Bessie was about 14. After her father's death, Bessie's uncle, Bob Buck, took the family to his station at Mt Quinn. Bessie first visited Uluru in the 1960s with her husband, an Arrernte man (now deceased) who was raised in Alice Springs. Bessie's first language is Luritja, but she speaks Yankunytjatjara from her mother's side and Arrernte from her father's side. However, she gave her evidence without the assistance of an interpreter. In the 1970s Bessie and her family formed the Luritja Land Association to try to regain traditional Luritja lands. • Nellie Armunta . Armunta was born in the late 1920s at Cave Hill in South Australia, about 100 kilometres south of the Application Area. Her father, Charlie Aluritja, was born at Mantarurr and was a Yankunytjatjara man. (Armunta told Professor Sutton that her father was born at Pirurrpa Karlarrinytja, a short distance to the northeast of Mantarurr. ) Charlie Aluritja grew up in the Mantarurr area and around Kata Tjurta and Uluru. Armunta's mother, Murika, was a Yankunytjatjara woman, born at Apu Tjirlpi, near Mulga Park, about 80 or 90 kilometres to the southeast of the Application Area. Armunta's maternal and paternal grandparents were all Yankunytjatjara people. Her paternal grandfather, Purpartu, was born at Pirurrpa Karla, which is close to Mantarurr, and grew up in that area. Her paternal grandmother, Nyapatjarriny, was born and grew up at Ullkiya, to the south of the Application Area in South Australia. Armunta grew up at Mantarurr with her extended family group. The group lived in a traditional manner and hunted for food in many places in the area. Armunta married Dickie Minyintiri, who was born near Piipalyatjarra in Pitjantjatjara country. Although the sequence of events is not entirely clear, Armunta and Dickie lived for a long time at Ernabella and Armunta gave birth to five children in the bush near Ernabella. She also lived with her family at some stage at Mutitjulu, but they left there because they were upset at not getting a house. Armunta now apparently lives at Cave Hill. She has three surviving children, fourteen surviving grandchildren and six great grandchildren. Armunta is a custodian of the site at Katartitja which is registered with the Aboriginal Areas Protection Authority. None of Armunta's children gave evidence. • Windlass Kunmarnarra (Aluritja). Windlass is Armunta's brother. He was born at Wintawarta, west of Amata, close to Cave Hill in South Australia. Windlass' language, like that of his parents, is Yankunytjatjara. He agreed with Armunta that their father, Charlie Uluritja, was born at Mantarurr. According to Windlass, his mother, Murika, was born at Kajikuta, near Amata. Windlass also said that his paternal grandfather, Pupartu, had been born to the east of Docker River at Urilpila. Windlass' wife, who died long ago, was from Karnypi and worked at the Mission School at Ernabella for a long time. All five of Windlass' children were born at Ernabella. As a child, Windlass walked around the Kata Tjurta and Uluru area with his family, although they appear to have spent most of their time at Mantarurr. They camped at different sites in the area including Yularra Purlka, Kurlpi Taltja, Kata Tjurta and Uluru. At some stage, the family travelled to Ernabella where Windlass attended school. After becoming a wati at Ernabella, Windlass hunted for dingo scalps around Mantarurr. As a man, Windlass worked at many stations in the region. He seems to have spent time at Uluru in the 1960s and 1970s, since he worked with Derek Roff and assisted ARAC with some of its work. Windlass said that he took his wife 'back to Mantarurr and [the] Kata Tjurta area', but it is not clear when this happened. Of Windlass' five children only one (Alison Carroll) gave evidence. • Alison Carroll (Windlass). Alison Carroll's parents are Windlass Aluritja and Tjuwilyi, a Pitjantjatjara woman born southwest of Ernabella. Alison herself was born at Ernabella in 1958 and still lives there. She identifies as both a Yankunytjatjara and Pitjantjatjara woman, but speaks mainly the latter dialect. Alison grew up at Ernabella and went to school there. She visited Kurlpi Tjarta as a very young girl for a short period in the company of her family. She would also travel to Mantarurr and Uluru with her father and siblings. As a 15 year-old she visited Uluru. She also visited Mantarurr as an adult in order to learn about the important places. Alison married Pipeye Carroll from 'Papunya, Haast's Bluff Areyonga side'. She and her husband have five children and two grandchildren, all of whom live at Ernabella. Alison serves on the Board of the National Park and also accompanies her father to other meetings. • Nellie Patterson. Mrs Patterson was born and 'smoked' in about 1938, at Piipalyatjarra, in the Tomkinson Ranges near the Western Australian border. Her Arnangu name is Nula. As a child, she lived mostly around Mantarurr, but the family returned to Piipalyatjarra in order for Mrs Patterson's mother, Mary Angili, to give birth to children. Mrs Patterson's language is Pitjantjatjara, but she speaks Yankunytjatjara and understands Warlpiri and Pintupi. Mrs Patterson's father, Tommy Mungurin, was also born at Piipalyatjarra but lived at Ernabella and Mulga Park. He was a Pitjantjatjara man, as was his father, Katanya (Mrs Patterson's paternal grandfather). Mrs Patterson's mother, Mary Angili was born at or near Umutju, near the Mann Ranges to the southwest of the Application Area. Mary's mother, Mitjunitja, grew up near Umutju. Mrs Patterson married her promised husband Tommy Wongin (deceased) from Karnpi, near Amata. His language was Yankunytjatjara which he got from his father, but he also spoke Pitjantjatjara from his mother's side. Mrs Patterson's son, Matthew, was born in 1983, apparently at Alice Springs. He was smoked in the bush near Amata, where the family was living at the time. As a child, Mrs Patterson walked with her extended family around Mantarurr, Kata Tjurta, Uluru, Yularra Purlka and other places in the area. Sometimes she would travel with Charlie Aluritja and his wife and her (Mrs Patterson's) maternal grandmother, Mitjunitja. Mrs Patterson lived at Mutitjulu with her husband for about 20 years and in the 1980s and 1990s she worked as a Park Ranger. She now lives in Alice Springs for health and family reasons. Mrs Patterson was a member of the Board of Management of the National Park for a long time. She was a founder of the Ngaanyatjarra Pitjantjatjara Yankunytjatjara Women's Council. • Barbara Tjikartu. Tjikartu was born in about 1938 at Nyira in the Mann Ranges in South Australia, near the Western Australian border. Tjikartu's father, Wangili, was a Pitjantjatjara man who was born at Anumarra Pirti in Western Australia. Her mother was a Pitjantjatjara woman from the Puka Puka area near Piltarti, in the Mann Ranges. Tjikartu's language is Pitjantjatjara. Her maternal grandmother was Pantjiti, whose birth place was Piipalyatjarra in Pitjantjatjara country. Tjikartu married Nipper Winmati (deceased), a Yankunytjatjara man who was born near Docker River. (Millie Okai said that Nipper Winmati in fact was a Pitjantjatjara man. ) Because of her marriage, Tjikartu is sometimes known as Barbara Nipper. Tjikartu is the mother of Colin Nipper, who gave evidence, and five other children. Tjikartu is a member of the Board of Management of the National Park. She has been actively involved in the development and operations of the Uluru Cultural Centre. (At an early stage in the proceedings, Mr Parsons said that Tjikartu, although not expressly named in par B1.8 of the Points of Claim, had interests in the area. However, he also suggested that Tjikartu had 'primary central interests elsewhere' and that her main interest in this area was as the mother of children who were members of the compensation claim group. During final submissions, Mr Basten handed up a document indicating that Tjikartu was indeed intended to be a member of the compensation claim group. For some unexplained reason, Tjikartu was excluded from the 'exhaustive' list of claimants embodied in the proposed amendment to par B1.8 of the Points of Claim. Colin Nipper is the eldest child of Tjikartu and Nipper Winmati. He was born at a creek near Areyonga in the mid-1950's. At the time, his parents were living in Areyonga and had been for some time. Colin takes his surname from his late father. He speaks Pitjantjatjara, the language he learned at school in Areyonga, but he also speaks Luritja and Arrernte. Colin, whose Arnangu name is Antama, is married to Teresa Nipper, a Pitjantjatjara woman. Her country is Umutju in the southwest corner of the Northern Territory. Teresa has two children by her first husband Billy Wilson (deceased) and four children with Colin. One of Teresa's children by Billy Wilson is Peter Wilson. • Peter Wilson. Peter Wilson was born in Alice Springs Hospital in 1973. His mother is Teresa Nipper, a Pitjantjatjara speaker from Areyonga. Peter's father, Billy Wilson, left the family when Peter was very young and Peter was raised by his stepfather, Colin Nipper. Peter's paternal grandparents (through his stepfather) are Nipper Winmati and Barbara Tjikartu. Peter was raised as a young child in Areyonga, but was educated in Ballarat (Victoria), Alice Springs and Darwin. After leaving school, he completed a Land Management course at Batchelor College. Peter commenced work in 1994 as a trainee Ranger at the National Park and at the time of the hearing was a Ranger whose responsibilities included the Mala (rufous hare wallaby), Kuniya (python) and Lirru (brown snake) walks at Uluru. Peter's first language is Pitjantjatjara, but he is fluent in English and gave his evidence in that language. Peter is married to an Arrernte woman from the 'right side' and they have three daughters, all of whom were born in Alice Springs Hospital. Peter said in evidence that he would 'lean towards' Docker River (where his 'ancestors' came from) and Areyonga (where he grew up) as his traditional country. • Malya Teamay. Malya Teamay was born in 1947 at Tjulu (Curtin Springs), which is now located on the Lasseter Highway, east of the Application Area. Malya's mother, Amanyi, came from the Blackstone area in Western Australia. Her language was Ngaatjatjara. Malya's father, Willy Kuntjurmini, was born near Lake Wilson on the borders of Northern Territory, Western Australia and South Australia. Willy Kuntjurmini spoke Yankunytjatjara and Pitjantjatjara. Malya himself grew up speaking Pitjantjatjara, Luritja, Arrernte and Ngaatjatjarra. Malya has been married twice and has four children. He lived in a number of places with his first wife, Mona, and together they conducted a tourist business at Tjulu, on the way to Uluru. Malya first visited Uluru in about 1961, before he had completed wati ceremonies. This was in Bill Harney's time, when Malya's uncle, Snowy Minyintiri, was also working at Uluru. In 1983, Malya was living with his family at Docker River, but took up an opportunity in that year to move to Uluru. He has lived in the area ever since, apart from one period when he lived in Alice Springs. Malya currently resides at Mutitjulu and has served as Chairman of the Mutitjulu Community Council. Malya Teamay is Chairman of the Indigenous Heritage Committee set up by the Park Rangers and has served on the Board of Management for the National Park. • Kitty Impana (Collins). Kitty Impana was born at Areyonga in 1953, when her parents, Snowy Minyintiri and Mary Tjingapa, were living there. Impana is a step-sister to Barbara Tjikartu because Tjikartu's mother married Snowy Minyintiri when Impana was small. Snowy Minyintiri was a Nyakatatjara man who also spoke Pitjantjatjara. He grew up near Docker River, where his mother was born. Impana's mother, Mary Tjingapa, a Yankunytjatjara woman, was born at Yulara and is buried at Mutitjulu. Mary Tjinjapa's father (Impana's maternal grandfather) was a Yankunytjatjara man from Kata Tjurta and Titirarra. Impana's first husband died many years ago. Her second husband, Des Kunoth was born at Tjunti and grew up at Angas Downs. He is the father of Impana's two children, one of whom (Raelene) was born on a sandhill near Murtitjulu. • Frank Djana. Frank Djana is Kitty Impana's brother. The name 'Djana' was given to him by the missionaries at Areyonga, where he was born. He is also known as 'Dr Frank' because he worked in health care for a long time. According to Dr Frank, his mother, Mary Miyarini, was born at Pirurrpa Karlarrinytja, near Kata Tjurta, and spoke Yankunytjatjara. Dr Frank's father, whom he called Nui Minyintiri, was born west of Docker River, but died at Mutitjulu in 1985. Dr Frank himself was born at Areyonga and became an initiated man there. He first went to Uluru as a married man with children. He moved to Mutitjulu at about Handback time. Dr Frank at one time was the Chairperson of the Mutitjulu Community Council. • Ngoi Ngoi Donald. Ngoi Ngoi was born in the bush at Wartarrka (Kings Canyon), at a time when her mother was travelling across country by camel. She received the special name 'Ngoi Ngoi' from her paternal grandmother. Her father was Lively No 1 Palyinjka, Nipper Winmati's brother. Lively No 1 was a Yankunytjatjara man who was born at a women's site near Murtitjulu Springs (Uluru) and grew up at Uluru and Kata Tjurta. Ngoi Ngoi's mother, Imanturra, was born near Docker River and spoke Pitjantjatjara. Ngoi Ngoi grew up speaking that dialect, but says that she identifies as a Yankunytjatjara person notwithstanding that she was born on Luritja country. As a child, Ngoi Ngoi lived with her parents at Areyonga because they could get rations there. She would travel to Mutitjulu by camel 'for holidays'. At that time Bill Harney was living there in a tent. Ngoi Ngoi worked at a motel at Uluru for a short period during Bill Harney's time. She then appears to have lived at Areyonga, although after the Handback she lived with Tjikartu and Nipper Winmati at Ampiyarra. She then went to Mutitjulu where she stayed for a long time before finally returning to Areyonga. Ngoi Ngoi married William Donald, who was born at Waralla, near Angas Downs, and whose language is Pitjantjatjara. Ngoi Ngoi has three children and one grandchild. Although the children were included in the compensation claim group, they did not give evidence. • Dora Haggie Walkabout. Dora Walkabout was born at Urrampinyi, on Tempe Downs Station, where her parents were living at the time. Her mother was a Pitjantjatjara woman who was born at Mantapalyka, near Mantarurr Itjinpi. Dora's father, Wintjin Walkabout, was born and grew up near Docker River. Dora's mother died when Dora was young and she was brought up by Tjintjiwarra, who was married to the younger brother of Dora's father. Dora's language is Pitjantjatjara, but she also speaks Arrernte. Dora's first husband was Don Okai, a Yankunytjatjara man born at Maratjarra (Lyndavale). They had six children together. After Don Okai's death, Dora became a co-wife of Stanley Kunmarnarra (deceased) and they had one child together. Stanley Kunmarnarra was born at Urlayipa, near Mulga Park. He was the youngest brother of Nellie Armunta and Windlass Aluritja. Dora has served on the Board of Management for the National Park. In her evidence, Dora claimed to be ngurraritja for Mantarurr, Itjinpi, Mutitjulu, Kata Tjurta, Yularra Purlka and Yulara. Nonetheless, she is not included in the compensation claim group put forward by the applicants in their proposed amendment to par B1.8 of the Points of Claim. • Pantjiti McKenzie. Pantjiti McKenzie was born and grew up near Blackstone in Western Australia. Pantjiti's father was from the same place, while her mother was a Pitjantjatjara woman from the Lake Wilson area. Pantjiti's main language is Pitjantjatjara from her mother, but she also speaks Ngaatjatjara from her father's side. Pantjitji is married to Simon Mckenzie, who was born at Pulkurru near Mount Conner, about 100 kilometres to the east of the Application Area. The evidence is somewhat unclear, but it appears that Pantjiti and her husband lived in Mutitjulu for many years from the mid 1950s. Pantjiti's son, Jacob, was born at Mutitjulu and lived there until he was aged three. Pantjiti now lives in Alice Springs because of her husband's ill-health. (As I have noted, Pantjiti is not said to be a member of the compensation claim group. Ms Keely explained that Pantjiti was giving evidence because her son, Jacob, is a claimant. However, Jacob did not give evidence and the list of claimants ultimately put forward by the applicants in their proposed amendment to the Points of Claim does not include him. Betty Conway was born at Tempe Downs in 1956 and grew up at Areyonga where she attended school. Her father, Alec Conway, was born at Tempe Downs, but she was brought up by her stepfather, Big Foot Tjamulmalyi (also called Tjinapulka). Big Foot had two wives, the second of whom was Betty's mother, Ivy Kalykulya, a Yankunytjatjara woman born at Pirurrpa Karla. Big Foot's sister, Eunice, was married to Mick Wilyarti and their children were Johnny Jango and Judy Kunmarnarra (Trigger). Ivy Kalykula's mother was Witjiwarra and her aunt (Witjiwarra's sister) was Mary Miyariny, whose children were Frank Djana and Kitty Impana. Betty does not appear ever to have lived in the Uluru-Kata Tjurta area, having moved from Areyonga to Alice Springs in 1979. However, as a child Betty went to Uluru to visit her brother, Alex Forrester (now deceased), and in more recent times she has visited the area 'a couple of times each year'. Betty had one child with her first husband in 1974. After her first husband's death when their son was a little baby, she married Billy Armstrong, a Pertame man, with whom she had four children. One of their children, Selissa, is a Senior Ranger at the National Park and has lived at Mutitjulu since the age of 16. Betty can speak Yankunytjatjara but has not spoken it a great deal recently. She also speaks Pitjantjatjara and Luritja. • Nicola Forrester. Nicola Forrester was born in Alice Springs in 1972. She lives in Victoria for family reasons and gave her evidence in English. Ms Forrester's father was Alec (or Alex) Forrester (deceased), a Pitjantjatjara man from the Western Desert. Her mother is Nola Armstrong, an Arrernte woman from Alice Springs whose country is around Finke River. Ms Forrester has five children. She grew up speaking Pitjantjatjara and indeed is an accredited interpreter in that language. She also learned Arrernte from her mother. Ms Forrester lived at Finke and Jay Creek when she was very young and later attended school in Alice Springs, Adelaide and Darwin (Batchelor College). The family visited Uluru often. When Ms Forrester's parents separated, her father moved to Uluru, but the children stayed with their mother. After her marriage at a young age, Ms Forrester lived for a time at Yularra Purlka and thereafter at Mutitjulu. Ms Forrester worked at the National Park for a total of nine years, in the course of which she learned the Tjukurrpa stories from older Aboriginal people and Park staff. • Donald Fraser. Donald Fraser was born in 1947 or 1948 at Ernabella. His father, Tommy Minyungu, was born at Kurlpi Tjarta and spoke Yankunytjatjara as his main language. Mr Fraser's paternal grandfather, Warawarra, was born at Uluru and thus his country included Uluru and Kata Tjurta. Mr Fraser's mother, Inyalangka, is a Pitjantjatjara woman. Donald lives at Yunyaryni, east of Ernabella (formerly Kenmore Park Pastoral Lease) and has done so since 1978. As a child Mr Fraser moved around with his parents. He started school at age 10 or 11 at Ernabella and became a wati at Areyonga. Mr Fraser visited Kulpi Tjarta when he was very small, travelling on foot or by camel from Ernabella. He later visited Uluru as a wati . Mr Fraser's wife is from Walytja Tjarta in the Mann Ranges. He and his wife have four children. Mr Fraser has been the Chairperson of the Uluru-Kata Tjuta National Park since 2003. He gave his evidence in English. Mr Fraser was not put forward as a member of the compensation claim group, either in the original pleadings or in the proposed amendments to par B1.8 of the Points of Claim. Nonetheless, Mr Fraser claimed that he could speak for Uluru because it was his father's and grandfather's country. He also maintained that he is next in line after Windlass Aluritja and Jim Nyukuti, who was said by Dr Willis to be recognised as ngurraritja for an area to the west of Kata Tjurta, as a senior man for Uluru. • Julie Clyne. Julie Clyne was born in Alice Springs in 1958. Her father, Ben Clyne, was born in the 1930s, also in Alice Springs. Ben Clyne had a white father but he was raised by Arrapi, a man from the Kata Tjurta area, as Arrapi's son. Ben Clyne's sister was Tintjiwarra. Julie Clyne's mother, Daisy Clyne, was born at Mt Cavenagh Station. As a child, Julie travelled to different stations with her father. When she was 11 years of age she was taken to Amoonguna to go to school. She first visited Ulpanyali (Kings Canyon) as a teenager and later went to live there. Julie now lives at Ulpanyali Outstation, east of the Ulpanyali sacred site of which she is the custodian. Julie has two children who also live at Ulpanyali. She has never lived around the Uluru-Kata Tjurta area and, as she agreed in cross-examination, does not know the laws or Tjukurrpa for this country. • Yami Lester. Yami Lester was called as a witness by the Commonwealth but the applicants relied on some of his evidence to support their case. It is fair to say that Mr Lester is a remarkable man. He was born in 1941 at Wallatinna Station in South Australia, in what he described as Yankunytjatjara country. He is now the owner of the station and lives there. Mr Lester's mother was a Pitjantjatjara woman and his stepfather was a Yankunytjatjara man. Mr Lester's stepfather's sister, Munyi, was married to Paddy Uluru. As a child, Mr Lester had no education in the 'white man's way' and he grew up speaking only Yankunytjatjara. His stepfather worked on various stations and the family travelled to those places. People would walk in family groups from one station to another and on these travels Mr Lester heard the Dreaming stories from Paddy Uluru. At the age of 16 Mr Lester became blind, a condition he attributes to radiation from the atomic tests at Maralinga in the early 1950s. He then went to Adelaide for about 14 years, where he lost touch with his people. While in Adelaide he learned English and he returned to central Australia to act as a translator for Western Desert languages. He also received training in welfare and social work. Mr Lester was involved in the establishment of the Central Land Council and of the Institute for Aboriginal Development. He also participated in the work of ARAC in the mid-1970s. At the time he gave evidence Mr Lester, among other positions held by him, was the Chairperson of the Yankunytjatjara Council and a Board Member of the South Australia Aboriginal Housing Authority. Mr Lester's country is his birthplace, Wallatinna, and Iltur (Coffin Hill) through his mother's side. He does not claim that the area around Uluru-Kata Tjurta is his country. Although born of European-Australian parents in New South Wales, for most of his adult life Dr Willis has worked for and with Pitjantjatjara and Yankunytjatjara people. He speaks both dialects. In 1991, Dr Willis became a Pitjantjatjara man through an initiation ceremony which took place at Docker River. Since becoming a wati , he identifies himself as a Pitjantjatjara/Yankunytjatjara man and as an Arnangu . 277 In 1997, Dr Willis completed studies towards the award of a Doctorate of Philosophy by the University of Queensland. His thesis examined the social construction of Pitjantjatjara and Yankunytjatjara masculinity and sexuality through Walpurku inma and the Tjilkatja cycle of ceremonies. For several years, Dr Willis worked with the Pitjantjatjara Council as an anthropologist. In that capacity, he assisted at the Handback in 1985, where he first met a number of the claimants. He also participated in site clearances, including one for a gravel quarry at Impumpu, some forty kilometres west of Kata Tjurta. From 1989 to 1997, Dr Willis worked with some of the indigenous witnesses as a Community/Park Liaison Officer at Uluru-Kata Tjuta National Park. His primary role was to assist the traditional landowners of the National Park to carry out their responsibilities as co-managers of the Park with the Australian National Parks and Wildlife Service (now Parks Australia). 278 Dr Willis has learned Arnangu laws and customs in general, and the laws and customs of the Uluru-Kata Tjurta area in particular, in 'a similar way to most other Arnangu men'. He has learned the laws and customs of the Uluru-Kata Tjurta area from a series of knowledgeable men, including Reggie and Cassidy Uluru, Johnny Jango, Windlass Aluritja, Malya Teamay, Nipper Winmati and Yami Lester. Dr Willis has also acquired information from women who occupy the position of 'mother' to him, including Nellie Patterson, Nellie Armunta and Rita Jango, as well as from women who occupy the position of 'sister' and 'grandmother', such as Barbara Tjikartu. Dr Willis emphasised that he has learned different classes of information from different groups of Arnangu . 279 Dr Willis has given evidence as an expert anthropologist in other proceedings, including De Rose v South Australia [2002] FCA 1342 (' De Rose (FCA) '). Initially, the applicants indicated that they wished to rely on Dr Willis' report as that of an expert containing the opinions of an anthropologist with specialist knowledge of the people of the eastern Western Desert. Ultimately, however, the applicants did not persist with that approach and tendered his statement simply as an account of his own observations and experiences as an initiated Pitjantjatjara man. This approach had the necessary consequence that some opinions expressed by Dr Willis were not admitted into evidence, since he was not put forward as a person having specialised knowledge based on his training, study or experience for the purposes of s 79 of the Evidence Act . I accept him as a witness of truth. I also accept that, generally speaking, his statement constitutes a careful description of events and conduct that he has observed over many years, as well as his observations on other matters within his own knowledge. • Secondly, Dr Willis' evidence is very useful on the issues with which he deals because of his unique perspective as an observer of and an adherent to the laws and customs of the Yankunytjatjara and Pitjantjatjara people of the eastern Western Desert. It is hardly surprising that most indigenous witnesses, particularly if they must speak through an interpreter, experience difficulty in explaining or describing the content of their traditional laws and customs in the alien environment of a courtroom (even if the proceedings are relatively informal). This in no way denigrates the importance or cogency of their evidence, but merely reflects the fact that there are cultural and conceptual barriers to effective communication between indigenous and non-indigenous people on sensitive issues. Dr Willis' training and research experience, coupled with his own experiences as a wati , equip him to convey the concepts embodied in traditional laws and customs in a manner that, to some extent at least, overcomes the communication barriers that otherwise exist. • Thirdly, despite the length of his statement, Dr Willis' evidence was limited in important respects. He explained in detail such matters as the concept of Tjukurrpa; the significance of ceremonies and rituals to Pitjantjatjara and Yankunytjatjara people; behavioural rules and prohibitions; belief systems, such as the belief that human bodies are the transformation of the kurunitja (spirit or essence) of Tjukuritja (ancestral beings); ceremonial transformations reflecting those beliefs; initiation rituals; and restrictions on information. However, because the applicants did not press sections of Dr Willis' statement in the face of objections, or perhaps for other reasons, his evidence paid little attention to the laws and customs governing the acquisition and recognition of rights and interests in land. Accordingly, his evidence was largely peripheral to one of the critical issues in the case, namely whether the laws and customs relied on by the applicants can be regarded as 'traditional' in the sense required by s 223(1) of the NTA. Indeed, in some respects, as the respondents contend, his evidence is difficult to reconcile with the applicants' contentions. • Fifthly, any judicial observations made in relation to Dr Willis' evidence in other cases are quite irrelevant to the current proceedings: cf De Rose (FCA) , at [22], [332]-[346], per O'Loughlin J. • Sixthly, I reject the Commonwealth's submission that the applicants' decision not to call Dr Willis as an expert witness gives rise to an inference that his expert testimony would not have assisted their case. However, Dr Willis is an initiated man who is both knowledgeable about the laws and customs of the Western Desert and able to articulate his views clearly. In these circumstances, the fact that his otherwise detailed evidence does not explain in any depth his understanding of the laws and customs of the Western Desert relating to rights and interests in land is a significant omission in the applicants' case. Only one, Derek Roff, gave oral evidence. Mr Roff took up a position in 1968 as Curator of what was then the Ayres Rock - Mount Olga National Park. He remained in the area until 1985 and in the mid-1970s attended meetings of ARAC. The applicants submit that Mr Roff's evidence confirms 'much of the general picture of the lives and ways of the claimants as given in their evidence'. The Commonwealth, by contrast, contends that Mr Roff's evidence does 'not greatly advance the applicants' case' and indeed supports the Commonwealth's submissions as to the efficacy of the site clearance conducted in respect of the Yulara town site in 1974. 282 Paul Josif provided a statement which was admitted without objection and without Mr Josif being required for cross-examination. Mr Josif was the Joint Management Co-ordinator of the Uluru-Kata Tjuta National Park from 1997 until 2001. However, his evidence is of peripheral significance to this case. 283 The statement of Rev William Edwards was also admitted into evidence without Rev Edwards being required for cross-examination. Reverend Edwards worked as a missionary at Ernabella from 1958 to 1972. He has a Masters degree in anthropology from the University of Adelaide and has lectured in Aboriginal Studies. Reverend Edwards appended to his statement his article, Patterns of Aboriginal Residence, to which I have previously referred (see par 134, above). The applicants make no reference in their submissions in chief to this article. However, the Commonwealth submits that Rev Edwards' description of traditional land ownership and patterns of Aboriginal migration is more consistent with the views of anthropologists such as Tindale, Berndt and Munn than with those of Professor Sutton. They also rely, although to a lesser extent, on a report by Ms Petronella Vaarzon-Morel, a consultant anthropologist. I refer to their evidence, particularly that of Professor Sutton, in section 15 , below. 285 Both reports in turn rely heavily on information provided by Aboriginal informants, only some of whom gave evidence in the proceedings. I admitted the reports into evidence on the basis that those parts of the reports which contain or refer to previous representations by persons are not evidence of the truth of the facts asserted therein, but are admitted only for the purpose of disclosing the basis of the author's opinions. An exception was made in the case of previous representations made by certain deceased persons, as follows: Alex Forrester, Andrew Uluru, Ben Clyne, Bill Katakura, Tony Tjamiwa and Walter Pukutiwara. 286 The applicants tendered a substantial volume of published works by anthropologists who had undertaken research in the Western Desert region. These included publications by Norman Tindale, Ronald and Catherine Berndt, Adolphus Elkin, Charles Mountford, Nancy Munn and Aram Yengoyan. This evidence was admitted without restriction and indeed much of it is relied on by the Commonwealth in its submissions. It points out that trial Judges dealing with native title claims in this Court have consistently stated that what really matters in such cases is the evidence of the Aboriginal claimants: Yarmirr v Northern Territory (1998) 82 FCR 533 (' Yarmirr' ), at 562, per Olney J; De Rose(FCA) , at [342], [351], per O'Loughlin J. 289 The Commonwealth submits that there are inconsistencies between the evidence of Aboriginal witnesses and the expert evidence given by Professor Sutton and Ms Vaarzon- Morel. Both experts describe the information provided to them by Aboriginal people (many of whom were witnesses in the proceedings) as 'folk models' that can be at odds with the actual behaviour of people. Thus in Yarmirr at first instance, Olney J declined to accept a claim that the Aboriginal applicants, by their traditional laws and customs, enjoyed exclusive possession, occupation and enjoyment of the waters of the claimed area, notwithstanding that the claim had been supported by the virtually unchallenged anthropological evidence: Yarmirr , at 563, 585. In the light of these authorities, the Commonwealth submits that the evidence of Professor Sutton and Ms Vaarzon-Morel cannot be used to rectify deficiencies in the evidence of the Aboriginal witnesses. 291 It is plainly correct that expert anthropological evidence is unlikely to cure certain kinds of gaps or deficiencies in evidence adduced from Aboriginal witnesses. If, for example, indigenous witnesses consistently disclaim a suggestion that their traditional laws and customs allow interests in country to be acquired in a particular manner, evidence to the contrary by an anthropologist is unlikely to carry a great deal of weight. This will be so even if the anthropologist's evidence is not directly challenged in cross-examination, since evidence from indigenous witnesses is normally regarded as providing the most reliable account of traditional laws and customs of the relevant people. 292 Depending upon the circumstances, however, anthropological evidence might well supplement the testimony of indigenous witnesses and, in that sense, fill in some evidentiary gaps. In the present case, for example, the applicants submit, with some force, that most of the Aboriginal witnesses experienced difficulty in providing full and coherent accounts of their customary practices in relation to country. This was by no means because they lacked knowledge or understanding of those practices. Rather, it reflected the fact that they were not accustomed to expressing the underlying concepts in a manner suited to a courtroom (even a 'courtroom' conducted on-country). The barriers to effective communication were compounded by the difficulty of translating questions and answers relating to those concepts to and from the dialects of the Western Desert. 293 In these circumstances, the anthropological evidence, if otherwise reliable, might assist in explaining the nature of the practices adopted in relation to country and the people who acknowledge and observe similar practices. An example concerns the evidence given by the Aboriginal witnesses as to the people who acknowledge and observe laws and customs similar to their own. Perhaps not surprisingly, most witnesses who were asked to address this topic had difficulty in identifying what the anthropologists described as the people of the Western Desert or of the eastern Western Desert. (An exception was Peter Wilson, a younger man educated at State schools who gave his evidence in English. He gave evidence of the extent of the Pitjantjatjara and Yankunytjatjara lands, the people of which share ceremonies and the Tjukurrpa stories. ) Anthropological evidence might assist in completing the picture left unfinished by the Aboriginal witnesses, or at least enable the Court better to understand the extent to which laws and customs are shared by people identifying with different tracts of country. 294 The applicants submit that in assessing the evidence of the Aboriginal witnesses, account should be taken of the cultural barriers to effective communication in a courtroom setting. I accept that there are such barriers and that they must be given due consideration. They include the obvious difficulties of translating observations about traditional customs and practices from Pitjantjatjara and Yankunytjatjara into English and vice versa (notwithstanding the conscientious efforts of the skilled interpreters); the unwillingness of some witnesses, particularly the older people, to speak about certain sensitive topics; a tendency for the witnesses to give what non-indigenous observers might regard as incomplete answers to questions (particularly to the non-leading questions that are ordinarily required in examination-in-chief); and, on occasion, a refusal for no apparent reason to respond when pressed for answers to particular questions. The barriers to communication in the present case were compounded by the physical infirmities endured by some witnesses who, clearly enough, found it a strain to concentrate and answer questions, even for relatively short periods. 295 An example of the difficulty of communication occurred when Ms Kelly, for the Territory, asked Reggie Uluru an apparently simple question in cross-examination. Rather, I thought that the answer reflected his imperfect understanding of the question asked or, perhaps, a difficulty in translating his response adequately. 296 The contrast between the demeanour of witnesses when testifying in the courtroom and when giving evidence more informally on-country was sometimes striking. Nellie Armunta, for example, appeared uncomfortable in the courtroom and required frequent breaks. Her state of health was not good and giving evidence in that setting was clearly a strain for her. Yet when Armunta joined the entourage on-country at places such as Mantarurr (her father's country) and Katartitja, she showed remarkable energy and stamina for an elderly person whose health was clearly fragile. At one point during the site visit to Mantarurr, which involved some exertion in warm conditions, Armunta volunteered this comment: 'I can't see too well but ... I'm really happy today'. 297 The applicants go so far as to submit that the obvious cultural obstacles to effective communication justify disregarding certain evidence unfavourable to the applicants' case. Their written submissions illustrate the contention by reference to Reggie Uluru's assent in cross-examination to a series of propositions concerning the consultative processes undertaken by ARAC in the 1970s, when that body was considering the appropriate location for the planned airport and tourist accommodation. The applicants submit that Mr Uluru's assent to the propositions reflected the phenomenon of 'gratuitous concurrence' --- that is, agreement to false propositions without an adequate understanding of the content of those propositions. 298 Acknowledging the need to take account of barriers to communication in assessing evidence is one thing. Disregarding the evidence of indigenous witnesses unfavourable to the applicants' case because of what is said to be the phenomenon of 'gratuitous concurrence' is quite another. Of course, if I am satisfied from my own observations or from the evidence as a whole that a particular witness has not understood questions, or has incorrectly assented to propositions put to him or her, I would regard the evidence on that topic as of little or no probative value. As it happens, I would not regard the site clearance conducted by ARAC as an insuperable obstacle to the applicants succeeding, provided that they can otherwise establish the essential elements of their case (see section 18.1 , below). But I do not reach that conclusion on the ground that I should simply disregard Mr Uluru's evidence as an example of 'gratuitous concurrence'. 299 The Commonwealth seeks to impugn a good deal of the evidence given by indigenous witnesses on a quite different ground. It contends that the applicants cannot rely on the lay Aboriginal evidence because the applicants' own experts have acknowledged that the witnesses were often prepared to manipulate memories for their own purposes and have accepted that there were often contradictions between the claims made by particular individuals and records of which the experts were aware. In response to the applicants' contention that the evidence of the indigenous witnesses was generally not challenged in cross-examination, the Commonwealth submits that the absence of cross-examination on a given subject cannot make up for gaps in the applicants' case. In any event, so Mr Hughston argued, courts are not bound to accept evidence that has not been challenged in cross-examination. 300 A failure to cross-examine a witness on contentious issues may have at least two consequences: Ellis v Wallsend District Hospital (1989) 17 NSWLR 553, at 587, per Samuels JA (with whom Meagher JA agreed). First, the so-called rule in Browne v Dunn (1893) 6 R 67, which reflects a principle of procedural fairness, may prevent the cross-examining party asking the court not to accept the evidence of the witness on that particular issue: J D Heydon, Cross on Evidence (6 th Aust ed, 2000), at [17460]. Secondly, the failure to cross-examine may provide a cogent reason for accepting the witness's evidence, particularly if it is not contradicted: Precision Plastics Pty Ltd v Demir [1975] HCA 27 ; (1975) 132 CLR 362, at 371. However, there is no rule that evidence which is unchallenged in cross-examination must be accepted by the trier of fact, especially if it appears to be inherently incredible or is contradicted by other credible evidence: Bulstrode v Trimble [1970] VR 840, at 849, per Newton J; Ellis v Wallsend District Hospital , at 586-588, per Samuels JA; Elkington v Shell Australia Ltd (1993) 32 NSWLR 11, at 17, per Kirby ACJ. 301 These authorities demonstrate that, subject to the operation to the rule in Browne v Dunn, a failure to cross-examine a witness does not necessarily mean that the Court is bound to accept the evidence of that witness. Nonetheless, general observations of the kind expressed by Professor Sutton about the reliability of some of his informants cannot substitute for an evaluation of their evidence given on oath or affirmation in open court. Generally speaking, if particular features of the evidence given by indigenous (or other) witnesses have not been challenged in cross-examination, there need to be cogent reasons for rejecting that evidence. An example might be where two Aboriginal witnesses have given contradictory evidence in relation to the same issue, in which case it may be necessary to choose between the two versions. However, the question still remains as to whether the evidence adduced by the applicants is sufficient to establish the essential elements of their case. 14. • Kane Hardingham, who was an Environment Manager with Voyages Hotels and Resorts Pty Ltd, based at Yulara. Mr Hardingham gave evidence that in June 2001 a number of Aboriginal women showed him a site located in a pit within the boundaries of Connellan Airport. He was told that the Two Sisters sat at this site. • Colin French, a Project Manager with Geoscience Australia, who gave evidence as to whether the sites for a possible airport and town marked on drawings prepared in 1974 corresponded to the sites at which Connellan Airport and the tourist facilities were ultimately constructed. • Ian Cawood, formerly an Assistant Ranger at Ayres Rock - Mt Olga National Park, who gave evidence of his experiences in the course of his extensive involvement with the area, including his participation in the work undertaken by ARAC from 1974 to 1976. Ian Cawood first arrived at Uluru in 1960 in order to work in the family business, the Ayres Rock Chalet. He remained at Uluru until 1982. For the last 14 years of his stay Mr Cawood worked with Derek Roff as Assistant Ranger at the Ayres Rock-Mount Olga National Park. • Nicholas Browning, who worked with the Australian Presbyterian Board of Missions at Fregon and Everard Park (Mimili) for various periods from 1966-1974 and thereafter with the Department of Aboriginal Affairs in Alice Springs (1974-1981). Mr Browning gave detailed evidence of his work with ARAC and his involvement in consultations undertaken through that body in order to identify and locate Aboriginal people with interests in and around Uluru. Mr Browning knew Paddy Uluru and Reggie Uluru during his time at Fregon and Mimili. Mr Browning acquired fluency in the Yankunytjatjara, Pitjantjatjara and Luritja languages. • Ivan Cebelo, who was employed in the construction of Connellan Airport from December 1995 until December 1996. Mr Cebelo gave evidence that the registered site now known as Katartitja was excavated in 1996. Mr Cebelo also authenticated contemporary photographs of the site and the surrounding area. • Creed Lovegrove, who was Director of Welfare in the Northern Territory (1972-1974) and subsequently Director of Aboriginal Affairs (NT) (1974-1977). Mr Lovegrove gave evidence of his role in the consultations carried out under the auspices of ARAC in 1974 and 1975. Three of these witnesses, namely Messrs Lester, Browning and Cawood, were cross-examined. 303 The Commonwealth submits that the evidence of the seven witnesses who provided statements is supported by contemporary documentary evidence (such as the records of ARAC) and corroborated by a number of witnesses called on behalf of the applicants, including some senior Aboriginal people. 15. At the time he gave evidence, Professor Sutton was a Professorial Fellow in the School of Social Sciences at the University of Adelaide and an Honorary Research Fellow at the Institute of Archaeology, University College, London. His fields of specialist expertise include social anthropology and linguistic anthropology. Professor Sutton has published widely in these and related fields and it appears that his publications are well regarded. 305 Professor Sutton has long experience in preparing reports and giving evidence in land rights and native title claims. He has prepared reports or provided advice in relation to many claims under the Lands Rights Act and has also prepared about a dozen reports in relation to claims under the NTA . From 1991 to 2003, Professor Sutton acted as 'self-employed consultant anthropologist', although he also held some part-time academic appointments during this period. Thus in addition to his academic attainments, he has had extensive forensic experience. They reproduce verbatim some (although not all) of the 'criteria for being a native title holder' pleaded in the Points of Claim. 307 The Sutton Report identifies a total of twelve Propositions, each of which has a number of components. Perhaps the most central of these is Proposition 7, which sets out the 'bases for holding rights in country'. However Proposition 7 adds two elements not pleaded in the Points of Claim, namely 'support for asserted connections' (subpar (j)) and 'recorded evidence' (subpar (k)). 309 Professor Sutton expresses the view that Proposition 7 is true. To that extent 'membership involve[s] individual choice' (at [331], citing F R Myers, Pintupi Country, Pintupi Self: Sentiment, Place and Politics among Western Desert Aborigines (Australian Institute of Aboriginal Studies, 1986), at 138). 310 The respondents are content to adopt some of the opinions expressed in the Sutton Report. For example, they do not dispute Professor Sutton's view that there is a disconformity between the traditional laws and customs in relation to interests in country, as expressed by the more senior Aboriginal people, and the behaviour and practices of the less senior members of the community. Nor do they dispute Professor Sutton's view that the senior people sometimes differ in their understanding of the means by which interests in land can be acquired under traditional laws and customs. Otherwise, the respondents vigorously challenge the evidentiary value of much of the Sutton Report. In order to evaluate that challenge some background is necessary. 311 Professor Sutton and Ms Petronella Vaarzon-Morel, who describes herself as an independent consultant anthropologist, were engaged by the applicants in late 1998 to undertake a number of tasks connected with the litigation. As I observed in Jango (No 2) , at [13], their instructions were wide-ranging and vague. The tasks to be performed by them included the preparation of an expert anthropological report based on their research and fieldwork. Unfortunately, it was not until February 2003, some four years after the initial instructions, that Professor Sutton and Ms Vaarzon-Morel received supplementary instructions designed to direct their attention to particular questions that were thought to be relevant to the issues in dispute in these proceedings. Even then it appears that they were not informed of the requirements of the Evidence Act governing the admissibility of expert evidence. 312 Professor Sutton commenced field work in March 1999. In March 2003, he and Ms Vaarzon-Morel completed a joint report (the 'Yulara Anthropology Report'). During the four years between their engagement by the applicants' solicitors and the completion of the Yulara Anthropology Report, Professor Sutton and Ms Vaarzon-Morel undertook, between them, at least 398 days of 'desk research' and 'non-ethnographic interviews' and 99 days of 'ethnographic field work'. The Yulara Anthropology Report itself comprised 364 pages and some 6,000 pages of appendices. 313 The respondents took many objections to the admissibility of sections of the Yulara Anthropology Report. In a ruling on evidence delivered on 3 August 2004, shortly before resumption of the trial after twenty-eight hearing days, I rejected much of the Yulara Anthropology Report: Jango (No 2) . I pointed out that the Report had been prepared with 'scant regard for the requirements of the [ Evidence Act ]'. I attributed the defects of the Report from an evidentiary perspective, at least in part, to the vagueness of the instructions provided to the authors and the failure to inform them of the requirements of the Evidence Act . I also observed (at [15]) that it was not clear to me why it was thought necessary for the anthropologists to carry out such extensive interviews of witnesses and potential witnesses for the purposes of preparing their report. 314 The Sutton Report was completed on 27 October 2004, some three months after the ruling on evidence given in Jango (No 2) . The Sutton Report, as the evidence revealed, was in effect compiled by the applicants' legal representatives, essentially by selecting and recasting material derived from the Yulara Anthropology Report. It appears that Professor Sutton's involvement in the process was limited to perusing the revised draft with a view to correcting factual or typographical errors. When asked about the reason for the omission of some apparently relevant material from his revised Report, Professor Sutton attributed the removal to the 'lawyers' Occam's Razor'. Even taking into account time pressures, it must be said that this is an odd way for an expert to prepare the final version of a report which is to be tendered in legal proceedings and which is said to be central to the applicants' case. 315 There is no doubt that Professor Sutton is very well qualified and has extensive experience as a social anthropologist and linguistic anthropologist. Although in recent years he has spent much of his time preparing reports or giving evidence in Aboriginal land claims and native title cases, he has published extensively in his fields and, as I have noted, his publications are highly regarded. Moreover, it is clear that he has spent a great deal of time undertaking research and field work for the purposes of the present case. Some of the opinions expressed in the Sutton Report reflect careful analysis of the available material. Even so, in my opinion, there are a number of significant difficulties with the Sutton Report that affect the cogency of certain conclusions reached by Professor Sutton. 316 First , despite Professor Sutton's qualifications, he readily acknowledged in evidence that he is not an expert in the traditional laws and customs of the Western Desert region and indeed had not been briefed in the present proceedings as such an expert. He agreed that his role was to acquire knowledge over a period of time sufficient to enable him to express an opinion on the issues ultimately identified in the Sutton Report. Indeed in the Yulara Anthropology Report, in a passage not repeated in the Sutton Report, Professor Sutton expressed the view that he and Ms Vaarzon-Morel had ' learned enough to enable us to reach the conclusions set out in the report'. The evidence does not reveal the reasons for their inability or unwillingness to perform that role. The point for present purposes is that there are anthropologists in Australia with greater expertise and field work experience in the Western Desert region than Professor Sutton. 318 The second difficulty is related to the first. Because Professor Sutton lacks expertise and experience in relation to the traditional laws and customs of the Western Desert people, he had to spend a great deal of time acquiring sufficient knowledge to enable him to express opinions on the matters identified in the Sutton Report. This required him not only to familiarise himself (to the extent he was not already familiar) with the anthropological literature, but also to interview a large number of people who claimed to have ties to the Application Area or nearby country. To this end Professor Sutton spent 245 days of desk research and 52 days of field work on the tasks prior to completion of the Yulara Anthropology Report. Thereafter he spent a further 187 days on work connected with the case, some of which apparently involved addressing objections to the Yulara Anthropology Report. 319 Having regard to the provenance of the Sutton Report, its conclusions are necessarily dependent in part on information derived from indigenous informants. It is significant, in my opinion, that the field work designed to gather that information was undertaken in the context of the very litigation in which the claims of many of the informants were formulated and assessed . Professor Sutton did not have the opportunity to carry out field work among peoples of the eastern Western Desert in an environment divorced from their pending claims to compensation. Much less did he have the opportunity to study and describe the traditional laws and customs of these peoples as part of what might be described as a disinterested academic endeavour. Many, if not all of Professor Sutton's informants were aware that a compensation claim was pending at the time they spoke to him and were also aware that their observations might be used for the purposes of the litigation. While I do not doubt that Professor Sutton attempted to maintain his independence from the claimants, the fact is that he undertook the field work and other research for the purposes of preparing a report in support of their case and did so while the claim was pending. 320 The number of days Professor Sutton devoted to field work demonstrates clearly enough that he took his responsibilities seriously. But it is equally clear that the process of interviewing informants was fraught with difficulties. • The eastern Western Desert is one of the most difficult regions of Australia in which an anthropologist can work. Their reticence extended to information concerning the persons said to hold traditional interests in the Application Area and nearby country. It is true that Professor Sutton has had some formal training in the Pitjantjatjara language and, as he said in evidence, was on a 'fast learning curve' while conducting his field work. Even so, his inability to obtain a reliable interpreter prevented him from acquiring a full understanding of what some of his informants were endeavouring to convey. In his evidence, Professor Sutton tended to minimise this difficulty and suggested that many informants spoke 'English adequate to basic day to day purposes of communication'. However, having seen a large number of indigenous witnesses give evidence, including many of those interviewed by Professor Sutton, I cannot accept that their knowledge of English was generally adequate to overcome gaps in an interviewer's knowledge of their own language. This is particularly the case insofar as the communications related to their traditional laws and customs. At times it was difficult to be sure whether these statements were genuine attempts to include those kin or perhaps at times genuflections designed to discharge duties of loyalty, but without too serious an intent. At other times it seems clear that the inclusions were firmly intended. Some people who supported such inclusions of close kin, who had marginal connections were also recorded as being prepared to deny the claims of those who are connection [sic] to a comparable depth but who were the relatives of other people. He gave as an example Nipper Winmati, who had given or been provided with a number of alternative birthplaces between 1962 and 2003. In re-examination, Professor Sutton observed that in his research with Aboriginal people he had come to expect a 'range of variation' in the factual materials but that 'this is the highest point on that range I have experienced'. 321 Despite the contradictions and disputation to which he referred and his 'strong sense' that people were sometimes 'fictionalising', Professor Sutton, understandably enough, did not see it as part of his role to make judgments as to the veracity or reliability of the information on which he acted. It is fair to say (as the Commonwealth argues) that, in effect, Professor Sutton carried out a form of parallel inquiry to that undertaken by the Court, but without many of its advantages (such as the opportunity for cross-examination) and without having to make judgments as to the reliability of the information provided. 322 Thirdly , I formed the view that Professor Sutton played an active part in formulating and preparing the applicants' case and that this participation influenced both the way in which their case was presented and Professor Sutton's approach in giving evidence. I understand and accept that in the peculiar circumstances of a native title claim (including a compensation claim) it may be difficult for an anthropologist to remain as aloof from the parties as might be the case with, say, an expert economist or accountant in other kinds of litigation. Anthropologists might be expected to have had close contact with the peoples about whose laws and customs they are asked to comment and to have genuine affection and respect for the peoples whose laws and customs they have studied. I also accept that Professor Sutton was conscious of the problems that can arise from too close an identification with the claimants on whose behalf he is preparing a report. In particular, I do not doubt the sincerity of his claim to have been at pains to maintain his independence while conducting field work and preparing reports. 323 But the fact remains that the applicants' case, as Professor Sutton was aware, closely follows the framework he created. Of course, the circumstance that a pleaded case closely corresponds with the evidence of an expert witness may simply reflect the expert's independent analysis of the objective facts. In this case, however, my strong impression was that the presentation of evidence by the applicants was heavily influenced by the approach taken by the two anthropologists. Professor Sutton acknowledged, for example, that he had spent considerable time commenting on draft witness statements. He denied that he 'settled' the statements, maintaining that his role was limited to 'comment[ing] on factual accuracy', including pointing out disagreements with the genealogical connections he had prepared. Nonetheless, Professor Sutton and, I infer, Ms Vaarzon-Morel, clearly played a significant part in shaping witness statements. It would have been very difficult for them to comment on witness statements without taking into account their understanding of the applicants' case and the approach taken in their own reports. 324 Professor Sutton's role in framing and presenting the applicants' case went beyond these matters. He rejected the original version of the Points of Claim, which had relied on the concept of ngurraritja as the foundation for the existence, prior to extinguishment, of native title rights and interests in relation to the Application Area. Professor Sutton said in evidence that he found that version to be 'so at variance with my own findings, that I said I couldn't possibly work with it or its author'. He took this view notwithstanding that the ngurraritja model was similar to that advanced in the Tempe Downs Land Claim , the applicants in which included some members of the compensation claim group in the present proceedings. Professor Sutton was, however, apparently satisfied that the Points of Claim as ultimately drafted were 'compatible with [his] approach'. 325 Professor Sutton also acknowledged that he had given advice concerning informants whom he considered would be good witnesses, although he denied that he gave advice as to who would be 'a bad witness in terms of the facts'. Moreover, Professor Sutton and Ms Vaarzon-Morel were present at most of the hearings at which evidence was taken. Professor Sutton usually sat in close proximity to counsel for the applicants and, as I observed (and he acknowledged), suggested questions to counsel from time to time. 326 In these circumstances, it is perhaps not surprising that I detected a tone of defensiveness in Professor Sutton's evidence while being cross-examined. This tone cannot be attributed to any undue aggression or combativeness in the cross-examination. Mr Hughston and Mr Pauling QC (the Solicitor-General for the Territory) conducted their questioning in a restrained and courteous fashion. Rather I thought that Professor Sutton's defensiveness was a product of his realisation that his role in the case had not been limited to that of a wholly objective expert observer and commentator. An illustration of Professor Sutton's defensiveness occurred when he was being cross-examined about the grounds for his disagreement with the conclusions reached by the late Norman Tindale, who conducted a number of significant expeditions to the Western Desert and wrote many papers, reports and books arising out of his work and received honorary doctorates from two universities. Professor Sutton commented disparagingly on Tindale's qualifications, offering the observation that 'his big field was really insects'. 327 Fourthly , Professor Sutton's approach, while it may conform to what he described as the 'anthropological method', departs from the assumptions underlying the definition of 'native title' in the NTA and is therefore of limited assistance in applying the criteria specified in that section. I have made a number of records of informants' statements about how one rightfully may belong to a place, or how one should behave according to customary rules to do with sites, country, marriage, religious matters and so on. These are useful guides as to how people formulate principles. Such statements do not, however, alone account for or predict how people relate systematically to places or how they in practice allocate rights and interests in them. They are "folk models' --- usually fragments of them --- that contribute important subjective knowledge to the record . An anthropological model, on the other hand, has to take into account what can be learned from people's actual behaviours, including other statements, as well. A senior man may say, for example, that strong interests in a country can only come from having a birthplace there or a father from that place, but it is apparent that there are many cases which do not conform to this "rule". For these reasons, anthropologically, it would be both unsophisticated and counterproductive to reduce the category of evidence for traditional "laws and customs," for example, to verbal formulations that might be elicited from particular Aboriginal informants or witnesses. The "normative" covers not only explicit rules but also the reflection of the assumption of a norm, and average or typical behaviour as well as ideal norms. I take as an accepted fact that this is a cultural tradition in which it would be abnormal, perhaps even inconceivable, for people to produce explicit, full and objective articulations of how their social order works. Anthropologists rely on the combined informant evidence along with documentary evidence in order to gradually form a systematic picture of topics such as customary ways of recognising rights in country'. (Emphasis added. ... The old rules persist in the minds of older people and may be stated in ... a simple or conservative form that does not describe at all richly the various solutions younger people have been reaching in practice . Even if an older person may disagree with some such developments, and may even consider them less than lawful in the customary sense, the fact that these shifts occur mainly in a rather organised fashion and as an extension rather than a reversal of tradition means that one can reduce them to systematic generalisations'. (Emphasis added. He therefore interprets the concept of normative behaviour as including conduct other than that which conforms to accepted rules or standards. I have read ... legal material where the term crops up. They may even disagree with young people who say, well look my father was a white man, I've got no other choice than to take country through my mother. The old man might say, well you've got to take it through your father, and so you're all lost or whatever; I've heard people say things like that. It also gives rise to the question of whether 'the various solutions younger people have been reaching in practice' are consistent with the traditional laws and customs of the Western Desert. 331 In this connection, Professor Sutton was asked to explain what he intended to convey by the expression 'an extension rather than a reversal of tradition' in par 50 of the Sutton Report. In this case I think it's giving greater attention to factors other than place of birth, in other words it's shifting the balance. What I'm talking about is a movement of emphasis from a clear primacy being given to birthplace to more [of] a constellation approach, including birthplace'. Professor Sutton described the value judgment as 'ultimately a political question and therefore a legal question in this case'. 333 The question of 'continuity' is dealt with in Part 7 of the Sutton Report. It does not explain in any detail, however, why the 'solutions' reached by younger people can be described as 'adaptive', in the sense that they conform to the traditional laws and customs of the eastern Western Desert. But his analysis does not address whether the elements identified in Proposition 7 are consistent with the traditional laws and customs of the Western Desert. Indeed, Professor Sutton agreed in evidence that the Report does not specifically address or answer that question. 335 Some of the difficulties to which I have referred can be exemplified by reference to an opinion expressed by Professor Sutton. Part 6 of the Sutton Report deals with eastern Western Desert laws and customs. ) This term "Law" glosses one of the main senses of the terms Tjukurr(pa) or Waparr. The assumption of that Law is that proper modes of behaviour in relation to country and for claiming interests in country are in essence or ultimately laid down in the Dreaming by ancestral legendary figures. I rely on what I was told by my informants as assumed fact. Talk about such things was repetitive. I recall, but did not always record conversations in which traditional Law was the focus of assertions of rights in land. However, see my conversations with people, including Windlass Aluritja, Donald Fraser, Tony Tjamiwa, Malya Teamay, Johnny Jingo, Timothy Wood, Walter Pukutiwarra, Reggie Uluru, Judy Trigger, Nellie Armunta and others. 336 Mr Pauling took Professor Sutton to each of those pages and invited him to identify the entries that supported the matters recorded at par 198 of the Sutton Report. The material in the footnotes cumulatively adds up to a gradually pieced together picture of the system'. Many of the notes (as one might expect) are cryptic and therefore difficult to interpret. But on their face the words recorded do not appear to justify the proposition that the informants 'continually emphasised Aboriginal Law as the foundation of rights in country'. 337 Two particular examples help make the point. Especially Mick using the word "kurnta" make all the watis shame, no 50/50 nothing'. This note is accompanied by a rough sketch. Nothing on the page supports Professor Sutton's hypothesis. 338 These criticisms of Professor Sutton's approach do not justify rejecting all the opinions expressed in his Report. Some are supported by careful analyses of the available material and are consistent with other evidence. Other opinions, however, require careful scrutiny of the reasoning process underlying them, particularly where the opinions have been challenged in cross-examination. Not all command acceptance. In consequence of the rejection of much of that Report, Ms Vaarzon-Morel prepared (or was said to have prepared) a further report that was admitted into evidence. In my opinion, Ms Vaarzon-Morel's report and evidence adds nothing of substance to Professor Sutton's evidence insofar as she supports the applicants' case. In any event, I can place little weight on her opinions to the extent that they have been challenged. 340 Ms Vaarzon-Morel's formal qualifications as an anthropologist are modest. Prior to undertaking work in connection with this case, she had only very limited research experience in relation to Western Desert people. Ms Vaarzon-Morel acknowledged that she was not a specialist in the anthropology of the Western Desert region. She also acknowledged that the Western Desert region is the most difficult part of Australia in which to work as an anthropologist investigating traditional land relationships. 341 Key elements of Ms Vaarzon-Morel's report simply reproduce Professor Sutton's views and indeed replicate verbatim sections of his report. For example, Ms Vaarzon-Morel reproduces in her report several of the Propositions, including Proposition 7, found in the Sutton Report. A number of other passages in the Sutton Report are also reproduced verbatim . When asked about the appropriateness of an expert taking this course, she said that she had 'adopted' Professor Sutton's words and had not considered it necessary to use her own language. She also said that the report she ultimately signed had been 'largely prepared by lawyers based on what we had written in previous reports'. She had time only to read 'her' report quickly before signing it. 342 Ms Vaarzon-Morel was cross-examined at some length as to the basis for the opinions she endorsed in her report. The Commonwealth submitted, in my view correctly, that Ms Vaarzon-Morel was not only prepared to lend her name to conclusions she had not formulated, but was frequently prepared to do so on the basis of little more than her expressed agreement with Professor Sutton's views. On a number of issues, it was difficult to discern in the source materials cited by Ms Vaarzon-Morel substantial support for the opinions or conclusions she was expressing. She was forced to acknowledge that her views on some of these issues rested on general impressions she had gained from her informants. In certain instances, such as Ms Vaarzon-Morel's support for Proposition 7(b) (relating to 'borning places'), her opinions rested in large measure on conversations with Aboriginal people who might have given evidence in the proceedings but did not do so. 16. In this context, "society" is to be understood as a body of persons united in and by its acknowledgement and observance of a body of law and customs. • Did the Western Desert bloc continue in existence as a society until the compensation acts occurred? • Can the eastern Western Desert be regarded as a sub-region of the Western Desert? Professor Sutton takes as representative of the boundaries of the Western Desert those recorded in a map prepared by Amee Glass, C ohesion in Ngaanyatjarra Discourse (Summer Institute of Linguistics, 1997). (The map is reproduced as Map 3. The "Western Desert bloc" as it is known among scholars is not merely an analytical construct arrived at by non-Aboriginal academics, but the academic recognition of a pre-existing unity of a striking nature, given its size relative to other cultural blocs in Aboriginal Australia. For the reasons I have given, the absence of any such challenge does not necessarily compel acceptance of his views. However, they seem to me to be supported by the material to which Professor Sutton refers in his report. Furthermore, I see no reason why the fact that Aboriginal people do not adopt a particular expression to describe a given group of people (or indeed use no expression at all) negates the proposition that the group is capable of constituting a society, the members of which acknowledge and observe a body of laws and customs. The absence of a word or expression in the Yankunytjatjara or Pitjantjatjara dialects to describe the Western Desert bloc does not determine the answer to the question posed in Yorta Yorta (HC) . 349 The Commonwealth submits that the evidence of Aboriginal witnesses gives no support to Professor Sutton's analysis. For example, the Commonwealth cites Yami Lester's evidence that he first heard the expression 'Western Desert' while working for the Institute of Aboriginal Development in Alice Springs in the early 1970s. So what about when you were growing up, was there some way that you referred to that area that white fellas now call the Western Desert? He also confirmed the evidence of other witnesses that the first three languages of the Western Desert identified by him have such close similarities that a speaker of one is able to understand the others. 350 Peter Wilson gave evidence that people of the area he understood as the Western Desert shared the 'law, Tjukurrpa , the Creation'. He explained that the Tjukurrpa constitutes an Aboriginal person's identity, notwithstanding that there are different Tjukurrpa for different sites or tracks. It is true, as Mr Hughston pointed out, that Peter Wilson accepted that, subject to some variations, the Tjukurrpa also forms part of the law for certain people such as the Warlpiri, whose country is outside the Western Desert. But that fact is not inconsistent with the existence of the Western Desert bloc as a society whose people are united in their acknowledgement of particular laws and customs. 351 The evidence of Aboriginal witnesses, although not extensive on this question, therefore lends some support to Professor Sutton's views. They also receive some support from the report of the Carruthers survey expedition in 1889 that all the 'tribes' seen by the members of the expedition in a large area of the Western Desert were similar in 'appearance, habits, and customs'. The anthropological literature (some of which is referred to in the Sutton Report) also contains references to the similarities of the customs of Western Desert people. If the boundaries of the tribe "are the boundaries of intelligibility, then the Western Desert itself is the 'tribal unit' and this involves a pre-contact population of as many 10,000 people" (Berndt 1966:32). 352 For these reasons, I do not think that the concept of the Western Desert bloc, in the sense of a society whose members acknowledge and observe a body of laws and customs, can be rejected on the ground that it is an anthropological construct divorced from an underlying reality. The evidence supports the conclusion that the Western Desert bloc can be regarded as a society in that sense. Whether members of the compensation claim group have acknowledged and observed the traditional laws and customs of the Western Desert bloc, specifically those relating to native title rights and interests, is a separate question requiring independent consideration. But the applicants' case does not come to grief at the first obstacle. Without that quality 'there may be observable patterns of behaviour but not rights or interests in relation to land': at [42]. • For a law or custom to be 'traditional' in the sense required by s 223(1) of the NTA , it must have its origins in the normative rules of the Aboriginal societies that existed before the British Crown acquired sovereignty. It is only those normative rules that can be 'traditional' laws and customs: at [46], [79], [86]. • The normative system must be one that has had 'a continuous existence and vitality since sovereignty'. If the normative system has not existed throughout that period, the rights and interests which owe their existence to that system will have ceased to exist: at [47]. Similarly, if the society which gives rise to the body of laws and customs ceases to exist as a group which acknowledges and observes the laws and customs, those laws and customs cease to have a continued existence and vitality: at [50]. • Identifying a society that can be said to continue to acknowledge and observe customs may be very difficult. But if the relevant society ceases to acknowledge and observe those customs, s 223(1) of the NTA cannot be satisfied. However, on the basis of archaeological, biogenetic and comparative linguistic data, he suggests that by about 1000 AD a society of Western Desert speakers had probably become established on the south-western fringes of the Arrernte region. He also suggests that the Western Desert languages have been differentiating internally over a period of between 500 and 1000 years. I infer that the position as described by Professor Sutton remained intact until the first contact between Europeans and Aboriginal people. 355 The chronology of events (section 8 , above) shows that in the 1870s the early European explorers had brief encounters with Aboriginal people around Uluru and Kata Tjurta and nearby country. Although the first pastoral lease over the Application Area was granted in 1882, Tindale's field work in the 1930s suggests that the first major contact with Aboriginal people in the Uluru-Kata Tjurta area did not take place until the late 1880s, when the Carruthers survey reached the area. Since Tindale's field included older Yankunytjatjara people, it is a reasonable inference that the initial major contact was primarily with people speaking that language. This conclusion is certainly consistent with Windlass Aluritja's insistence that the country around Yulara is traditionally Yankunytjatjara country, a view echoed by Yami Lester and others. 356 The evidence also establishes that contact between Aboriginal people in the area and Europeans occurred at intervals until Tindale's 1933 expedition to the Musgrave and Mann Ranges. Some population movement also occurred. The severe drought of 1914-1915, for example, forced some Pitjantjatjara people to the east. As late as 1926, the Mackay expedition came across tribal Aboriginal people about to participate in initiation rites near Kata Tjurta. There can be little doubt that there was a continuous presence of Aboriginal people in the area until the time of the Tindale expedition, although of course the nature and extent of the presence was dictated by the extremely harsh environment. Professor Sutton's analysis of Tindale's case material supports the proposition that Tindale's informants followed cultural practices, including belief in the Tjukurrpa and adoption of a system of generational moieties, that were consistent with practices that (in the recollections of the informants) extended back to the middle of nineteenth century. 357 Professor Sutton undertook a detailed analysis of a variety of materials in order to demonstrate that there has not been any 'long term full hiatus' in people's connection with the study area. The source material includes, but is by no means limited to, information provided to Professor Sutton or Ms Vaarzon-Morel by the Aboriginal people they interviewed. However, the information cited by Professor Sutton is often supported by the direct evidence of Aboriginal witnesses. None of that evidence was seriously challenged. 358 The evidence to which I have referred suggests that, notwithstanding periods of interruption, a small number of Aboriginal people maintained a physical association with the country around Uluru-Kata Tjurta from the 1930s. It also suggests that in the five decades leading to the Handback some of these people acknowledged and observed important elements of the traditional laws and customs of the Western Desert. 359 This conclusion is reinforced by the evidence given by Aboriginal witnesses as to how they learned of the Tjukurrpa stories and other aspects of traditional laws and customs. Yes, my grandfather, his grandfather and his grandfather all told me the story, my tjamu. That's our law. From nyiirnka we go through manhood for many many generations. That's our law. I was brought up for many times go through generations, learning through, and to take over from when the elders pass on. You have to take over. And when it comes from grandfather to grandfather to grandfather, where does it start from? Where does that whole law come from? I was going to ask Mr [Jango], when you talk about Tjukurrpa, can you explain to the Judge, please, what you mean by Tjukurrpa; what's that mean? Nor do they dispute that the claimants, particularly the older people, believe in the Tjukurrpa and its relevance to matters affecting their lives, such as kinship and mourning practices. There is also no issue that a number of important Dreaming tracks are connected to sites, including Uluru and Kata Tjurta, within the larger region in which the Application Area is located. 364 The Commonwealth's submission that there is a disconformity between the rules acknowledged by the older witnesses and the practices followed by the younger witnesses may be very important in relation to other issues in these proceedings. But any such disconformity does not demonstrate that the Western Desert society has ceased to exist, nor that the traditional laws and customs of that society have altogether ceased to exist. On the contrary, subject to the significance of patterns of migration within the Western Desert, the evidence suggests that the Western Desert bloc has existed as a society at all times since sovereignty and that there have been some members of that society who have acknowledged and observed its laws and customs in the eastern Western Desert, including the area around Uluru and Kata Tjurta. 365 Since the Commonwealth's submissions rely heavily upon Yorta Yorta (HC) , it is worth observing that the facts of that case were very different from those of the present case. There was also positive evidence, emanating from the Aboriginal people themselves, to the same effect. This included a petition by Aboriginal people in 1881 to the Governor of New South Wales, which lamented the fact that all land within tribal boundaries had been taken by the Government and white settlers. The petitioners expressed a desire to change their 'old mode of life' in favour of 'settling down to more orderly habits of industry': Yorta Yorta , at [117]-[120], per Olney J. No comparable evidence has been adduced in the present case. 366 I emphasise that the conclusion I have reached does not determine the separate question of whether the applicants have shown that the members of the compensation claim group acknowledged and observed the laws and customs relating to native title rights and interests pleaded in the Points of Claim. Nor does it determine whether the pleaded laws and customs are the traditional laws and customs of the Western Desert bloc. These issues require separate consideration (section 17 , below). The evidence in the present case suggests that population movements in the Western Desert occurred well before European settlement. 368 These observations are consistent with Professor Sutton's own opinion, recorded in his published works, that the Western Desert is the region of Australia that seems to have experienced the greatest demographic instability at the time of colonisation. He attributes this state of affairs to the ecological uncertainty that people faced, before the water bores were introduced and imported food became available. Professor Sutton also accepts that 'incursive movements' to the east and southeast of the Western Desert occurred during the earliest colonial phase: P M Sutton, Native Title in Australia: An Ethnographic Perspective (2003), at 143. 369 In 1930, Elkin conducted a ten month study of 'The Social Organization of South Australian Tribes'. For most of that period he was based at Oodnadatta, which is a considerable distance south of Uluru, although it appears that he ventured as far north as Ernabella. Elkin reported that he had seen 'natives in this region ... living in a totally uncivilised manner'. He noted that these people had experienced 'a specially hard time during the past ten years on account of a severe drought' and that as a result migration into the areas of white settlement had increased. Professor Elkin also noted that his investigations around Ooldea (on the southern fringes of the Western Desert) suggested that Aboriginal people had travelled there from the direction of the Everard Ranges. 370 In unpublished notes prepared in 1933, during his expedition to the Mann and Musgrave Ranges, Mr Tindale noted that population movements had occurred in those areas. Pitjantjatjara people had drifted eastwards and the Yankunytjatjara had 'virtually abandoned the western end of their country' (which Tindale identified as the western Musgrave Ranges, to the south of Uluru). Tindale also noted that there had been some further eastward penetration by the Pitjantjatjara, but that this movement had occurred very recently. He attributed the drift mainly to the release of population pressures by movement to less crowded country on the fringes of European settlement and to the demand for Aboriginal labour on stations, although the sporadic effects of drought upon the indigenous population also played a part. 371 In a subsequent publication, Tindale referred to the great drought of 1914-1915 as the stimulus for the eastward movement of the Pitjantjatjara and their 'usurping' of country as far east as Ernabella. However, he noted that as Europeans penetrated the area some Yankunytjatjara people returned to the Ernabella region: N B Tindale, 'The Pitjandjara' in MG Bicchieri (ed), Hunters and Gatherers Today (1972) (' The Pitjandjara '), at 219. 372 Professor R M Berndt undertook field work with Western Desert people at Ooldea in 1939. He observed that Yankunytjatjara people had congregated there, having travelled from their 'rightful countries' in the Everard Ranges to the northeast. He expressed the view that as the Pitjantjatjara moved eastward, the Yankunytjatjara had moved south: R M Berndt, 'Tribal Migrations and Myths Centring on Ooldea, South Australia' (1941) 12 Oceania 1, at 1, 4. In a well-known 1959 article, Berndt noted that the population of the Western Desert had decreased to about 3,200 people, compared to an estimated population of some 18,000 before European contact. He considered that 'alien pressures' had been at work for a long time and had accounted for the displacement of certain groups, although there had always been 'some territorial flexibility': R M Berndt: 'The Concept of "the Tribe" in the Western Desert of Australia' (1959) 30 Oceania 81 (' Concept of "the Tribe" '), at 86. 373 Professor Sutton anticipated that the respondents would rely on these studies to dispute the argument that the people of the Western Desert were, at sovereignty and in more recent times, a body of people united in and by their acknowledgement of traditional laws and customs. He contended that Tindale had been incorrect to suggest, in effect, that there had been large scale tribal movements in the Western Desert. No doubt there is a legitimate academic interest in reconsidering the views of the early anthropologists by reassessing such primary materials as may have survived. But Tindale's views on migratory patterns were not based solely on the data compiled from his 1933 expedition. In any event, much of Professor Sutton's reassessment rests on assumptions that are impossible to verify at this distance in time. In particular, as Professor Sutton's evidence in cross-examination shows, it is by no means clear that Tindale's views, insofar as they were derived from his 1933 expedition, were based exclusively on the material re-analysed by Professor Sutton. 375 Nonetheless, I consider that the Commonwealth's submissions overstate the significance of the anthropological literature relating to migration within the Western Desert, insofar as the submissions rely on that literature to challenge the continued existence of the Western Desert bloc as a society. It is necessary to bear in mind that none of the anthropologists appears to have regarded the movement of people in the Western Desert as a novel phenomenon. For obvious environmental and survival reasons, population shifts predated European settlement of central Australia. The 'displacement' of some people from their traditional lands, either temporarily or permanently, is inconsistent neither with the survival of Western Desert bloc as a society nor the continued existence of at least some of its traditional laws and customs. 376 It is also necessary to bear in mind that none of the studies relied on by the Commonwealth focuses on population shifts to and from the Uluru-Kata Tjurta area. Professor Berndt's field work, for example, was concerned with an area on the southern fringes of the Western Desert. Moreover, the published papers (and Tindale's unpublished observations) describe in general terms, rather than exhaustively, migratory patterns over different periods and over a vast area of land. They do not address the extent to which particular groups of Aboriginal people may have maintained an intermittent association with country from which they had moved or been displaced. Nor do the studies consider the extent to which such people may have continued to observe, as best they could, their traditional laws and customs. 377 While I do not think that Professor Sutton's reworking of Tindale's data is helpful on the question of migratory patterns, I think that there is more force in the distinction he draws between 'residential migration' (physical relocation) and 'tenurial migration' (a shift of 'primary abstract ties' from one country to another). There is no doubt that the apparent attractions of the missions and the opportunities for work and accommodation in the wake of European settlement led to the relocation of many people of the eastern Western Desert to places like Ernabella and Mutitjulu. The Commonwealth correctly points out that many of the Aboriginal witnesses and their families have chosen to live in settlements, sometimes (but not always) far from their traditional lands. 378 However, there is also no doubt that throughout the period from the 1930s to the 1980s or 1990s, some eastern Western Desert people maintained a physical association with the Uluru-Kata Tjurta area, even though they might not have lived there continuously. More importantly for present purposes, it is clear that throughout that period there were always people who maintained their commitment to some of the traditional laws and customs of the Western Desert. As I have observed, a real question arises as to whether the members of the compensation claim group acknowledged and observed traditional laws and customs in relation to rights and interests in land a manner that satisfies s 223(1) of the NTA . But the evidence, in my opinion, provides no warrant for concluding that, by reason of patterns of migration, the Western Desert bloc, and its traditional laws and customs, ceased to exist before the compensation acts occurred. Professor Sutton acknowledges that the people of such sub-regions are not readily separable from the people of neighbouring sub-regions with whom they interact, intermarry and share most cultural features. Nonetheless, in his view, the eastern Western Desert is characterised by 'high dialectal unity, a common kinship system and mostly similar religious organisations'. 380 Professor Sutton identifies the fundamental concept in the belief system and the laws and customs of the people of the eastern Western Desert as that of the Tjukurrpa (Proposition 4). An integrated section or subsection is absent. In this part of the Western Desert there is no integrated system of sections and subsections. This system involves marriage rules and incest taboos. Patrimoieties and matrimoieties are absent. There are no patrilineal or matrilineal moieties in the region. Accordingly, people tend to emphasise the reality of nurturing and responsibility over the so-called facts of physical parentage. Moreover, a single term is used for both grandfathers ( tjamu ) and another for both grandmothers ( kami ). Hence it is sometimes difficult, for example, to ascertain whether a kami is a person's paternal grandmother or maternal grandmother. The opposite moiety is that of the remaining, alternate, generations: one's parents and their siblings, one's own and one's siblings' children, and one's great-grandkin. The opposite moiety is referred to as tjanamilytjan(pa) (probably from "they-flesh"). In particular, there is a great deal of evidence to support the pervasive role of the Tjukurrpa in everyday life in the eastern Western Desert. In simplest terms, Tjukurpa is a narrative about the creation of the world and everything in it. The Pitjantjatjara and Yankunytjatjara believe, as do the Pintupi, that Tjukurpa actually constitutes the world, by relating and describing the "given condition of 'what there is'", as well as defining a framework for human action (Myers 1986). The creative process usually consists of the eruption from the earth of Tjukuritja, a noun literally meaning "pertaining to Tjukurpa" or "of Tjukurpa", which is sometimes glossed as ancestral beings. There were many of these beings, who began their activity at locations all over the country. Many of the beings travelled from their place of appearance, and their travels and activities left marks on the surface they travelled over. They encountered and interacted with other Tjukuritja, again leaving marks on the landscape. At the end of their travels, many of them died, or became "tired", and went back into the ground, turned into objects in the landscape, or ascended into the sky and became stars. There are a number of features of interest in the structure of Tjukurpa as narrative, particularly the fact that Tjukurpa narratives are episodic, but the episodes of the journey of an ancestor tend to be thematically linked. So the activities of Malu, Kanyala and Tjurki (Red Kangaroo, Euro and Nightjar) who travel together throughout the Western Desert, are generally associated by the Pitjantjatjara and Yankunytjatjara, with senior initiation. Tjitji Kutjara, the Two Boys, sketch the theme of pre-adolescent behaviour and yearning for manhood in the activities of their journey --- they are continually stumbling across or overhearing men's ceremonies. Mala, the Rufous Hare Wallabies, seem to be concerned always with the correct way of doing ceremonies, and particularly with gender responsibilities in the conduct of ceremonies. Kuniya, the Woma or Children's Python, seems to embrace thematically strong emotions including just anger, revenge, love and homesickness. The nature of these thematic links may be on a number of levels: for example, Lungkata Tjukurpa at Uluru concerns the theft by the Blue Tongue Lizard of an emu originally speared by a pair of Panpanpalala (Crested Bellbird) brothers. The brothers retaliate by tracking the lizard down and burning him to death. The main thematic links between this event and other parts of Lungkata's journey include the fact that when Lungkata came from the north he was chasing two brothers (his sons) who had offended him. So there is a thematic link of pursuit, and of conflict with pairs of brothers. Secondly, as Lungkata came south, he burned the country as a means of flushing out his sons. So fire is a recurrent image throughout his story. Within these broad themes, the narratives are episodic, and individual episodes on the journeys of ancestors may deal in quite detailed ways with particular aspects of the broad themes or with other events apparently unrelated to these themes except in terms of recurrent imagery. To us passages which relate how a native woman gathers and prepares ... seed may seem unimportant and over-lengthy; the native listener takes pleasure in the fact that his own supernatural ancestors carried out their daily tasks in exactly the same routine fashion that has become accepted in his own life. The native, again, has had to study the ways of animals very closely in his own hunting existence; and accurate descriptions of the habits of animals never fail to arouse great and appreciative interest on the part of native listeners. ... Tjukurpa also contains rules and guides to correct procedure for dealing with and judging problems. It sets out for us all the nature of possible problems, as well as penalties for transgressing rules. And as with laws in nature, we perceive the rules of possibility that govern our choices as immutable, although our choices within the huge body of oral tradition that constitutes Tjukurpa are always the result of interpretation. I learned from my grandmother over and over again so I can be really ninti (knowledgeable). My kami said, "You don't walk around and listen to other people's ideas, you do what I'm telling you because that comes from the Tjukurrpa" ... Tjukurrpa is really big, important, on top, first before everything. It was part of their daily life and through Tjukurrpa they performed daily ... inma ceremony songs, story dance. It was part of their [way] of life'. 387 A number of witnesses gave evidence of kinship relationships in this area of the Western Desert. I call my mother's sister ngunytju. I call my mother's brother kamuru . I call my father mama. I call my father's brother mama. I call my father's sister kurntili . I call my daughter urntalpa. I call my son katja . My daughter calls her older brother kurta. My son calls his older sister kangkuru, and the younger one marlanypa . I call my sister's daughter urntalpa. I call my sister's son katja . I call my brother's daughter ukari. I call my brother's son ukari . I call my daughter's daughter kami . I call my daughter's son tjamu. I call my son's daughter kami. I call my son's son pakarli . I call my mother's mother kami . I call my mother's father tjamu. I call my father's mother kami. I call my father's father tjamu. My grand-daughters, sisters, cousins and grandmothers are on my side. I call my side Nganarnamiri (lit. we-skin) or another word Nganarntarrka (lit. we-skin). These people on the sun side - tjirntu Itulwakalpa (sun-side). They have skin like me. It is inyurrpa (of the opposite generation moiety) or tjanamilytjan ("they-flesh" their side, people belonging to the other moiety group from yourself). These people are on the shade side - wiltjalyuru ("shade" side). I must marry someone from my skin, ngananamirri . If someone marries wrong way, they tell them it's shame for them, and they'll growl at them. A big fight will come up. Kami, tjamu , father and mother all tell them --- all the older generation. ... You can't marry close up because they are your family, you must marry long way family. Parrarri (from a long way) family, not close. It also contends that the evidence of Aboriginal witnesses does not support the concept of an eastern Western Desert sub-region. However, as the applicants make clear in their submission in reply, they do not put forward the eastern Western Desert as a separate cultural bloc or society. Their case rests on the compensation claim group's acknowledgement and observance of the traditional laws and customs of the Western Desert. 390 The concept of the eastern Western Desert as a sub-region of the Western Desert may not add a great deal to this case, beyond perhaps identifying an area whose people are more closely linked to each other than they are to the people of other areas within the Western Desert. As Professor Sutton points out, they share adherence to the Tjukurrpa with other people of the Western Desert and interact, intermarry and share most cultural features with them. But, in my opinion, the concept cannot be dismissed as one that simply reflects the preconceptions of anthropologists and bears no relationship to the actual beliefs and practices of the people of the region. 17. • If so, can the laws and customs be characterised as 'normative' in the sense required by s 223(1) of the NTA as interpreted by the High Court in Yorta Yorta (HC) ? • Assuming affirmative answers to the first two questions, are the laws and customs 'traditional' within the meaning of s 223(1) of the NTA ? In particular, the respondents' submissions appear to merge the first and second questions, while the applicants' submissions pay considerably less attention to the third question than I think it deserves. I propose to comment briefly on the second question (the 'normative' issue), albeit out of strict logical order, and then to address the remaining questions. The respondents' contention that the 'practices' (to use the respondents' word) described by the Aboriginal witnesses are not normative rests on a distinction drawn by the High Court in Yorta Yorta (HC). Without that quality, there may be observable patterns of behaviour but not rights or interests in relation to land or waters '. (Emphasis added. As I have noted (par 365, above), the trial Judge in Yorta Yorta found, among other things, that the traditional way of life of the claimants' ancestors had been suppressed and that, in consequence, their observance of traditional practices had disintegrated. As the joint judgment records ( Yorta Yorta (HC), at [95]), these were not findings about the content of or changes in law and custom, but 'about interruption in observance of traditional law and custom'. The findings were to the effect that the society that had once observed traditional laws and customs had ceased to do so and thus no longer constituted a society out of which traditional laws and customs sprang. The findings were therefore inconsistent with a key element of the claimants' case. 395 For reasons I have explained, the present case is different. I have found that the Western Desert cultural bloc is a society that has continued in existence since sovereignty. I have also found that members of that society have maintained their acknowledgment and observance of certain traditional laws and customs of the Western Desert as applied to the eastern Western Desert (including the country on which the Application Area is located). Even so, the findings made in the present case do not necessarily mean that the applicants have established that members of the compensation claim group acknowledge and observe rules relating to rights and interests in land that can be said to have a normative content. It is no doubt possible for people to acknowledge and observe certain traditional laws and customs, yet merely engage in 'observable patterns of behaviour', as opposed to following normative rules, when allocating or recognising 'entitlements' to rights and interests in land. 396 On the other hand, the mere fact that the rules or practices governing the asserted entitlements to rights and interest in land are formulated in vague and imprecise terms, at least by the standards of the common law, does not necessarily mean that these rules and practices lack 'normative' content. As was pointed out in Yorta Yorta (HC) , at [39], a 'normative system' is not to be understood as confined to a system that has 'all the characteristics of a developed European body of written laws'. The fact that rights and interests under traditional laws and customs reflect different conceptions of 'property' or 'belonging' does not of itself deny that the laws and customs have the requisite normative quality: Yorta Yorta (HC) , at [40]. Similarly, the fact that there is some disagreement among Aboriginal people as to the 'true' nature of traditional laws and customs does not necessarily mean that those laws and customs lack normative content. The disagreement may do no more than give rise to disputed factual issues requiring resolution by the Court. 397 As will appear, there is not only a lack of consistency in the evidence of the Aboriginal witnesses, but their evidence does not support the way in which the applicants have pleaded and presented their case. In these circumstances, it may well be difficult to characterise the various customs and practices followed or described by the witnesses as 'normative' in the sense required by Yorta Yorta (HC) . However, it is not necessary for the purposes of the present case to determine whether the laws and customs described in the evidence can be said to have normative content and I do not propose to do so. Their case is that under the traditional laws and customs of the Western Desert, satisfaction of one of the four 'conditions' specified in par B1.10 (leaving aside a fifth condition which the applicants do not press) is a necessary pre-requisite to showing that a person has rights and interests in country. (The additional factors are reproduced in par 179, above). 399 One difficulty facing the applicants is that there is a lack of congruence, if not an inconsistency, between their pleaded case (to which they adhered) and the way in which they presented their evidence and arguments. The lack of congruence is apparent from the evidence of Professor Sutton, on which the applicants place heavy reliance. In contrast to the case pleaded in the Points of Claim, Professor Sutton's Proposition 7 (reproduced in par 307, above) identifies eleven 'rules and principles' for determining whether an individual has 'a strong connection to and rights in an area' under the laws and customs of the Western Desert. Professor Sutton states that a person's capacity to assert a 'strong traditional connection' with land is 'accretive', in the sense that a person with several bases for a claim has a stronger case for asserting rights and interests than someone with only a single basis. The applicants' written submissions follow the structure adopted by Professor Sutton in Proposition 7 and reproduce in substance the eleven rules and principles identified by him. 400 Professor Sutton does not explain in any depth the interrelationship between the eleven criteria he identifies. He appears to acknowledge that land ownership in the Western Desert is an 'elusive matter' (citing Professor F R Myers) and involves an element of 'individual choice'. In cross examination, Professor Sutton accepted the proposition that a person who satisfies only one of the eleven criteria does not necessarily have a strong connection with country. He was not, however, invited to elaborate on this evidence. 401 Neither Professor Sutton's written nor oral evidence supports the applicants' pleaded contention that under the traditional laws and customs of the Western Desert a person must satisfy one of four specific conditions in order to acquire and hold rights and interests in country. Nor does Professor Sutton's evidence support the concept of additional (but subordinate) factors that, of themselves, do not create a connection with country, but can determine the strength of a connection that is independently established. For these and the other reasons I have set out in detail earlier in this judgment (section 15.1 , above), Professor Sutton's evidence is of limited value in supporting the applicants' case. However, they do point to evidence suggesting that a given person might satisfy several distinct criteria for becoming or being recognised as ngurraritja for particular country. They cite Reggie Uluru as an example. Although neither Reggie nor his father was born particularly close to Uluru, he gave several reasons why Uluru was his country: the ngurra came from his father and his grandmother (although there appears to be no evidence as to why Uluru was his grandmother's country); his father grew up at Uluru; Reggie Uluru himself 'grew up around the water'; Reggie's father and mother had the Mala Tjukurrpa ; and his father had passed on knowledge to him. Although Reggie did not say so expressly, his evidence is said to demonstrate that an accumulation of factors enhances a person's role within the class of those holding rights in country. They also cite Malya Teamay, who gave evidence that his children would ultimately be able to choose among the various areas with which they are associated. The second one from the grandfather's line, story line in the grandfather's area where they roamed and number 3 ngurraritja is where they were born'. The applicants cite numerous examples of witnesses stating that they, or a relative (usually a parent or grandparent), had become ngurraritja for country by virtue of being born there, although the witnesses sometimes also relied on other factors such as being put through the smoke at that place. • Borning place nearby on Dreaming track. The applicants support this criterion by reference to the evidence of several witnesses who suggested, in various ways, that they (or others) had become ngurraritja for country by virtue of their association with a Tjukurrpa track. For example, Dora Walkabout claimed to be ngurraritja for Mantarurr and Uluru, among other places, because she was born at Urrampinyi (Tempe Downs Station) on the Kungka Kutjarra (Two Women) track. (Urrampinyi is some 200 kilometres from Uluru. ) Johnny Jango claimed to be associated with Uluru by reason, among other factors, of his birth at Maratjurra (about 150 kilometres from Uluru) on the Kuniya Tjukurrpa track. Malya Teamay, who claimed to be ngurraritja for several different areas, said that his country included Uluru through the Kuniya (Python) , Mala (Rufous hare wallaby) , Lirru (Brown Snake) and Kurrpany (Devil Dog) Tjukurrpa tracks. • Kin links. The applicants cite evidence, for example from Frank Djana, Barbara Tjikartu and Windlass Aluritja, that a person can take the country of his or her father or grandfather. However, they also refer to evidence from other witnesses, including Bessie Liddle, that country may be taken through a mother or grandfather or indeed other relatives. This evidence, so the applicants submit, shows that there is not and never has been a 'strictly patrilineal system of acquiring rights in country'. The applicants rely on Donald Fraser's evidence for the proposition that there are factors limiting the extension of country through kin links. The only two factors identified are the need for an 'important Dreaming' and 'choice'. • Generation or time depth of identification with the area. The only evidence to which the applicants refer on this point is that of Donald Fraser. However, the evidence merely consists of a remark that a person's country is where his or her family has lived for hundreds of years. • Linguistic identification. The applicants point to evidence from Frank Djana, Judy Trigger and others suggesting that the area around Uluru and Kata Tjurta is Yankunytjatjara country. Oddly enough, however, it is only in their reply that the applicants address the difficulty that some of the people within the compensation claim group appear not to be Yankunytjatjara people, but people whose first language is Pitjantjatjara or, in some instances, another language of the Western Desert. • Religious and ritual knowledge. The applicants cite the evidence of Peter Wilson (a wati , but a relatively junior man) as support for the contention that ritual knowledge is more concerned with status among rights holders than an independent basis for holding rights. However, they acknowledge that some witnesses (Rita Jango, Pantjitji McKenzie and Donald Fraser) gave evidence suggesting that knowledge of Tjukurrpa , of itself, confers rights in land. • Long association. The applicants submit that the evidence (principally that of Donald Fraser) shows that a person cannot become ngurraritja for a place only by living there for a very long time. However, it can be a factor in activating a condition or in improving one's position in relation to others. Moreover, so they argue, a person can have a long association with a place without physically residing there. • Taking responsibility. The applicants cite only the evidence of Peter Wilson to support this criterion. They accept that it 'involve[s] extensive overlap with others' since it is difficult to take responsibility without knowledge and it is also difficult to acquire knowledge without long association. • Assertion and support. The applicants state that it is not part of their case that assertion is a sufficient basis for holding rights and interests in land. They say that active assertion of and support for a claim 'may be involved in the activation of an "automatic" factor' and may improve the status of the person making the assertion against other rights holders. The applicants do not suggest that any of the Aboriginal witnesses gave evidence to this effect. They appear to deduce the principle from the fact that most witnesses made assertions about their own rights and interests and those of other people. • Caring for country. The applicants refer to evidence from witnesses to the effect that a person who becomes ngurraritja for country is expected to look after it. None of the passages cited by the applicants, however, suggests that caring for country confers the status of ngurraritja on a person. That is, they support each of the various elements of their pleaded case (or of Proposition 7) by reference to the evidence of one or, perhaps, several witnesses. The assumption appears to be that the particular combination of laws and customs upon which the applicants rely can be pieced together like a mosaic, using selected elements from the evidence of individual witnesses. 406 A major difficulty with this approach is that none of the Aboriginal witnesses gave evidence that the traditional laws and customs of the Western Desert relating to rights and interests in land correspond to the case pleaded by the applicants. Indeed the applicants' submissions do not suggest otherwise. It is true that the evidence of the indigenous witnesses, taken overall, provides some support for specific aspects of the pleaded case. In particular, the evidence suggests that having a borning place on or in close proximity to a specific site of itself ordinarily suffices to create rights and interests in that site, although even on this point different views were expressed. But the evidence does not support the dichotomy between 'conditions' (satisfaction of any one of which suffices to create native title rights and interests) and 'additional factors' relied on by the applicants. Nor does it support the combination of criteria pleaded in the Points of Claim or, for that matter, the combination of criteria set out in Professor Sutton's Proposition 7. Perhaps not surprisingly, the evidence of individual witnesses tended to be framed in a way that favoured their own claims or those of close relatives. 407 I accept that Aboriginal witnesses cannot be expected to recount their laws and customs with anything like the precision that might reasonably be expected of a lawyer expounding common law principles. I also accept that the fact that there may be disagreement among witnesses as to the relevant rules and practices is not, of itself, surprising and certainly not fatal to the applicants' contentions. Understandably enough, the Aboriginal witnesses are not accustomed to conceptualising their laws and customs in a manner that enables them to respond directly and clearly to the kinds of questions asked by counsel. 408 Even so, it might be thought that some of the witnesses would have explained the relevant laws and customs in terms that more or less correspond to the way in which the applicants present their case. That is, it might have been expected that some of the witnesses would have given an account of traditional laws and customs of the Western Desert bloc relating to native title rights and interests that broadly matched the laws and customs pleaded in the Points of Claim. No doubt the absence of such evidence owes something to the manner in which the applicants' case was prepared and presented. But the lack of correspondence between the evidence of the indigenous witnesses and the applicants' formulation of the laws and customs does little to advance the applicants' claims that members of the compensation claim group acknowledge and observe a particular body of laws and customs relating to rights and interests in land and that those laws and customs can be regarded as 'traditional' in the sense required by Yorta Yorta (HC). The account also illustrates some of the more significant variations in the evidence of the various witnesses. Mr Fraser said that a person could become ngurraritja for country in four different ways: by reason of birthplace; and by taking country from one's father, one's mother or one's grandmother. (These criteria are different, for example, from those put forward by Malya Teamay which are also cited in the applicants' submissions. Mr Fraser said that there was a link between the Tjukurrpa and rights in country, although he also asserted that under Aboriginal law there must be somebody who is ngurraritja for every part of a given country, even if that country is devoid of significant Tjukurrpa sites. 411 Mr Fraser downplayed the significance of his own birthplace, on the ground that one's place of birth is important only if there is a substantial family connection: '[h]is right is really where his family lived for hundreds of years'. Mr Fraser considered that Ernabella was less important to him than other places because '[t]hat's a little Tjukurrpa [there]' . They only moved away from here because of the flour, tea and sugar probably'. 412 It is hardly surprising that Mr Fraser's account of the laws and customs of the Western Desert does not correspond precisely to the language used in the applicants' Points of Claim. Moreover, there is some degree of overlap between the criteria identified by the applicants and the laws and customs identified by Mr Fraser. However, he said nothing about a division between 'conditions' (one of which must be satisfied in order for a person to obtain rights or interests in land) and 'additional factors' (determining the extent of such rights and interests) along the lines advanced by the applicants. Nor did Mr Fraser say anything about the significance of having close kin who have died or have been buried in the area (Points of Claim, par B1.10(d)), or of personally identifying with the linguistic character of the area (par B1.11(c)). (According to his affidavit, Mr Fraser's language is Pitjantjatjara, derived from his parents, although he suggested in his oral evidence that his father's major language had been Yankunytjatjara. Indeed, it seems that Mr Fraser's view was that merely living in a place like Mutitjulu since childhood cannot strengthen one's claim to be ngurraritja for that place. Mr Fraser also rejected the idea that a person who is born at a place on a Dreaming track which runs through an area of land becomes ngurraritja for that area. In his view, for example, someone born on the Kuniya Tjukurrpa track at Maratjurra (Lyndavale Station), about one hundred kilometres to the east of Uluru, is not ngurraritja for Uluru, notwithstanding that the Kuniya track passes through Uluru (cf par B1.10(b)). 414 Johnny Jango was not asked to explain or expound the laws or customs of the Western Desert relating to interests in land. However, Mr Jango said that his father (Mick Wilyarti) was ngurraritja for Yularra Purlka and Kata Tjurta because he (Mick) was born there and because he 'roamed around' the area. (I note that it is by no means clear that Mick Wilyarti in fact was born in that area. ) Mr Jango also said that his own country was Lyndavale Station because he had been born there: 'It's my place'. He attributed this 'law' to the Tjukurrpa, about which his grandfather had told him. 415 In his evidence in chief, Mr Jango also claimed to be 'associated' with Uluru by reason of the Kuniya Tjukurrpa storyline, which passes from Lyndavale Station through Uluru. The word he used, which was translated as 'associated' was ' tjukurritja '. He explained that he used that word because the Kuniya story is part of the Tjukurrpa . This evidence might be thought to imply that Mr Jango claimed to be ngurraritja for Uluru. That's, like, our --- our place, where we're living, and come from our grandmother's side. That's where we living. That's our --- our place. That --- that's their water, their place. Are you a local man for Mutitjulu? I'm from Lyndavale Station, but my kids grew up here and that makes us local because we're living here today. ' (Emphasis added. 417 The distinction between being a 'local' and being ngurraritja was not clarified in the evidence. (Previously, Mr Jango had used the word 'local' to describe his father's links to Uluru. ) Mr Jango's evidence, although not easy to follow, suggests that a person can become ngurraritja for an area simply by 'sit[ting] down there'. He said that his mother's country was around Docker River because she 'roamed around and gathered' food there, although Mr Jango also said that she 'might be associated with the Tjukurrpa , big story there'. 418 Mr Jango's evidence provides support for particular aspects of the case pleaded by the applicants. He plainly regarded birthplace (par B1.10(a)) as important, but also gave weight to a person's long association with an area (par B1.11(d)), apparently disagreeing with Mr Fraser on this score. He also referred, in general terms, to following his father in relation to becoming ngurraritja for country, but this point was not taken further in the evidence. He did not suggest that a person could take country through relatives other than a father or grandfather, although he made a passing reference to 'grandmother's side'. 419 Millie Okai was asked, in the course of her evidence in chief, what the word ' ngurraritja ' means to her. Does it mean anything else? From anybody - any other - any other way you can be ngurraritja? Accordingly, she said that she was ngurraritja for Maratjurra, since she was born there. However, her answer also suggests that a person becomes ngurraritja for an area or site simply by growing up at that place or by being there for a long time, a proposition not advanced by the applicants in their Points of Claim. In addition, Millie indicated that a person can take rights and interests in country from a variety of relatives or kinfolk. She claimed to be ngurraritja for Uluru, Pirurrpa Karla, Yularra Purlka, Ampiyarra and Mantarurr since they were the places of her grandmother (Tjintjiwara), her uncle (Mick Wilyarti) and her grandfather (Mirruwanti, her mother's stepfather). She also claimed to be ngurraritja for Karlaya (near Docker River) because that was her father's place. 421 It will be apparent that on Millie Okai's evidence, a person might have rights to and interests in many different areas or places depending on his or her family history or the associations with country of his or her relatives. This understanding of laws and customs, if anything, seems to be considerably more generous to a potential claimant than the criteria put forward by the applicants. On the other hand, Millie did not say that having a borning place on a Tjukurrpa track that travels through or to a site is an independent basis for claiming rights and interests in country (cf par B1.10(b)). Like the other witnesses, she said nothing that indicated that there is a dichotomy between 'conditions' and 'additional factors' of the kind pleaded in the Points of Claim. 422 I have already referred to Reggie Uluru's evidence (par 402, above). It is not easy to deduce from that evidence the nature of any laws and customs concerning rights and interests in land. However, Reggie appears to support the idea that a person's place of birth may make him or her ngurraritja for that place, since Reggie said that his mother was ngurraritja for Mimili, where she was born. (Curiously enough, Reggie appears not to have relied on the fact that his grandfather, Lungkarta, was said to have been born at Uluru in order to support his (Reggie's) claim to be ngurraritja for that place. Nor does Reggie appear to suggest that he is ngurraritja for Mimili, his mother's birthplace. It is also possible to read Reggie's evidence as consistent with the proposition that a person can acquire rights and interests in country which is on the Tjukurrpa track of the person's birthplace. This is because Reggie gave evidence that his birthplace, Paramita, is on the ' Kuniya line' which travels to Mutitjulu. But he does not expressly identify this connection as a reason why he was ngurraritja for Uluru. There is nothing in Reggie's evidence to support the division between 'conditions' and 'additional factors' adopted in the Points of Claim. 424 Nellie Patterson appears to accept that a person can become ngurraritja for country by being born there. According to Mrs Patterson, both she and her father were ngurraritja for Piipalyatjarra, since that was their birthplace (and the place where Mrs Patterson was put through the smoke). She added that in recent times a child who is born at a hospital can become ngurraritja for his or her own Tjukurrpa by going through the smoke (presumably at an important site on the track, although the point was not developed). 425 Mrs Patterson claimed to be ngurraritja for the country around Uluru, despite acknowledging that it was Yankunytjatjara country and that her language was Pitjantjatjara (she apparently speaks or understands other languages, including Yankunytjatjara). She said that the basis of her claim was that ' ngurra ... means where you are sitting down'. Although it is not entirely clear, it appears that Mrs Patterson's understanding of laws and customs was that long residence in, or occupation of, an area may be sufficient of itself to confer rights and interests in the land. This was not the understanding of other witnesses and was not the position taken by the applicants in the Points of Claim. 426 Mrs Patterson was not asked about and did not address other criteria specified in the Points of Claim and in Proposition 7. Her evidence does not positively support, for example, the contention that a borning place of a parent or grandparent on a Dreaming track that travels through particular country will create rights and interests in that country. 427 Nellie Armunta, when asked what the word ' ngurra ' means replied 'where you were born'. This answer is consistent with her evidence that her maternal grandmother (Intjipati) was ngurraritja for Murtitjulu Springs because she was from there; that her father (Charlie Aluritja) had his country at Mantarurr, where he was born; that Armunta herself was ngurra for Cave Hill because she was born there and because her (umbilical) cord fell off nearby at Amata; that her husband, Dickie Minyintirri, is ngurra for Mt Davies, his birthplace; and that her children's country is Ernabella because they were born there. Armunta gave evidence that in several cases a person born in a particular area had also grown up in that area, but she does not appear to suggest that this factor was critical to their entitlement to hold rights and interests in the land. 428 Armunta was somewhat less forthcoming about the basis of her own claim that Murtitjulu Springs was 'her place'. She gave no other evidence explaining the basis for people acquiring rights and interests in land under the laws and customs of the Western Desert. 429 Ngoi Ngoi Donald was born at Watarrka (Kings Canyon). She indicated that she was ngurraritja for Watarrka since it was her birthplace. She also claimed to be ngurraritja for Mutitjulu, Yulara, Ampiyarra and Yularra Purlka. She explained her claim on the ground that her father (Lively No 1) had been born near Murtitjulu. However, she did not explain why she had rights and interests in all the places near Uluru that she mentioned, beyond asserting that they are 'together as one place'. Ngoi Ngoi said that she had the Kuniya Tjukurrpa through her father and by virtue of Murtitjulu being her country. 430 Ngoi Ngoi stated that Barbara Tjikartu (whose husband was Lively No 1's brother) was ngurraritja for Uluru because she (Tjikartu) had worked there with the tourists. Insofar as this evidence suggests that a person can acquire rights and interests in land by working on the site, it is not consistent with the applicants' case and appears not to be supported by other evidence. (Tjikartu herself claimed that her country included Uluru through her husband, Nipper Winmati. Nipper was a Pitjantjatjara man born at Docker River, who grew up at Uluru). Ngoi Ngoi did not suggest other criteria by reference to which a person can claim to be ngurraritja for land. 431 A number of indigenous witnesses gave evidence that the country around Uluru is Yankunytjatjara country. Windlass Aluritja said that Pitjantjatjara people cannot be ngurraritja for Yulara because they come from 'other country, different place'. Nobody else owns it. The Pitjantjatjara from Docker River have an affiliation with Ayres Rock because their story lines come in to it but Paddy Uluru told me " It's [Yankunytjatjara] land - mula jatjatjara. " --- meaning it's a [Yankunytjatjara] place. It's still [Yankunytjatjara] and Paddy Uluru was then the traditional owner. The area around Uluru was within Yankunytjatjara country. 432 In their reply, the applicants seem to accept the concept of the 'linguistic identification' of country but suggest that the 'linguistic identity' of a person is a less clearcut concept. However, the applicants do not point to evidence that would allow persons whose first language is Pitjantjatjara, rather than Yankunytjatjara, to be regarded as Yankunytjatjara for the purpose of holding rights in Yankunytjatjara country. The point is not (as the applicants seem to contend) that rights in such country 'cannot be held by any person who has anything that may identify them in any way with a language other than Yankunytjatjara'. It is that the evidence does not explain how, under the laws and customs of the Western Desert, those who were not originally Yankunytjatjara speakers could become eligible to acquire rights in Yankunytjatjara country. However, in my opinion, Dr Willis' evidence does not substantially advance the applicants' case on the existence and content of laws and customs relating to rights and interests in land. Indeed, to the extent that his evidence bears on the question, it appears to be inconsistent in some respects with that of Professor Sutton. This scarcity of evidence of fixed and objectified songline segments correlating with localised "countries" is a major reason why it is difficult to apply the construct of "estates" to strings of Dreaming sites in this case, and why the notion of more of [sic] less constantly fixed claimant subgroups based on shared interests in such strings is also therefore inapplicable. Tjukurpa stories make up narrative blocks, or episodes, that run across a stretch of country, and I believe that these clusters are bounded by breaks in country that are mirrored in narrative breaks in associated stories. Because of the nature of the activities of ancestral beings, and the variations in the signs of their activities in the landscape, there is no general and simple "narrative rule" that can be articulated for the general case (for example, to determine the boundary of a story, count three sites distant from the tjukurpa site in each direction along the track), however I believe that narrative clusters can be articulated by Anangu for each story in a particular region. Despite the fact that such a rule does not exist in an abstract form that can be generalised to every case, there does appear to be a kind of geographical syntax to the boundaries of these clusters that could be thought of as a general rule (although there are no doubt many exceptions to this general rule): for example, many stories include geographic "breaks", long travels underground or through the air, or long stretches of country where there are no sites associated with inma verses. Anangu appear to be only able to belong to one "college" by virtue of their birthplace and/or that of their parents and grandparents. Although Professor Sutton suggested in the course of his cross-examination that there was a 'fair area of overlap' between his analysis and Dr Willis' description, it is difficult to avoid the conclusion that their views on this issue are quite different. 436 Professor Sutton apparently intends the passage I have quoted (par 434, above) to support Proposition 5.3, which asserts that the people of the Western Desert do not identify country as discrete bounded areas or 'estates'. It seems not to be put in support of Proposition 7. Nonetheless, if Dr Willis' views are correct (and I prefer his evidence on this point), they seem to have a direct bearing on the correctness of Professor Sutton's Proposition 7(b) (that one basis for rights and interests in particular country is having a borning place, or that of a parent or grandparent, 'upstream' on a Dreaming track which travels through the country. ) Although Dr Willis was not asked directly about Proposition 7(b), his evidence suggests that he would not have supported it or the equivalent proposition stated in the Points of Claim (par B1.10(b)). 437 Dr Willis's evidence supports the contention that the laws and customs of the eastern Western Desert recognise birthplace as a basis for asserting what he described as 'ownership' of land. But he does not appear to support the idea that long association with a region, in the absence of 'genealogical relationships with land', suffices to establish 'ownership', although he does suggest that 'adjacency' confers 'a degree of ownership and authority, particularly when supported by long-term local residence and knowledge'. Some witnesses were either not asked for this opinion or, when asked, gave little information. For example, neither Johnny Jango nor Nellie Armunta was asked, while Reggie Uluru simply said in response to a question that he and Cassidy Uluru were ngurraritja for the country. 439 While there tended to be a modest degree of common ground among those who were asked, they gave significantly different answers. In addition to herself, she named Johnny Jango, Rita Jango, Todd Jango, Windlass Aluritja, Colin Nipper and the Nipper family, Ngoi Ngoi Donald, the Uluru family, Millie Okai, Nellie Armunta, Nicola Forrester, Kitty Impana and Hawkeye. (Neither Colin Nipper nor Nicola Forrester seem to be a Yankunytjatjara person. When asked whether there were any other families, she replied: 'I only know this mob. ' Alison's evidence that Barbara Tjikartu was ngurraritja is inconsistent with the evidence of Donald Fraser. It also seems to be inconsistent with the evidence of Windlass and Yami Lester that only Yankunytjatjara people can be ngurraritja for the Uluru-Kata Tjurta area and with Pantitji McKenzie's evidence that a woman from one country who marries a man who is ngurraritja for another does not acquire her husband's country. (Several other people who are apparently not identified as Yankunytjatjara claimed to have rights and interests in the area or to speak for the country. (They do not, however, appear to be named by other witnesses who identified holders of rights and interests in that land. ) Pantitji also named the Jango family, Windlass Aluritja, Nellie Armunta, Colin Nipper, Lively No 1 and his children, Lively No 1's siblings and their children, Mille Okai and her first husband. In addition, she identified certain other people, such as Nancy Paddy and Nunjima Robinson, who were not mentioned as native title holders by other witnesses. • Kitty Impana at first named the following as ngurraritja : Johnny Jango (whom she described as her brother), Frank Djana (who is her brother), Cassidy Uluru and Cassidy's nephew, Sammy Wilson. Later in her evidence she also named a number of people living near Yulara as ngurraritja including her sister, Elsie Malbungka. It appears that no other witnesses identified any people in the second category as ngurraritja , while only Peter Wilson referred in evidence to Sammy Wilson as someone who might speak for the country. Apart from Frank Djana himself, Betty Conway and Rita Jingo, Impana appears to be the only witness to have nominated him as a native title holder for the Uluru-Kata Tjurta area. The case that they seek to make out, therefore, is the combination of 'conditions' and 'additional factors' to which I have referred. These are said to be the laws acknowledged and customs observed by the people of the Western Desert, including members of the compensation claim group, at the time the compensation acts occurred. 441 In Yorta Yorta (HC) , as I have noted, the joint judgment pointed out (at [49]) that laws and customs do not exist in a vacuum, but derive from all forces that go to make society. In that case, the content of the laws and customs was known, but there was no society which continued to acknowledge and observe them (at [50]). Here it is the content of the laws and customs that is in issue. 442 I have found that there is (and was) a society now known as the 'Western Desert bloc' and that the society continued to exist at least until the time the compensation acts occurred. But these findings do not establish that the applicants have made out their case: that is, that at the time the compensation acts took place, the laws and customs of the Western Desert bloc relating to rights and interests in land were those pleaded in the Points of Claim. 443 It is important to appreciate that the applicants do not invite me to select one or two criteria from the eleven pleaded conditions or additional factors as representing the laws and customs of the Western Desert. There are doubtless many reasons for not doing so, not least the fact that such a submission would have attracted vehement objections from the respondents on the ground that had such a case been pleaded they would have conducted the proceedings differently. But the evidence adduced on behalf of the applicants must be assessed against the case that they have pleaded and to which they have adhered. The applicants, for example, abandoned their pleaded contention that a woman giving birth to a child on particular country thereby becomes ngurraritja for that country. The respondents do not submit that what amounts to an amendment to the pleadings prevents the applicants succeeding, if the evidence supports the balance of their claims. Similarly, I would not regard as necessarily fatal the apparent absence of evidence to support the claim that the laws and customs observed and acknowledged by members of the compensation claim group include the principle that a person acquires rights or interests in country if a close relative died or is buried on the land (par B1.10(d)). 446 However, even if a reasonably flexible interpretation of the pleadings is adopted, the applicants face very serious difficulties in making out their case. The most fundamental problem is that the evidence does not reveal a consistent pattern of observance and acknowledgement of laws and customs, or even practices, relating to rights and interests in land. Consequently, the evidence falls short of establishing the existence of a body of laws and customs relating to rights and interests in land that was acknowledged and recognised by members of the Western Desert bloc at the relevant time or times. A second major difficulty is that the evidence of virtually none of the senior Aboriginal witnesses supports the distinction between 'conditions' and 'additional factors' underpinning the applicants' pleaded case. 447 The pleaded case seems to have been deliberately framed in very wide terms in order to accommodate the range of views and practices expressed or described by the indigenous witnesses. Be that as it may, the breadth of the criterion tends to obscure the fact that the indigenous witnesses expressed very different views as to the content of the laws and customs that they recognised and observed and that determined who became ngurraritja for sites within the Uluru-Kata Tjurta area. 448 Some witnesses were adamant that the area was Yankunytjatjara country. Others claimed that Pitjantjatjara or other non-Yankunytjatjara speaking people can be and are ngurraritja for that country. Some said that a person can take country from either a grandfather or grandmother. Other witnesses appeared to limit the principle to male ancestors. Some supported the principle that country can be taken through a wide range of relatives and indeed claimed that a person can choose his or her country from among the various possibilities. Others recognised a more limited principle of descent and seemed to reject the notion that people can choose to be ngurraritja for country. Some seemed to accept that birth on a Tjukurrpa track travelling to or through a particular site can make the person ngurraritja for that site. Others disputed that proposition. Some thought that long residence, or even working in an area for a long period, is sufficient to constitute the person concerned ngurraritja for the area. Others denied that there is or was any such custom. 449 I reiterate that I appreciate and accept the need for some leeway in interpreting the indigenous evidence. If most witnesses gave evidence broadly compatible with the pleaded case, it perhaps would be open to disregard minority or idiosyncratic views or practices. But this is not the state of the evidence. It reflects such a variety of opinions, practices and assertions that it cannot be taken as establishing that the indigenous witnesses or members of the compensation claim group observed and acknowledged at the relevant times laws and customs of the Western Desert bloc as pleaded in the Points of Claim. 450 At the risk of repetition, I stress that I was not invited to pick and choose among the laws and customs relied on by the applicants. I should also observe that my finding does not necessarily imply that none of the indigenous witnesses is ngurraritja for sites in the Uluru-Kata Tjurta area under laws and customs currently observed and acknowledged by them. My finding is that the applicants have not made out the particular case on law and custom that they have chosen to plead and to press in their final submissions. This does not necessarily mean that the people who gave evidence of this kind lack a genuine belief in the validity or legitimacy of the 'laws' and 'customs' that they identified, or the claims that they advanced. But in my opinion the evidence as a whole does not support the applicants' contention that the laws and customs acknowledged and observed by the indigenous witnesses or the compensation claim group correspond in substance to those identified in the Points of Claim. Indeed, addressing that question presents some problems. The gaps and inconsistencies in the evidence, when assessed against the applicants' pleaded case, make it difficult to identify a particular body of laws and customs for the purpose of determining whether the laws and customs are 'traditional'. 453 Nonetheless, since the respondents have raised the issue, I shall deal with it. For this purpose I propose to assume, contrary to my findings, that the applicants have shown that members of the compensation claim group acknowledged and observed laws and customs to the effect of those pleaded in the Points of Claim. The issue is then whether the applicants have established that those laws and customs are the traditional laws and customs of the Western Desert, within the meaning of s 223(1) of the NTA . 454 Native title rights and interests derive from traditional laws and customs, not from the common law. The role accorded to the common law is that stated in s 223(1)(c) of the NTA , namely the recognition of native title rights and interests: Ward (HC) , at [20]. The rights and interests asserted by the compensation claim group must therefore find their origins in a normative system that existed before the Crown acquired sovereignty over the claimed land: Yorta Yorta (HC) at [38]. Rights or interests in land created after sovereignty and which owed their origin and continued existence only to a normative system other than that of the new sovereign power, would not and will not be given effect by the legal order of the new sovereign'. (Emphasis in original. Nor is it to deny the efficacy of rules of transmission of rights and interests under traditional laws and traditional customs which existed at sovereignty, where those native title rights continue to be recognised by the legal order of the new sovereign. The rights and interests in land which the new sovereign order recognised included the rules of traditional law and custom which dealt with the transmission of those interests. Nor is it to say that account could never be taken of any alteration to, or development of, that traditional law and custom that occurred after sovereignty. Account may have to be taken of developments at least of a kind contemplated by that traditional law and custom. Indeed, in this matter, both the claimants and respondents accepted that there could be "significant adaptations". But what the assertion of sovereignty by the British Crown necessarily entailed was that there could be no parallel law-making system in the territory over which it asserted sovereignty. To hold otherwise would be to deny the acquisition of sovereignty and as has been pointed out earlier, that is not permissible. Because there could be no parallel law-making system after the assertion of sovereignty it also follows that the only rights or interests in relation to land or waters, originating otherwise than in the new sovereign order, which would be recognised after the assertion of that new sovereignty are those that find their origin in pre-sovereignty law and custom'. (Emphasis added. It is only those normative rules that are "traditional laws" and customs'. (Emphasis added. In such cases, difficult questions of fact and degree may emerge, not only in assessing what, if any, significance should be attached to the fact of change or adaptation but also in deciding what it was that was changed or adapted. It is not possible to offer any single bright line test for deciding what inferences may be drawn or when they may be drawn, any more than it is possible to offer such a test for deciding what changes or adaptations are significant. Indeed, so far as the second of those issues is concerned, it would be wrong to attempt to reformulate the statutory language when it is the words of the definition to which effect must be given. ' (Emphasis added. (Emphasis in original. The relevant criterion to be applied in deciding the significance of change to, or adaptation of, traditional law or custom is readily stated (though its application to particular facts may well be difficult). 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? ' (Emphasis added. The appellants did this by identifying the traditional laws and customs as those of the Western Desert Bloc. In this case, the appellants asserted that they possessed rights and interests in relation to the claim area by virtue of being recognised under the traditional laws and customs of the Western Desert Bloc as Nguraritja for sites or tracks on the claim area. They identified the rights and interests as those that flowed from the status of Nguraritja under the traditional laws and customs of the Western Desert Bloc. It was not enough for them to show that they purported to acknowledge or observe the traditional laws or customs of the Western Desert Bloc. If, for example, the appellants had been "usurpers" of the claim area, who were not recognised under the laws and customs of the Western Desert Bloc as capable of possessing native title rights and interests, their claim could not succeed. This would be so even though they might have genuinely been attempting to act in conformity with their understanding of the traditional laws and customs of the Western Desert Bloc. If, for example, the appellants' forebears had formulated new and expanded Nguraritja rules in the 1920s or later specifically in order to accommodate unprecedented population shifts, and this form of accommodation did not form part of, or was not recognised by, the traditional laws and customs of the Western Desert Bloc, the appellants would be unable to satisfy the requirements of s 223(1)(a) of the NTA. This would be so even if the appellants were regarded by other members of the Western Desert Bloc as part of that society, although in practice the two issues (membership of the society, and recognition by the traditional laws and customs of that society of the broader Nguraritja rules) are likely to be closely related. ' (Emphasis added. Virtually all the indigenous witnesses who gave evidence about their laws and customs referred to them as being derived from the Tjukurrpa, or handed down by their parents, grandparents or other ancestors. Of course, as I have explained, the witnesses usually gave this evidence in relation to the particular laws and customs identified by them, rather than by reference more generally to the laws and customs relied on by the applicants. However, even if the limited evidence given by the witnesses is taken as indicating their belief that the laws and customs pleaded by the applicants derive from the Tjukurrpa or from ancestors, the evidence does not, of itself, establish that those laws and customs are traditional in the sense required by Yorta Yorta (HC). People may believe that the laws and customs they currently acknowledge and observe are those followed by their ancestors or laid down by the Tjukurrpa . Nonetheless, the content of those laws and customs may have expanded or altered so much over time that they can no longer be regarded as being founded on the laws and customs of the relevant society at the date the Crown asserted sovereignty (in this case, 1824 or 1825). Such a conclusion may be appropriate even if due account is taken of the High Court's express acknowledgement in Yorta Yorta (HC) that developments of a kind contemplated by traditional laws and customs may themselves be characterised as 'traditional'. As the High Court has said, difficult questions of fact and degree may be involved. While Aboriginal witnesses may be able to recount the content of laws and customs acknowledged and observed in the past, the collective memory of living people will not extend back for 170 or 180 years. In the ordinary course, claimants adduce anthropological evidence to establish the link between current laws and customs (or those observed in the recent past) and the laws and customs acknowledged and observed by the claimants' predecessors at the time of sovereignty. So it is in the present case that the applicants rely to a considerable extent on the evidence of Professor Sutton to establish the necessary link with the laws and customs of the Western Desert bloc at sovereignty. 463 There is, however, a serious difficulty in relying on this evidence to show that the pleaded laws and customs can be regarded as 'traditional'. Professor Sutton's approach may well conform to what he describes as the 'anthropological method'. But the Sutton Report does not address the question of whether the principles Professor Sutton identifies (which, in any event, are not identical to those pleaded by the applicants) are 'traditional'. On the contrary, the Propositions on which Professor Sutton comments, specifically Proposition 7, do not purport to describe behaviour conforming to long-standing norms or rules. Rather they describe what Professor Sutton characterises as 'average or typical behaviour as well as ideal norms'. His analysis does not address the question, crucial to these proceedings, as to whether the 'behaviour' is in conformity with, or dictated by, the rules and norms that formed part of the traditional laws and customs of the Western Desert. 464 As I have noted, Yorta Yorta (HC) recognises that some adaptation of traditional laws and customs may be consistent with a conclusion that the adaptation derives from the normative system in force at the date of sovereignty. But, as Professor Sutton accepted in cross examination, his Report does not consider whether the changes that have occurred can be regarded as adaptive in the required sense. Indeed, although the Report touches on the question of 'continuity' and although Professor Sutton recognises that there have been changes from the 'ossified view' of the rules held by older people, the Report does not systematically explore the extent to which the principles identified in Proposition 7 incorporate changes to the traditional laws and customs acknowledged and observed at sovereignty. In fact, the Report frequently refers to such material and indeed has a section describing aspects of the work of a number of anthropologists and ethnographers. In addition, there are two particular sections of the Sutton Report that, although not expressly considering whether the laws and customs identified by Professor Sutton can be described as traditional, nonetheless contain material that might be thought to bear on that question. Nor do they identify "clans" or other discrete bounded territorial groupings of people'. 467 Professor Sutton, in dealing with the question of clans or estates, rejects the view that the population of the Western Desert was divided into named land-holding descent-based groups. He accepts that much of anthropological literature, including works by Professor R M Berndt and Mr Tindale, contains references to local territorial groups. However, Professor Sutton asserts that these works should not be accepted as correct, at least insofar as they suggest that traditional Western Desert society was characterised by land-holding descent-based groups. Professor Sutton supports this claim by arguing that the anthropological literature, properly understood, suggests that birth in a particular area is a 'privileged pathway' for strong identification with and thus rights in the land and sites of that area. 468 Professor Sutton recognises that Tindale, in particular, was a strong proponent of the view that Western Desert society was divided into small groups (clans) founded on patrilineal descent. It tends to be composed of male members of the clan minus the older girls and women who have been sent away as wives to other clans, but plus the girls and women who have been brought in as brides for local clansmen. To these persons may be added a few casual visitors and some odd persons who for one reason or another have become attached to the local group from other clans. Such persons through the passing of time may become a part of it. Thus the local group or horde constitutes the usual agglutinative group which traverses a hordal territory in the seasons favourable for such activities. Of the 190 data cards, 97 (slightly more than half) recorded this information. 470 Professor Sutton says that a common birth country and totem between parent and child could be found in only a minority of the sample of 97 cards. Sixty of the subjects appeared to have a principal totem that differed from the totems of both parents; six had the same totem as their fathers (but not their mothers); and seven had the same totem as both parents. Thus only 13 shared a totem with their father. But it is not consonant with Tindale's sweeping claim of a patrilineal system for totems and countries, combined, in this area'. One would also expect a large number of cases where three generations of consistent transmission of the same "totem" were visible, from father to offspring, and from male offspring to their offspring. Analysis of the Tindale data, which contain genealogical data on several hundred people, reveals only ... nine cases ... where there are totems or birthplaces common to three generations of kin'. He says, for example, that Professor R M Berndt's data for asserting (in 1959) that local groups at Ooldea were united by common patrilineal descent have never been made available for checking. Professor Robert Layton's finding (in 1983) that descent groups existed in the Ayres Rock region is said to be doubtful because his data show that a person's own estate was the one in respect of which the person most frequently exercised his or her 'inchoate rights'. Tindale's reliance on the 'horde' is said to lack support in the literature and to have been based upon a misunderstanding of information supplied to him. Professor Sutton recognises that Professor Nancy Munn 'leant [in her studies] more towards an essentially patrilineal group model', but says that she, in effect, modified the model by accepting recruitment through birthplace and loss of identification with father's country 'under appropriate conditions'. This led Professor Sutton to exclude from his analysis cases that Tindale is likely to have regarded as supporting his (Tindale's) thesis. • Tindale's views, as outlined in his 1972 article, were not based solely, or even primarily, on the data collected in the course of the 1933 expedition. Tindale undertook at least seven further expeditions to the Western Desert between 1934 and 1965. His views were based on the totality of his research, not merely information gathered in 1933. • In any event, Tindale's surviving 1933 field data do not constitute a complete record of the notes he compiled during the expeditions. Some of the raw information gathered by Tindale was therefore not available to Professor Sutton. That information may well have influenced the outcome of Professor Sutton's reanalysis of the data cards. • Professor Sutton's methodology led him to exclude cards that did not contain information identifying the country of both parents of the subject. The result was to exclude some cards containing information that supported Tindale's thesis. • Despite making certain disparaging remarks about Tindale's status as a scholar, Professor Sutton acknowledged that other experienced anthropologists regarded Tindale's work highly. Professor Sutton himself conceded that Tindale was a 'careful and meticulous scholar', although adding the qualification 'at his ethnographic level'. This is not to say that Tindale's views are unchallengeable, nor that his approach would necessarily survive rigorous anthropological re-evaluation. But, on the evidence in this case, Professor Sutton's reanalysis of the data cards is of little probative value in challenging Tindale's hypothesis. As the Commonwealth submits, the earlier anthropologists, generally speaking, identified a system whereby local groups of people, recruited on a principle of patrilineal descent, had rights or interests in relatively bounded estates, which were largely defined by clusters of spiritually significant sites. As I have noted, Professor Sutton expresses a preference for an approach which includes within the 'normative', behaviour that is average or typical, as well as behaviour that conforms to ideal norms. This approach is much less concerned with historical continuity, in particular with whether current rules or practices can be regarded as 'traditional', than with simply describing and recording contemporary practices and 'case material'. It is perhaps therefore not surprising that Professor Sutton sees the anthropological literature in a somewhat different light than might a person considering whether current land-holding practices can fairly be regarded as conforming to the traditional laws and customs of the Western Desert. 479 What might be characterised as the conventional view of the land-holding unit of Western Desert society is reflected in Professor R M Berndt's paper, ' The Concept of "the Tribe" '. This paper, which Professor Sutton agreed is a 'seminal paper on Western Desert society', was based in part on research conducted by Berndt among Pitjantjatjara and Yankunytjatjara people of the eastern Western Desert. Berndt also reviewed the earlier anthropological literature, including the work of Tindale and Elkin. Although the "country" in which a person is born is in a sense unique, and is connected (ideally) with all members of the patrilineal descent group, the totemic associations are not --- although the actions performed by that particular ancestor, either alone or in conjunction with others, are. It is the ancestor and his actions which are enshrined by that group and which, when viewed in relation to the whole chain of sites connected with him or her, constitute the total mythology. Each group holds in custody part of this myth and the ritual relevant to it. Executive powers are almost entirely in the hands of initiated males, who control, and possess the right to perform, the major totemic rituals relevant to that group and various other religious activities. The female members of such a group move out of it at marriage, but are expected to maintain spiritual and emotional ties with their "country"; they do not relinquish their totemic affiliations. We may therefore speak of this local unit as a patrilineal descent group . Its male members have the most active associations with their country and all it stands for, and with their wives form a relatively closely knit body. This system of ritual and associated beliefs is usually referred to as patrilineal cult totemism. Such territory is, ideally, unalienable; but members of other local groups are not debarred from entry, or from hunting game or collecting food within its precincts, although they may be denied access to a sacred site where objects of ritual use are stored. ]' (Emphasis added. He recorded that he had isolated for discussion a number of social units. These were: the dialectical unit; the local group (which he and others regarded as of basic importance); the horde; the religious cult unit; and the wider unit formed seasonally by a number of hordes coming together to perform sacred rituals. Berndt emphasised, however, that 'conditions in this region [were] changing quite rapidly'. As Aboriginal people had moved into settlements, the 'sense of community' appeared to be 'much weaker than in the traditional context'. 482 Professor Nancy D Munn conducted research among Aboriginal people at the Areyonga settlement during the period 29 March 1964 to 2 February 1965. She published the results of that research: A Report on Field Research at Areyonga 1964-1965 (1965). Munn reported that there were about 200 adults who 'closely associate[d]' with Areyonga, of whom 87 per cent were Pitjantjatjara and only 2 per cent were Yankunytjatjara. However, Munn's informants included Nipper Winmati and the people living at Areyonga at the time included Barbara Tjikartu and Ngoi Ngoi Donald. 483 Professor Munn commented that the Pitjantjatjara people at Areyonga were much less traditionally oriented than she had previously realised. Most had come originally from the Petermann Ranges and nearby areas. (I use the term local group to refer to the land-owning group). The name of the main site of the locality was the one generally given by an informant asked for the name of the country (ngura) from which he or she came. I will call the home country the local group's estate. No part of the country --- neither the design-marked sacred boards and stones lodged in crevices and caves, nor any of the ordinary stones of the country, which might be metamorphosed forms of the ancestors or Dreamings --- should be "touched" (removed or molested) without their approval. An estate ordinarily includes a few Dreamings, but one of these is treated as the dominant or representative one. There also were certain conditions under which an individual might lose his rights in his father's home country. The example Munn gives is of a man who remained with his wife's family after marriage, and whose son grew up in the wife's country rather than the man's country. In that situation, the son had no right in his father's country, but was considered a member of his mother's and her brothers' land-owning group. 485 Professor Robert Tonkinson of the University of Western Australia has undertaken extensive field work with Western Desert people since the 1960s, mainly in the Jigalong region of Western Australia. It consists of a limited number of important waterholes and sacred sites to which the members of the group are intimately related through bonds that imbue them with strongly felt sentiments of attachment and belonging. At that time, Professor Layton was a post-doctoral research fellow at the Australian Institute of Aboriginal Affairs. The primary purpose of his work was to study local traditions, particularly rights in land. The study was in part prompted by a request that Professor Layton prepare the claim book for the Lake Amadeus Land Claim. Layton's main informants included Nipper Winmati and Paddy Uluru. 488 Layton expressed the view that, in common with other Australian Aborigines, the Pitjantjatjara and the Yankunytjatjara recognised named areas of land corresponding to 'estates' as defined by Professor Stanner. He found that each estate was associated with a limited number of descent groups: that is, groups of people united by ties with a specified locality, in which membership was normally transmitted from parent to child. Although Layton did not say that the groups were exclusively patrilineal, he found that there was a strong preference for patrilineal descent. In subsequent published figures, Layton recorded that of the 114 cases he studied in the region, 69 per cent claimed to have become a member of the relevant land-owning group through their fathers, while 20 per cent claimed through their mothers and eight per cent through the sibling of a parent. 489 Dr Lee Sackett is an anthropologist who has carried out field work with Western Desert people since 1972 and has published a number of papers on the relationship between Western Desert people and the land. Dr Sackett prepared the anthropologist's report tendered in evidence in the Tempe Downs and Middleton Ponds/Luritja Land Claim (' Tempe Downs Land Claim ') in 1994. The Tempe Downs Land Claim involved several claimants who are or have been claimants in the present proceedings, such as Bessie Liddle and members of the Walkabout family. Sackett's report, which Professor Sutton described as carefully researched, clear and reliable, was in evidence in the present proceedings. 490 Dr Sackett identified four countries or ngurra within the Tempe Downs claim area. That is, claimants speak of country not as neatly demarcated and enclosed blocks of land, but as clusters of sites, Dreamings and Dreaming lines or "tracks" and surrounding stretches of terrain'. In line with this, many simultaneously assert their group membership and their privileges with respect to country by saying that they are in fact following their tjamu and their mama. Sackett also acknowledged that a small number of claimants traced their descent group links in other ways. However, in each case this was because of an inability to follow the descent of upper generational non-Aboriginal men. Given the harsh uncertainties of desert life, such a state of affairs is unlikely to have occurred in the traditional past. And certainly today some claimants who take country from their fathers were not born in their fathers' countries, while a number of people whose parents' countries lie outside the claim area nonetheless were, as a consequence of migration, station work, etc, born within its boundaries. To realise this prospect, a person must have his or her potential claims recognised and accepted by others --- specifically, by those who have already had their own claims affirmed. However, Myers' work has been primarily among the Pintupi people of the northern Western Desert and is relatively recent, having been undertaken in the 1970s and 1980s. Professor Sutton, who acknowledges that Myers 'considered Pintupi land tenure to be an elusive matter', does not attempt in his Report to relate to Myers' findings to the laws and customs of the Western Desert at the date of sovereignty or prior to the influence of European settlement. 495 Finally, reference should be made to the work of Professor Annette Hamilton. Like Myers, Hamilton carried out her field work with the Western Desert relatively recently, most pertinently with Yankunytjatjara people at Mimili (Everard Park) in the early 1970s and subsequently with Yankunytjatjara and Pitjantjatjara people in the Northern Territory for the purposes of the Lake Amadeus Land Claim . 496 Professor Sutton argues that Hamilton 'flatly denied a principle of patrilineal descent for land rights and stressed birthplace instead'. This rather overstates the position, since Hamilton recognised that patrilineal descent was involved in the acquisition of rights in country. However, she attributed primary force to birth at a particular place: A Hamilton, 'Descended from Father, Belonging to Country' in Politics and History in Band Societies (1982), at 101. In addition, as Professor Sutton acknowledges, Hamilton denied the existence of any settled system of land tenure in the Western Desert, apparently even at sovereignty. This is not a view that has commanded widespread acceptance in the anthropological literature. Nonetheless, it seems to me that the weight of the anthropological evidence in this case, which includes the published work of distinguished researchers who have studied the people of the Western Desert, points clearly to a particular conclusion. 498 For the reasons I have given, I am not persuaded by the evidence of Professor Sutton (or Ms Vaarzon-Morel), to the extent that it suggests otherwise. This does not imply that I think that further debate among anthropologists is foreclosed. On the contrary, there may well be room for further scholarly inquiry on the issues canvassed in the evidence in the present case. However, I am bound to decide factual questions on the evidence presented to me. That evidence does not dislodge or rebut the views consistently expressed by the early scholars who carried out field work among Aboriginal people in the Western Desert, including the eastern Western Desert. 499 The findings I have made about the content of the traditional laws and customs of the Western Desert are inconsistent with the applicants' case. The applicants repudiate an emphasis on patrilineal descent as a key element in the acquisition of rights and interests in land under traditional laws and customs. They also reject the concept of 'discrete bounded areas or "estates"' and assert that 'unpredictability, negotiability and contestation' are features of the laws acknowledged and customs observed by the people of the eastern Western Desert. Yet the anthropological literature (and the evidence of Dr Willis) recognises that 'estates' are an element of traditional laws and customs. The evidence does not support the applicants' assertion that the laws and customs are unpredictable or subject to contestation in the manner suggested by them. 500 It is true that there is a modest overlap between the principles governing rights in land identified in the anthropological literature and the various 'conditions' and 'additional factors' advanced by the applicants as reflecting modern laws and customs. But the nature and scope of the conditions and additional factors go far beyond the circumscribed principles of traditional laws and customs articulated in the anthropological literature. This is particularly so in relation to the applicants' wide-ranging proposition that 'kin links' can suffice to constitute a person ngurraritja for country. 501 The applicants do not suggest that the substantial differences between the two sets of criteria can be accommodated under the rubric of traditional laws and customs of the Western Desert. Specifically, the applicants do not contend that if the content of the traditional laws and customs was as I have described, those laws and customs contemplated the virtual abandonment of patrilineal descent and the acceptance of an ill-defined and far-reaching 'kin links' principle identifying ngurraritja for country. In any event, there is nothing in the evidence (once the views of Professor Sutton and Ms Vaarzon-Morel bearing on this issue are put to one side) to suggest that the pleaded criteria can be classified as 'adaptations' of traditional laws and customs. In this respect, it is necessary to remember that the applicants bear the onus of establishing that the laws and customs on which they rely are 'traditional' in the required sense. As I have noted, it is appropriate, when determining whether the onus has been satisfied, to take into account the difficulties of proof inevitably confronting indigenous claimants. It is also necessary to bear in mind that Yorta Yorta (HC) accords applicants some leeway in accommodating post-sovereignty alterations to laws and customs within the framework of traditional laws and customs. Nonetheless, the onus remains with the applicants. 503 I have approached the question of whether the laws and customs put forward by the applicants are traditional on the assumption, contrary to my findings, that the applicants have shown that the Aboriginal witnesses acknowledged and observed those laws and customs at the relevant times. Virtually all of the Aboriginal witnesses attributed the binding force of the laws and customs they described to the Tjukurrpa and to the teachings of their ancestors. Many, including Dr Willis, gave evidence that the laws and customs, being handed down by ancestral beings, are unchanging and thus cannot be modified by human intervention. However, I do not regard these beliefs as incompatible with adaptation of traditional laws and customs, any more than the widespread nineteenth century belief that the common law was constant and unalterable prevented judge-made law adapting to meet changed social and economic circumstances. 504 If the indigenous evidence consistently favoured a particular set of laws and customs, an inference might well be available that the laws and customs described by the witnesses have remained substantially intact since sovereignty, or at least that any changes have been of a kind contemplated by pre-sovereignty norms. The evidence is not, however, consistent. Accordingly, the force of any inference that might otherwise be available is much reduced. Indeed, the fact that in modern times people apparently have adhered to such different versions of law and custom rather suggests that the changes that have occurred since sovereignty are not mere 'adaptations'. 505 The anthropological evidence must also be considered. Even if it does not warrant the findings I have made as to the content of traditional laws and customs, the evidence at least suggests that the criteria for acquiring rights and interests in land under pre-sovereignty norms were substantially more restrictive than the laws and customs said to be currently acknowledged and observed. In particular, it suggests that patrilineal descent played an important role in pre-sovereignty norms. It is significant, too, that Professor Sutton implicitly accepted that the 'messier realities of the case material' relating to current practices reflect norms that are different from the criteria articulated by older and more senior people. 506 Moreover, some of the indigenous evidence seems to support, or at least to be consistent with, the opinions expressed by the early anthropologists. Some witnesses, such as Windlass Aluritja, gave evidence suggesting that there was a close correlation between the country of a person's male forebears and the person's own country and Tjukurrpa . Others referred to the importance of a 'borning' taking place on the father's country. Several witnesses, including Judy Trigger and Rita Jango, not only said that rights and interests were acquired through male ancestors, but gave examples of claims through female relatives being rejected by ngurraritja . Evidence of the kind referred to in this paragraph is consistent with the emphasis on patrilineal descent identified in much of the anthropological literature discussed earlier. 507 The applicants seek to fill the gaps in the evidence by relying on the Sutton Report. But as I have explained, that Report does not directly address the critical question. Insofar as the contents of the Report touch on that question, the analysis does not assist the applicants to establish that the current laws and customs relating to rights and interests in land represent an adaptation of pre-sovereignty norms. The result, in my opinion, is that the evidence is simply insufficient to enable me to conclude that the laws and customs pleaded by the applicants, to the extent that they were acknowledged and observed by the Aboriginal witnesses at the relevant times, are the traditional laws and customs of the Western Desert. 18. However, I think it appropriate to make several observations concerning the evidence on this topic. 510 First, I have no doubt that the persons authorised by ARAC to conduct the site clearance believed that they were undertaking extensive consultations with Aboriginal people and that these were designed to ensure that any sites of significance were identified and that the wishes of Aboriginal people were ascertained and given due consideration. The evidence of Mr Browning and Yami Lester supports that finding. 511 Secondly, despite the efforts to ensure that the site clearance was undertaken thoroughly, I have serious doubts as to whether the Aboriginal people fully appreciated what they were being asked to approve. Some of the Aboriginal people, particularly Paddy Uluru, were anxious to remove tourists and the infrastructure servicing them from the sacred and ceremonial places at or near Uluru itself. The actual site visits undertaken through ARAC were relatively brief (Mr Browning said that the crucial visit took about two hours). It would be surprising if the Aboriginal people fully understood, from what they were told, either the scale of the proposed development (let alone what has in fact occurred) or the consequences for any claims that might later be made by them in relation to the land. 512 Thirdly, the responses of the Aboriginal people consulted was by no means unequivocal so far as the assertion of rights and interests in the Yulara Block was concerned. It's okay to build houses here but it's still, and I remember this clearly, it's still our land, Aboriginal land, but you're welcome to put houses here, all the tourist place and all that and the same for the airstrip. Palya, Okay. But it's still our land. We used to go hunting all over this part. There's a water point here (at the site of Yulara, the small one) and we used to go hunting for kangaroos here. But you're welcome to put the houses here. No doubt, as the Commonwealth submits, this omission reflected attitudes of the time and 'things would be done differently now'. But the failure to consult Aboriginal women hardly engenders confidence in the thoroughness or exhaustiveness of the process. 514 For these reasons, if I had taken a different view as to the sufficiency of the evidence adduced by the applicants in support of their pleaded case, I would not have regarded the site clearance undertaken in 1974 as an insuperable obstacle to them succeeding in their claim. I would have reached this conclusion notwithstanding the evidence of Reggie Uluru to which I have previously referred (par 298, above). Several senior women gave evidence that the Kungka Kutjarra track travels from Mantarurr to Katartitja and then northeast to Ulpanyali. Evidence was given, for example by Armunta, that the two women, Nyarapai and Anyankirri, 'sat down' at Katartitja and that the site had 'a big, big Tjukurrpa there'. Armunta said that as a child she had visited the site, which included a soakage, with her parents. 516 The Court visited Katartitja and women's ceremonies and inma were performed in my presence. The inma were said to include the name of Katartitja. 517 The claim that Katartitja has long been recognised by Aboriginal women as a site of significance bears on the quantum of compensation payable, should the applicants establish that members of the compensation claim group had native title rights and interests that were extinguished as a result of the compensation acts. Since the applicants have failed to establish that native title existed at the material times, the Katartitja claim is now of little or no significance to the outcome of these proceedings. Nonetheless, in view of the evidence and submissions addressing the issue, it is appropriate that I should record a finding. 518 In assessing the applicants' claim, a critical fact is that the site identified as Katartitja was excavated only in 1996, as part of major works extending the runway at Connellan Airport. Prior to the excavation, as Armunta accepted in her evidence, the site identified by the Aboriginal witnesses was buried under a very large volume of sand. In view of this and other evidence, I am not satisfied that the site now known as Katartitja was of spiritual significance to Aboriginal women before the excavation took place. I do not accept the applicants' submission that there were always physical features at the site, such as a soakage and trees, that made the site important. • Armunta and Tjikartu gave detailed evidence in the Lake Amadeus Land Claim about the track of the Kungka Kutjarra, including preparing a map, but made no mention of Katartitja as a site of significance. • Bessie Liddle, who claimed to be the 'boss' for the Kungka Kutjarra, gave evidence in the Tempe Downs Land Claim about the Tjukurrpa, but said nothing about the Two Sisters stopping anywhere on the Yulara block. Indeed, in evidence in the present case Bessie said that she was not told about Katartitja until very recently. • In 1996, the Central Land Council's anthropologist, Ms Munster, prepared a site clearance report for the Aboriginal Area Protection Authority. The report was prepared following consultations with senior Aboriginal people, including women who claimed to be knowledgeable about the Kungka Kutjarra. The report recorded the custodians' consent to all upgrading works at the Airport, subject to environmental rehabilitation of two sandhills. The report did not indicate that there was any site within the Yulara block of particular spiritual significance. 520 The finding I have made does not necessarily imply that the Aboriginal witnesses fabricated their evidence as to the significance of Katartitja. It is possible that they have come to believe that the site is important. Perhaps, too, there has been some confusion about the historical location of sites on the Kungka Kutjarra track. Be that as it may, the applicants have failed to satisfy me that the site at Katartitja had any particular spiritual significance prior to 1996. 19. Extinguishment can occur by the express grant of estates or interests in the land or other exercises of power by the new 'sovereign' that are inconsistent with the continued existence of native title. 522 The conclusions I have already reached make it unnecessary to consider the effect of the extinguishing acts on native title or on the right to compensation for any loss of native title rights and interests. Nonetheless, the parties have addressed these matters and I propose to deal with them. 523 In this section, I consider the effect of the pastoral leases on native title. I do so on the assumption that the applicants can establish that when the first lease was granted (1882), their predecessors acknowledged and observed traditional laws and customs of the Western Desert bloc as pleaded in the Points of Claim. The significance of the leases is that they were the only grants made prior to the enactment of the RD Act that could have extinguished any native title rights and interests that may have existed in respect of the Application Area. It is common ground that neither of the leases wholly extinguished pre-existing native title rights and interests. The parties differed, however, as to the extent of the extinguishment. The lease was granted pursuant to the Northern Territory Land Act 1872 (SA) (' 1872 Act ') (as amended by the Northern Territory Land Act 1876 (SA) (' 1876 Act ')) and was for a term of twenty-five years, commencing on 1 January 1882. PL 456 was expressed to be for 'grazing and other pastoral purposes'. 525 The 1872 Act empowered the Governor to demise waste lands for grazing and other pastoral purposes, for a period not exceeding 25 years: 1872 Act , s 74; 1876 Act , s 3. Non-payment of rent was to work a forfeiture of the lease: s 12. The legislation provided a procedure for recovery of possession from a person in possession under colour of a forfeited lease: ss 93-97. Unauthorised occupation of waste lands attracted pecuniary penalties: s 100. 526 The regulations provided that the leased land had to be stocked and kept stocked with cattle: Northern Territory Pastoral Regulations 1881 (SA), regs 2, 8. However, they say that this entitlement was subject to any reserved rights or other restrictions imposed by the lease or pursuant to statute. 530 The applicants point out that none of the rights of the lessee was completely unqualified. The lease incorporated the whole of the land subject to the 1882 lease and thus included the Application Area. Extraordinarily enough, at least to modern observers, the lease also incorporated the whole of the land within what is now the Uluru-Kata Tjuta National Park. 534 The lease was granted 'for pastoral purposes' pursuant to the Northern Territory Crown Lands Act 1890 (SA) (' 1890 Act '), for a term of forty-two years commencing on 1 April 1896. The 1896 lease was determined on 21 May 1898, although the evidence does not reveal the reason for the termination. 535 The provisions of the 1896 lease were similar although not identical to those of the 1882 lease, and included a reservation in same terms in favour of Aboriginal people. It is not suggested that the 1896 lease conferred greater rights on the lessee than the 1882 lease, nor that it extinguished native title rights and interests to any greater extent than the earlier lease. Accordingly, it is not necessary to examine in detail the terms of the 1890 Act or of the 1896 lease. The major provisions of the 1890 Act and the regulations made thereunder are outlined in Ward (HC), at [397]-[401]. The following records the common ground. 537 The leases were valid when granted. They were 'pastoral leases' as defined in s 248 of the NTA . Since each lease contained a reservation in favour of Aboriginal people, it did not confer a right of exclusive possession on the lessee and was not an 'exclusive pastoral lease' as defined in s 248A of the NTA : Ward (HC) , at [415]. The leases were, therefore, non-exclusive pastoral leases within the meaing of s 248B of the NTA . 538 A valid non-exclusive pastoral lease entered into before 23 December 1996 is a 'previous non-exclusive possession act' as defined in s 23F(2) of the NTA and s 3B of the Validation Act. Part 3C of the Validation Act applies to all previous non-exclusive possession acts attributable to the Territory: Validation Act , s 9K. The grants of the pastoral leases, notwithstanding that they were made before the Acceptance Act came into force in 1911, are acts attributable to the Territory: Validation Act , s 9NA; NTA , s 23JA. The effect of the leases on native rights and interests is therefore to be determined by ss 9L and 9M of the Validation Act . These provisions are set out in par 100, above. 539 Sections 9L and 9M of the Validation Act require the Court to determine the extent to which a previous non-exclusive possession act involves the grant of rights that are inconsistent with native title in relation to the leasehold land. To the extent that the grant of rights and interests is not inconsistent with native title, the rights and interests so granted and the doing of any activity giving effect to them prevail over the native title rights and interests, but do not extinguish them: s 9L. The extinguishment effected by s 9M(1)(a) is taken to have happened when the act was done: s 9M(2). 540 As I have noted, the applicants accept that what was described as the 'portmanteau' expression of a single, comprehensive right to exclude all others could not survive the grant of the pastoral leases. However, they contend that other native title rights and interests possessed under traditional laws and customs were not inconsistent with the rights granted by the pastoral leases and thus had not been extinguished by those leases. The parties' submissions are directed to that issue. They also point out that in Ward (HC) it was held (at 417) that a reservation of the kind included in the pastoral leases in this case 'did not define or confine the rights that native title holders could exercise'. In other words, the reservation did not necessarily have the effect of preserving only those rights specifically referred to in the reservation itself. 542 In any event, so it is argued, the reservation contemplated and preserved native title rights and interests, including activities incidental to those rights and interests. 543 The applicants acknowledge the significance of the holding in Ward (HC) (at [417]) that the grant of a Northern Territory pastoral lease in that case was inconsistent with the continued existence of the native title right to control access to and make decisions about the land. They also acknowledge the holding in Ward (HC) (at [422]), that the native title right to be asked permission to use or to have access to the land was inconsistent with the rights asserted under the various pastoral leases. The applicants accept that any native title rights and interests of this kind were extinguished by the grant of the leases in the present case. 544 The applicants argue, however, that not every right relating to control of access to land or to the making of decisions about the use of the land was extinguished by the grant of the leases. They say that it was only the absolute right to control the use of, or access to the land that was extinguished --- that is, the right to exclude all others. The native title holders could still make decisions among themselves as to how, when and for what purpose they, and each of them, could have access to and use particular land. This was a matter internal to the traditional laws and customs of the native title holders and the rights concerned had not been extinguished by the pastoral leases. The rights could be exercised against other Aboriginal people who acknowledge or are otherwise subject to the traditional laws and customs. The rights also extended to the control of access to the extent necessary to protect significant Aboriginal sites. There may have been a 'core' right under traditional laws and customs to be asked for permission to enter upon or use land and to speak for country. If so, that core right had been extinguished by the grant of the pastoral leases, since the grant involved an assertion by the Crown of control over access to and use of the leasehold land. There could be no question of that right being 'unbundled' into non-exclusive rights. 546 The Commonwealth submits that the 'other expressions of an exclusive right' identified by the applicants (TR2, TR3, TR4, TR5, TR6, TR7 and TR8), would have been extinguished by the grants of the pastoral leases. The right to speak for country (TR2), to look after country (TR3) or to control access to and use of country or resources (TR6, TR7) were simply aspects of the claimed core right to exclusive possession which could not survive the grant of the pastoral leases. The claimed right to control the use of cultural knowledge and symbols (TR8) could not be recognised as a native title right or interest in relation to the land or waters . 547 The Commonwealth says that the claimed rights to use and enjoy country and to take resources (TR11, TR12) are 'too broad and lacking in specificity' to be recognised as native title rights and interests. Mr Hughston formally submitted that, in this respect, Ward (FC)(No 2) was incorrectly decided. 549 Otherwise the Commonwealth appears to accept that the non-exclusive rights claimed by the applicants, if they existed as native title rights and interests, were not extinguished by the grant of the pastoral leases. Section 23G was introduced by the NTAA 1998 , but was amended in the course of its passage through Parliament. This reflects the Government's view that at common law the grant of an interest by the Crown extinguishes any native title the continuance of which is inconsistent with the grant: see Wik Peoples v Queensland [1996] HCA 40 ; (1996) 187 CLR 1 at 243. That is, native title is extinguished to the extent of any inconsistency with the Crown grant. Of course, it is for a court to determine to what extent native title rights and interests are inconsistent with the grant. There is however an opposing view of the common law. That view is that the grant of a non-exclusive possession title, such as a non-exclusive pastoral lease of the kind involved in Wik, does not extinguish native title rights and interest [sic] that are inconsistent with the grant; rather, the inconsistent native title rights are merely suspended while the non-exclusive possession title is in force. This is not the Government's understanding of the common law. If however the position at common law is that a non-exclusive possession agricultural lease or non-exclusive possession pastoral lease does not extinguish any inconsistent native title rights and interests, but merely suspends them while the lease is in existence, then subparagraph 23G(1)(b)(ii) ensures that the inconsistent native rights and interests are suspended for the duration of the lease (including as renewed etc). It applies to the extent that a previous non-exclusive possession act (in this case, the pastoral lease) involves the grant of rights and interests that are inconsistent with native title rights and interests. If, apart from the NTA, the act extinguishes native title rights and interests, those interests are extinguished (s 23G(1)(b)(i)). However, if the act, apart from the NTA , does not extinguish native title rights and interests, those rights and interests are nonetheless suspended for the duration of the lease (s 23G(1)(b)(ii)). Section 9M(1)(a) of the Validation Act corresponds to s 23G(1)(b)(i) of the NTA, while s 9M(1)(b) corresponds to s 23G(1)(b)(ii). The starting point for present purposes is the determination made by the Full Federal Court in that case (reproduced in Ward (HC) , at [47]). 553 The joint judgment in Ward (HC) noted (at [49)] that there was a tension between pars 5(b) and 9 of the determination. Providing that, to the extent that any inconsistency exists, native title rights and interests must yield to the rights of others does not help in identifying the content of a non-exclusive right to make decisions about use and enjoyment. The pastoral leases were acts attributable to the State which denied to the native title holders the continuation of a traditional right to say who could or who could not come onto the land in question. That consequence flowed apart from the provisions of the State Validation Act. It followed that to that extent the grants of pastoral leases extinguished native title rights and interests within the meaning of par (b)(i) of s 12M(1) [the equivalent to the Validation Act, s 9M(1)(a)]. For example, the native title right to hunt or gather traditional food on the land would not be inconsistent with the rights of the pastoral leaseholder although, as stated in par (a) of s 12M(1) [the equivalent to the Validation Act, s 9L], the rights of the pastoral leaseholder would "prevail over" the native title rights and interests in question. On the other hand, for the native title holders to burn off the land probably would have been inconsistent with the rights granted to the pastoral leaseholder, so as to bring about extinguishment as identified in par (b)(i) of s 12M(1). Therefore, independently of any operation of the Territory Validation Act, the consecutive pre-RDA grants of the pastoral leases extinguished this native title right. Paragraph (a) of s 9M(1) of the Territory Validation Act thus was attracted and the relevant native title right extinguished. In that case, it was held that there was a 'fundamental inconsistency' between the asserted native title right to exclude all others from the waters of the claim area, on the one hand, and the common law public rights of navigation and fishing, on the other (at [98]). The rights and interests are those capable of being possessed under traditional laws and customs and need not correspond with common law conceptions of property: Yorta Yorta (HC) , at [40]. Such rights and interests owe their origins to a normative system other than the legal system of the new sovereign power (the Crown). That is, native title rights and interests owe their origins to the traditional laws acknowledged and traditional customs observed by the relevant indigenous peoples: Yorta Yorta (HC) , at [37]. 557 It is therefore a mistake to assume that native title rights and interests are to be expressed in common law terms. For example, it is productive of error to speak of native title rights and interests in terms of 'possession'. To speak of Aboriginal connection with "country" in only those terms is to reduce a very complex relationship to a single dimension. It is to impose common law concepts of property on peoples and systems which saw the relationship between the community and the land very differently from the common lawyer'. 559 Curiously enough, it is this core concept of a right to be asked permission and to speak for country that made native title 'inherently fragile' before the enactment of the NTA. Upon that authority being exercised, by the creation or assertion of rights to control access to land, the right to be asked for permission to use or have access to the land was inevitably confined, if not excluded. But because native title is more than the right to be asked for permission to use or have access (important though that right undoubtedly is) there are other rights and interests which must be considered, including rights and interests in the use of the land'. 560 A number of other propositions were endorsed in Ward (HC). They were recently summarised in De Rose v South Australia (No 2) [2005] FCAFC 110 ; (2005) 145 FCR 290 (' De Rose (FC) (No 2) '), at [145], as follows: (the references are to paragraphs in Ward (HC) ). This is an objective inquiry which requires identification of and a comparison between two sets of rights, one deriving from traditional laws and customs and the other from 'the new sovereign authority that came with settlement' (at [78], [82]). Reference to the use of land is relevant only to the extent that it focuses attention upon the rights pursuant to which the land is used (at [78]). If they are inconsistent, there will be extinguishment to the extent of the inconsistency ... Absent particular statutory provision to the contrary, questions of suspension of one set of rights in favour of another do not arise " ( at [82]). (Emphasis added. Where that occurs, no question of suspension of native title arises. The example given is a post-1975 grant which, by operation of the RD Act , was ineffective to extinguish native title rights and interests (at [82]). (This seems to involve reading the expression "the grant of rights" in s 23G(1)(b) as including a purported grant, given that the RD Act would, apart from the NTA , presumably render the grant invalid. Use of land may suggest, or even demonstrate, that such rights have been created, but the basic inquiry is about inconsistency of rights, not use (at [215]). (Emphasis added. Most of the leases contained reservations in favour of Aboriginal people in terms similar to those contained in PL 456 and PL 1804 in the present case. None of the pastoral leases remained in force at the time the Alyawarr proceedings were commenced. • The right to exclude all others from the claim area was extinguished by the grant of pastoral leases conferring rights inconsistent with the native title right to control access (at [42]). • The applicants retained the rights to hunt, fish and gather on the land, to use the resources of the land (such as food, plants, trees, charcoal, ochre and stone) and to have access to and the use of water on the land (at [121]). The Court rejected the Territory's contention that a native title right of permanent settlement was inconsistent with the rights of a pastoral lease holder (at [131]). • To engage in cultural activities, conduct ceremonies and participate in cultural practices on the land. The Court held that this right included the right to teach people on the land about the physical and spiritual attributes of places and areas of importance (at [135]). • To have access to, maintain and protect places and areas of importance on or in the land (at [138], [140]). The Court held that the word 'protect' was appropriate, since it did not imply that the applicants were entitled to exclude others entirely from the relevant places and areas (at [139]-[140]). • To share or exchange subsistence and other traditional resources obtained on or from the land. The Court rejected the applicants' contention that they had a right to trade in the resources of the land, on the ground that the evidence fell short of establishing the existence of any such traditional right (at [157]). The Court acknowledged that a determination in the more limited form had been made in Ward (FC) (par 5(e)). However, their Honours pointed out (at [151]) that in the Alyawarr Case there were no persons, other than the native title holders themselves, who were bound by the traditional laws and customs. • To control the disclosure, otherwise than in accordance with traditional laws and customs, of spiritual beliefs or practices relating to any part of, or place on, the land (at [163], [164]). The Court held (at [162]) that the propounded right was not a right 'in relation to land'. However, they argue that Ward (HC) should be interpreted as holding only that a pastoral lease extinguishes an absolute native title right to control the use of or access to land, as distinct from a right to control access by other Aboriginal persons in accordance with traditional laws and customs. There is authority to support this view. 567 In De Rose (FCA) , O'Loughlin J rejected (at [553]) a submission that the grant of a pastoral lease by the Crown necessarily extinguishes any native title right to control access to the land or to decide how the land is to be used. His Honour concluded that although the rights and obligations contained in pastoral leases gave superior rights to the lessee with respect to matters of access and use, that did not mean that all native title rights of access and control were necessarily extinguished. I do not see that it necessarily takes away the residual rights of control of access and use as between the holders of native title themselves and any other Aboriginal people who seek access or use of the claim area in accordance with the traditional laws and customs'. Both native title rights were expressed to be subject to the rights and interests granted by the pastoral leases. The latter prevailed over the native title rights and interests, but did not extinguish them (par 10). 569 Paragraph 3(l) of the determination made in De Rose (FC) (No 2) follows closely the corresponding provision in par 5(e) of the determination made in Ward (FC) (No 2) . At one point in the present case, the Commonwealth seemed to suggest that par 5(e) of the determination in Ward (FC) (No 2) had been made by consent and therefore had no value as a precedent. However, there is a clear distinction between a right to control access, generally and as a matter of law, and a right to make decisions about the use and enjoyment of land by Aboriginal people who will recognise those decisions and observe them pursuant to their traditional laws and customs. The continued existence of the former right is incompatible with a pastoral lease entitling the pastoral lessee to determine who has access to the land; the latter is not. We think subcl (e) should remain'. 570 The Commonwealth cites several first instance decisions as authorities to the contrary of Ward (FC) (No 2) . Leaving aside the fact that I am bound by Ward (FC) (No 2), each of these cases is distinguishable. In Lardil Peoples v Queensland [2004] FCA 298 , Cooper J was concerned with native title rights over certain waters which rights were expressed to be good against all the world other than people exercising public rights of fishing, navigation or innocent passage, or other rights lawfully conferred by statute. Cooper J, with respect, correctly considered that a formulation in these terms amounted to an attempt to control access to and use of the land in a manner that was inconsistent with the reasoning in Ward (HC) : see at [188]. Lardil Peoples v Queensland did not involve any native title right of the kind dealt with either in para 5(e) of the determination in Ward (FC) (No 2) or in the determination made in De Rose (FC) (No 2). Similarly, the passages cited from Daniel v Western Australia [2003] FCA 666 , at [134]-[136], and Neowarra v Western Australia [2003] FCA 1402 , at [475], do not directly bear on a native title right to make decisions about the use and enjoyment of land by Aboriginal peoples bound by traditional laws and customs. 571 The Full Court in the Alyawarr Case suggested that par 5(e) of the determination in Ward (FC) (No 2) is 'not without difficulty' (at [151]). However, their Honours seemed to accept that a determination in that form would be justifiable 'where the native title holders were found to be a subset of a society comprising the Western Desert Bloc'. Since that is the (hypothetical) position in the present case, I would conclude that any native title rights to make decisions about the use or enjoyment of the Application Area by Aboriginal people who are governed by the traditional laws and customs of the Western Desert bloc were not extinguished by the pastoral leases. 20. I have found that the applicants have not established that members of the compensation claim group had rights and interests in the Application Area under the traditional laws and customs of the Western Desert, as pleaded in the Points of Claim. Therefore the effect of the compensation acts on subsisting native title rights and interests is not an issue that need be examined in the present proceedings. 573 Nonetheless, the issue has been argued at some length before me. For that reason and in case the matter goes further, it is appropriate to address the novel questions that have been addressed by the parties. First, however, it is necessary to outline the transactions and actions that affected the Application Area from the date the Town of Yulara was proclaimed. All Crown land within the boundaries was set aside as Town lands. The CL Act 1931 was previously known as the Crown Lands Ordinance 1931 , which was continued in force after self-government by operation of s 57 of the Self-Government Act . The Crown Lands Act 1992 (NT) ( 'CL Act 1992' ), which came into force on 26 June 1992, repealed and replaced the CL Act 1931 . 575 On 27 April 1981, the relevant Minister of the Territory gave notice of a determination made under of s 15(2) of the CL Act 1931 to grant a fee simple estate to the Territory over Crown land comprising an area of 495.9 hectares, being Lot 101 Townsite of Yulara. The grant was made for the purpose of developing an airport. In September 1981, the Minister granted to the Territory an estate in fee simple in Lot 101 (see Map 2). The grant was made under s 14 of the CL Act 1931 and was registered under the Real Property Act on 10 September 1981. (The Real Property Act , subject to certain irrelevant exceptions, was continued in force in the Northern Territory by the Self-Government Act . The Real Property Act was repealed by the Land Titles Act 2000 (NT)). 576 Lot 101 is the site of Connellan Airport. Nothing turns on whether (as the Commonwealth submitted) the giving of the notice on 27 April 1981 effected a grant of the fee simple estate, or whether the grant was not made until September 1981. 577 Section 14(1) of the CL Act 1931 empowered the Minister, in the name of the Territory, to grant a fee simple estate in, or a lease of, Crown land. The power included a power to grant a fee simple estate to the Territory, in which case the estate so granted was not to merge with the radical title to the land: s 14(2). The expression 'Crown land' was defined to mean 'all lands of the Territory', but did not include reserved or dedicated land. 578 On 17 November 1983, the Minister granted Crown Lease 256 ('CL 256') over Lot 104 on the application area (being the shaded area on Map 2, excluding roads) to Yulara Development Co Ltd ('Yulara Development'). The lease was granted under s 14(1) of the CL Act 1931 for a term of four years (subsequently extended to 15 November 1993) and was for the purpose of 'Tourist Village and Ancillary'. The area of land comprised in the lease was approximately 1,250 hectares. The lease excluded the original town roads that had already been constructed by November 1983. 579 CL 256 was registered under the Real Property Act on 17 November 1983. It is an agreed fact that Yulara Development cannot be classified as either the Crown or a statutory authority of the Crown. CL 256 was assigned to Yulara Nominees Pty Ltd ('Yulara Nominees') on 21 December 1984. Yulara Nominees changed its name to Ayres Rock Resort Nominees Pty Ltd ('Resort Nominees') in March 1992. 580 CL 256 required the lessee to erect improvements on the land in accordance with specified plans. On completion of the development in compliance with the lease, the lessee was entitled to surrender the whole or part of the lease in exchange for estates in fee simple over developed portions of the lease in the name of the lessee, or as the lessee directed. 581 Freehold grants over land within Lot 104 before 20 December 1984 were made to Yulara Development and subsequently transferred to Yulara Nominees. Freehold grants on or after that date were made directly to Yulara Nominees. 582 On 20 December 1984, the Minister granted an estate in fee simple over Lots 127, 130 and 131 to Yulara Nominees. These grants were made under the CL Act 1931 and were registered under the Real Property Act on 4 January 1985. Lots 130 (5.99 hectares) and 131 (10.87 hectares) were wholly outside the boundaries of Lot 104 (see Map 2). Lot 127 (0.36 hectares) was partly within Lot 104 (0.025 hectares) and partly outside (0.335 hectares), although this does not appear clearly on Map 2. A survey was undertaken to enable this agreement to be implemented. The balance of Lot 104 was consolidated with Lot 221 (said to be 'an administrative parcel only') to form that part of Lot 237 within Lot 104. 585 On 26 June 1992, the Minister granted a fee simple estate over Lots 237 and 243-247 to Ayres Rock Nominees. Lots 243-247 were roads in existence at the time of the grant. The company immediately executed a dedication of the roads to the public. 586 Lot 237 comprised an area of 94.2 square kilometres. Until this was done, no road reserve had been created for that part of the Lasseter Highway located outside Lot 104. The reserve for the Lasseter Highway, insofar as it was located within Lot 104, had been created in 1983. 588 On 26 June 1992, the Minister granted an estate in fee simple over Lots 240-242 to the Power and Water Authority of the Territory (now the Power and Water Corporation), a statutory authority of the Crown in right of the Territory. Lots 240-242, which were Crown land when the grants were made comprised the land on which three bores had been constructed in 1980. The grants were made, pursuant to s 9(1) of the CL Act 1992 . Section 9(1) was in substantially the same terms as s 14(1) of the CL Act 1931 and 'Crown lands' was given the same definition as in s 5 of the CL Act 1931. They also agree that prior to the grants of tenure referred to above, neither the Commonwealth nor the Territory took any steps compulsorily to acquire the land subject to the grant or to acquire any native title rights and interests in that land under a law providing for the compulsory acquisition of land by the Commonwealth or the Territory. 590 It is common ground that each of the interests created after 31 October 1975 was validly granted, except to the extent of any invalidity by reason of the existence of native title rights and interests at the date of the grant. At that time, the land in question was 'Crown land', as defined in s 5 of the CL Act 1931 . The airstrip itself was sealed by 30 June 1980 and a temporary terminal building was completed by 9 January 1981. By June 1981 the access road had been completed and the Airport works were reported to be in good condition. In the same month the Airport received its current name. As has been noted, the fee simple estate in Lot 101, on which the Airport is constructed, was granted to the Territory on 10 September 1981. It was common ground that the land on which the 'public work' is situated is the whole of Lot 101 (cf NTA, s 251D). 593 There was no specific statutory authorisation for the construction of Connellan Airport. However, the respondents contend that the construction was authorised under the Self-Government Act and the Northern Territory (Self-Government) Regulations (' Self-Government Regulations ') . Construction commenced on Lot 240 on 21 April 1980, on Lot 241 on 21 March 1980 and on Lot 242 on 25 March 1980. At the time the construction began, the land in question was 'Crown land' as defined in s 5 of the CL Act 1931. There is agreement that the 'public works' on which the bores are constructed comprise the whole of Lots 240, 241 and 242. In April 1981, construction commenced on that part of the Lasseter Highway running from the eastern boundary of the Application Area to the intersection of Coote Road. 596 It is agreed that the land on which the Lasseter Highway is constructed or situated is the corridor along its length that is the subject of a road reserve and is 100 metres in width. In 1980 and 1981, some Roads were constructed within the area that later became Lot 104. These Roads, however, were excluded from Lot 104 when it was created and were therefore also excluded from the subsequent grant of CL 256. 598 The exclusion took place by the registration of a plan of subdivision of Lot 104 on 8 August 1983 of subdivision (Survey Plan s 82/15). The plan of subdivision, the first in respect of Lot 104, indicated the width of the Lasseter Highway (100 metres) and of the Roads. As will be seen, the Commonwealth contends that registration of the plan of subdivision vested the Lasseter Highway and the Roads marked on the plan in the Territory for public road purposes, pursuant to s 99 of the Planning Act 1979 (NT) ( 'Planning Act' ) as then in force. 599 Between January 1980 and June 1992, a number of Roads were constructed outside the boundaries of Lot 104. These Roads and the Roads excluded from Lot 104 were referred to by the parties as 'Schedule 2 Roads'. The Schedule 2 Roads were ultimately designated in 1992 as Lots 243-247. Until fee simple grants were made in respect of each of these lots in June 1992, the Roads had not been the subject of any grants of tenure. 600 Following the grant of CL 256 in 1983, Roads were constructed within the boundaries of Lot 104. These were designated by the parties as 'Schedule 1 Roads' and were also included within Lots 243-247. (In some cases, Roads were constructed along a route both inside and outside Lot 104. In these cases, part of the Road was classified as a Schedule 1 Road and the other part as a Schedule 2 Road. ) The parties agree that the areas on which the Roads are constructed or situated comprise the reserve for each Road, as set out in Schedules 1 and 2 to the applicants' submissions. 601 Survey plans were registered on 18 September 1984 in respect of Lots 130 (s 84/50) and 131 (s 84/51). A further subdivision of Lot 104 was registered on 24 October 1984 (s 85/73). Later subdivisions of other lots in the Application Area were registered in 1986 and 1992. 21. Although it is pleaded that the construction commenced in 1979, it in fact commenced on 14 January 1980 and was completed by about June 1981. (b) Alternatively, the grant on 10 September 1981 to the Territory of the fee simple estate in Lot 101, which was duly registered on the same date under the Real Property Act . Lot 104 comprises an area of about 12 square kilometres on which the Yulara Tourist Village is now constructed. These lots are outside Lot 104 and comprise about 17 hectares. (b) Grants in fee simple of Lots 237 and 244-247, made in July 1992 to Resort Nominees. In effect, these grants covered all of the Application Area, other than lots which had already been the subject of freehold grants and the Lasseter Highway. They say that the native title rights and interests were not extinguished by any of the grants of tenure or the Public Works at the time the grants were made or the Public Works undertaken. They submit that while the grants of freehold estates would have extinguished native title under the general law, the grants (all of which were made after the RD Act came into force) were invalid by reason of the operation of s 10(1) of the RD Act . Similarly, they submit that the Public Works were invalid when undertaken on Crown land by reason of the RD Act. They submit that on that date the native title holders acquired a right to compensation under s 20 of the NTA for the extinguishment of their native title rights and interests. 605 The foundation for the applicants' compensation argument appears to be that the NTA and the corresponding provisions of the Validation Act each make mutually exclusive provision for the past act regime (Div 2 of Part 2 of the NTA and Parts 2 and 3 of the Validation Act ) and the confirmation of past extinguishment regime (Div 2B of Part 2 of the NTA and Parts 3B and 3C of the Validation Act) . The applicants point out that an act attributable to the Territory that was invalid when done by reason of the existence of native title, provided it comes within the definition of 'past act', is validated by s 4 of the Validation Act . The applicants maintain that a 'past act' attributable to the Territory cannot also be a 'previous exclusive possession act' for the purposes of the Validation Act . 606 They rely on the definition of 'previous exclusive possession act' in Sched 1 to the Validation Act which adopts the definition in s 23B(2) of the NTA , with the addition of several words. Thus, so they argue, a past act attributable to the Territory, cannot be a 'previous exclusive possession act' for the purposes of the Validation Act since it is not rendered valid 'because of Div 2 ... of Part 2 of the Commonwealth Act' --- that is, because of the NTA . On the applicants' argument, the native title holders' entitlement to compensation arises under s 20 of the NTA , since that section applies, inter alia , where a law of a Territory validates a past act attributable to the Territory in accordance with s 19 of the NTA . The entitlement does not arise under s 23J of the NTA , since the extinguishment of native title takes place under ss 5 and 6 of the Validation Act (within Part 3), not under Parts 3B and 3C of the Validation Act enacted in conformity with Div 2B of Part 2 of the NTA. The applicants accept that if the entitlement to compensation arises under s 23J of the NTA , the effect of s 23J(1) is that any right to compensation is available only to the extent that the relevant native title rights and interests were not extinguished otherwise than under the NTA . 608 In his final address, Mr Basten put an alternative argument to support the proposition that the past act and confirmation of extinguishment regimes are mutually exclusive. He pointed out that neither s 5 nor s 6 of the Validation Act (the counterparts to s 15(1)(a) and (b) of the NTA ) specifies the date from which the extinguishment of native title by reason of category A past acts takes effect. He also pointed out that, by contrast, Part 3B of the Validation Act (corresponding to s 23C of the NTA ) specifies that a previous exclusive possession act is taken to extinguish native title when the act was done: Validation Act, ss 9H(2), 9J(2). This demonstrates, so he contended, that ss 5 and 6 of the Validation Act are not intended to have retrospective effect. Instead, they should be construed as providing for the extinguishment of native title by a category A past act as from the date of commencement of the Validation Act . 609 It follows, so the applicants argue, that any native title holders whose rights and interests were extinguished by a past act validated by Part 2 of the Validation Act obtained an accrued right to compensation under s 20 of the NTA on 10 March 1994. Part 3B of the Validation Act (which was enacted in 1998) cannot be read as intended to interfere with an accrued right. The applicants acknowledge that s 4D of the Validation Act states that the extinguishment provisions of Part 3 apply to past acts to which Parts 3B and 3C of the Validation Act do not apply (cf NTA s 23C(3)). However, they submit that this does not mean that Part 3B of the Validation Act is intended to destroy or impair the native title holders' accrued right to compensation. 610 The applicants seek to apply this analysis to the various compensation acts. I shall outline the specific arguments upon which the applicants rely in relation to each of the major compensation acts. 612 The applicants accept that if native title did not exist in respect of Lot 101, on which Connellan Airport is now situated, the construction of the Airport would have fallen within the scope of the authority of Territory Ministers to construct public works. They also accept that construction of the Airport involved an assertion by the Territory of rights in respect of Lot 101 that were wholly inconsistent with the continued existence of native title rights and interests. 614 As I have explained, the applicants submit that the extinguishment of native title rights and interests in respect of Lot 101 took effect on 10 March 1994, the date the Validation Act commenced, and that the right to compensation under s 20 of the NTA therefore arose on that date. 615 The applicants put forward two bases for the contention that the construction work on Connellan Airport was invalid. The first rests largely on the proposition that the extinguishment of native title rights and interests constituted an 'acquisition of property' by the Territory otherwise than on just terms. They submit that the construction work had this effect because the extinguishment of native title gave the Territory a title to what is now Lot 101 freed from the burden of native title rights and interests. In other words, the extinguishment of native title produced a commensurate expansion of the Territory's title to the land. Since the native title holders (in the absence of statute) were not entitled to compensation for the loss of their rights and interests, their property had been acquired otherwise than on just terms. 616 The applicants submit that the executive authority of the Territory to carry out public works did not incorporate a power to acquire property rights (such as native title) otherwise than on just terms. In particular, the legislation sets out procedures for acquiring land for the purpose of constructing public works which require just terms to be provided in the event of a compulsory acquisition. There is therefore no room for additional executive powers to acquire land for the purpose of constructing public works without affording the affected landholders just compensation. • Section 50(1) of the Self-Government Act prevents the Legislative Assembly from making laws with respect to the acquisition of property otherwise than on just terms. Any incidental executive authority to acquire interests in land compulsorily without compensation would be inconsistent with the clear intent of s 50(1) of the Self-Government Act that property should not be acquired by the Territory save on just terms. It follows, so the applicants argue, that the construction work on Connellan Airport was not authorised and was 'invalid' for the purpose of the definition of 'past act' in the NTA . 617 The second argument rests on the proposition that it is necessary to read the Self-Government Act (a Commonwealth law) consistently with the terms of the RD Act (also a Commonwealth law). The applicants contend that if the practical operation and effect of the Self-Government Act and the Self-Government Regulations (by authorising the construction of public works) is to extinguish without compensation only native title rights and interests, while leaving intact the rights of holders of other forms of title, s 10(1) of the RD Act would be engaged. The construction of a public work in these circumstances would have a discriminatory effect upon the right of native title holders to own and inherit property. The RD Act would not render the Self-Government Act invalid (as would be the case if there were an inconsistency between a State law and the RD Act , a Commonwealth law). However, the Self-Government Act should be read as not authorising conduct having a discriminatory effect upon native title rights and interests. 618 The applicants accept that if, contrary to their argument, the construction work at Connellan Airport constituted a 'previous exclusive possession act' , Part 3B of the Validation Act would apply. In these circumstances, they also accept that by reason of s 9J(2) of the Validation Act, extinguishment occurred when the construction of the Public Work began (that is, on 10 January 1980). Insofar as that question depends on the terms of the Self-Government Act and the Self-Government Regulations, the issues are the same as those raised by the construction of Connellan Airport. 620 In their written submissions, the applicants point out that the Control of Waters Act (NT) (' Control of Waters Act ') provides another possible source of authority for construction of the bores. However, they also point out that there is no evidence that the Controller of Waters authorised construction of the bores within the Town of Yulara. They therefore submit that the Control of Waters Act cannot be invoked as a source of authority for the construction of the bores. Since the respondents do not challenge this analysis, there is no need to address it further. The first is s 35 of the Self-Government Act and reg 4(1) of the Self-Government Regulations . The latter confers executive authority on Territory Ministers in relation to 'surface transport regulation (including ... roads and bridges ...)' and 'public works'. 623 The applicants also submit that the Control of Roads Act does not authorise construction of the Lasseter Highway or the Roads. They point out that there is no evidence that the procedures laid down in Part IV of the Control of Roads Act for the opening of roads were followed. They also point out that an entitlement to compensation under the Control of Roads Act arises only where a road is opened in accordance with that procedure. Nor does the Control of Roads Act provide for the acquisition of land prior to construction of a road. 624 The applicants say that the Territory, by constructing the Lasseter Highway and the Roads, asserted rights that were inconsistent with any subsisting native title rights and interests over the land. Accordingly, if the construction of the Lasseter Highway and the Roads was valid, it would have resulted in the Territory taking full title to the land on which they were constructed. 625 According to the applicants, this is not a case where the law provides for the extinguishment of land titles but affords compensation only for non-native interests in land. (The applicants seem to accept that in such a case, s 10(1) of the RD Act would supplement the Territory law by providing a right to compensation, but would not invalidate the acquisition (see section 25, below). It is a case where only native title rights and interests could have been extinguished by the construction work and the native title holders would have had no rights to compensation. Accordingly, the construction of the Lasseter Highway and the Roads had a discriminatory operation and effect on native title rights and interests. It follows that the Control of Roads Act cannot be read as authorising such works. 626 In their submissions in reply, the applicants seek to answer the Commonwealth's contention that it was not the physical construction of the Lasseter Highway and the Roads that extinguished any native title rights and interests over those portions of the Application Area. According to the Commonwealth, either s 7 of the Control of Roads Act (which provides that all 'roads' in the Territory are the property of or are vested in the Territory) or s 99 of the Planning Act (which vests in the Territory public roads marked as such on the registered survey plan) had the effect of vesting the Lasseter Highway and the Roads in the Territory. 627 The applicants argue that the application of the relevant statutory provisions requires reference to the order in which the acts affecting native title rights and interests actually occurred. Since the Lasseter Highway and the Roads were constructed before the registration of any survey plan, s 99 of the Planning Act has no relevance. Moreover, s 7 of the Control of Roads Act did not extinguish native title rights and interests. The extinguishment therefore occurred by the physical construction of the Lasseter Highway and the Roads. 22. This is so regardless of whether the construction was 'valid' or was 'invalid' by reason of the existence of native title and had been subsequently validated by s 4 of the Validation Act . Any remaining native title rights and interests over Connellan Airport were extinguished when construction commenced on 14 January 1980: Validation Act, s 9J. It is therefore not necessary to consider the subsequent grant of freehold title over Lot 101. • The same analysis applies to construction of the bores on Lots 240-242. Any remaining native title rights and interests over the bores were extinguished on the dates when construction of each bore commenced (March and April 1980). • The same analysis also applies to the construction of the Lasseter Highway. Accordingly, any remaining native title rights and interests over the Lasseter Highway were extinguished on the dates when construction began (that is, in September 1979 (Stage 1) and 22 April 1981 (Stage 2)). • The Schedule 1 Roads were constructed on land previously included within CL 256. The construction of those Roads had no extinguishing effect, as any remaining native title rights and interests had been extinguished by the grant of CL 256. • The Schedule 2 Roads were constructed on land outside Lot 104. The Schedule 2 Roads identified in Part A of the Schedule were constructed before the grant of a fee simple estate over Lot 243. The construction of these Roads was a previous exclusive possession act which extinguished any remaining native title rights and interests over the land on which they were constructed: NTA, s 23B(7): Validation Act , s 9J. The dates of extinguishment of any remaining native title rights and interests over the Schedule 2 Part A Roads were the respective dates of commencement of construction of those Roads as set out in Schedule 2: Validation Act, s 9J. The Schedule 2 Part B Roads were constructed after the grant of the fee simple estate over Lot 243. Accordingly, the construction of those Roads had no extinguishing effect. • The grant of CL 256 was a previous exclusive possession act which extinguished any remaining native title rights and interests in relation to the whole of Lot 104: NTA, s 23B(2). Any remaining native title rights and interests over Lot 104 were extinguished on 17 November 1983, the date of the grant: Validation Act , s 9H. It is therefore not necessary to consider the subsequent grant of freehold estates over numerous subdivided lots and Roads within Lot 104. This is so even if the applicants' argument is correct since, on their approach, any extinguishment as a result of those grants would have occurred at precisely the same time as the extinguishment effected by CL 256 --- that is, on 10 March 1994. • The grant of a fee simple estate over Lot 237 was a previous exclusive possession act which extinguished any remaining native title rights and interests over the whole of Lot 237: NTA, s 23B(2); Validation Act , s 9H. The date of extinguishment of any remaining native title rights and interests over Lot 237 (except for the Schedule 2 Part A Roads) was the date of the grant, namely 26 June 1992: Validation Act , s 9H. The same analysis applies to the fee simple grants over Lots 127, 130 and 131. Accordingly, the date of extinguishment of any remaining native title rights and interests over those lots was the date of the grants, namely 20 December 1984. The Territory disputes that each enactment consists of two distinct elements, one dealing with the validation of past acts and the other with the confirmation of past extinguishment of native title. It argues that the correct starting point is the text of the NTA and the Validation Act, including the 1998 amendments, and that the correct approach to construction is to read each enactment as a whole. 630 On this approach it is said to be quite clear that a 'past act' can also be a 'previous exclusive possession act' for the purposes of both the NTA and the Validation Act . For example, the definition of 'previous exclusive possession act' in s 23B(2) and (7) of the NTA specifically contemplates that an act which is valid because of Div 2 of Part 2 (that is, a past act which had been validated by Div 2), can also be a previous exclusive possession act. Moreover, so the Territory argues, Div 2B of Part 2 of NTA specifically addresses the relationship between the past act extinguishment provisions and those confirming past extinguishment of native title. In particular, s 23C(3) provides that if the extinguishment provisions of s 23C apply to a previous exclusive possession act, s 15 does not apply to that act. There is an equivalent provision in the Validation Act, namely s 4D, which provides that Part 3 (dealing with validation of past acts) applies to the past acts to which Parts 3B and 3C do not apply. 631 The Territory says that s 23C(3) establishes the primacy of Div 2B in relation to a previous exclusive possession act which is also a past act. It does so by excluding s 15 (which can only apply to a past act) from consideration when dealing with the extinguishing effect of a previous exclusive possession act. The result is that where native title is extinguished by a previous exclusive possession act, the extinguishment takes effect from the dates identified in s 23C and the right to compensation arises under s 23J. The same analysis is said to apply to the equivalent provisions of the Validation Act . 632 The Territory maintains that this construction of the legislation does not give rise to any difficulties of the kind identified by the applicants. It points out that if the result of applying Div 2B of Part 2 of the NTA, or the equivalent provisions of the Validation Act, in accordance with their plain terms is that a native title holder loses an 'accrued' right under Div 2 to compensation, s 53(1) of the NTA ensures that just compensation will be afforded for the loss of that property right. 633 In any event, the Territory also disputes the applicants' construction of Div 2 of Part 2 of the NTA . It submits that s 15 of the NTA must be read together with s 14. The direction in s 14 that a past act is taken 'always to have been valid', so it is argued, is a clear indication that s 15, when it provides for the extinguishment of native title by a past act, intends the extinguishment to take effect from the date of the validated act. It follows that s 23C(1)(b) and (2)(b) in Div 2B, which expressly identify when the extinguishment is taken to have happened as the result of previous exclusive possession act, merely make explicit what is implicit in Div 2 in relation to a past act. It follows, so it is said, that any general right to compensation must be created by statute. The mere fact that native title has been extinguished does not create a right to compensation. The Commonwealth also says that an act which occurred prior to the enactment of the NTA , which at the time was both valid and effective to extinguish native title, is not affected by the NTA (although the NTA confirms the extinguishment of native title by a valid 'previous exclusive possession act'). 636 The Commonwealth accepts that the grants of fee simple estates over Crown land within the Application Area do not of themselves extinguish any native title rights and interests that may have survived the grant of the nineteenth century pastoral leases. The same concession is made in relation to CL 256. The concessions are said to be dictated by reasoning in Ward (HC), based on s 10(1) of the RD Act , in relation to certain leases of Crown land in the Territory. The Commonwealth accepts that the circumstances in Ward (HC) cannot be distinguished from those of the present case. 637 Nonetheless, the Commonwealth contends that any surviving native title rights and interests over the Application Area (other than the Lasseter Highway) were extinguished before the NTA or the Validation Act came into force. This result is said to flow from the operation of the so-called indefeasibility provisions of the South Australian Torrens system statute, the Real Property Act which, as amended by Territory laws, was then in force in the Territory. According to the Commonwealth, the Real Property Act conferred an indefeasible title on each grantee which title validly extinguished any surviving native title rights and interests. There was no inconsistency with s 10(1) of the Real Property Act , so it is argued, because the Real Property Act treats unregistered native title rights and interests in the same way as other unregistered interests in land brought under the Real Property Act . I deal with this argument later (see section 24.3, below). 638 The Commonwealth submits that, in these circumstances, native title holders are not entitled to compensation for the extinguishment of their rights and interests over the Application Area. Neither s 20 nor s 23J confers any right to compensation, since the extinguishment took place independently of the NTA and the Validation Act. The Commonwealth also submits that the construction of the Public Works by the Territory validly extinguished any surviving native title rights and interests independently of the operation of the NTA or the Validation Act . Thus no entitlement to compensation arises under the NTA in respect of the extinguishment of those rights and interests. 639 If, contrary to the Commonwealth's submissions, native title rights and interests were extinguished by the Validation Act , the Commonwealth effectively adopts the Territory's submissions on the relationship between the past act regime and the confirmation of past extinguishment regime. The Commonwealth says that the date of extinguishment of native title in consequence of a previous exclusive possession act is determined by s 23C of the NTA , regardless of whether the act is also a past act. The native title holders' right to compensation therefore arises under s 23J of the NTA and is to be assessed at the date native title is taken to have been extinguished. Section 20 of the NTA is said to be irrelevant to the applicants' claim although it continues to apply to past acts that are not also previous exclusive possession acts. Accordingly, the native title holders have no entitlement to compensation under the NTA in respect of those acts. Section 23J of the NTA confers no right to compensation since the native title rights and interests were extinguished otherwise than under the NTA --- that is, they were extinguished under the general law stated in Mabo (No 2) . • If, contrary to the Commonwealth's contentions, the construction of the Airport was invalid by reason of its effect on native title, it was a 'previous exclusive possession acts' for the purposes of Part 3B of the Validation Act (even though it was also a 'category A past act'). Section 9J of the Validation Act confirms the extinguishment of native title rights and interests over the land on which the Airport was situated as from the date construction of the public work commenced. Any entitlement to compensation therefore arises under s 23J of the NTA, subject to the question of the effect of registration of the grants in fee simple. The Commonwealth argues that the Court should be reluctant to imply limitations on executive power from a 'quasi-constitutional instrument' such as the Self-Government Act . The executive power of the Territory flows from the Self-Government Act and the Self-Government Regulations . The Self-Government Regulations confer executive authority in terms that authorise both the construction of the Public Works (including Connellan Airport) on land in respect of which native title existed and the assertion of rights inconsistent with the continued enjoyment of native title rights and interests over that land. 642 The Commonwealth submits that, in any event, the extinguishment of native title does not constitute an 'acquisition of property' for the purposes of s 50(1) of the Self-Government Act . The extinguishment of native title by the construction of the Airport is merely the consequence of the inherent defeasibility of native title to extinguishment at common law. The extinguishment of native title, in these circumstances, cannot constitute an acquisition of property for the purposes either of s 51(xxxi) of the Constitution or s 50(1) of the Self-Government Act. It follows, according to the Commonwealth, that even if the executive power of the Territory is subject to a limitation equivalent to that imposed on legislative power by s 50(1) of the Self-Government Act , this does not affect the capacity of the Executive Government to extinguish native title by undertaking the Public Works on Crown land. 643 The Commonwealth further submits, for the same reason, that even if (as the applicants contend) the Acquisition Act constitutes an exclusive code for the acquisition of land in the Northern Territory, it does not prevent the extinguishment of native title by the construction of the Public Works on Crown land. The Acquisition Act is inapplicable because the Public Works do not involve the 'acquisition' of any property. 644 The Commonwealth also argues that s 10(1) of the RD Act is not engaged by the extinguishment of native title as the result of the construction of the Public Works. It points out that both the RD Act and the Self-Government Act are laws of the Commonwealth Parliament and it is therefore necessary to attempt to give both enactments an effective operation. The Commonwealth says that neither the Self-Government Act nor the Self-Government Regulations makes any distinction on the basis of race. The provisions merely confer 'bare executive power' on the Territory in respect of certain subject matters. Accordingly, the provisions have no discriminatory operation or effect and s 10(1) of the RD Act does not apply to them. 645 The result, according to the Commonwealth, is that the construction of Connellan Airport was carried out by the Territory pursuant to lawful authority. Even if native title rights and interests existed over Lot 101 at the time the Airport was constructed, those rights and interests were validly extinguished and required no validation by the NTA. The extinguishment of native title is confirmed by s 9J of the Validation Act , but no right to compensation arises under the NTA in respect of that confirmation. 646 In the alternative, if the construction of Connellan Airport did not extinguish native title rights and interests the Commonwealth accepts that the later grant of the fee simple estate over Lot 101 was invalid by reason of s 10(1) of the RD Act , but contends that registration of the fee simple estate under the Real Property Act on 10 September 1981 validly extinguished native title rights and interests. 647 If, contrary to the Commonwealth's principal submissions, construction of Connellan Airport was invalid, the Commonwealth accepts that the construction was a past act attributable to the Territory. Accordingly, the act is valid and taken always to have been valid by s 4 of the Validation Act. Any native title rights and interests are therefore taken to have been extinguished at the date the construction of the airport commenced (14 January 1980). This result is brought about by s 9J(2) of the Validation Act, which applies to the exclusion of s 4 of the Validation Act. The right to compensation in these circumstances arises under s 23J of the NTA. However, the Commonwealth submits that Part IV is not the only mechanism for establishing roads and vesting them in the Territory. Section 7 of the Control of Roads Act can have that effect, as can registration of an authorised survey plan in accordance with s 99 of the Planning Act . The Commonwealth relies upon the registration of a survey plan in respect of Lot 104 which excluded the original town roads and the Lasseter Highway and showed them as road reserves. The Commonwealth contends that it is a mistake to concentrate on the physical construction of Lasseter Highway and the Roads. Rather, it is necessary to focus on the operation of s 99 of the Planning Act and common law principles governing the dedication of roads. 650 The Commonwealth submits that the statutory scheme, understood in this way does not discriminate against native title rights and interests. It accepts that an estate in fee simple can co-exist with a public road: CL Act 1931 , s 93(2). But that does not mean that 'lesser rights', such as the right to use the road, can co-exist with the public's right to use the highway. Since all such 'lesser' interests are extinguished by the dedication of a road, there is no relevant discrimination against native title rights and interests. 651 In any event, so the Commonwealth argues, the public's right to use the Lasseter Highway and the Roads arises under the common law, not under Territory legislation. Section 10(1) of the RD Act therefore does not apply, as any extinguishment had not occurred by operation of the 'laws' of the Territory. 652 The Commonwealth also repeats its argument that the Self-Government Act and the Self-Government Regulations, if read independently of s 10(1) of the RD Act, do not discriminate against native title rights and interests. The Commonwealth's concession is apparently prompted by the fact that in the present case CL 256 was granted under the power in s 14(1) of the CL Act 1931 to make grants of Crown land. This is the same provision pursuant to which CLP 581, discussed in Ward (HC), was granted by the Territory. The Commonwealth accepts that a power in these terms discriminates against native title rights and interests, since they can be extinguished by a grant of Crown land while other titles, such as freehold or leasehold estates, cannot be so extinguished. 654 Accordingly, the Commonwealth accepts that, subject to the effect of registration, under the Real Property Act , the grant was validated by s 4 of the Validation Act and, being a previous exclusive possession act, s 9H of the Validation Act confirms the extinguishment of native title. Again subject to the effect of registration, it accepts that the claimants are entitled to compensation for the extinguishment of native title rights and interests pursuant to s 23J of the NTA . 655 However, the Commonwealth contends that registration of the grant pursuant to the Real Property Act validly extinguished native title prior to the enactment of the NTA . Since s 23J provides for compensation only to the extent that the native title rights and interests were not extinguished otherwise than under the NTA , the Commonwealth submits that the claimants are not entitled to any compensation in respect of extinguishment effected by CL 256. The Commonwealth accepts, on the authority of the reasoning in Ward (HC) relating to CLP 581, that the grants were invalid when made. Subject to its argument based on registration of the grants under the Real Property Act , the Commonwealth agrees that the invalid grants were validated by s 4 of the Validation Act . According to the Commonwealth, the acts were also previous exclusive possession acts and their extinguishing effect has been confirmed by s 9H of the Validation Act . Any entitlement to compensation for the loss of native title rights and interests therefore arises under s 23J of the NTA. For this reason, the Commonwealth contends that no compensation is payable in respect of the extinguishment of native title over Lots 127 and 130-131 under s 23J of the NTA. The Commonwealth's principal contention is that the construction of the Public Works validly extinguished native title under the general law before the NTA came into force. The propositions set out below are derived from those cases. 662 1. The 'rights' referred to in s 10(1) of the RD Act are human rights, not necessarily legal rights enforceable under municipal law: Mabo (No 1) , at 217, per Brennan, Toohey and Gaudron JJ. The human rights protected by s 10(1) include those referred to in art 5 of the Convention, notably the right to own and inherit property. That right encompasses an immunity from arbitrary deprivation of property and for this purpose 'property' includes native title rights and interests: Ward (HC), at [116]. 663 In the Native Title Act Case the High Court pointed out (at 437) that s 10(1) of the RD Act , confers equality of enjoyment of the human right to own and inherit property on 'persons of a particular race'. "Property" in the context of the human rights with which we are concerned includes land and chattels as well as interests therein. Where, under the general law, the indigenous "persons of a particular race" uniquely have a right to own or to inherit property within Australia arising from indigenous law and custom but the security of enjoyment of that property is more limited than the security enjoyed by others who have a right to own or to inherit other property, the persons of the particular race are given, by s 10(1), security in the enjoyment of their property "to the same extent" as persons generally have security in the enjoyment of their property. Security in the right to own property carries immunity from arbitrary deprivation of the property. Section 10(1) thus protects the enjoyment of traditional interests in land recognised by the common law'. (Emphasis added. Section 10(1) of the RD Act applies in two different situations, insofar as State laws are concerned. If a State law omits to make a right universal, for example, by failing to confer that right on a person of a particular race, s 10(1) operates to confer the right on a person of that race. In this situation, the right conferred by the RD Act (a Commonwealth law) complements the right created by the State law. Because the RD Act shows no intention to occupy the field for the purposes of s 109 of the Constitution , the provisions of the State law remain unaffected: Gerhardy v Brown, at 98; Ward (HC), at [106]. Thus if a State law provides for the extinguishment of land titles, but provides compensation only in respect of titles other than native title rights and interests, the extinguishment remains valid, but the right to compensation is extended by operation of s 10(1) of the RD Act to the native title holders: Ward (HC) at [108]. 665 The second situation is where the State imposes or authorises a discriminatory burden or prohibition, for example a law forbidding people of a particular race from enjoying a human right enjoyed by persons of another race. This necessarily results in an inconsistency between s 10 and the prohibition contained in the State [or Territory] law'. The reason is that the State law, to that extent, is inconsistent with s 10(1) of the RD Act and is rendered invalid by s 109 of the Constitution : Ward (HC), at [108]. 666 3. Section 10(1) of the RD Act is directed to the case where some people enjoy rights but others do not enjoy those rights, or do so to a more limited extent. Rights may be enjoyed unequally even if the laws concerned do not have a purpose that can be identified as discriminatory: Ward (HC), at [105]. It follows that s 10(1) does not require that the relevant law, or an act authorised by that law, be 'aimed at' native title rights and interests. Nor does it require the law to make an explicit distinction based on race. 667 Instead, s 10(1) of the RD Act is directed at 'the practical operation and effect' of the impugned legislation and is 'concerned not merely with matters of form but with matters of substance': Ward (HC) , at [115] citing Mabo (No 1), at 230, per Deane J and Gerhardy v Brown , at 99, per Mason J. Consequently, if a power is conferred by legislation which is non-discriminatory on its face and the power is exercised in a manner that is discriminatory as a matter of fact, s 10(1) is engaged: Ward (HC) , at [126]. 668 4. Because native title is held by members of a particular race, interference with the enjoyment of native title is capable of amounting to discrimination on the basis of race. In Ward (HC) , it was held (at [122]) that Mabo (No 1) and the Native Title Act Case should be taken as having rejected the proposition that native title can be treated differently from other forms of title simply because it has characteristics different from other property rights and derives from different sources. In this respect the [RD Act] operates in a manner not unlike most other anti-discrimination legislation which proceeds by reference to an unexpressed declaration that a particular characteristic is irrelevant for the purposes of that legislation. The fact that native title has unique characteristics, including its vulnerability to extinguishment by legislative or executive action, is not a basis for denying the application of the RD Act to native title. 670 This point can be illustrated by the treatment of the Keep River Leases in Ward (HC) . In 1980 (after the RD Act commenced), a lease (SPL 475) was granted to the Conservation Land Corporation for conservation purposes. The lease was granted pursuant to a statutory power to grant Special Purposes Leases over unleased Crown land. The land comprised in SPL 475 had previously been subject to pastoral leases which had been surrendered. The Court held (at [417]) that the pastoral leases were inconsistent with the native title rights to control access and make decisions about the land. However, not all native title rights and interests had been extinguished, although it was not possible to determine which of those rights and interests had survived the grant of the pastoral leases (at [425]). 671 The Court considered that SPL 475 conferred a right of exclusive possession on the lessee and therefore, subject to the RD Act , extinguished the remaining native title rights and interests. The Court decided, however, that the effect of s 10(1) of the RD Act was to protect the surviving native title rights and interests by invalidating the grant of the lease, although the lease had subsequently been validated by s 4 of the Validation Act . For present purposes the significant point is that s 10(1) was held to apply, notwithstanding that it was not possible to ascertain the extent of the native title rights and interests that had survived the grant of the pastoral leases, let alone assimilate those rights and interests to property rights recognised under the general law or created by statute. 672 The Court did not explain in detail why s 10(1) of the RD Act applied to the grant of SPL 475. It would seem, however, that since a Special Purposes Lease could be granted only over unleased Crown land, the only property rights that could be extinguished by SPL 475 were surviving native title rights and interests over the land. Since the holders of non-native title property rights could not be affected by the grant of leases over unleased Crown land, the grant of SPL 475 discriminated against the holders of native title. 673 I should observe, that, as the Commonwealth points out, the principle applied in relation to SPL 475 in Ward (HC) does not mean that the precise content of native title rights and interests is necessarily irrelevant when determining the effect of legislative or executive acts upon native title. In Ward (HC) itself, for example, the Court considered whether native title holders had been treated differently than the holders of other interests by reason of the grant of mining leases under the Mining Act 1978 (WA) (' Mining Act ' ) (at [316]). It ultimately proved unnecessary to decide whether the native title holders had the same entitlement under the Mining Act as other title holders to compensation for the loss of their rights. Had it been necessary to do so, the Court would have had to decide whether the native title holders were 'occupiers' or 'owners' of the land within the meaning of s 123(2) of the Mining Act . That inquiry would have required the Court to ascertain the precise nature of the native title rights and interests that existed over the land at the time the mining leases were granted. 674 5. Since s 10(1) of the RD Act confers on native title holders security of enjoyment of title to the same extent as the holders of other forms of title have security of enjoyment, it is necessary to compare the effect of the provisions of Commonwealth, State or Territory laws on the two forms of title: Native Title Act Case , at 438. If under those provisions native title holders do not have the same security of enjoyment of their rights as do the holders of other forms of title, there is an inconsistency between s 10(1) of the RD Act and the other provisions: Native Title Act Case , at 438. The consequences of the inconsistency may depend on whether the provisions are in the laws of the Commonwealth, the State or the Territory. 24. The Commonwealth relies on the indefeasibility principle to support the proposition that even though the original grants in fee simple over Crown land within the Application Area were invalid when made (as the Commonwealth accepts), registration of the fee simple estates under the Real Property Act extinguished any surviving native title rights and interests over each of the lots concerned. Thus, so the Commonwealth argues, native title rights and interests were validly extinguished before the NTA came into force and the applicants are not entitled to any compensation under the NTA for the loss of their rights and interests . Dr Perry submitted that the fact the grant of the fee simple estate or lease (in the case of CL 256) was invalid by reason of the operation of s 10(1) of the RD Act does not prevent the grantee obtaining an indefeasible title upon the estate or interest being brought under the Real Property Act , just as a person registering a forged transfer obtains an indefeasible title to the registered estate provided he or she acts without fraud: Frazer v Walker [1967] AC 589; Breskvar v Wall , at 385-386, per Barwick CJ. 678 Dr Perry anticipated and sought to rebut two possible counter-arguments. She submitted that native title rights and interests cannot constitute an exception to the indefeasibility provisions of the Real Property Act . She argued that the legislation evinces no intention to recognise any such exception. Similarly, the so called in personam exception to indefeasibility cannot avail the holders of native title, since that principle only protects claims founded upon the conduct of the registered proprietor himself or herself. 679 Dr Perry also anticipated an argument that the indefeasibility provisions of the Real Property Act , if they operate as she contended, discriminate against native title holders for the purposes of s 10(1) of the RD Act and therefore cannot validly extinguish native title rights and interests. She submitted that the indefeasibility provisions do not operate in a discriminatory manner, since under the Real Property Act a registered estate or interest prevails over all unregistered interests, save for those protected by the statutory exceptions to indefeasibility. Moreover, so she argued, the holders of native title can lodge a caveat under s 191 of the Real Property Act to protect their interests against the registration of an inconsistent estate or interest in the same way as any other holder of an unregistered interest. 681 First, if the Territory enacted legislation empowering it to grant a title free of encumbrances to a party to a void transaction, the law could be characterised as one with respect to the acquisition of property. Such a law would extinguish pre-existing interests over the land and, to the extent that it did not provide compensation on just terms, would be inconsistent with s 50(1) of the Self-Government Act. It is not clear whether this submission is intended to be limited to the case where the first registered proprietor is the Territory or its instrumentalities, or whether the submission is intended to have a wider scope. 682 Secondly, the Real Property Act , insofar as it purports to grant indefeasibility to registered titles, thereby extinguishing pre-existing native title rights and interests, is inconsistent with s 10(1) of the RD Act. Just as the CL Act 1931 would be inconsistent with s 10(1) of the RD Act if it authorised grants that would extinguish native title but not other forms of title, so the Real Property Act extinguishes native title but not other interests. The applicants submit that if the Territory cannot legislate to confer on its officers a power to grant interests extinguishing native title, it cannot (in the absence of enabling Commonwealth legislation) enact separate legislation purporting to validate the invalid grants. Such a law, they argue, would be inconsistent with s 10(1) of the RD Act , even if it does not have a discriminatory operation on its face. In that case, Callinan J addressed (at [864]-[876]) the effect of registration of Crown leases under the Transfer of Land Act 1893 (WA) (' TL Act' ). The TL Act implemented the Torrens system of title registration in Western Australia and was similar in structure to the Real Property Act . In Western Australia, however, it has been possible to register Crown leases under the TL Act since 1909: Ward (HC) at [865]. 684 In Ward (HC) , the State of Western Australia argued that if (contrary to its earlier submissions) pastoral leases granted by the Crown had not already extinguished all native title rights and interests, registration of the leases under the TL Act had that effect. The State contended that s 68 of the TL Act, which provided for the indefeasibility of registered title, extinguished any surviving native title rights and interests over pastoral leases registered under the TL Act: Ward (HC), at [867]. It was not necessary for Callinan J to address this argument, since he had previously concluded that the pastoral leases had extinguished native title rights and interests in any event: at [699], [720]. Nonetheless, his Honour made some observations on the State's contentions and the responses of the Ward claimants to them. 685 First, Callinan J rejected the Ward claimants' argument that s 68 of the TL Act was effective only in relation to interests that might otherwise have 'priority' or be 'paramount'. Callinan J (at [869]) saw no reason to restrict s 68 in this way. Accordingly, in his view it applied to any estate or interest in land, whether or not that estate or interest would have had priority but for the TL Act . In any event, he considered the native title rights and interests did have a degree of 'paramountcy', in the sense that unless and until a grant conferred a right to exclusive possession, native title rights and interests were capable of subsisting over the land. 686 Secondly, Callinan J expressed the view, contrary to the Ward claimants' submissions, that there appeared to be no reason why native title rights and interests (assuming they were capable of being recognised and protected by the common law) could not be protected by the lodging of a caveat under the TL Act . His Honour pointed out that the caveat provisions (ss 30 and 137) were framed broadly. For example, s 137 enabled any 'person claiming any estate or interest in land under the operation of [the TL Act ]' to lodge a caveat forbidding the registration of any person as transferee or proprietor of the land until notice of the intended registration or dealing was given to the caveator. His Honour considered that the language appeared 'to extend naturally to native title rights' (at [870]). 687 Callinan J acknowledged that there were Canadian authorities to the effect that caveats could not be lodged to protect Aboriginal title under the Torrens system. However, the decision of the Supreme Court of Canada in Paulette v The Queen [1977] 2 SCR 628, turned on the fact that the land had never been granted by the Crown and was not the subject of any registered title (see Paulette v The Queen, at 630). The decision therefore said nothing about whether native title rights and interests could be protected by caveat after a Crown grant had issued in respect of the land. His Honour considered that other Canadian decisions turned on the particular provisions of the Torrens statutes in force: see Uukw v British Columbia (1987) 37 DLR (4 th ) 408, followed in Skeetschestn Indian Band v British Columbia (Registrar of Land Titles) [2001] 1 CNLR 310 (both decisions of the British Columbia Court of Appeal). 688 Thirdly, Callinan J expressed the view that because native title rights and interests were inalienable, except to the Crown, they could not be registered under the TL Act. His Honour pointed out (at [874]) that the TL Act contemplated dealings that were registrable and which were in respect of interests capable of being transferred. 689 Fourthly, his Honour made some comments about the possible application of the RD Act to pastoral leases registered under the TL Act . In this respect, it appears that all the pastoral leases under consideration in Ward (HC) , except one, predated the RD Act : at [396] ff. However, the Newry Lease was granted in 1979 and, as the joint judgment noted (at [418]), might have attracted the operation of the RD Act . Callinan J expressed the view that if native title rights and interests could be protected by caveats lodged under the TL Act, 'no question of the operation of the [ RD Act ] would arise' even if they could not be registered, at [875]. Native title rights and interests could not be regarded as outside the TL Act . While they would be extinguished by the registration of a title under the TL Act , they would be 'treated no differently in this respect from other unregistered interests'. In my view, the provisions discussed below must be taken into account. 691 Part IV provided a procedure whereby land alienated by the Crown in fee before the Real Property Act came into force (1886) could be brought under the Real Property Act : s 27. All land alienated in fee after that date became 'immediately on alienation' subject to the provisions of the Real Property Act : s 25. 692 The only grants of tenure in the present case which pre-dated the RD Act were the two pastoral leases, PL 456 (1882) and PL 1804 (1896). The first of these pre-dated the enactment of the Real Property Act . The second did not involve a grant in fee, but the grant of a leasehold estate. Therefore neither grant brought the Application Area under the Real Property Act . 693 At the times fee simple Crown grants were made over lots within the Application areas, s 39 of the Real Property Act provided that any person having or claiming an estate or interest in any land 'sought to be brought under the provisions of this Act' could lodge a caveat with the Registrar-General forbidding the bringing of such land under the provisions of the Act. Assuming that native title rights and interests can be regarded as estates or interests in land, it would seem that s 39 would not have authorised a native title holder to lodge a caveat to prevent an initial grant of Crown land in fee simple. By s 25, such a grant would have had the immediate effect of bringing the land concerned under the Real Property Act and would have attracted the protection of the indefeasibility provisions to the registered estate. 694 It is necessary, however, to note the express exceptions to indefeasibility under the Real Property Act . Section 69 provided for exceptions in the case of fraud (s 69(I)) and in the case of a certificate or other instrument of title obtained by forgery or from a person under legal disability, subject to protecting the title of a registered proprietor who had taken bona fide and for valuable consideration s 69(II). 696 There may be a question as to whether the holders of native title rights and interests can be described as 'persons adversely in actual occupation of, and rightfully entitled to, such land'. If the answer is yes, then native title holders are not adversely affected by the indefeasibility provisions of the Real Property Act upon registration of a fee simple estate granted by the Crown. Whether native title rights and interests fall within the exception to indefeasibility in s 69(VI) would seem to depend on the precise native title rights and interests in existence at the time the particular land was brought under the Real Property Act . Given the observations in the joint judgment in Ward (HC) at [317], it is unlikely that native title holders who had lost the right to control access to the land (for example because pastoral leases had been granted over the land) could come within s 69(VI) of the Real Property Act . If this is correct (as I think it is), the interests of native title holders who did not have the right to control access to the land were not protected by s 69(VI) of the Real Property Act . 697 The effect of the statutory exceptions to indefeasibility was that a wide range of unregistered interests in land received protection from what otherwise would be the indefeasible title conferred on the first registered proprietor of the fee simple estate, by virtue of s 69 of the Real Property Act . The following interests were protected from s 69 of the Real Property Act : the interest of any person in adverse possession of the land (or part of it); an 'omitted' easement (which expression encompasses an easement which is simply not on the register: Dobbie v Davidson (1991) 23 NSWLR 625, at 627; Williams v State Transit Authority of NSW [2004] NSWCA 179 ; (2004) 60 NSWLR 286 at [105] ---[109], per Mason P); the interest of a proprietor of land included in a certificate of title by wrong description; public rights of way and easements enjoyed by the public; and a short-term lease held under an unregistered instrument or agreement. 698 At the times the fee simple estates were granted over lots within the Application Area and were brought under the Real Property Act , no holders of any unregistered interest could have lodged a caveat to prevent the Crown grants. Thus neither native title holders nor the holders (if any) of other interests over the Crown land could have lodged a caveat for this purpose. But the consequences flowing from this inability varied as between native title holders and the holders of other unregistered interests. 699 Since native title holders were unable to lodge a caveat but were not protected from the indefeasibility provisions of the Real Property Act , on the Commonwealth's approach their interests would have been extinguished upon the registration of the grant in fee simple. This would be so notwithstanding that the Crown grant of the fee simple estate might have been void or 'invalid' by reason of the operation of s 10(1) of the RD Act . On the other hand, unregistered interests protected by the statutory exceptions as to indefeasibility would not have been extinguished upon registration of the Crown grant in fee simple. 700 It is true that not all unregistered non-native title rights and interests would necessarily have been protected by the statutory exceptions to infeasibility when the first Crown grant in fee simple was made. It is also true that a native title right to control access to the relevant land may have been protected from the consequences of indefeasibility by s 69(VI) of the Real Property Act . However, it is not easy in practice to envisage what native title rights and interests, apart from a right to control access, would have been protected from extinguishment, where the grant of a fee simple estate in Crown land was registered under the Real Property Act . It must be remembered that pastoral leases covered vast tracts of the Territory, especially if account is taken of pastoral leases which (like those in the present case) were long ago surrendered or forfeited. Those leases almost invariably would have extinguished the native title right to control access to land (a right that otherwise might have been protected by s 69(VI) of the Real Property Act ). If the Crown land concerned was then the subject of a grant in fee simple, which was registered under the Real Property Act , any surviving native title rights and interests (assuming the Commonwealth's argument to be correct) would have been wholly extinguished. 701 The Commonwealth's position is that s 69 of the Real Property Act has the effect of extinguishing native title rights and interests over Crown land which has been the subject of a fee simple grant, even if the grant itself was void or 'invalid'. If this is so, the practical operation and effect of the Real Property Act , in my view, would be to deny the holders of native title rights and interests security and enjoyment of their title to the same extent as the holders of other forms of title ultimately derived from the Crown have security and enjoyment of their title. This remains the case even allowing for the possibility that a native title right to control access to the land may be protected by the exception to indefeasibility contained in s 69(VI) of the Real Property Act . Unlike many forms of title under the general law, native title rights and interests (with perhaps one exception) were liable to extinguishment in consequence of s 69 of the Real Property Act by the registration of a grant in fee simple of Crown land . As I have explained, the authorities establish that the inherent vulnerability of native title rights and interests to extinguishment is not a factor to take into account in determining whether laws discriminate against native title and so are inconsistent with s 10(1) of the RD Act. I would therefore reject the Commonwealth's argument based on indefeasibility of title under the Real Property Act . 703 It will be seen that I have rejected the Commonwealth's argument on grounds that perhaps go beyond those developed by the applicants. Their principal contention is that s 69 of the Real Property Act cannot take the matter any further along the extinguishment route than the initial fee simple grants made under the CL Act 1931 and the CL Act 1992 . They say that as the Crown grants were invalid because s 10(1) of the RD Act limits the scope of the powers under Territory law to make Crown grants, any purported 'validation' of the Crown grants by the Real Property Act can be no more effective. 704 The Commonwealth's submissions suggest that the issue cannot be resolved so neatly. On its argument, the comparison required by s 10(1) of the RD Act is between the treatment accorded by the Real Property Act to unregistered native title rights and interests and the treatment accorded to unregistered interests under the general law. I accept that this is the appropriate comparison, subject to one important qualification. In my view, the comparison does not require a general analysis of the operation of the indefeasibility provisions of the Real Property Act . Rather, what is required is an examination of their specific application to a fee simple grant of Crown land . That is the point at which the Real Property Act affects native title rights and interests that would otherwise subsist over the land. 705 In my opinion, s 10(1) of the RD Act requires the effect of the indefeasibility provisions of the Real Property Act to be considered in relation to fee simple grants of Crown land, not in relation to transactions that may take place after the land has been brought under the Real Property Act . This, in turn, requires a comparison between the effect of the indefeasibility provisions on unregistered native title rights and interests over Crown land and their effect on unregistered interests acquired in accordance with the general law. For the reasons I have given, the indefeasibility provisions of the Real Property Act , if they are intended to work in the way suggested by the Commonwealth, would have a discriminatory impact on unregistered native title rights and interests over Crown land and the Territory. It follows that if the original fee simple grants over lots within the Application Area were invalid when made, registration of the grants under the Real Property Act did not extinguish any surviving native title rights and interests over the lots concerned. The Real Property Act , to the extent that it otherwise would have had this effect, was inconsistent with s 10(1) of the RD Act. It will be recalled that the applicants submit that the Public Works were not authorised by the Self-Government Act or the Self-Government Regulations since both must be read consistently with the RD Act. According to the applicants, when the Self-Government Act is read in this way it did not authorise, for example, the construction of Connellan Airport on Crown land, if the effect of the construction work was to extinguish native title rights and interests over the land on which the Airport is now located. Thus the Public Works were invalid when done, although they were subsequently validated by s 4 of the Validation Act . The applicants say that they are entitled under the NTA to compensation for the loss of their native title rights and interests, since those rights and interests had not been extinguished before the NTA came into force, but were extinguished by the combined operation of the NTA and the Validation Act . The Self-Government Act came into force on 1 July 1978, as did the Self-Government Regulations. Subject to the Self-Government Act , the Legislative Assembly has power with the assent of the Administrator or the Governor-General, to make laws for the peace, order and good government of the Territory: ss 6, 13. It follows that a law passed by the Legislative Assembly which provides for the acquisition of property otherwise than on just terms will be ultra vires the Legislative Assembly. 711 Part IV of the Self-Government Act is headed: 'The Administration'. First , the respondents accept the applicants' contention that the Self-Government Act (an enactment of the Commonwealth Parliament) must be read consistently with the RD Act (an earlier enactment of the Commonwealth Parliament). There must be very strong grounds to support that implication, for there is a general presumption that the legislature intended that both provisions should operate and that, to the extent that they would otherwise overlap, one should be read as subject to the other'. This is because s 57 of the Self-Government Act excludes from the power of alteration conferred on the Territory any Commonwealth enactment in force immediately before the commencement of the Self-Government Act : Ward (HC) , at [130]-[133]. 717 Thirdly , the parties agree that acts done by the Executive of the Territory before the NTA came into force could extinguish native title rights and interests over land. Extinguishment would occur if the acts were validly done pursuant to statutory authority and involved an assertion of powers over the land inconsistent with the continued existence of some or all of the surviving native title rights and interests: Ward (HC) , at [26], [151], [214]. 718 Fourthly , the executive power of the Territory extends to the construction of an airport and other public works on Crown land. The applicants identify the source of authority as reg 4(1) of the Self-Government Regulations , insofar as it confers authority on Ministers to carry out 'public works'. I do not understand the respondents to dissent from this view. 719 Fifthly , all parties accept that the construction of Connellan Airport on what was then Crown land, if done pursuant to statutory authority, involved an assertion by the Territory of rights in respect of land, or powers over land, inconsistent with any then existing native title rights and interests. Assuming the acts undertaken by the Minister were valid, the construction of Connellan Airport resulted in the Territory taking 'full title or plenum dominium ' to the land ( Ward (HC), at [151]), thereby extinguishing all native title rights and interests over that land. 720 Sixthly , the parties accept that, for the same reason, the construction of the bores and the Lasseter Highway would have had the same extinguishing effect on any surviving native title rights and interests over the areas of land on which those Public Works were constructed. The applicants' contention is that although the Territory has executive power under the Self-Government Regulations to construct public works, that power does not include the construction of public works that would extinguish native title rights and interests. They say that if the power did extend that far, the Self-Government Regulations would effectively authorise the imposition of a discriminatory burden on the holders of native title rights and interests. A purported conferral of power of this breadth would be inconsistent with s 10(1) of the RD Act and so the Self-Government Regulations must be read down so as not to include such a power. 722 The executive power of the Territory flows from ss 31 and 35 of the Self-Government Act and from sub-regs 4(1) and (5) of the Self-Government Regulations promulgated pursuant to the regulation-making power conferred by s 35. The matters in respect of which the Territory has executive power include 'land' and 'public works'. As the parties agree, in the absence of any issue arising by reason of Commonwealth legislation such as the RD Act , the executive power of the Territory extends to the construction of 'public works' on Crown land. There is no dispute that the construction of Connellan Airport, the bores and Roads on the Application Area constitute 'public works' for the purposes of reg 4(1) of the Self-Government Regulations . 723 The executive power of the Territory is, however, subject to two limitations relevant to the present case, although in practice their effect may be co-extensive. 724 First, as the respondents accept, the Self-Government Act must be read so as to operate consistently with the RD Act , an earlier enactment of the Commonwealth Parliament. Thus the Self-Government Act cannot be read as authorising the exercise by the Territory of legislative or executive powers that would impair the security of enjoyment of native title rights and interests to a greater extent than other forms of title. To do otherwise would be to allow the Self-Government Act to operate in a manner inconsistent with s 10(1) of the RD Act . 725 Secondly, reg 4(4) of the Self-Government Regulations specifically states that the matters specified in reg 4(1) as the subjects of executive authority are to be construed as subject to the provisions not only of the Self-Government Act , but of any other Act in force in the Territory. This includes the RD Act . The express intent of reg 4(4) is that any matters identified in subreg (1) are not to be read as inconsistent with the provisions of other Commonwealth enactments. It follows, for example, that reg 4(1), insofar as it authorises a Territory Minister to undertake 'public works', cannot be read as authorising activities that would be inconsistent with s 10(1) of the RD Act . 726 But for s 10(1) of the RD Act , the construction of the Public Works on the Application Area would have extinguished surviving native title rights and interests. The Public Works would have been carried out by or on behalf of the Territory Ministers pursuant to the authority conferred by reg 4(1) of the Self-Government Regulations . As I have noted, it is common ground that the construction of the Public Works involved an assertion of rights or powers over the areas on which the Public Works were constructed that was inconsistent with then existing native title rights and interests. The consequence is that those rights and interests would have been extinguished without the native title holders having any entitlement to compensation. This result reflects the vulnerability of native title under the general law to extinguishment by legislation or by the lawful actions of the executive. 727 Unlike the legislation considered in Ward (HC) in relation to the Keep River National Park, reg 4(1) of the Self-Government Regulations is not confined to authorising activities on Crown land, much less unleased Crown lands. The Ministerial power to carry out public works is not, in terms, confined to any particular type of landholding. Even so, but for s 10(1) of the RD Act, reg 4(1), on its proper construction, would have had the practical operation and effect, prior to the enactment of the NTA, of discriminating against native title holders. 728 To see why this is so, it is necessary to consider the scope of the general powers conferred by ss 31 and 35 of the Self-Government Act and reg 4(1) of the Self-Government Regulations. In particular, it is necessary to consider whether these provisions would have been construed to authorise the construction of public works on freehold or leasehold land in the Territory, regardless of the consent of the freeholder or leaseholder and without providing adequate compensation for any interference with their property rights. The answer to this question depends upon the application of well-established principles of statutory construction. 729 In one of its earliest decisions, the High Court applied a longstanding rule of construction that statutes 'are not to be construed as interfering with vested interests unless that intention is manifest': Clissold v Perry [1904] HCA 12 ; (1904) 1 CLR 363, at 373, per Griffith CJ. In that case, the High Court held that a person who had a mere possessory interest in land, having entered as a trespasser, nonetheless had a statutory right to compensation upon the land being resumed. The principle stated in Clissold v Perry has subsequently been applied in many cases. As Professors Pearce and Geddes point out (S tatutory Interpretation in Australia (5 th ed, 2001), at [515]-[517]), the principle has two aspects. Legislation is presumed not to authorise the acquisition of property rights without adequate compensation; and legislation is presumed not to interfere with vested property rights. 730 The latter proposition is illustrated by Wade v New South Wales Rutile Mining Co Pty Ltd [1969] HCA 28 ; (1969) 121 CLR 177. The High Court held there that the Mining Act 1906 (NSW) should be construed, in the circumstances of the case, not to interfere with a landowner's right to carry on mining operations on his own land. The courts are not entitled, and ought not, to eke out a derogation of such private rights by implications not rendered necessary by the words used by Parliament but merely considered to be consistent with the policy which the courts conclude or suppose the Parliament intended to implement'. If a Minister purported to authorise such works to be undertaken, his or her conduct would be inconsistent with the rights of the freeholder or leaseholder and would fall outside the executive powers of the Territory. If works were carried out on the freehold or leasehold land without permission, they could not extinguish or impair the title of the freeholder or leaseholder in the absence of specific legislation making provision to that effect. (Such legislation, if enacted by the Legislative Assembly, might also raise issues of compatibility with s 50(1) of the Self-Government Act . In the absence of s 10(1) of the RD Act , those provisions would authorise Territory Ministers to undertake public works on Crown land, including land in respect of which Aboriginal people hold native title rights and interests. If the works were inconsistent with the continued existence of native title rights and interests, those rights and interests would be extinguished and no compensation (leaving the NTA to one side) would be payable in respect of the extinguishment. But the Self-Government Act and the Self-Government Regulations , construed in the manner I have explained, would not authorise the Territory Ministers to undertake public works that could extinguish or interfere with other titles, such as freehold or leasehold estates carrying the right to exclusive possession. 733 As I have explained, the Self-Government Act and the Self-Government Regulations must be read consistently with s 10(1) of the RD Act . They therefore cannot be construed as authorising actions that would have a greater impact on native title rights and interests than on other forms of title. Such a construction would result in native title holders not having the same security of enjoyment of their rights as other title holders. Accordingly, the Self-Government Act and the Self-Government Regulations cannot be construed as authorising the construction of public works in circumstances that would extinguish native title rights and interests without adequate compensation. 734 The applicants submit that once the conclusion is reached that the construction of the Public Works was undertaken on the Application Area without lawful authority, the act of construction can be properly described as having been 'invalid to any extent' for the purposes of the definition of 'past act' in s 228 of the NTA. The applicants acknowledge that ordinarily one would not describe a Public Work as being either valid or invalid. Nonetheless, so they argue, if the construction of a Public Work was unauthorised, it cannot have had 'full force and effect' (see the definition of 'valid' in s 253 of the NTA ), in the sense that it could not have extinguished the interests of the native title holders over the land on which the Public Work was constructed. On that approach, the construction of the Public Works on the Application Area without lawful authority was invalid and required validation under s 14 of the NTA or equivalent State or Territory legislation. 735 The respondents do not challenge the applicants' approach on this issue. I think it is correct. I would add that the NTA plainly contemplates that a 'past act' can consist of the construction or establishment of a 'public work' (a term that itself is broadly defined): s 229(4) (which includes the construction or establishment of certain public works within the definition of 'category A past act'). An 'act' includes 'the exercise of any executive power of the Crown ... whether or not under legislation' (s 226(2)(e)) and 'an act having any effect at common law or in equity': s 226(2)(f). An act can only be a 'past act' if it is one that 'apart from [the NTA ] was invalid to any extent': s 228(2). Section 14 of the NTA provides for the validation of a 'past act' attributable to the Commonwealth. Clearly enough, the statutory scheme contemplates that a past act consisting of the construction or establishment of public works can be invalid 'to any extent' and thus require validation under s 14 of the NTA or equivalent State or Territory legislation. 736 It follows, to the extent that this reasoning is correct and applies to the construction of the Public Works, that the construction of each of the Public Works on the Application Area was an invalid act when done. However, since the construction in each case constituted a 'past act' attributable to the Territory, s 4 of the Validation Act has the effect that the act 'is valid and is taken always to have been valid'. The Commonwealth says, if I understand its position correctly, that even if the above reasoning is broadly correct, some of the Roads were lawfully constructed or reserved under Territory law and these acts validly extinguished any native title rights and interests over the affected land prior to the enactment of the NTA . 738 I must confess that I found the Commonwealth's arguments on this point somewhat elusive. Its submissions canvass at some length the operation of the Control of Roads Act . However, it appears to be common ground that the procedure for the dedication or opening of a road under the Control of Roads Act was not followed in relation to any of the Roads. Indeed the evidence is that the procedure is not normally followed in the Territory when it is proposed to construct a new road. 739 Reference was also made to s 99 of the Planning Act , which provides, relevantly, that upon registration of a survey plan for a subdivision, land marked as a 'public road' vests in the Territory for public road purposes. Survey plans relating to various lots within the Application Area were registered with the Registrar-General from time to time between 1983 and 1992. It appears that registration of the plans was effected in accordance with the procedure contemplated by s 99 of the Planning Act. In each case, however, subject to one minor exception, construction of the Road commenced and indeed was completed before registration of the applicable survey plan. It is therefore difficult to see the relevance of s 99 of the Planning Act to the present case. (I should add that CL 256, which was granted over Lot 104 on 17 November 1983, predated the construction of the Schedule 1 Roads on Lot 104. The Commonwealth also argues that s 10(1) of the RD Act does not affect the operation of common law principles. This is said to be so because the provision is concerned only with the 'laws' of a State or Territory, in the sense of statute law. But the construction of a road in the Territory by the Executive Government, if not otherwise authorised by statute, is an exercise of the powers conferred by ss 31 and 35 of the Self-Government Act and reg 4(1) of the Self-Government Regulations . The analysis I have put forward in relation to Public Works seems to me applicable to the construction of the Roads on the Application Area. 26. As I have noted, it was common ground that the fee simple grants over Crown land within the Application Area and the grant of CL 256 also did not, independently of the NTA and the Validation Act , extinguish native title rights and interests over the land. The grants and the construction of the Public Works were validated by s 4 of the Validation Act. • When is the extinguishment taken to have occurred? • Under which provisions are native title holders entitled to compensation? The applicants say that the former is the case, while the respondents contend that Part 3B of the Validation Act and Div 2B of Part 2 of the NTA govern issues of extinguishment and compensation. This is said to have come about because the definition in Schedule 1 to the Validation Act provides that an act is a 'previous exclusive possession act' if ( inter alia ) it is 'valid (including because of Division 2 or 2A of Part 2 of the Commonwealth Act )'. It is the addition of the bolded words, so the applicants argue, that creates the difficulty. 745 In my view it is quite clear that the definition in the Validation Act is intended to embrace acts validated by the operation of Part 2 of that Act. The contrary view would create significant gaps in what is plainly intended to be an integrated legislative scheme. 746 The short textual answer to the applicants' submission is that the words in parentheses in the definition are words of inclusion and are not intended to limit the ordinary meaning of the word 'valid'. There is no difficulty, in my opinion, in regarding that word as apt to embrace acts validated by legislation, including Territory legislation. In any event, past acts attributable to the Territory (rather than to the Commonwealth) can properly be described as valid 'because of Division 2 or 2A of Part 2 of the Commonwealth Act'. It is true that the validation provisions of the Validation Act are an exercise of the Territory's legislative power. But s 19(1) of the NTA does not merely authorise the enactment of the validation provisions but specifically contemplates their enactment. The Territory laws are part of what is clearly envisaged to be a co-ordinated legislative package, the terms of which are effectively dictated by the NTA . The extinguishing effects of those acts are determined by Parts 2, 3 and 3B of the Validation Act. Any entitlements to compensation in respect of those acts arise under s 20 or s 23J of the NTA . It is convenient, however, to address the question primarily by reference to the provisions of Divs 2 and 2B of the NTA, rather than their counterparts in the Validation Act . 748 If the applicants' construction argument relating to the definition of 'previous exclusive possession act' in the Validation Act is put to one side, I do not understand there to be any dispute that the various compensation acts satisfy that definition. In Mabo (No 2), the High Court recognised that in Australia native title to land survived the Crown's acquisition of sovereignty (at 69, per Brennan J). They can also be terminated by other inconsistent dealings with the land by the Crown'. The content of native title is ascertained by reference to the laws and customs of the people who possess that title, but their enjoyment of the title is precarious under the common law: it is defeasible by legislation or by the exercise of the Crown's (or a statutory authority's) power to grant inconsistent interests in the land or to appropriate the land and use it inconsistently with enjoyment of the native title'. This is so because the RD Act , as a paramount Commonwealth law, renders inconsistent State and Territory laws inoperative or requires them to be read down, including laws and other acts which discriminate, albeit unintentionally, against native title holders: Native Title Act Case , at 454. To this end, s 19 of the NTA, when read with what is now s 7(3) , removed any invalidating inconsistency between a future State or Territory law that validated past acts attributable to the State or Territory, on the one hand, and the RD Act or any other law of the Commonwealth, on the other: Native Title Act Case, at 455. 754 In Wik Peoples v Queensland [1996] HCA 40 ; (1996) 187 CLR 1 (' Wik '), a majority of the High Court held that certain pastoral leases in Queensland did not confer a right to exclusive possession on the lessees and thus did not necessarily extinguish all incidents of native title. The decision in Wik was thought by many to be inconsistent with the assumptions underlying the NTA . (Emphasis added. The Native Title Amendment Bill 1997 (' NTA Bill 1997' ), which was introduced into the House of Representatives on 4 September 1997, was designed to implement the 10 Point Plan. 756 The NTA Bill 1997 was passed by the House of Representatives on 29 October 1997. The Senate subsequently passed the Bill but amended it extensively. The Bill was reintroduced into the House on 9 March 1998. Many of the Senate's amendments were accepted by the House of Representatives and the NTA Bill 1997 was amended to incorporate these changes. It was this version of the NTA Bill 1997 to which the 1997 Explanatory Memorandum was directed. 757 I note in passing that at the time the 1997 Explanatory Memorandum was circulated (9 March 1998), litigation was under way to challenge the apparently clear proposition that the grant of a freehold estate in land necessarily extinguished all native title rights and interests in that land. The challenge had failed in the Federal Court on 27 February 1998 ( Fejo v Northern Territory (1998) 152 ALR 477), but in early March 1998 an appeal from this decision was apparently in contemplation. Part of that appeal was ultimately removed to the High Court and the challenge was finally rejected by the High Court on 10 September 1998, shortly before the NTAA came into force. 758 The 1997 Explanatory Memorandum stated (par 5.1) that Div 2B was to be inserted in Part 2 of the NTA in order to achieve points 2 and 4 of the 10 Point Plan. Agricultural leases would also be covered to the extent that it can reasonably be said that by reason of the grant or the nature of the permitted use of the land, exclusive possession must have been intended. Any current or former pastoral lease conferring exclusive possession would also be included. It also noted that Div 2B permitted the States and Territories to confirm the effect of acts they had done prior to 23 December 1996. The NTA currently says little about whether or where native title may still exist in Australia, and apart from the very limited validation provisions in Division 2 of Part 2 , says nothing about whether native title may or may not have been extinguished. The NTA generally leaves these issues to be determined by the common law. This has given rise to significant uncertainty for native title claimants and the holders of other interests in land. The effect will be to confirm that the native title is extinguished on exclusive tenures (such as freehold and residential leases) and extinguished to the extent of any inconsistency on non-exclusive agricultural and pastoral leases. Consistent with the Wik decision, the rationale for such confirmation is that the rights conferred and/or the nature of the use of the land is such that the exclusion of others (including native title holders) must have been presumed when the tenure was granted. The amendments will put the matter beyond doubt. These provisions [included] existing section 15 of the NTA ... Subsections 23C(3) and 23G(3) ensure that there is no overlap between the provisions that extinguish native title. For example, the non-extinguishment principle applies to the grant by the Commonwealth of freehold validated under Division 2 if it was no longer in existence on 1 January 1994 (see subsection 229(2) and section 232) but by reason of s 23C(1) , the native title will now be taken to have been extinguished by that grant. ' (Emphasis in original. A category D past act includes the grant of a freehold estate, where the grant was made before 1 January 1994 but the estate did not exist on 1 January 1994: s 229(2)(a) , (4). Section 23C(1) provides that a previous exclusive possession act (which includes the grant of a freehold estate validated under Div 2) extinguishes native title and does so from the date the act was done. As par 5.28 implies, the effect of s 23C(3) is to exclude s 15 of the NTA from applying to the previous exclusive possession act notwithstanding that it was also a past act. Thus the non-extinguishment principle does not apply to the category D past act. in accordance with common law principles that [sic] other legislation has extinguished native title), compensation is not payable under the NTA. However, if Division 2B does extinguish native title to a greater extent than otherwise would have been the case without the NTA, compensation is payable to that extent [subsection 23J(1)]. This ensures that Division 2B does not create a right to compensation for acts where it would not be payable without Division 2B. Therefore it is not expected that section 23J will need to operate. It is included as a safeguard in the event that a court finds that extinguishment under Division 2B goes further than the common law. ' (Emphasis in original. Paragraph 5.28 emphasises that if native title has been extinguished by a previous exclusive possession act, the provisions that deal with the effects of past acts do not apply. More particularly, par 5.28 makes it clear that there is to be no overlap between the provisions that extinguish native title. The example given by par 5.28, to which I have referred, reinforces the point. 764 The language of Div 2B gives effect to the objectives outlined in the 1997 Explanatory Memorandum. Section 15 of the NTA, which provides for the extinguishing effects of pasts acts, does not apply if an act is a previous exclusive possession act attributable to the Commonwealth: NTA, s 23C(3). Whatever the position before the 1998 amendments to the NTA , the extinguishing effect of such an act is determined by s 23C and by no other provision in the NTA . Section 23C(1) provides that an act other than a public work, being a previous exclusive possession act under s 23B(2) , extinguishes native title in relation to the land concerned. Section 23C(2) provides that if an act is a previous exclusive possession act under s 23B(7) (which deals with public works), the act also extinguishes native title in relation to the land concerned. Section 23C(1)(b) expressly states that the extinguishment effected by a previous exclusive possession act under s 23B(2) of the NTA 'is taken to have happened when the act was done'. Similarly, s 23C(2)(b) states that the extinguishment effected by a public work 'is taken to have happened when the construction or establishment of the public work began'. 765 The fact that Div 2B specifies the consequences for extinguishment of native title by previous exclusive possession acts does not necessarily mean that the native title holders' entitlement to compensation is created by Div 2B rather than Div 2. In the case of an act attributable to the Commonwealth, s 17(1) (in Div 2) simply provides that if the act is a category A past act, the native title holders are entitled to compensation for the act . However, s 17 has to be read with s 15 , which states (relevantly) that a category A past act attributable to the Commonwealth extinguishes the native title concerned. The entitlement to compensation created by s 17(1) , although said to be 'for the act', assumes that the past act has extinguished native title in accordance with s 15. In other words, s 17 creates an entitlement to compensation because s 15 provides that the past act extinguishes native title. 766 Following the 1998 amendments to the NTA, Div 2B specifies the extinguishing effects on native title of previous exclusive possession acts, including those that are also past acts for the purposes of Div 2. The consequences of a previous exclusive possession act for native title rights and interests are determined by s 23C of the NTA (in Div 2B) and not by s 15 (in Div 2). It follows, in my opinion, that the extinguishment of native title by reason of a previous exclusive possession act takes place 'under [Div 2B]' for the purposes of s 23J of the NTA . Thus the entitlement to compensation for the extinguishment arises under s 23J and not s 17 of the NTA. However, I interpret par 5.42 as intended to convey that s 23J will not create any greater entitlement to compensation than the NTA provided before the 1998 amendments, unless Div 2B is found to have extinguished native title to a greater extent. 768 In any event, par 5.42 of 1997 Explanatory Memorandum cannot control the meaning of Div 2B. For reasons I have given, s 23J of the NTA , in my view, creates an entitlement in native title holders to compensation for the extinguishment of native title effected by a previous exclusive possession act. This is so notwithstanding that the previous exclusive possession act is also a past act for the purposes of Div 2. 769 This view receives support from the observations concerning s 23J made by Gaudron, Gummow and Hayne JJ in Wilson v Anderson . The evident purpose s 23J is to limit, so far as possible, the entitlement to compensation under s 23J , to cases where the "act" is invalid by reason of the Racial Discrimination Act 1975 (Cth) ... and is subsequently validated by s 14 of the NTA or [equivalent State or Territory legislation] . However, s 23J also may be attracted in respect of a valid "act" which, although satisfying the definition of "previous exclusive possession act", would not completely extinguish native title at common law. That a different result may be reached under Div 2B of Pt 2 of the NTA or Pt 4 of the State Act emphasises the point that it is the statutory criteria provided for by those provisions which are to applied when determining issues of extinguishment'. Such an act presumably would be a 'past act' as defined in s 228(2) of the NTA as well as a 'previous exclusive possession act' as defined in s 23B of the NTA. Not all past acts are previous exclusive possession acts for the purposes of Div 2B of the NTA. For example, the grant of an estate is not a previous exclusive possession act if the grant involves the establishment of a national park for the purpose of preserving the natural environment: s 23B(9A). Yet such a grant may vest a right of exclusive possession in the grantee which is capable of extinguishing native title rights and interests: Ward (HC) , at [258]. If the grant was invalid under the RD Act by reason of its effect on native title, it could be a past act (s 228(2)) and could be validated by s 14 of the NTA. The effect on native title of the grant would be determined by s 15 of the NTA and the entitlement to compensation would arise under s 17. 771 As Mr Hughston pointed out, this construction of Div 2B accords with what will often be the practical realities and avoids what otherwise would be strange consequences. Previous exclusive possession acts include grants of fee simple estates or leases and the construction of public works. Some of these acts may have been invalid when done by reason of the RD Act (and thus would have been 'past acts'), but this would not have been known at the time. The practical consequences of these acts usually would have included the de facto loss or impairment of native title rights and interests. It makes sense that any right to compensation in respect of the validation of those acts is to be determined as at the date the acts took place. 772 The contrary view could lead to the statutory entitlement to compensation including compensation for the added value of public works and other improvement to the land after the extinguishing acts took place. For example, in the present case members of the compensation claim group would be entitled to compensation for the value of Connellan Airport, the construction of which was completed in 1981. Presumably, this would be in addition to other heads of compensation for the loss of native title rights and interests over the land on which the Airport was constructed. While it may well be appropriate (as the Commonwealth appears to accept) that native title holders should receive interest if compensation is assessed at the date of statutory extinguishment of their rights and interests, it is difficult to imagine that the compensation regime in the NTA is intended to provide the windfall benefits to claimants that are implicit in the applicants' arguments. 773 Thus far I have referred to the position under the NTA in respect of previous exclusive possession acts attributable to the Commonwealth. A similar analysis applies to previous exclusive possession acts attributable to the Territory. Section 9H(1) of the Validation Act provides that such an act, other than a public work, extinguishes native title in relation to the land concerned. Section 9H(2) of the Validation Act , which is the analogue to s 23C(1)(b) of the NTA, states that the extinguishment is taken to have happened when the act was done. Section 9J of the Validation Act contains provisions in relation to public works attributable to the Territory corresponding to those in s 23C(2) of the NTA. When s 23J(1) of the NTA is read with ss 9H(2) and 9J(2) of the Validation Act , any such right to compensation arises (or is taken to arise) when the extinguishment is taken to have happened. In the case of acts other than public works, this is the date the act was done; in the case of public works it is the date the construction or establishment of the public work began. 26.2 AN ACCRUED RIGHT TO COMPENSATION? This could occur, so it is said, because the entitlement to compensation for a past act under s 17 arose when the NTA came into force (1994), while the entitlement to compensation under s 23J is taken to have arisen when the relevant act was done. A person whose native title rights and interests came into existence after a past act took place, but before 1994 (for example, a native title holder born between those two dates), might be deprived of an 'accrued right' to compensation. 776 This argument appears to assume that a person whose native title rights and interests came into existence after the past act took place has a right to compensation under s 17. I doubt that the assumption is correct. Section 14 of the NTA provides that if a past act is attributable to the Commonwealth, the act is valid and is taken always to have been valid . Section 15 provides that, in the case of a category A past act, the act extinguishes native title. Although s 15 does not expressly state when native title is extinguished, reading ss 14 and 15 together the intent would appear to be that the extinguishment is to be taken as having occurred at the time the validated act took place. After all, that act must be taken 'always to have been valid'. Since the entitlement to compensation provided by s 17 of the NTA is 'for the act', the better view would seem to be that the only persons or groups entitled to compensation are those who held native title rights and interests at the date the past act occurred. 777 In any event, if the effect of inserting Div 2B into the NTA was to deprive some native title holders of an accrued right to compensation, it would be necessary to take s 53(1) of the NTA into account. This subsection provides that if the application of any of the provisions of the NTA would result in a 'paragraph 51(xxxi) acquisition of property' otherwise than on just terms, a person is entitled to such compensation as is necessary to ensure that just terms are provided. The loss of an 'accrued right' to compensation in respect of the extinguishment of native title rights and interests may well constitute an acquisition of property otherwise than on just terms, attracting the protection s 53(1). It is not necessary to consider that possibility further in the present case. The suggestion was not developed in oral argument. 779 Nonetheless, Dr Perry on behalf of the Commonwealth responded to the suggestion. She pointed out that s 23E is analogous to s 19 of the NTA . The latter allows a law of a State or Territory to provide that past acts attributable to the State or Territory are valid and are taken always to have been valid. Section 23E allows a law of a State or Territory to make provision to the same effect as s 23C in respect of previous exclusive possession acts attributable to the State or Territory (that is, to provide that previous exclusive possession acts extinguish native title). 780 In the Native Title Act Case, the High Court upheld the validity of s 19 of the NTA. The Court observed (at 468) that s 11(1) of the NTA protects native title from extinguishment. Those provisions are exceptions to the general sterilisation of extinguishing acts declared by s 11(1) '. In other words, those terms are not used in reference to the power to make or to the making of a State or Territory law but in reference to the effect which a State law, when validly made, might have in creating an exception to the blanket protection of native title by s 11(1). In using the terms "valid" and "invalid", the Act marks out the areas relating to native title left to regulation by State and Territory laws or the areas relating to native title regulated exclusively by the Commonwealth regime. Like s 19, it defines the areas within which State and Territory laws can extinguish native title. It, too, is an exception to the general sterilisation of extinguishing acts declared by s 11(1). Viewed in this way, its constitutional validity is not in doubt. 782 In any event, s 53(1) of the NTA ensures that if the application of any provision in the NTA , including s 23E, would result in an acquisition of property within the meaning of s 51(xxxi) of the Constitution , the person affected is entitled to just terms. Section 53(1) is clearly intended to ensure, in the event of any doubt, that provisions such as s 23E do not fall foul of s 51(xxxi) of the Constitution . If, therefore, the applicants intend to challenge the validity of s 23E of the NTA, that challenge fails. 27. The assumption is that the applicants have established that native title rights and interests subsisted over the Application Area in accordance with the traditional laws and customs of the Western Desert bloc, until extinguished by the compensations acts. 784 On that assumption, I reject the Commonwealth's submission that all surviving native title rights and interests were validly extinguished before the NTA came into force. I do not accept that those interests would have been validly extinguished prior to the commencement of the NTA . 785 On the other hand, I reject the applicants' submission that any entitlement to compensation under the NTA arose only on 10 March 1994, the date the Validation Act commenced. The applicants' submission is largely based upon the proposition that a 'past act' attributable to the Territory cannot be a 'previous exclusive possession act' for the purposes of the NTA and the Validation Act . For the reasons I have given, in my view that proposition is not correct. Accordingly, any right to compensation in respect of the extinguishment of native title rights and interests arises under s 23J of the NTA , not under s 20 of the NTA . On the correct construction of s 23J, when read in conjunction with ss 9H and 9J of the Validation Act, the entitlement to compensation is taken to have arisen at the time the extinguishment acts were done or, in the case of public works, when the construction or establishment of the particular public work began. Accordingly, if the compensation claim group were entitled to compensation for the extinguishment of native rights and interests, the quantum of compensation would be assessed without reference to any improvements on the land the construction of which post-dated the relevant extinguishing acts or events. In the case of Public Works constructed on the Application Area, the extinguishment is taken to have happened when the construction or establishment of the Public Works began: Validation Act, s 9J(2). The entitlement is taken to have arisen on the date or dates the extinguishing acts or events occurred. Thus members of the compensation claim group would not be entitled to compensation in respect of improvements to the land effected after those acts or events occurred. My present view, however, is that the analysis advanced by the Territory (summarised in par 628, above), generally speaking, accurately reflects the reasoning I have adopted. 28. The threshold issue is whether the applicants have shown that at the time the compensation acts occurred (no earlier than 1979), any native title rights and interests subsisted over the Application Area. If there were no such rights and interests, the compensation acts could not have extinguished them. • Secondly, I am not satisfied that any laws and customs relating to rights and interests in land that may have been acknowledged and observed by the Aboriginal witnesses are the traditional laws and customs of the Western Desert bloc, within the meaning of s 223(1) of the NTA . 790 In the second part of the judgment I address the issues relating to extinguishment of native title that would have arisen had the applicants (contrary to my findings) succeeded on the threshold question. On that assumption, I have concluded that the native title rights and interests of members of the compensation claim group would not have been validly extinguished prior to the compensation acts taking place (although some interests would have been extinguished by the pastoral leases granted in 1882 and 1896). Thus at least some members of the compensation claim group would have been entitled to compensation. However, contrary to the applicants' submissions, I conclude that any such entitlement would have arisen at the time major construction works on the Application Area commenced (that is, before any substantial works had been undertaken on the land). Accordingly, any entitlement to compensation would not include the value of any building or works on the Application Area. 791 I emphasise, as I have elsewhere in this judgment, that I have addressed the compensation case the applicants have chosen to put forward. My conclusions do not necessarily imply that none of the applicants or members of the compensation claim group could have established an entitlement to native title rights and interests over the Yulara block had the case been conducted differently. However, I am not entitled to consider some alternative or different case that the applicants perhaps might have advanced in the light of the anthropological literature and the evidence of indigenous witnesses. Indeed I was not asked to do so. 792 I reiterate that this comment is not intended as a criticism of the manner in which the applicants' case was presented. There may have been very good reasons why the applicants chose to proceed in the manner they have. But they are bound by the conduct of their case. 793 The result is that the applicants have not established that the Territory is liable to pay compensation to any member of the compensation claim group. The compensation application must therefore be dismissed. I shall give the parties an opportunity to make submissions on costs and on any consequential orders that may be required. | compensation claim applicants seek a determination of compensation for extinguishment of native title over the town of yulara in the northern territory ('application area') any surviving native title rights and interests extinguished by grants of tenure and the construction of public works ('compensation acts') separate trial on liability (if any) of the northern territory to pay compensation native title act 1993 (cth) (' nta' ), s 61(1) whether applicants have established that native title rights and interests existed over application area at the time the compensation acts took place whether western desert bloc is a 'society' having traditional laws and customs whether the society continued in existence until the compensation acts occurred whether the eastern western desert is a sub-region of the western desert whether applicants have established that members of the compensation claim group acknowledged and observed the laws and customs pleaded by the applicants whether the applicants have shown that the pleaded laws and customs are the 'traditional' laws and customs of the western desert bloc extinguishment effect of northern territory pastoral leases on native title 'previous non-exclusive possession acts' extent of inconsistency between native title rights and interests and the rights of pastoral lessees extinguishment whether any surviving native title rights and interests were validly extinguished before commencement of the nta whether grants of tenure and construction of public works were invalid to any extent racial discrimination act 1975 (cth) (' rd act' ), s 10(1) extinguishment effect of registration of crown grants under the torrens system whether principle of indefeasibility applies to validate grants that would otherwise be invalid whether registration of crown grants has a discriminatory effect on native title under the law of the northern territory extinguishment construction of public works whether effect of construction is to discriminate against native title holders by extinguishing native title whether construction was invalid to any extent by reason of the rd act entitlement to compensation 'previous exclusive possession act' which is also a 'past act' whether entitlement arises under s 17 or s 23j of the nta when entitlement to compensation arises by reason of grants of tenure or construction of public works native title native title native title native title native title native title native title native title native title |
Under s 36(2) of the Act the criterion for a protection visa is that the applicant for the visa is (relevantly) a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol (meaning, in accordance with s 5(1) , the 1951 Convention relating to the Status of Refugees and the 1967 Protocol relating to the Status of Refugees). Section 474 of the Act protects "privative clause decisions" (defined to include decisions with respect to protection visas) from challenge other than on the grounds of jurisdictional error. The appellant is a citizen of India. He arrived in Australia on 26 April 2003 and applied for a protection visa on 23 May 2003. The Minister's delegate refused the application on 8 September 2003. The appellant applied to the Refugee Review Tribunal for a review of this refusal on 8 October 2003. The Tribunal affirmed the delegate's decision on two occasions (4 February 2004 and 25 July 2006) but on each occasion, on appeal to the Federal Magistrates Court, the Tribunal's decision was quashed by consent orders (dated 3 April 2006 and 6 February 2008). The Tribunal invited the appellant to attend and the appellant attended a further hearing on 8 May 2008. The Tribunal forwarded a letter to the appellant on the same date requesting comments on information that the Tribunal considered would be the reason or part of the reason for deciding that the appellant was not entitled to a protection visa (as required by s 424A of the Act). The appellant responded by letter dated 19 May 2008. On 19 June 2008 the Tribunal affirmed the decision of the Minister's delegate that the appellant was not entitled to the grant of a protection visa. On 16 July 2008 the appellant appealed to the Federal Magistrates Court against this decision. The Federal Magistrates Court, on 2 October 2008, found that the appellant's claims of jurisdictional error by the Tribunal were unsubstantiated and thus dismissed the application for review. On 20 November 2008 the appellant filed an appeal in this Court against the dismissal of the application for review by the Federal Magistrates Court. The notice of appeal identifies two grounds. First, that the Federal Magistrates Court erred by failing to consider that the Tribunal ought to have given the appellant the benefit of the doubt in circumstances where the Tribunal accepted the possibility of the plausibility of the appellant's claims so that it was open to the Tribunal to find that the appellant was a refugee. Secondly, that the Federal Magistrates Court erred by not finding that the Tribunal denied the appellant procedural fairness in that the Tribunal drew adverse conclusions about the appellant not being involved in student politics or with the Bharatiya Janata Party (BJP), these being conclusions that were not obviously open on the known material and without giving the appellant an opportunity to be heard about those matters. When the matter was called for hearing this afternoon the appellant did not appear. The Minister sought an order for summary dismissal of the proceedings under s 25(2B)(bb)(ii) of the Federal Court of Australia Act 1976 (Cth). That section permits the dismissal of proceedings where an appellant fails to attend a hearing relating to an appeal. The Minister relied on two letters in support dated 19 January and 5 February 2009 each of which notified the appellant of the time and place of the hearing and advised that the Minister would seek dismissal of the appeal if the appellant failed to appear. Given these circumstances I am satisfied that the appeal should be dismissed. It is also relevant to note that, in any event, I consider that neither ground of appeal notified by the appellant can be sustained. The first ground is a challenge to the merits of the Tribunal's decision. It was a matter for the Tribunal alone to weigh the material before it and determine whether or not to accept the appellant's claims. The Tribunal was entitled to find that the appellant was not a plausible witness and to reject his claims about his political activities and the threat of persecution. The second ground fails to recognise that the Tribunal was entitled (indeed, bound) to weigh up all of the available material when assessing the appellant's claims. The fact that the Tribunal reached a conclusion adverse to the appellant does not mean that the Tribunal denied the appellant procedural fairness. The Tribunal, by letter dated 8 May 2008, informed the appellant about a range of information that would be the reason or part of the reason for rejecting his claims and invited the appellant to comment. This letter included reference to the appellant's political activities and other circumstances said to indicate that some or all of the appellant's claims were not truthful. The Tribunal considered the appellant's response (as its reasons disclose) but concluded that the appellant was not a truthful or credible witness by reason of the contradictions and inconsistencies in and implausibility of many of the appellant's claims. Credibility findings are a matter for the Tribunal "par excellence" ( Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 168 ALR 407 ; [2007] HCA 1 at [67] ). The Tribunal's appraisal of the appellant's credibility was not "information" requiring the Tribunal to comply with the notification and related procedures in s 424A of the Act ( SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609; [2007] HCA 26 at [15] ). It was open to the Tribunal to make the factual findings that it did. For these reasons the appeal must be dismissed. The Minister is also entitled to an order for costs. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | application for protection visa migration |
The years of income for which the deductions were claimed were 1998, 1999 and 2000. The Commissioner concedes some of the deductions but maintains that other deductions including certain prepaid fees, loan interest and a loan insurance fee should be disallowed. 2 The Commissioner does not dispute that the sandalwood project is a serious commercial venture nor that the agreements and liabilities entered into by Mr Lenzo were all genuine. He contends, however, that the investment structure and payment arrangements involved with the plantation project had as their dominant purpose the gaining of a tax benefit which he properly cancelled under Pt IVA of the Income Tax Assessment Act 1936 (Cth) (the ITAA 1936). 3 For the reasons that follow I do not consider that Pt IVA applies to the claimed deductions and will allow Mr Lenzo's appeal. The relevant amended assessments will be set aside and the Commissioner directed to further amend the assessments to give effect to these reasons. Prior to that he was employed as an accountant at Ernst & Young for a period of 14 years. He commenced his employment with that firm, then known as Ernst & Whinney, as a new graduate from the University of Western Australia. 5 Early in 1997 Mr Lenzo became aware of trials, being conducted by the Department of Conservation and Land Management (CALM), of the growing of commercial quantities of Indian sandalwood for export. The trials were conducted in the Ord River irrigation area near Kununurra (the Ord). Mr Lenzo was told of the trials by Mr Arthur Baker. 6 Mr Baker was promoting a managed investment scheme under which investors would become growers in a commercial Indian sandalwood operation at Kununurra. The proposed scheme was called the "Kununurra Tropical Forestry Project" also known as the "AllRange Project". In 1997 Mr Lenzo travelled to Kununurra with Mr Baker, at Mr Baker's expense, to inspect the proposed plantation. He was impressed with the commercial potential for Indian sandalwood in Kununurra, the infrastructure, the nursery setup to cater for future plantations and the research which had been undertaken by CALM. Nevertheless, he said he did not "feel comfortable" with the management team behind the AllRange Project. His family has a long history in farming and agriculture and he was aware of the importance of having experienced and knowledgeable people undertaking farming operations. He decided not to invest in Mr Baker's project but was still "enthused" about the potential of Indian sandalwood. 7 In 1998 Mr Lenzo was provided with a brochure by an organisation called Australian Tropical Forestry. The brochure offered a number of services for potential investors in commercial sandalwood plantations. He considered the merits of commencing his own operation. While of the view that it would have made a good return, he regarded the initial outlay required as prohibitive. He decided to do some more research into the Indian sandalwood industry and to read some books from his local library discussing the general nature of the product. 8 Early in 1998 Mr Lenzo heard of another managed investment scheme involving the growing of Indian sandalwood in Kununurra. It was called the Ord River Sandalwood Project. Mr Baker was involved. Mr Lenzo received and considered an assessment report conducted by AssetWare Pty Ltd. Again he was not comfortable with the management team behind the project and declined to invest in it. 9 Later that year Mr Lenzo became aware that a friend and former work associate, Mr Frank Wilson of the law firm Wilson & Atkinson, was becoming involved in the commercial cultivation of Indian sandalwood in Kununurra by way of a managed investment scheme. Mr Lenzo was provided with a prospectus for the project which was dated 31 March 1998. He received the prospectus at the end of May 1998. He read it and considered the commercial returns shown in it. It contained tables setting out forecasts and annual internal rates of return depending upon whether the investor chose to prepay annual lease and management fees and borrowed for the investment. Mr Lenzo considered the assumptions underpinning the forecast returns and based on his knowledge of Indian Sandalwood, and discussions with people experienced in the relevant market, formed the view that they were reasonable. As appears from the evidence of expert witnesses called in these proceedings this was a well based view. The project was being promoted by East Kimberley Sandalwood Company Ltd (EKS). Messrs Wilson and Atkinson were both directors of EKS. By way of follow-up he received a letter from EKS dated 22 June 1998 stating that many other managed investment schemes preferred to disclose an annual rate of return on investment rather than an internal rate of return. In order to allow a proper basis for comparison with other projects EKS provided a projected annual rate of return on investment from its project. 10 It may be noted at this point that EKS changed its name to Tropical Forestry Services Ltd (TFS) in February 2000. It became a wholly owned subsidiary of TFS Corporation Ltd. Mr Wilson is a director of TFS. It provided a diagrammatic overview of the organisational arrangements for the project. The substance of that diagram is reproduced at the end of these reasons. 12 The prospectus identified four classes of expenditure for each leased area. A table set out estimated amounts payable including amounts payable to EKS. These activities relate to preparation of cleared land immediately prior to plantation. 13 Under the heading "Subsequent costs" the prospectus said that to meet ongoing costs and expenses from 1 July 1999 growers must pay an annual contribution to the trustee. The contribution would be adjusted each year to allow for inflation. A statement from the manager would be received in May of each year, commencing May 1999, advising of the annual contribution required for the following financial year. (if you elect to insure your interests in the plantation), your proportion of the insurance premium payable for the following financial year, together with the administration fee of 10% of the premium. The estimated amount of the total annual contribution until the end of the project for each leased area was $22,456 comprising $2,212 for rent and $20,244 for maintenance fees. 14 Under the heading "Pre-payment of annual contributions" growers were told they could elect to pre-pay all annual contributions due after the initial period to the trustee on or before 1 July 1999. 15 Reference was then made to a loan facility available from Arwon Finance Pty Ltd (Arwon), a related company of EKS. Messrs Wilson and Atkinson were directors and shareholders of Arwon. Loan funds would be made available to "approved applicants for application moneys and annual contributions in respect of leased areas". The loans were to be made on a "full recourse basis" and secured against the grower's interests in the project. Interest was to be paid at normal commercial rates. Growers borrowing from Arwon could enter into an indemnity agreement with another related entity, Intersure Services Pty Ltd (Intersure), pay it an annual fee and receive an indemnity for any liability arising under the loan agreement to the extent that the distribution of the proceeds from the harvest was insufficient to repay monies borrowed. Messrs Wilson and Atkinson were directors and shareholders of Intersure. interest on funds borrowed, and the annual indemnity fee (if applicable). You should, however, obtain your own taxation advice appropriate to your individual circumstances. Specific assumptions about the number of sandalwood trees per hectare, survival and production rates, production periods, selling prices, marketing costs and land degradation and harvest supervision fund levels were coupled with general assumptions about inflation. In the case of the financial forecast with loans additional assumptions about interest costs were made. Both tables assumed 463 sandalwood trees planted per hectare and a survival rate of 90%. Before tax the "Internal Rate of Return" (IRR) pursuant to the financial forecast with loans in Table 1 was 16.91%. The before tax IRR without loans was 11.81%. There was no positive net cash inflow for growers under either table before year 15, ie 2012/13. 17 A further table showed a financial forecast without loans and with management fees and land rent paid in advance. Similar assumptions were made. It showed a before tax IRR of 13.62%. Sensitivity analyses and assumption risks followed the tables. There was then a section about the farming of sandalwood and the proposed planting configurations. 18 The taxation opinion from Ernst & Young referred to above was dated 5 March 1998 and was incorporated in the prospectus. Rental fees. 2. Management fees or other expenses. 3. Interest. 4. Yearly premium. The assumptions upon which these outgoings were said to be deductible included the proviso that a grower was carrying on a business by his or her involvement in the project and that, by entering into a finance arrangement, the grower intended the investment to run the full course until harvest and sale of the produce. 19 A report from Mr Roger Underwood, principal consultant with a company called Fortech was included in the prospectus. It gave information about the sandalwood industry and the establishment of plantations under the project. Mr Underwood set out the plantation establishment and management regime including quality control for sandalwood seed, nursery operations, host species to be planted with the sandalwood, site preparation, proposed planting rate and survival/replacement strategy, the planting of the sandalwood and short and mid term hosts, fertilisation, irrigation, weed control, pruning and pest control. He stated that a survival rate of 90% at age one (416 trees) would be deemed acceptable. To achieve that it might be necessary to replant some sandalwood during the first planting season. Risks associated with the project including fire, pests, storm, monsoon failure, grazing and immature technology were referred to. 20 A report by Mr Anantha Padmanabha dated 30 November 1997 was also included. Mr Padmanabha described himself as "currently working as the Senior Scientist guiding a number of research projects on Sandalwood at the Institute of Wood Science and Technology, Bangalore, India.". He holds a Masters Degree in Botany. In his report he said that sandalwood production in India was not keeping up with demand. There was increasing awareness of the need to grow more sandalwood supporting eco-friendly commercial production. Countries outside India purchasing sandalwood included countries of the Middle East, Japan, Taiwan, Hong Kong, Korea, Germany, Sweden, Switzerland, France, Australia, the United Kingdom and the United States. He described the inquiries as a "due diligence process". He had discussions with the management about the risks. There were those usually associated with any agricultural business and any start up business such as fire, climate change, future market changes and future government policy shifts. The long term nature of the project also carried a risk. He formed the impression that everybody involved with the project was making an effort to ensure that it was operated, according to its plans, in order to take advantage of the buoyant Indian sandalwood market predicted for the future. He was aware that EKS had long term plans. Its project was not going to be a one off, but part of a yearly strategy to develop a big plantation. As a certified practising accountant, he was aware of the taxation implications of investing in the project. He intended to make a profit from his involvement. In his opinion the expenditure incurred in gaining or producing the projected and intended assessable income would be deductible against his income. 23 Mr Lenzo had "pretty much" decided to invest in the project in mid June 1998. At the time he had a substantial exposure to equities and property. Although both options were fully tax deductible on their face, he chose the project as it showed strong returns and was an asset class to which he had no exposure in his then current asset portfolio. 24 It was suggested to Mr Lenzo in cross-examination that the superannuation contributions were never a real option. He had not contributed a sum anywhere near $20,000 to his super fund for many years. In 1997 he had only paid about $1,750. He said, however, that he had $20,000 available in 1998 to pay into his fund. It was put to him that to get a tax deduction equivalent to that he could expect from the plantation investment he would have had to make a contribution to his superannuation fund in excess of $20,000. He knew that there were limits on the amount which he could contribute to his superannuation fund consistently with obtaining a deduction for the contribution. He agreed that in 1998 the limit for a man of his age would have been about $25,000. 25 Each of the lots on offer in the EKS plantation comprised one sixth of a hectare. The application fee for each was $10,158. Mr Lenzo chose a prepaid option as it yielded a superior internal rate of return. He also opted to take up the offer of loan finance from Arwon. He signed and completed a power of attorney which appointed EKS as his attorney to execute various documents and agreements on his behalf and do all things necessary to ensure his interest in the lots were created. Under that power of attorney Sandalwood Marketing Co Pty Ltd (SMC) was appointed to assist in the marketing of produce derived on harvest. The directors of EKS and SMC were the same. Whilst my family had an established history in farming and agriculture, I did not have the requisite expertise to operate an Indian Sandalwood plantation and decided to appoint EKS Ltd to manage my two lots and my Indian Sandalwood business. This was in my opinion the best commercial option for me as I was of the view that having someone with the credentials and expertise to operate my business would in turn lead to a more efficiently operated business. This could then lead to greater returns and harvest. In answer to a question from the Court, he agreed that even if he had had the relevant expertise and time, there was no way he would have managed his own land areas. 26 Mr Lenzo also decided to subscribe for shares in SMC which he said gave him the potential for an added return in the future should SMC become a profitable "supply" company. He executed all the relevant documentation on 30 June 1998. He was told that he had been allocated identifiable areas of land, namely Lots C104 and C105 on the property at King Location 254, Kununurra in Western Australia. The letter attached a copy of a map which identified his two lots in the area of the plantation. He was told he was entitled to claim a deduction of $20,850 in his 1998 income tax return in accordance with a schedule which was attached. 28 As noted, Mr Lenzo chose to fund his participation in the project with a loan from Arwon. Its office address was the same as that of his solicitors, Wilson & Atkinson. The loan was for an amount of $36,982. There was a First Principal Sum of $20,316 which was advanced on 30 June 1998. This covered maintenance/management and rent fees for the initial year of the project. A Second Principal Sum of $16,660 was to be advanced on 1 July 1999. That covered maintenance/management and rent fees for the remainder of the project. 29 Mr Lenzo repaid $7,506 of the First Principal Sum on 31 October 1998. The remainder was not due for repayment until harvest or 30 June 2014 whichever occurred earlier. The loan was a full recourse loan and the liability to repay it remained irrespective of harvest proceeds. Mr Lenzo also took out an indemnity policy with Intersure. 30 Mr Lenzo received verbal assurances when he signed the application on 30 June 1998 that Intersure had the capacity to meet its obligations under the Indemnity Agreement. Those assurances were given to him by Mr Wilson. He made no independent inquiries about it. He had had some prior involvement with Arwon. He knew that it provided short term finance. One of his clients had used its services some years before and the arrangement had worked well. He did not turn his mind to the likelihood that Arwon was offering similar loans to other growers. He was aware from the prospectus that he would enjoy the best return if he took out a loan. He calculated at the time he entered into the investment that he would be claiming, on an annual basis, a deduction for interest he would not have to pay until 15 years from the commencement of his contract. He responded that any obligation incurred was deductible at the time it was incurred. 31 Mr Lenzo never actually visited the plantation. He had seen a nursery in the area when he visited the Allrange project in 1997. 32 Before the Second Principal Sum was advanced to Mr Lenzo he was advised by Arwon that it had been researching the lending market place and evaluating possible alternatives for its clients to refinance their loans. He was of the view that it was not attractive for him to refinance both the First Principal Sum and Second Principal Sum with the ANZ Bank. However he came to the "considered" view that he would apply for a loan from the ANZ Bank to pay for the latter which covered his maintenance/management and rent fees for the remainder of the project. On 25 June 1999 he applied for and was successful in obtaining a loan from the ANZ Bank in the amount of $16,666 to pay for maintenance/management and rent fees for the remainder of the project. Arwon never advanced a Second Principal Sum to him. That was done by the ANZ Bank. Mr Lenzo was asked why he chose to refinance with the ANZ Bank rather than holding Arwon to its loan agreement. He said he had "no real reason". He "went with one of them and decided to leave the other one the way it was". It was put to him that the ANZ loan was less advantageous to him from a commercial point of view. The term of the Arwon loan was 15 years. The ANZ Bank loan was for 10 years. The interest rate charged by the ANZ Bank was 10.05%, and that payable on the Arwon loan was 9.9%. Mr Lenzo said that at the time he was happy with his decision and knew he could repay the loan fairly quickly. The extra 1% interest on the $16,000 chargeable by the ANZ Bank was not exactly "sheep stations". It was the case however, as Mr Lenzo accepted, that the indemnity signed with Intersure only governed the Arwon loan and not the ANZ Bank loan. 33 The reason for the recommended change to ANZ Bank loan financing did not emerge from the evidence. It may be that the scheme required additional external funding. It may be that there was a concern that Arwon's involvement made the project more vulnerable to attack under Pt IVA of the ITAA 1936. These are speculations. Given the objective character of the test used to determine the dominant purpose of entry into a scheme under Pt IVA , the reasons for recommending the change would not seem to be material. The Commissioner criticised Mr Lenzo's evidence about his reasons for changing to the ANZ Bank, which it must be said were fairly vague. However his subjective reasons or purposes are immaterial. 34 Mr Lenzo made repayments on the principal and interest of the loan from the ANZ Bank and the entire loan was repaid on 21 September 2000. He exhibited bank statements to his affidavit. Following the final repayment of the loan the only outstanding liability he had with respect to his investment in the project was the balance of the Arwon advance of the First Principal Sum. Taking into account the first drawdown, his initial payment and interest accrued on the loan, the closing balance of the loan at 2 July 2000 was $12,810. This amount was to be repaid on harvest or 30 June 2014, whichever occurred first. 35 To this point Mr Lenzo has not received any income from the project. No income was forecast until harvest in 2014. Given his election to prepay for maintenance/management and rent fees for the remainder of the project, his only ongoing obligations were the annual indemnity premiums and annual plantation insurance which have been attended to every year. EKS has been paying the annual plantation insurance from the time the plantation was planted until 23 December 2000. He was only obliged to make plantation insurance payments from after this date. He exhibited to his affidavit a number of letters and tax invoices which he has paid in relation to the indemnity premium. 36 Since the commencement of the project Mr Lenzo has received regular updates, newsletters and financial reports from EKS, which changed its name to Tropical Forestry Services Ltd (TFS) in 2000. He was advised early in 2000 that the survival rate of the trees was poor but that EKS would be replanting sufficient trees on another location to make good the deficiency. He said in his affidavit evidence that the project is functioning better than projected in the prospectus and that his initial assessment of the Indian sandalwood industry was correct. He expects that returns which are higher than those forecast in the prospectus should be derived by him on harvest. He referred to various letters that he had received from EKS and TFS covering the period from 1998 through to November 2005. These included annual financial reports for the project and newsletters and updates. 37 One of the reports indicated that a very severe wet season had resulted in the loss of about 50% of the sandalwood trees. Few of the host trees were affected. A restocking program in 2000 was only partially successful and the company planted an additional area of 25 ha on land it owned at Packsaddle Road, Kununurra. Mr Lenzo accepted that there was no obligation on the company to replant on additional land. 38 In closing submissions counsel for Mr Lenzo set out the actual cash outlays he made (which are of course to be distinguished from the liabilities he incurred and in connection with his investment). 39 Mr Lenzo has complied with all the terms and obligations under all the agreements that he entered into for the project and by the end of 2000 had paid out cash amounts totalling $29,072.84 for his participation in it. This exceeded the cash payments required under the prospectus and compared to the $29,938 in tax deductions claimed under the project. He said that his prevailing purpose for investing in the project was to provide for a future income distribution which would assist him to generate wealth for retirement. The harvest of his sandalwood lots would occur in 2013 when he reaches the age of 60. He said the project for him was a superannuation investment strategy. Having regard to the liabilities incurred, he invested $36,982 in it in June 1998. If he hadn't done so he would have invested the same amount into his self-managed superannuation fund at that time. 40 I accept Mr Lenzo's evidence as to the process by which he decided to enter into the project, the payments he made and the opinions he formed. In so doing, I accept that his subjective motives and purposes are not material in determining, under s 177D(b) of the ITAA 1936, whether it could be concluded that a dominant purpose of his entry into the project was to secure a tax benefit. The application was expressed to be for two leased areas in the project. 42 Also executed at the same time was a document entitled "Applicant's Power of Attorney". By cl 2 of that document, Mr Lenzo appointed EKS and its duly authorised attorneys as his attorney. By cl 3 he granted the attorney power to execute a lease and management agreement on his behalf, and any variation or amendment thereof "... and to execute any other document the Attorney reasonably considers necessary or desirable to effect and complete the Applicant's application, and the issue of leased areas to the Applicant pursuant to that application". He authorised the attorney to arrange the stamping of the lease and management agreement and the lodgement of any caveat under the Transfer of Land Act 1893 (WA). 43 A lease and management agreement dated 30 June 1998 was in evidence. It was made between EKS, Professional Funds Management Pty Ltd as Trustee of the investor's funds (PFM), SMC and each of the investors named in a schedule to the deed referred to in the deed as a "grower". The document was executed by PFM, SMC and EKS as manager and "as attorney and agent on behalf of each relevant grower". 44 In its recitals the lease and management agreement stated that EKS as manager was, or was entitled to become, the owner or head lessee of the plantation land and had agreed to sublet to each relevant grower one or more separate leased areas. These separate leased areas were set out in Item 11 of the Schedule, each comprising one part of the plantation for the purpose of conducting a commercial forestry project on it on the basis that the relevant grower would pay rent and on further terms and conditions set out in the agreement. The agreement recited that the grower wished to appoint the manager as manager of the grower's commercial forestry project to be conducted on the relevant leased area and in that capacity to establish and maintain the project and to harvest its produce. It also recited that the relevant grower wished to appoint a marketing company, SMC, as marketer of the produce of the project and that SMC wished to accept that appointment. The trustee, PFM, had agreed to protect the rights and interests of the relevant grower under the deed. 45 Clause 4 of the agreement provided for the payment of rent in respect of each relevant leased area. The amount was $158, for the initial period which was 13 months from the commencement date. That date was 30 June 1998 (see cl 1.9). For each financial year after the initial period the rent was $158 per relevant leased area multiplied by an inflation adjustment factor on a date when the manager gave notice of the annual contribution payable for the relevant financial year (cl 3.2). 46 Under cl 8 the manager was to establish, maintain, supervise and manage on a day to day basis on behalf of the grower, in accordance with good commercial practice all commercial forestry activities to be carried on by the grower on the leased area. This included the planting and raising of Santalum Album (Indian sandalwood) seedlings or trees. 47 By cl 23.10 the grower could elect to pay annual contributions by prepaying the aggregate of rent and maintenance fees, after year one, to the trustee on or before 1 July 1999. The aggregate rent was $871 per relevant leased area and maintenance fees of $7,462 per relevant leased area. If such an election were made then receipt by the Trustee of the amount referred to would be a complete discharge to the grower in respect of its obligations to pay rent and management fees during the term of the agreement. 48 Mr Lenzo also entered into a Loan Deed dated 30 June 1998 with Arwon. By cl 2.1 of that deed, read with the schedule to the deed, Arwon agreed to advance to him a First Principal Sum of $20,316 on 30 June 1998 and a Second Principal Sum of $16,666 on 1 July 1999. The First Principal Sum was to be repayable in two instalments, one of $6,094 on 30 September 1998 and the other of $14,222, on the date on which Mr Lenzo was first entitled to receive the whole or part of his net proceeds from the harvest and, alternatively, no later than 30 June 2014. The latter formula also applied to the repayment date of the Second Principal Sum. The deed specified an interest rate of 9% or the rate of interest charged by BankWest to its customers on overdraft accounts of less than $100,000 from time to time less 5% per annum, whichever was the higher rate. 49 Mr Lenzo executed an indemnity agreement with Intersure on 30 June 1998. Its effect was to provide an indemnity against any shortfall between the amount borrowed from Arwon and the proceeds of the harvest. It still required Mr Lenzo to repay the sum of $7,506, being the first instalment of the First Principal Sum due on 30 September 1998. He was also required to pay interest on the Second Principal Sum. The fees for this indemnity were an initial annual sum of $267.67 per relevant leased lot to be paid in advance on or before the commencement date and thereafter an annual sum of 2 x $533.34, ie $1,066.68. The interest and bank fees were underclaimed. The amount of interest paid for the year ended 30 June 1999 on the Arwon loan was $1,345.38. The interest and bank fees were overclaimed. The amount of interest paid for the year ended 30 June 2000 was $2,739.74. However the amount asserted as deductible in the objection notice was $2,471 which appears to have been less than the actual interest paid which totalled $2,739.74, $1,152.90 of which was attributable to Arwon and $1,586.84 attributable to the ANZ Bank loan. 51 On 8 August 2001 a Deputy Commissioner of Taxation made determinations pursuant to s 177F of Pt IVA of the ITAA 1936. He determined, under para 177F(1)(b) that the amounts of $20,850, $3,884 and $5,203 each being "a tax benefit that is referrable to a deduction being allowable to Gino Lenzo" for the respective years of income ended 30 June 1998, 30 June 1999 and 30 June 2000, should not be allowable to him in relation to that year of income. Notices of amended assessment issued on 7 September 2001 giving effect to that determination. Under-statement penalties and interest were imposed; $4,044.60 for the year ended 1998, $509.75 for the year ended 30 June 1999 and $267.65 for the year ended 30 June 2000. 52 Mr Lenzo lodged objections against the assessments on 14 September 2001. On 8 March 2005 a First Assistant Commissioner of Taxation advised that his objections had been considered and disallowed. Reasons for Decision were attached to the letter of advice. The notice of appeal against the Commissioner's disallowance of Mr Lenzo's objections was filed in this Court on 3 May 2005. I received that evidence subject to relevance. In my opinion, it is relevant to the objective purpose of investment in the project. The Commissioner has accepted that the sandalwood plantation is a serious commercial project, so to that extent the evidence does not go to a matter in dispute. However it does underpin the expert opinion evidence offered as to projected returns from the plantation and the appropriateness of the fees charged for entry into the project. In the end the substance of the evidence was not controverted. 54 Mr Underwood, who had prepared the forestry report for inclusion in the prospectus, was the first of the three witnesses to give evidence about the operation of the plantation. At the request of the directors of Intersure he undertook an inspection of the plantations in October 1999 and produced a report on 1 November 1999 based on that inspection. He undertook a similar inspection on 25 April 2000 and prepared another report on 28 April 2000 based on that inspection. He has not provided another report for EKS or its related entities since April 2000. He has, however, seen the plantations since that time. His inspection in October 1999 took place about six months after site preparation and two months after the planting of the seedlings. He was of the opinion that at the planning stage the project provided all the necessary elements for success. The prospectus demonstrated that the best information about growing Indian sandalwood at the Ord had been gathered and was to be applied. He was generally of the opinion that the plantations were professionally managed thereafter although he was concerned about the standard of seedlings planted and the lateness of some of the planting. 55 Subsequent visits to the plantations at various times over the years confirmed Mr Underwood's concerns about seedling quality and lateness of planting. He said that they are today generally understocked. Fortunately, Indian sandalwood today is far more valuable than it was at the time of the commencement of the project. 56 Mr Underwood inspected the plantations in October 2005 and despite the poor stocking of Indian sandalwood trees was of the opinion that they were being well managed. He still holds the opinion that he held in 1999 that the project will be a commercial success. He also observed that the techniques used in Indian sandalwood establishment and plantation maintenance have evolved since 1998 as a result of further research and experience. The current operation of the project and subsequent projects are more sophisticated and more efficient than they were in 1998. 57 Mr Underwood gave opinion evidence relating to the level of fees charged to the investors. In 2001 the Commissioner had asked him to inspect the plantation the subject of the Kununurra tropical forestry project also known as the AllRange Project and to provide a report on its progress. That project, which had been earlier considered and rejected by Mr Lenzo, also involved the growing of sandalwood in the Ord. Mr Underwood had formed the opinion that the fees charged to the investors in that project for the purchase of sandalwood seedlings and host seedlings were excessive and gave evidence to that effect in Federal Court proceedings, Puzey v Commissioner of Taxation [2002] FCA 1615 ; (2002) 51 ATR 616. In relation to the EKS project however, he was not of the same opinion. He said that investors in that project were charged fees totalling $60,000 per hectare for services performed by EKS as manager of the project as outlined in the lease and management agreements. Planting and raising Santalum Album seedlings or trees. Planting on the invested areas as soon as practicable after execution of the relevant lease and management agreement sufficient Santalum Album seedlings or trees. 3. Planting on the investors' areas such other trees as might reasonably be necessary or required to enable or encourage growth of, or protect, the Santalum Album seedlings. 4. Cultivating, tending, culling, pruning, fertilising, spraying, irrigating and otherwise caring for the trees as and when required. 5. Collecting seeds and propagation material from the investors' areas. 6. Keeping in good repair access roads to the investors' areas. 7. Using all reasonable measures by fumigating and poisoning for extermination and keeping the investors' areas free from vermin. 8. At all times maintaining in good repair and condition fire breaks and irrigation channels in and about the investors' areas. 9. Paying all costs and expenses of establishing and maintaining the plantation. The project managers of the 2006 ITC sandalwood project charged investors a fee of $3,520 per 0.04 ha for establishment. This equated to $88,000 per hectare. On that comparison, he regarded the fees charged to investors in the project currently under consideration as not excessive. 58 Mr Underwood was cross-examined in relation to his report in the prospectus. He agreed that as of March 1998 there had not been any international sales of Indian sandalwood grown in Australia of which he knew. He was also cross-examined about the adequacy of the provision for replanting and infilling where planted trees had died. He said in his experience most forestry projects nearly always involved an expectation that there would be some need for replanting in the second year. He did not himself inquire as to whether there was such a provision in relation to the EKS project. He just naturally assumed that it would happen. He agreed that the EKS project had suffered early mortality among seedlings in the first wet season immediately after planting. The sandalwood is a parasitic or semi-parasitic tree which attaches its roots to the roots of other trees. When a sandalwood plantation is grown from seedlings through to maturity it is necessary to establish a range of different host species during the 15 year period of the growth. The host trees are planted in amongst the sandalwood, adjacent to the sandalwood trees. Progressively the sandalwood kills the trees of the host species and sucks them dry so that other host species trees are needed to replace them. 59 I accept Mr Underwood's evidence that the set up and management of the EKS plantation project indicated that it was properly conceived and generally properly managed. The question whether fees charged to investors were "excessive" involves normative judgments the basis of which needs to be made clear in order to establish their relevance. In a case such as the present, if the level of entry fees paid is able to be characterised, on objective criteria, as inflated beyond what is relevant to the interests and services being acquired, and the costs, direct and indirect, of providing them, then that fact, in combination with others, may support the conclusion that a dominant purpose for entering the scheme was to acquire a tax benefit. In this case Mr Underwood's opinion about the fees was based upon the range of services provided and in that sense was properly based. Using a criterion of somewhat lesser reliability it invoked comparisons with other Indian sandalwood projects. I accept overall that Mr Underwood did have a proper basis for his opinion that the fees charged were reasonable. Such opinions however are necessarily more qualitative than quantitative in character. 60 Evidence was also called from Mr Anantha Padmanabha who, along with Mr Underwood, had prepared a report which was included in the prospectus. He has over 43 years experience in forestry in India predominantly dealing with sandalwood. There was no challenge to his qualifications or expertise. 61 Mr Padmanabha said the sale price of sandalwood in India over the period from 1990 to 2006 has increased from US$4,000 per ton to US$77,000 per ton. That represented an average increase of 23% per annum. In his opinion the increasing price trend will continue due to the rapid reduction in the supply of Indian sandalwood caused by dwindling production. Demand for the wood is increasing in the domestic market of India and in international markets. The gap between supply and demand is also dramatically increasing. 62 Mr Padmanabha referred to the projected 2014 price in the prospectus which was A$60,000 per ton. The annual percentage price increase for sandalwood over the past 15 years has averaged 23%. This exceeds the forecast 6% inflationary figure used in the prospectus projections. He anticipated that the final price to be achieved by investors in the project on harvest in 2013, based on continuing demand and the current price, may be at least double the prospectus forecast. In cross-examination he said that harvesting and sale of sandalwood is controlled by State governments in India. He agreed that it is a valuable export for that country but said that domestic demand is absorbing about 60% to 70% of production. Sandalwood in India is obtained from natural forests. There are no plantations because private landowners fear the "rigorous rules framed by the Forest Department". They are not willing to raise sandalwood and then just give it to the government. It appears from his evidence that sandalwood marketing in India is effectively controlled by State governments. 63 Mr Padmanabha's evidence can be accepted. As with the evidence of Mr Underwood, it largely went to the commercial viability of the plantation and its genuiness as a commercial operation. Having regard to the express acceptance by the Commissioner in the course of Mr Padmanabha's examination that the genuine commercial nature of the plantation project was not in issue, it is not necessary to say anything other than that the concession is supported by his evidence as well as that of Mr Underwood. 64 I also accept what Mr Padmanabha has had to say about the prospects of high returns from the plantation having regard to trends in the price of sandalwood. Given the trends which he identified and which existed at the time that the prospectus was issued, there was considerable cause for optimism about the future of Indian sandalwood as a commercial export product notwithstanding that the project itself had risks. 65 Evidence as to the soundness of the investment and the fee levels was called from Mr Martin Sammon, again subject to objection as to relevance. Mr Sammon is a chartered accountant who has been involved in the management and appraisal of regional agribusinesses for 25 years. He specialises in business strategy and business planning and has been intimately involved with the formation of a number of viticultural investment projects. From 2001 to 2005 he managed the establishment and development of Lonsdale Securities Ltd's (Lonsec) Alternative Research division. In that time he was engaged in the review of agricultural investments in the Managed Investment Scheme sector. Since 2005 he has worked with Thompson Partners to launch an institutional agribusiness fund, known as the Australian Rural Investment Fund. It is a joint venture aimed at attracting wholesale funds into regional agriculture, processing and infrastructure investment opportunities which meet predefined investment criteria. He was also a member of the Victorian Government Rural Land Stewardship Critical Reference Group. Mr Sammon is currently engaged as a consultant by the holding company for the TFS Group which, under its former name EKS, promoted the East Kimberley Sandalwood Project No 1. 66 Mr Sammon was asked by Mr Lenzo's solicitors to provide an opinion, for the purpose of these proceedings, on the investment offered under the EKS Project No 1 prospectus. He said that the project did not need to rely upon the tax benefits in order to provide a sufficient financial return to qualify as an investment grade product. He carried out his analysis of the project as an investment on a before tax basis. He reviewed the prospectus and applied factors he would normally consider in assessing an agribusiness project. During his employment with Lonsec he had reviewed a number of subsequent TFS Indian sandalwood projects similar to that proposed in this case. He produced reports on those projects. Through the process of reviewing those reports he had become familiar with the management of TFS, the Indian sandalwood market and Western Australian government research on growing Indian sandalwood in Kununurra which preceded the project. 67 In 1984 the Western Australian State Government had established experimental plantations of Indian sandalwood in Kununurra. These demonstrated that Indian sandalwood could be successfully grown in the Ord River Irrigation Area. The most suitable host species and soil type had been identified and the process for the propagation of seedlings from seed stock had been successfully established. There was sufficient evidence in 1998 to be satisfied that Indian sandalwood could be grown as a commercial forestry crop in the Ord. However, the plantation was a pioneering project as no large scale commercial Indian sandalwood plantations had been established in the Ord prior to 1998. Mr Sammon accepted that it is often the case that large scale operations in agriculture disclose problems not evident in smaller scale trial projects or not capable of efficient resolution in large scale operations. The risks of agricultural failure were therefore much higher for this project when compared to more established large scale forestry operations. 68 Mr Sammon considered the initial directors and managers of the project to be appropriately experienced. However he identified, as a major weakness in its early stages, the use of independent contractors located in Kununurra who had had no previous experience with Indian sandalwood and were not adequately trained foresters. He said that since that time EKS had corrected the problem. 69 Mr Sammon gave evidence about the market for Indian sandalwood. He described its outlook as "very bright today due to the dwindling supply and the growing demand from the two power house economies of the world in India and China where Indian sandalwood has been prized for its aromatic oil for centuries". Based on the prospectus forecasts, the project showed strong financial returns on a before tax and before finance basis. The forecast returns were very strong compared to other established forestry projects at the time which were projecting before tax and before finance returns of 6-8% per annum. In Mr Sammon's opinion the assumptions underlying the forecasts were reasonable. The forecast end price for the year 2013 as set out in the prospectus was US$43,132 per ton. At the most recent auction of Indian sandalwood held in Salem, India in March 2006, the average price obtained was US$75,260 per ton. Mr Sammon could not be confident that Kununurra Indian sandalwood would command the same price as Indian grown timber which usually has a higher oil content. However, even if the price obtained by Indian grown timber were to be discounted by 50%, which in his view was an excessive discount, the price projection in the prospectus was not only reasonable but understated. 70 The assumed survival rate of 90% was optimistic and a long term survival rate of 60% would have been more realistic. As to the forecast heartwood yield per tree, that was underpinned by State government research and Mr Underwood's report and was a reasonable assumption. 71 Mr Sammon was of the opinion that the fees charged were reasonable give the balanced management required in successfully establishing an irrigated Indian sandalwood plantation in a remote location of Australia. Although EKS had a significant profit margin on the actual costs of establishing and maintaining the plantation, the forecast financial return to the investors was, in his opinion, still reasonable. 72 Despite the experimental nature of the project in 1998, Mr Sammon considered that the compelling market outlook for Indian sandalwood at that time and the strong financial returns projected made it a project that was suitable as an "Investment Grade" project. The higher risks associated with it were commensurate with the higher returns expected. He described the project as suitable for an investor who was prepared to assume the higher risks in pursuance of the much higher returns that were possible from it compared to the lower returns expected from more traditional forestry projects. 73 It was put to Mr Sammon in cross-examination that out of the initial payment shown on Table 1 in the prospectus, $10,158 of it was not said to meet the initial costs that the manager had to meet. He said in response that he had not had an opportunity to form a detailed assessment of those costs. He didn't have enough information to make a statement of excessive charging but in the context of subsequent TFS projects the fees were reasonable. He said that the Table only showed "direct costs". He was asked in re-examination what indirect costs he had in mind. He said that, in answering that question one would need to know how the total operating costs of the promoter were allocated to the project. He said the promoter had to fund the creation of the underlying farm asset and the project itself. Under the structure of managed investment schemes, those costs get confusing accounting treatment. This seems to give an inflated view of the paper profits that are being made. The tables in the prospectus did not show the cost of land to the promoter or the cost of holding that land or any contingencies. 74 I accept Mr Sammon's evidence. In one respect it goes to the proposition, which is not in dispute, that the project was a genuine commercial project. However the significant issue which he and the other expert witnesses canvassed was whether the "upfront" payments were higher than reasonable for commercial purposes. The answer to that question would be relevant to whether the way in which the payments were structured could be said to have a dominant purpose of obtaining a tax benefit. AIRS is the holder of an Australian Financial Services licence. Mr Begley said he is authorised, by that licence, to give advice in relation to listed securities, managed investments, master trusts, superannuation investments, property syndicates and income investments. AIRS specialises in servicing customers with $1 million or more in investment capital. He has himself been a grower of Indian sandalwood with TFS since June 2000 and a shareholder since that time. Mr Lenzo's solicitors had asked him to give evidence on the suitability of the investment in the EKS project number 1 based on the content of its prospectus focussing in particular on projected returns and taking into account the financial circumstances and goals of Mr Lenzo. His evidence was objected to by counsel for the Commissioner. The objection was on the basis that his opinion about the suitability of the investment was not a matter to which the provisions of Pt IVA were directed. The evidence was again received subject to relevance. 76 Mr Begley had been provided with an AIRS financial information questionnaire completed by Mr Lenzo and a worksheet detailing Mr Lenzo's financial position. He also had a copy of the prospectus. He set out his academic and other qualifications and experience in his affidavit. These were not in dispute. He stated his familiarity with pooled managed investment schemes which he described as providing an opportunity to invest in assets and industries that would otherwise be out of the reach of most investors. The pooling of funds provided economies of scale to investors enabling them to acquire interests in assets otherwise beyond their means, access management expertise and reduced management costs. 77 Mr Begley said he had reviewed Mr Lenzo's financial position as it was in June 1998. This was based on information provided in the AIRS financial information questionnaire which Mr Lenzo had completed. Depending on the option chosen by the investor the projected returns ranged on a pretax and prefinance basis from 11.81% per annum for the annual fee option and 13.82% per annum for the prepaid option calculated on an internal rate of return basis. Given the applicant's high after tax income giving rise to excess cash flow at the time, his strong asset position which consisted mainly of property, equities and alternative investments, his age, his relatively high tolerance for risk in investing and his relatively low exposure to forestry as an asset class, in my opinion, the Project was a suitable (although relatively small) investment for the applicant to make at the time. He was asked why he didn't consider the rate of return based on the loan financed option which Mr Lenzo had chosen. He said that his objective was just to take a conservative approach. He said it was important in considering investment returns. Considering the returns without "gearing" he was able to compare them with the returns of a balance portfolio which over the medium to longer term he would expect to yield 4% to 6% ahead of inflation, that is to say about 7% to 9%. So he compared the 11.8% and the 13.82% returns shown in the non loan options for assessing suitability of the investment. 79 Mr Begley was aware that the project involved innovative technology. He was also aware that there was no history of the commercial production of Indian sandalwood in Australia and, in particular, in the Kununurra region. He was aware, however, that there had been some prior plantations in Kununurra. 80 I accept that Mr Begley's evidence was a reasonable assessment of the investment and that it is relevant to some of the factors to be considered under s 177D(b). Submissions as to the relevance of his evidence and that of Messrs Sammon and Padmanabha were made in closing by counsel for Mr Lenzo and I refer to those briefly. He relied upon the decision of the Full Court in Commissioner of Taxation v Sleight [2004] FCAFC 94 ; (2004) 136 FCR 211. The Court there upheld the Commissioner's application of Pt IVA. Both Hill and Carr JJ referred to the significance of poor projected financial returns from the particular scheme. 82 The case concerned an investment in a tea tree oil farming project. The Court held, having regard to the eight matters listed in s 177D(b) of the ITAA 1936, that the taxpayers had entered into and carried out the investment scheme for the purposes of obtaining a tax benefit. The Court had regard to the commercial uncertainty of the scheme in concluding that its tax purposes predominated over its commercial purposes. 83 In considering the manner in which the scheme was entered into or carried out for the purposes of s 177D(b)(i), Hill J observed that the commercial investment in tea trees was attendant with risk. Without the tax benefits which the prospectus predicted "the commercial returns were far from encouraging" (at [75]). Carr J, in considering the "form and substance of the scheme" for the purpose of s 177D(b)(ii) referred to "what can only be described as miniscule projected returns over a long period of time from a venture which on all the evidence involved significant risk so described in the Prospectus" (at [216]). In those circumstances it cannot be objectively found that the dominant purpose of the applicant's entry into the scheme was to enable the applicant to make a commercial investment: the tax benefit was the key to the commerciality of the scheme. Their unchallenged evidence was that the projected returns from the project were commensurate with the risks. Mr Sammon's unchallenged evidence was that the project was an "Investment Grade" investment without any reliance being placed on tax benefits and that the project showed strong financial returns on a before tax and before finance basis. 86 Counsel also pointed to Mr Padmanabha's evidence of an increase in demand for Indian sandalwood and the increase in average price. He also submitted evidence that the EKS project was suitable to Mr Lenzo's particular financial circumstances and that it did not rely on tax benefits and financing to show an acceptable return was relevant to whether Mr Lenzo could be regarded as having had a dominant tax purpose. Such evidence, it was submitted, was an objective fact to which regard must be had in considering whether Mr Lenzo had a dominant tax purpose and, in particular, in considering the manner in which the scheme was entered into or carried out, the form and substance of the scheme and the change in the financial position of Mr Lenzo that had resulted, would result, or might reasonably be expected to result, from the scheme. 87 The evidence of Messrs Sammon, Padmanabha and Begley was objected to on grounds of relevance only. In my opinion the evidence was relevant and therefore admissible. Counsel for the Commissioner objected to it on the grounds of relevance but did not object to it being read subject to relevance. There was no cross-examination of Mr Atchison. 89 Mr Atchison is a chartered accountant who was the company secretary of EKS from January to October 2001. He was also company secretary of Arwon and SMC from December 2000 until October 2001. He was company secretary of Intersure from June 1998 until November 2002. He said that he decided to become an investor in the project in the financial year ended 30 June 1998. In 2000 he became aware of an investor in the project who did not have the financial capacity to meet its ongoing commitments to EKS under the lease and management agreement. That grower had agreed with EKS to find a replacement to assume its obligations under the lease and management agreement. Mr Atchison gave consideration to the grower's commitments and taking up a sublease agreement. Under that agreement he would have had to assume the original grower's obligation to pay rental and the initial plantation, preparation and establishment fees together with the ongoing rental and plantation maintenance fees in relation to the proposed areas. 90 Because of publicity surrounding disallowance of deductions by the Australian Taxation Office in other tax effective investment schemes, Mr Atchison made application, through Wilson & Atkinson for a "Private Binding Ruling". That application was made on 22 March 2000. On 16 May 2000 he received a letter from the Commissioner dated 10 May 2000 which enclosed the Private Binding Ruling. $10,158 per leased area plus any interest incurred for his initial expenditure for the year of income ended 30 June 2000. 2. $1,560 per leased area plus any interest incurred for his expenditure for the year of income ended 30 June 2001. $1,560 per leased area plus any interest that he incurred for his expenditure in the year of income ended 30 June 2004. Alternatively, if he chose to prepay the lease and management fees, an amount of $833 per leased area plus any interest that he incurred for his expenditure for the year of income ended 30 June 2002. He also understood that the Commissioner was of the view that Pt IVA did not apply to disallow his allowable deductions. Despite the favourable Private Binding Ruling however, he decided not to invest. He exhibited a copy of the ruling to his affidavit. 91 The ruling was expressed to be a "Private Ruling" for the purposes of Pt IVAA of the Taxation Administration Act 1953 (Cth). Pt IVAA was repealed with effect from 1 January 2006. However a private ruling in force immediately before that date, had effect on and after that day as if it were a private ruling made under Div 359 in Sch 1 to the Tax Administration Act as amended. 92 The ruling covered the years of income ending 30 June 2000, 2001 and 2002. It described the arrangement the subject of the ruling by reference, inter alia, to the prospectus dated 31 March 1998, the lease and management agreement, the plantation contracting agreement and deed of variation thereof, the plantation sub-contracting agreement, the unexecuted deed of sublease, a secondary sales notice for prescribed interests, the trust deed, and the loan agreement offered by Arwon. It noted that the loan options involved full recourse loans. TFS to be put in funds by the financier to the full extent of the loan relating to the rulee's investment in the project. 2. None of the rulee's subscription monies will be placed on deposit with the financier or in substance be returned to the financier or any associate of the financier. 93 At the time that the affidavit was read, counsel for the Commissioner said that the substance of his objection was not the significant "technical" point that the Private Binding Ruling was given to Mr Atchison and not to Mr Lenzo, but that the arrangement with which the ruling was concerned was not the arrangement before the Court. A point of distinction which counsel described as critical was that the ruling proceeded on the premise that the finance agreement would not include a feature whereby entities associated with the project other than Arwon were involved in the provision of finance for the project. In the present case, as appears below, EKS entered into an agreement with Arwon to lend Arwon $8.4 million which it could on-lend to investors. Another point of distinction was said to be that the ruling proceeded on the basis that the finance agreement would not include indemnity agreements in relation to the loan designed to limit the borrower's risk. In the present case there was an indemnity agreement. The third point of distinction was that the ruling was premised on the proposition that the arrangement did not involve repayments of interest not being made regularly. In the present case the interest was not payable until the end of the project. 94 Counsel for Mr Lenzo did not dispute that there were differences in the financing arrangements. Rather, he relied upon a statement in the ruling that there were no features of the scheme such as the total lease and management fees of $10,158 per leased area, being excessive and uncommercial or financed by non-recourse or limited recourse loans that might suggest the scheme was predominantly designed to produce a tax deduction. He submitted that the evidence was relevant to show that the view taken by the Commissioner was that the fee being charged for the project was not excessive. That is to say, it was accepted as being commercial. The only difference between Mr Atchison and Mr Lenzo was the financing arrangements. 95 In my opinion however the private ruling in relation to Mr Atchison was an administrative determination reflecting an administrative opinion. That opinion is not evidence of any matter relevant to the issues which I have to decide. I disregard that evidence as irrelevant. On the same basis I would exclude evidence adduced from Thomas Nash Cullity, the Chief Executive Officer of TFS relating to Product Rulings that TFS has been granted for its projects, not including the project. The project in issue in this case, when initially marketed preceded the implementation of the product ruling system. Relevant to the financing of the project was an Offer to Loan made by Arwon to EKS and dated 23 June 1998. By that document, Arwon offered to borrow from EKS $8,481,930. The mode of acceptance was prescribed as "the advance of Loan on or before 30 June 1998". The consideration payable by Arwon to EKS was interest and repayment of the loan on the terms set out in a schedule to the offer. 2. Interest payments shall be made on the dates that interest payments are made by the growers in the East Kimberley Sandalwood Project No 1 to the Offeror or as otherwise mutually agreed between the Offeree and the Offeror from time to time. EKS drew a cheque in favour of Arwon dated 30 June 1998 in the sum of $8,481,930. Arwon endorsed the cheque over to the trustee, PFM, which then endorsed it back to EKS. All of this happened on 30 June 1998. The EKS statement of account at St George Bank shows a debit and a credit in that amount on the same day. The statement of account for Arwon with the same bank on the same day shows a credit and debit of that amount. The Arwon balance sheet as at 30 June 1998 showed the sum of $8,481,930 as a "receivable" under the heading "Non-current assets". It showed the same amount as a "Non-current liability". The balance sheet also showed that as at 30 June 1997 Arwon's total net assets were $13. The net position on 30 June 1998 was $1,446. The company's paid up capital was $2. 98 Counsel for the Commissioner contended that without the loan from EKS, Arwon did not have the capacity to lend $8.4 million to the growers. Fees for the work were set out in a schedule to the agreement. 100 A related agreement was a "Plantation Sub-Contracting Agreement" between Sandalwood Contracting and Plantation Management Services Pty Ltd (Plantation Management Services) dated May 1999. The latter company was based in Kununurra and evidently not related to EKS or its associated companies. By the sub-contracting agreement, Plantation Management Services was appointed to carry out "certain duties and obligations of the Contractor under the Plantation Contracting Agreement ...". These duties included preparation of the land for planting. 101 Counsel for the Commissioner submitted that it could be inferred from the sub-contracting agreement that actual work on the plantation was to commence in or around May 1999. Mr Lenzo's commitment, on 30 June 1998, to $20,000 worth of expenditure was said, on that basis, to be referable to a desire to obtain a tax benefit. A corollary of that submission was that there was no evidence to show that entering into the project on 30 June 1998 was necessary to achieve its commercial objectives. 102 Counsel for Mr Lenzo pointed out that the lease and management agreement imposed a wider range of obligations on EKS than were imposed on the sub-contractor under the sub-contract. The wider duties included the propagation of the sandalwood seedlings and host species. Under the prospectus the planting was to be done upon the commencement of the dry season in May/June 1999. That was after the seedlings had been propagated and the land was dry enough to permit its preparation and planting of the seedlings. The sub-contractor's commencement date of 1 May 1999 was consistent with the prospectus and the provision of plantation establishment services within 13 months of 30 June 1998. As a matter of fact, because of weather and other agricultural factors, planting did not finish until August 1999. I note also that Mr Underwood said, and it was not disputed, that his inspection of the plantation in October 1999 took place about six months after site preparation. On that basis site preparation would have commenced in about April or May 1999. 103 In my opinion there is little comfort to be derived for the Commissioner from the timing of the commencement of planting under the sub-contracting agreement. I would give it little weight in support of the inference that a dominant purpose of obtaining a tax benefit is to be inferred from the investment structure. $1,066 for indemnity fees. $1,066 for indemnity fees. 105 The Commissioner concedes that the deduction of $1,666 claimed in respect of the outgoings for maintenance fees and rent on or about 23 June 1999 and the interest incurred and paid to the ANZ Bank are allowable. (5) A reference in this Part to a scheme or a part of a scheme being entered into or carried out by a person for a particular purpose shall be read as including a reference to the scheme or the part of the scheme being entered into or carried out by the person for 2 or more purposes of which that particular purpose is the dominant purpose. The elements of that structure which he emphasised were those reflected in the agreements to which Mr Lenzo made on that day, the Loan Offer document between Arwon and EKS and the round-robin transaction which gave effect to that loan arrangement. Counsel also pointed to the fact that the scheme as entered into in 1998 was not implemented precisely in 1999 and 2000 because it had contemplated that prepayment in June 1999 would be done through Arwon. 112 The Commissioner contended that there was in existence, relevant to the 1998 year of income, a scheme within the meaning of s 177A(1) of the ITAA 1936. The scheme as formulated by the Commissioner continued in the 1999 and 2000 years of income so far as it was relevant to the advance of the First Principal Sum, the interest payable on it under the Loan Deed and the fees payable under the Indemnity Agreement. The variation in the loan arrangements in 1999 and 2000 with the borrowing from the ANZ Bank instead of Arwon explains why the Commissioner does not now contend that the deductions claimed on interest paid on those borrowings should be disallowed. It is the ongoing interest on the loan from Arwon and the ongoing indemnity fees for 1999 and 2000 that represent continuing elements of the original scheme. The Commissioner's position, in effect, was that the tax benefits derived from those deductions represented tax benefits obtained "in connection with" the scheme which he identified for the purposes of s 117F. 113 The Commissioner's formulation of the relevant alternative schemes in his closing submissions differed slightly from the formulation in his formal Response to Mr Lenzo's Statement of Grounds. That earlier formulation was accepted by Mr Lenzo in his closing submissions. The principal difference between the two formulations was the inclusion of the Offer to Loan between Arwon and EKS as an element of the more recent version. An express reference, in the earlier version, to Mr Lenzo's election to prepay aggregate annual rent and maintenance fees was dropped. The Commissioner concedes that Pt IVA does not apply to the prepayment of future maintenance and rent fees in the 1999 and 2000 years. 114 In my opinion the alternative schemes as formulated may be accepted as schemes for the purposes of Pt IVA notwithstanding the somewhat ungrammatical inclusion of the prospectus as an element of a scheme. 115 The first question which must be asked in this case is whether, by entering into the relevant scheme, Mr Lenzo obtained a tax benefit in relation to it. Section 177C explains what is meant by obtaining a tax benefit in connection with a scheme. If it is a benefit derived from a deduction it must be a deduction that "... would not have been allowable, or might reasonably be expected not to have been allowable, to the taxpayer in relation to that year of income if the scheme had not been entered into or carried out". 116 It was submitted for Mr Lenzo that had he not invested in the plantation project, he would have obtained a similar tax benefit by putting money into his self-managed superannuation fund. It was said that an investment of $36,982 in that fund in the 1998 year would have given rise to an allowable deduction of $28,420 in that year. That represented the amount of his age based superannuation limits at that time. The amount of the deduction claimed in 1998 for the EKS project was $20,852. Based on what was said to be Mr Lenzo's "categorical evidence" that he would have invested the sum in his superannuation fund, it would be reasonable to expect that he would have obtained the same tax benefit had the scheme not been carried out. The evidence that he had established his own self-managed superannuation fund prior to 1998. 2. Payment of non-deductible contributions to his superannuation fund prior to 1998 which exceeded his maximum deductible contribution benefits. He gave evidence of this in his cross-examination. 3. The fact that he had funds available to make a contribution of $36,982 to his superannuation fund in the 1998 year. He also gave evidence of that fact in his cross-examination. 4. The fact that he was 41 in 1998 and would have been unable to draw on his superannuation until 14 years later at age 55. 5. The duration of the project before harvest proceeds arose was also 14 years. That refers to a deduction being allowable to the taxpayer where the whole or a part that deduction would not have been allowable if the scheme had not been entered into or carried out. The relevant deduction was for prepayment of lease and management fees and indemnity fees. In my opinion the superannuation counterfactual is extraneous to the alternatives which are to be considered for the purposes of s 177C(1)(b). 119 A relevant counterfactual in this case involved Mr Lenzo borrowing the money needed to finance his involvement with the scheme from some source other than Arwon. He could have borrowed from the ANZ Bank from the outset. Alternatively, he could have used his own funds and obtained the same deduction. The Loan Deed was an element of each of the alternative schemes defined by the Commissioner. A loan from the ANZ Bank from the outset would have supported Mr Lenzo's investment in the plantation scheme to the same effect as the borrowing from Arwon. On that basis the deduction claimed in respect of the 1998 year would have been allowable or might reasonably be expected to have been allowable in relation to that year of income if the scheme had not been entered into or carried out. I do not consider therefore that Mr Lenzo gained, by entering into the scheme, a tax benefit in respect of his borrowings that he could not reasonably have been expected to obtain otherwise. 120 Assuming there was a tax benefit, s 177D requires attention to the question whether, having regard to the eight factors listed in para (b) "it would be concluded that" Mr Lenzo or any other person who entered into or carried out the scheme or any part of it "did so for the purpose of enabling [Mr Lenzo] to obtain a tax benefit in connection with the scheme". The purposes to be considered are those attributable to "relevant persons who entered into or carried out the scheme or any part of the scheme". Section 177D(b) is not concerned with attributing a purpose to "the scheme": Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 at [63] . The test of purpose is objective and not to be answered in whole or in part by reference to actual subjective purposes. If there is more than one purpose to be imputed, the question is whether the taxation benefit purpose was the dominant purpose. By that is meant the "ruling, prevailing, or most influential purpose": Federal Commissioner of Taxation v Spotless Services [1996] HCA 34 ; (1996) 186 CLR 404 at 416. But those are statements about why the respondents acted as they did or about why the lender (or its agent) structured the loan in the way it was. They are not statements which provide an answer to the question posed by s 177D(b). That provision requires the drawing of a conclusion about purpose from the eight identified objective matters; it does not require, or event permit, any inquiry into the subjective motives of the relevant taxpayers or others who entered into or carried out the scheme or any part of it. Each of the eight specified factors must be taken into account. But the decisionmaker, being the Commissioner, or a judge on appeal from the Commissioner, is not required to award points for each factor like a judging panel in an ice skating competition. The enumerated factors identify essential elements associated with entry into and implementation of the scheme in question and are to be considered together. On Mr Sammon's evidence it did not need to rely upon tax benefits in order to provide a sufficient financial return to qualify as an investment grade product. I do not consider that the evidence indicates any over-emphasis on tax benefits to be derived from the scheme. The marketing of any commercial investment product can draw attention to its tax benefits by rendering the gaining of those benefits the dominant purpose of the product. In this case, in my opinion, the tax benefits as marketed were subordinate to the reasonably based commercial returns albeit those returns, being high, carried a corresponding level of risk. 123 A second relevant aspect of the manner in which the scheme was entered into was said by the Commissioner to be related to the timing of Mr Lenzo's execution of the documents. This falls for consideration under the factor identified in s 177D(b)(iii). I consider that the fact that the scheme was entered into on 30 June 1998 and the execution of prepared proforma documents occurred on that date can be taken as indicative of a desire to obtain a tax benefit for the 1998 year of income. But while it goes into the balance in support of the Commissioner's contentions as to dominant purpose, it is not a factor to which, in this case, I attribute great weight. If there is a significant commercial benefit to be derived from an investment and an associated tax benefit, entry into the investment scheme on 30 June 1998 with a view to obtaining the tax benefit in that year is entirely consistent with a predominantly commercial purpose. 124 The round-robin upon which much emphasis was placed by the Commissioner carries with it the negative connotations traditionally associated with such apparently artificial transactions. I accept that Mr Lenzo's lack of awareness of that transaction is immaterial. However the significance of it for the assessment of a dominant purpose of obtaining a tax benefit for Mr Lenzo is not apparent. In a sense it overlaps with the question whether a tax benefit was obtained given the alternative of external financing to individual growers. It was not as though they were being offered non-recourse loans by Arwon. While the round-robin is a factor which in combination with other matters might support an inference of a dominant tax purpose, it is not determinative of the existence of such a purpose. Moreover it may be seen as an incident of the much more significant commercial purposes achievable with or without a tax benefit. 125 The Commissioner also pointed to the small initial outlay of $535 in the 1998 year of income and the obligation to make a payment of only $7,506 on 30 September 1998. He contended that the savings of $10,112.25 from the total tax deductions claimed of $20,850 exceeded the amount of the payment required on 30 September 1998. He went on to refer, under this heading, to the effect of the various agreements on Mr Lenzo's ability to claim tax deductions in 1999 and 2000. He also argued that only the amount of $7,506 actually paid out of the $20,315 nominally contributed by Mr Lenzo in terms of his liabilities was ever available to the manager for the pursuit of the commercial objectives of growing, harvesting and selling the Indian sandalwood. He contended that the amount of the initial maintenance fees and rent payable by Mr Lenzo was not related to the pursuit of those commercial objectives but reflected a desire to enable him to achieve tax savings in excess of the amount of his initial cash outlay in relation to the project. At one point in the submissions the Commissioner seemed to be slipping into a subjective test of purpose. 126 It was pointed out by counsel for Mr Lenzo that the $7,506 was paid from his own cash funds. His 1998 assessment issued in mid-November did not result in a tax benefit to him. Counsel submitted that there was no evidence that the borrowed funds in 1998 were not "available" for the management of the wood lots. Counsel pointed to financial statements of the EKS project manager which showed substantial funds available in the 1998 year. In 1998 and 1999 the EKS project manager had sufficient funds available for the management of the allotments. 127 What was created by the loans was a real liability with no non-recourse exit. The growers' liability was converted into cash as payments were made by the growers from time to time in reduction of it or interest paid on the loan. As it turned out over the first three years of the project Mr Lenzo made actual cash outlays of $29,072.84 against claimed deductions of $29,938. While the high level of the initial outlay measured by liability and the smaller amount of the actual payment made by Mr Lenzo may be taken into account as indicative of a tax benefit purpose, it does not in my opinion establish that as a dominant purpose against the overall purpose of the scheme. Moreover the level of fees charged up front may be related to both direct and indirect costs as Mr Underwood pointed out. Some of those costs would no doubt involve a longer term recovery by the plantation manager. There was no suggestion that any of the agreements entered into was a sham. They were not complex or artificial, save for the round-robin transaction, but were similar to other arrangements in agriculture managed investment schemes which EKS carried on for commercial gain. Although the Commissioner made submissions relevant to the timing of the payment of the management fees, it cannot be said that they were paid for anything other than services which EKS agreed to provide under the lease and management agreements. Nor were the amounts paid for principal repayments and interest anything other than as described in the loan agreement. There was also expert evidence that the project had been established, operated and managed during the life of the project in a professional, commercial and business like manner. The Commissioner had not suggested an alternative form in which the project could have been cast. 129 Although in some sense it may be said that Mr Lenzo was a "passive investor" the Commissioner nevertheless appears to have accepted that the deductions claimed would have been allowable on the basis that they were incurred in gaining income or carrying on a business. In any event, given the significant commercial benefits offered by the project, I do not regard his "passivity" as indicative of a dominant tax benefit purpose. But the existence and use of a facility to claim such taxation benefits as are available within a particular income year does not necessarily indicate a dominant tax purpose. Quite apart from that, the project was not merely a paper exercise concluded at the close of the financial year to generate paper liabilities. The liabilities were real. They were incurred in relation to a serious commercial project with a 15 year lifetime. The prospect of a commercial return would justify it without reference to any taxation benefits. It is plain however that a mere fact that a taxpayer claims a tax benefit does not mean that Pt IVA applies. Simply to show that a taxpayer has obtained a tax benefit does not show that Pt IVA applies. He received immediate tax savings which exceeded his cash outlays in respect of the scheme in the 1998 and 1999 years of income. In the following years of income he would receive the benefit of deductions for interest accrued but unpaid and indemnity fees which would all but offset the actual cash outlays in respect of the indemnity fees. His exposure to further cash outlays would turn upon the success or otherwise of the plantation and the operation of the indemnity agreement at the completion of the scheme. Counsel for Mr Lenzo submitted that this factor is to assessed at the time that the relevant transactions were entered into. 133 The change in the financial position of Mr Lenzo that must be considered under (iv) is not limited to tax benefits but also the prospect of a commercial return which he has acquired by the investment. The evidence was clear that this was a real prospect although attended by the usual risks of any agricultural cultivation scheme. The forecast financial returns for this project were described as "attractive on a pre-tax basis". The forecast returns cannot, in my opinion, be dismissed as merely speculative. There was, on the evidence, a reasonable prospect of a return. The project manager would benefit from the receipt of management fees and land rental fees. The promoters' dominant purpose was profit from the development, management and operation of the EKS project. It could not be concluded, viewed objectively, that the dominant purpose of EKS and its related companies was to obtain a tax benefit for Mr Lenzo. (vii) Any other relevant consequences for the relevant taxpayer, or for any person referred to in subparagraph (vi), of the scheme having been entered into or carried out. (viii) The nature of any connection (whether of a business, family or other nature) between the relevant taxpayer and any person referred to in subparagraph (vi). 137 Taking all these factors together and the transaction overall, I accept that there were tax benefits to be derived from the way in which the investment structure was set up. Aspects of the investment structure were indicative of a purpose of deriving a tax benefit from the scheme. I do not accept however, having regard to the factors already mentioned, the significant returns which could reasonably be expected from a moderately successful outcome to the project, independent of any tax benefits, and the ready availability of alternative financing arrangements to Mr Lenzo that it would be concluded that he or the manager or promoter entered into or carried out the scheme for the dominant purpose of enabling him to obtain a tax benefit in connection with the scheme. The applicant's appeal against the decision disallowing his objections succeeds. | deductions outgoings incurred in plantation investment scheme comprising prospectus, management and lease agreements, loan agreement, indemnity agreement and round-robin arrangement between manager and lender whether tax benefit derived in connection with scheme dominant purpose for entry into scheme objective criteria matters to be considered investment structure approach to consideration of relevant factors alternative finance available to like effect as scheme finance whether tax benefit unique to scheme scheme not entered into for dominant purpose of tax benefit commercial benefit of scheme expert evidence as to financial returns and benefits on a pre-tax basis income tax |
I indicated that I would publish short reasons for doing so. Order 78 r 12 of the Federal Court Rules provides an application for review must be filed within 42 days of the notification of the Registrar's decision. There is presently no requirement on claimants to amend their claim to meet the requirements of the registration test. The amendments inserted by item 73 are intended to provide a greater focus on the responsibility of applicants to take steps to improve the quality of their claims, recognising that poor quality claims are a burden on the native title system. Pursuant to s 190F(6) of the NTA, the Court may consider any 'other reason' why an application should not be dismissed. As to the principles applicable to how s 190F(6) should operate, I refer to and respectfully adopt, (without repeating), the recent analysis by Logan J in Christine George & Ors on behalf of the Gurambilbarra People v State of Queensland [2008] FCA 1518. On 13 December 2007, French J (as his Honour then was) ordered that all matters within the Goldfield region which had failed the registration test on the merits were to be listed for directions as to the disposition on 26 March 2008. Submissions in relation to that directions hearing were filed on the part of the Goldfields Land and Sea Council which did not represent the applicants in this claim but did represent applicants in overlapping claims. The Court ordered that the disposition of the application under s 190F was to be stood over for further directions. Siopis J on 9 December 2008 ordered that the applicant was to file and serve on the respondents then represented in Court any submissions in relation to the disposition of the application in relation to s 190F(6) on or before 28 February 2009. Consequential orders were made to provide for parties wishing to respond. No submissions were filed in response to his Honour's orders. There is also, notwithstanding opportunities being provided, no evidence or indication that the application is likely to be amended in any way that would lead to any different conclusion by the Registrar. There is no other reason why the application should not be dismissed. The application will be dismissed. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | court's discretionary power to dismiss an application on its own motion if the application has not been amended since earlier failure of registration test and no evidence that likely to be amended in a way that would lead to a different outcome no other reason why the application should not be dismissed native title |
2 The issue is the proper sum for paragraph 9 of the orders of Rares J on 6 September 2006. There are contending sums of USD3,625 put forward by Mr Sullivan and USD1,600 put forward by Dr Bell for the possible future consent application. Having read the material from the respective New York attorneys and using my own experience, though not American experience, to understand the steps involved, I think in all the circumstances the sum of USD3,625 is reasonable and that is the sum that should be taken and calculated to create the sum for the purpose of paragraph 9 of the orders. I think it is a more detailed estimate; and I give it more weight because it is of the firm that is likely to incur the costs, though that is not determinative. The reasons for the need to estimate is the unsatisfactory nature of the material from the London firm which undertook the application on behalf of the plaintiff. I do not make any personal criticism of the solicitors in this respect. I reject the premise in their estimate that the costs include reading and understanding Rares J's judgment. The costs assume a sound understanding of the orders. I think there was, however, legitimate room for debate about the terms of the consent order that required a certain degree of correspondence between dutiful and co-operative solicitors in London and with their Australian agents and correspondents. There was also the need to take documents to court and the like and a modest amount of consultation with counsel. And I think [sterling]2000 is more than adequate to cover all that. 6 It is clear from the terms of orders 1(c) and paragraph 9, that Pan is obliged to consent to the reinstatement of the orders, if it loses the appeal. It is entirely likely, however, and indeed, I would expect it to be the case, that something more than a minute of order be filed. It would not be the discharge of the exercise of judicial power that would be dealt with. It would be the reinstatement of the exercise of judicial power. If reinstatement is to occur, there will need to be a collection of material in order to apprise the Court of the state of the matter and the appropriateness of the granting, by way of reinstatement, of worldwide freezing orders. 7 The estimate of one London firm of solicitors, on pages 4 and 5 of Mr Wilson's affidavit of the 13th of October 2006, is that this will cost in the order of GBP9,825. Set against that, is the estimate of another London firm of solicitors of GBP500 which I take to be an estimate based really upon an administrative task of the preparation and filing of orders. Though, I do not pretend to be an English practitioner, an English judge or an English taxing master, and I must work on the evidence, I have some difficulty in coming to the conclusion, that it will be necessary in an application of a kind that I have identified, for something in the order of GBP10,000 to be spent. I also have difficulty in accepting that GBP500 will be sufficient. Doing the best I can in assessing that evidence, and recognising that there will be need to inform the High Court of Justice of the state of the litigation, and possibly to brief counsel on that short consent application, I would have thought something in the order of GBP4,000 was more than adequate. 8 Mr Sullivan does not wish to say anything against that. Therefore, my conclusion is that the sum of GBP4,000 is a reasonable and appropriate sum for the securing of the application on an indemnity basis for the reinstatement of the orders, recognising that it is security, and not payment of those costs in advance. At the hearing I gave extempore reasons which were critical of, the London solicitors for not having agreed to the relevant costs. I invited Australian solicitors to communicate with me if they thought I had been unfair. Ebsworth & Ebsworth have indicated to me that they thought my comments were unfairly critical of, at least one firm. I therefore, withdraw my remarks about both London firms and replace them with the following. 10 The reason why the Court was required to hear argument about a matter that the parties, through their lawyers (London and Sydney), should have been able to agree was either the failure of the lawyers to put forward what I regard as reasonable estimates or the failure to resolve in a sensible fashion the differences between the two estimates. It was therefore necessary for the Court to deal with the issue. Each party should therefore pay its own costs. 11 It is the duty of parties and advisers in litigation to limit the call upon court resources to matters truly necessary for decision: Ashmore v Corporation of Lloyds [1992] 1 WLR 446, 453 and see the notice to practitioners for the conduct of Admiralty and maritime work in the Federal Court of Australia dated 21 December 2005, especially the parts emphasised in the relevant portion of such notice, a copy which is annexed hereto. These obligations should be borne in mind and adhered to especially in what might be referred to as hard-fought litigation. This notice deals with: the new national arrangement, the identification of Admiralty and maritime work covered by the new arrangements, in personam proceedings, in rem proceedings, assisted or alternative dispute resolution, Court annexed arbitration, and the proper approach to Admiralty and maritime litigation. They will be assisted in undertaking the work by nominated Registrars, skilled Registry officers and Admiralty Marshals. A National Convening Judge and Registry Convening Judges will co-ordinate the work and harmonise practice and procedure in accordance with this notice to practitioners. Where possible, a directions hearing will be vacated if the parties can agree upon an appropriate regime prior to the nominated time and date of the directions hearing. An exception to this convenient method of procedure is where one (or more) of the parties is or has been, in significant default of existing orders, or where there are difficult issues which need, sooner rather than later, to be ventilated. It is inappropriate for one party to send submissions, letters and partisan documents to the judge. The facsimile machine and the email system are not to be used for private or unilateral filing of submissions or complaints without the leave of the Court, but if all parties agree on a communication being sent to the judge it may be forwarded, without leave, to the associate. At some early point in the procedural conduct of the matter, the Court will wish to understand the nature of the dispute, the real issues in dispute, how the real issues are to be proved and whether or not there are technical issues, whether there are particular evidential difficulties, whether because of expert or overseas witnesses. The Court appreciates that in Admiralty and maritime matters both the plaintiff and the defendant may, on occasions, need extended periods of time to obtain instructions from overseas clients and to ascertain what did or did not happen in places or on ships which may be both far away and inaccessible. Nevertheless, due allowance being made for such matters, the Court expects the parties and their legal representatives promptly to ascertain, as far as is reasonably possible, the nature and extent of the facts which pertain to any particular case. This is not limited to the particular points which the party wants to prove. It is not an acceptable way of conducting litigation to 'put the other side to proof' on all issues. The parties are expected to identify the real and genuine issues in dispute, whether of fact or law, after due investigation. It is the duty of the profession to assist the Court in the performance of its duty to resolve disputes by reference to what truly is, or should be, in dispute: see generally Ashmore v Corporation of Lloyds [1992] 1 WLR 446, 453, and see the speech by Hayne J 'Judicial Case Management and the Duties of Counsel', Wednesday 24 February 1999 to the Readers of the Bar Practice Course, Brisbane, contained on the High Court Website under the link 'publications'. In this context, parties should expect that the Court will be ready to use s 190(3) of the Evidence Act 1995 (Cth) in appropriate circumstances to lessen the cost of proving matters not bona fide in dispute. An aspect of this co-operation between the parties' representatives that the Court expects, however, is the provision of information and documentation in a prompt and timely fashion. Where legal practitioners make reasonable requests for documents or information (whether strictly 'particulars' or not) those requests should generally be met without the delay. In some cases, for various reasons, the formality (and cost) of a verified list of documents is necessary. These matters should be made plain to clients. This could be achieved by providing this Notice to Practitioners to them. In dealing with questions of costs the Court will presume that clients have been made aware of the general approach and the expectations of the Court reflected in this Notice to Practitioners. The Court encourages the use of external mediation and arbitration. Equally it is able, should parties and the profession desire it, to provide specialised, skilled Judges and Registrars who can deal with matters in a variety of ways best suited to the particular maritime dispute. | admiralty and maritime obligation of parties and lawyers to co-operate to ensure that only questions truly necessary for decision are brought to court for argument. practice and procedure |
It was written and composed in about 1934 by Ms Marion Sinclair. Larrikin Music Publishing Pty Ltd ("Larrikin") is an Australian music publisher which claims to have acquired the copyright in "Kookaburra" from either or both the Public Trustee and the Libraries Board of South Australia. The Public Trustee was the trustee of the estate of Ms Sinclair, who died in 1988. The Libraries Board claimed to be the owner of the copyright by reason of a donation of records made by Ms Sinclair in 1987. Larrikin has brought proceedings for copyright infringement against the composers of another well known Australian song "Down Under", which was composed and published in Australia in 1981. Larrikin claims that Mr Colin James Hay and Mr Ronald Graham Strykert, the composers of "Down Under", reproduced in that composition a substantial part of "Kookaburra". Claims of copyright infringement are also brought against EMI Songs Australia Pty Limited and EMI Music Publishing Australia Pty Limited, who are, respectively, the owner and licensee of the copyright in the words and music of "Down Under". I will refer to Mr Hay and Mr Strykert as "the composers", and to the two EMI companies as "EMI". The proceedings were listed for a final hearing in June 2009 but shortly before the hearing date, it appeared that the case was not ready for trial. It seemed to me that there was utility in determining as a preliminary point a question raised by the composers and EMI in their defence, namely whether Larrikin is the owner of the copyright in "Kookaburra". Of course, if Larrikin is not the owner of the copyright, its claim of copyright infringement must fail at the outset. The first was described by Senior Counsel for the composers and EMI by the Latin maxim " nemo dat quod non habet ", literally, no person can give what he or she does not own. This issue arises because in 1934, Ms Sinclair entered "Kookaburra" in a competition conducted by the Girl Guides Association of Victoria ("the Victorian Girl Guides"). It is sufficient to say that the effect of the 1912 Act was that the assignment was required to be in writing and signed by the owner. This raises questions of both fact and law which I will describe in more detail below. The second issue is whether, in the event that Ms Sinclair did not assign the copyright to the Victorian Girl Guides, certain deeds of assignment between Larrikin, the Public Trustee and the Libraries Board were effective to assign the copyright in "Kookaburra" to Larrikin. The first question of fact is whether I ought to infer that Ms Sinclair was aware of the rules of entry so that it may be said that they contained the terms of a written contract between Ms Sinclair and the Victorian Girl Guides. The second factual question is whether the "assignment" was signed by Ms Sinclair. The composers and EMI rely upon two signed or initialled manuscripts of "Kookaburra" submitted by Ms Sinclair as her entry in the competition to satisfy the statutory requirement that an assignment be signed by the copyright owner. However, even if the manuscripts formed part of the contract between Ms Sinclair and the Victorian Girl Guides, an issue arises as to whether Ms Sinclair signed them in the capacity of an assignor or merely to identify the manuscripts as her own works. The third question of fact is whether, in light of the surrounding circumstances in which the competition took place, viewed in light also of the subsequent communications between the parties, Ms Sinclair had an intention to assign the copyright to the Victorian Girl Guides. This question turns largely upon a consideration of certain correspondence between Ms Sinclair and the Victorian Girl Guides in late 1934 and early 1935. Larrikin also sought to rely on much later correspondence covering the period from the 1950s which was said to point to actions by Ms Sinclair that were inconsistent with the claim that she had assigned the copyright to the Victorian Girl Guides. The composers and EMI relied on statements made by Ms Sinclair in her 1984 autobiography which were said to disclose an intention to assign the copyright in 1934. A question arises as to whether this later correspondence, which includes correspondence with third parties, and the statements in the autobiography, may be taken into account to determine the question of Ms Sinclair's intention when she submitted the work to the Victorian Girl Guides in 1934: Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550---551 per Gleeson CJ. The question of law which arises in relation to the entry of "Kookaburra" in the competition in 1934 is one of construction of the rules of the competition. The question is whether, in the event that Ms Sinclair's entry was governed by the rules, the rule which provided that all matter entered was to become the property of the Victorian Girl Guides was effective to assign the copyright in the work to that Association. This issue arises because the composers and EMI contend that even if Ms Sinclair did not assign the copyright to the Victorian Girl Guides, the chain of title from Ms Sinclair to Larrikin, through the Public Trustee and the Libraries Board, was nonetheless ineffective to assign the copyright in "Kookaburra" to Larrikin. The composers and EMI press their contentions notwithstanding that the chain of title appears to be clearly documented in a Deed of Assignment made between the Public Trustee and Larrikin in 1990, a further Deed of Assignment between the Public Trustee, the Libraries Board and Larrikin in 2000 and a Deed of Confirmation made between all of those parties in 2008. The substance of the argument of the composers and EMI contains two steps. The first is that in the Deed made in 2000, the Public Trustee admitted that the assignment made in 1990 was ineffective. The second step in the argument is that, according to the composers and EMI, Ms Sinclair did not deposit the relevant copyright work with the Libraries Board, so that the purported assignment from the Libraries Board to Larrikin was also ineffective. If the composers and EMI are correct on these contentions, the effect of them would be that upon Ms Sinclair's death, the copyright in "Kookaburra" fell into a legal status which might be described as analogous to that of terra nullius , or property belonging to no one. The effect of s 8 of the 1912 Act was that the British Copyright Act was deemed to be in force in Australia from 1 July 1912. Section 5(1) of the British Copyright Act provided that, subject to certain provisions, the author of an original literary, dramatic, musical and artistic work would be the owner of the copyright. The Act deals with assignments of copyright in s 196. The circular commenced by stating that the Guide Village was a "big effort" of all members of the Victorian Girl Guides to raise money for a proposed Guide Camp House, and that "everything possible will be for sale". A short Story (not more than 2,500 words). A Poem. A design suitable for a Xmas Card. (a) The entrance fee for each entry in any of the Competitions to be 6d. (b) A prize of 10/6 to be given to the winner of each section. (c) The Competitions to be open to all enrolled members of the Guide Association in Australia. (d) All matter entered to become the property of the Guide Association. (e) The decision of the Judges to be final. (f) All entries to be accompanied by the entrance fee of 6d. also name and address of entrants. (g) All entries to be in by July 31st. It is not clear how regularly the publication was produced but the July 1934 edition was Vol 11 no 1. The July 1934 edition of "Matilda" recorded on page 5, under the heading "Guide Village News", further details of the competition referred to in the April circular. It enquired whether members had started working on the competitions and listed the four competitions stated in the circular, including the singing round with music. It also listed the seven rules for entry in exactly the same terms as stated in the circular, including the rule that provided for all "matter" entered in the competition to become the property of the Victorian Girl Guides. Think of the PRIZE that you might win and also that every entry helps to swell the Fund for our Guide Camp House. The news piece recorded details of the appointment of Lady Chauvel as the State Commissioner for the Victorian Girl Guides in a letter to "Matilda" from Ms Sinclair. We now have to thank you further for having these Rounds printed, and for your donation of the proceeds to the Guide House Fund. We do think it is ever so good of you to have made such a delightful contribution. He was the judge of the competition. The three rounds referred to in the letter were included in a publication, the cover of which bore the heading "Girl Guides' Association, Victoria, 1934". The cover was described as "Three Rounds by Marion Sinclair". It stated "Proceeds for Guide House Fund". The three rounds in the publication included a manuscript of the words and music of "Kookaburra". Although it is not entirely clear from the evidence, it seems likely that this was in the same form as the manuscript which was submitted for entry in the competition. The other two rounds included in the publication were not entered in the competition. It seems clear from the letter of 2 October 1934 that Ms Sinclair paid for the printing and publication of the three rounds, that the publication was made available for sale by Ms Sinclair and that she donated the proceeds of sale to the Victorian Girl Guides' House Fund. It is evident from two further letters to Ms Sinclair, written in 1935, that she continued to donate the proceeds of sale of the publication of the three rounds to the Victorian Girl Guides. The first letter from the Victorian Girl Guides to Ms Sinclair was dated 22 February 1935. The letter was never acknowledged nor was it returned; a further request for your address was ignored. This time I am trying via your National HQ. I am greatly disturbed about it and can only conclude from your silence that somewhere there was a grievous error. She said that a commercial firm, Silver Burdett, and a New York college press had paid $15 and $10 respectively for permission to reprint "Kookaburra". Years ago, I was attached to Imperial Headquarters in London to do a special music job and at that time compiled THE WORLD SINGS. I imagine that the British Guides told me then that it would be all right for American Girl Scouts to use "Kookaburra". In acknowledging this, F. W. Cheshire commented that it was a compliment to Ms Sinclair "that the tune should be thought to be traditional and ... so well-loved. " There were a large number of other items of correspondence evidencing the grant of permission by Ms Sinclair to the printing and publication of "Kookaburra". ) in the town square of a small town in the Philippines, and I do hope you will be willing to give us permission to print it in our book. The catalyst for the assignment to APRA was a letter to Ms Sinclair from the Australian Broadcasting Commission ("ABC") dated 17 March 1975 alerting her to the danger that "Kookaburra" was being reproduced without authorisation, thereby depriving her of performance royalties. In a further letter from the ABC to Ms Sinclair dated 25 March 1975, the ABC informed her that it had requested APRA to contact her and that APRA collects performing rights royalties on behalf of composers. On 11 May 1978, a violin teacher, Ms Penny Layton, wrote to Ms Sinclair seeking permission to publish a reproduction of "Kookaburra" in a form suitable to be played on the violin. It appears that Ms Sinclair gave permission and the adaptation of "Kookaburra" appears to have been deposited by Ms Sinclair with the Libraries Board. There are other examples of Ms Sinclair depositing various versions of the manuscript for "Kookaburra". One such example may be seen in a letter to the State Library of Victoria to Ms Sinclair dated 22 November 1979 thanking her for sending the manuscript to the Library. As late as 1983, Ms Sinclair may be seen to have maintained the stance that she had copyright in "Kookaburra". The autobiography contains a statement which might, on one view, be thought to indicate that Ms Sinclair acknowledged that the copyright in "Kookaburra" vested in the Victorian Girl Guides. The statement was that the winning entry in the competition conducted by the Victorian Girl Guides "would be sold to help the fund". The donation was contained in a document headed "Mortlock Library of South Australiana, Donation of Records". The "Mortlock Library of South Australiana" was the name given by the State Library, which was administered by the Libraries Board, to certain collections of South Australian material. The document signed by Ms Sinclair states in plain terms that the donation was to the Libraries Board of South Australia. I am satisfied that it was the adaptation of the work for which Ms Layton sought permission from Ms Sinclair to publish in 1978. The letter from Ms Layton to Ms Sinclair stated that a sample of the adaptation of "Kookaburrra" for violin was enclosed. It seems to me that this was the manuscript that was deposited with the State Library as one of the "musical compositions" referred to in the Donation of Records. Ms Sinclair had no children and she bequeathed the whole of her estate to her trustee to sell and convert into money to be held on trust equally for the Animal Welfare League of South Australia and the Helping Hand Centre. The Helping Hand Centre was the place at which Ms Sinclair lived the last years of her life. It had a Writers Club Magazine for which Ms Sinclair made contributions, including some observations about the circumstances in which she composed "Kookaburra" some 40 or more years earlier. Ms Sinclair died on 15 February 1988 and probate was granted to the Public Trustee on 9 May 1988. During 1989, the Public Trustee invited tenders for the purchase of the copyright in "Kookaburra". Campbell Connolly (Australia) Pty Ltd, a related company of Larrikin, submitted a tender of $6,100 for the work. Campbell Connolly was the successful tenderer and, thereafter, there was correspondence between its solicitors, Messrs Lee, Hourigan and Brooks, and the solicitors for the Public Trustee, which took the form of "requisitions" as to the title of the Public Trustee to convey title to the copyright in "Kookaburra". On 21 March 1990, the Public Trustee entered into a Deed of Assignment of the copyright in "Kookaburra" to Larrikin. The Deed provided for an absolute assignment of the copyright to Larrikin. The consideration stated in the Deed was $6,100. The Public Trustee warranted that it was the exclusive holder of the copyright, subject only to the assignment to APRA and two stipulated non-exclusive licences. The Public Trustee's liability for breach of the warranty was limited to the consideration paid for the assignment. The Deed contained a standard form of covenant for further assurance. The letter from Ms Sue Lewis to Mr Hourigan enclosed a copy of a Deed executed by the Libraries Board and the Public Trustee and requested that Larrikin also sign that document. On 21 December 1999, Mr Hourigan forwarded the Deed to Mr Norman Lurie, the managing director of Larrikin. Mr Hourigan's letter stated that a deal had been reached between the Libraries Board and the Public Trustee. He expressed his surprise at what had happened but requested Mr Lurie to sign the Deed. Mr Lurie's evidence before me was that he took the Deed, and what was said in it, in good faith. He therefore executed the Deed on behalf of Larrikin. The Deed was dated 14 March 2000. The parties were the Libraries Board, which was described as the Assignor, Larrikin, which was described as the Assignee, and the Public Trustee. The effect of the Deed, so far as Larrikin was concerned, was that the Libraries Board assigned the copyright in "Kookaburra" to Larrikin, in lieu of the previous assignment from the Public Trustee. The Recitals to the Deed are important and I will set them out in full: The Assignor is the holder of the entire copyright subsisting in the work known as "Kookaburra Sits in the Old Gum Tree" composed by Marion Sinclair and all other rights subsisting in and attaching to the work including renewal options and extensions thereof (including American renewal and British reversionary rights) for the whole of the World (hereinafter called 'the Rights'). The Assignee and Public Trustee did previously believe that Public Trustee was the holder of the Rights in its capacity as trustee of the will of Marion Sinclair. By a certain Deed made the 21 st day of March 1990 Public Trustee did purport to sell and assign absolutely to the Assignee the Rights. The parties have discovered that Public Trustee was not the holder of the Rights and that the sale and assignment in favour of the Assignee was ineffective. The Rights were at the time the property of the Assignor. The parties now wish to achieve an effective sale and assignment of the rights to the Assignee. The said Marion Sinclair died on 15 th February 1988 and the Rights subsist until 31 st December 2038. The Assignor has agreed with the Assignee for the assignment to the Assignee of the Rights. The operative parts of the Deed contained a number of acknowledgments and agreements. Clauses 1 to 4 were as follows: Public Trustee acknowledges and agrees that it was mistaken in its belief that it was the holder of the Rights. Public Trustee and the Assignee agree that the purported sale and assignment made the 21 st day of March 1990 was ineffective. The parties agree that the Assignor became the holder of the Rights on the death of Marion Sinclair. The Assignor hereby agrees to assign absolutely to the Assignee the Rights. Clause 5 provided that the assignment to Larrikin was to take effect from 21 March 1990, that is to say from the date of the assignment from the Public Trustee. There was a standard form of covenant for further assurance in Clause 8 of the Deed, under which the Libraries Board and the Public Trustee agreed to execute any further documents that may be reasonably required by Larrikin to establish and maintain the assignment of copyright. The effect of the Deed was to confirm that it was, at all times, the intention of the parties to the Deed that the copyright in "Kookaburra" be assigned by either or both the Public Trustee and the Libraries Board to Larrikin. Recitals to deeds are now out of vogue. They have been replaced by a statement of the background. The "Background" to the Deed is important and I will set it out in full: This Deed relates to the song consisting of the musical and related literary work known as " Kookaburra Sits in the Old Gum Tree " composed by Marion Sinclair ( "Kookaburra "). On 21 March 1990 Larrikin and the Public Trustee entered into a deed relating to Kookaburra. On 14 March 2000 Larrikin, the Public Trustee and the Libraries Board entered into a deed relating to Kookaburra. At all relevant times, it has been the intention of Larrikin, the Public Trustee and the Libraries Board that, on or after 21 March 1990, all Rights in Kookaburra that had been owned or were to be owned by either or both the Public Trustee and the Libraries Board be assigned to and owned by Larrikin absolutely. Without limiting the immediately preceding recital, for all Rights in Kookaburra that might come to be owned by either or both of the Public Trustee and the Libraries Board on or after 21 March 1990, it has been the intention of Larrikin, the Public Trustee and the Libraries Board at all relevant times that all such Rights be assigned and owned by Larrikin absolutely. For the avoidance of doubt, Larrikin has requested that the Public Trustee and the Libraries Board confirm the intention(s) of the parties as stated above and, to the extent necessary to perfect and give full legal effect to that intention or those intentions, to give the assignments herein contained. above. Ordinarily, it would be thought that an entrant in a competition, particularly the winning entrant, would be bound by the rules of the competition. However, in the present case, there is a dearth of evidence about the circumstances in which Ms Sinclair entered "Kookaburra" in the competition. The documentary evidence shows that Ms Sinclair was a strong supporter of the Victorian Girl Guides movement and there are a number of competing inferences that are open as to how she came to enter "Kookaburra" in the competition. The essence of the argument of the composers and EMI was that Ms Sinclair was aware of the rules and accepted them by conduct in submitting the manuscript of "Kookaburra" as her entry. Rule (f) of the rules of entry stated that entries would be accompanied by a fee, and the name and address of entrants were to be submitted. Mr Catterns QC, who appeared for the composers and EMI, submitted that, although rule (f) does not say so expressly, it contemplated the existence of a written entry form. However, he conceded that no such entry forms had been located. Mr Catterns asked me to infer that such a form must have existed, or at very least, that Ms Sinclair read the circular of 20 April 1934, or the statement of the rules set out in the July edition of "Matilda", before she submitted her entry. The difficulty with this submission is that it depends upon speculation and conjecture rather than upon proved circumstances which raise a hypothesis that is more probable than not. The distinction between inference and conjecture is aptly summed up in the observations by the learned author of Cross on Evidence (7th Aust edition, 2004), J. D. Heydon at [9055]. It is there pointed out that where satisfaction of the civil standard depends upon inference, there must be something more than mere conjecture, guesswork or surmise. The test is that there must be shown to be more than "conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture": see Nominal Defendant v Owens (1978) 22 ALR 128 at 132, and the authorities there referred to. Here, in the absence of an entry form or any evidence that Ms Sinclair had knowledge of the terms of the competition on submitting her entry, it is equally probably that Ms Sinclair learned of the existence of the competition without seeing the circular or the rules. She had an active interest in the Victorian Girl Guides' movement and it is equally probable that she learned of the competition through her association with the Movement. It is also equally probable that there were no formal documents constituting entry forms and that entries were submitted informally, by lodgement of the composition, the entry fee, and details of the entrant's name and address, if not already known to the Victorian Girl Guides. No inference may be drawn from the proximity of Ms Sinclair's contribution in the July edition of "Matilda" to the statement of the rules which appeared under the item "Guide Village News". All that can be safely inferred from Ms Sinclair's piece in the July edition is that she contributed it. To suggest that she must have read the rules on the other side of the page is no more than conjecture. Indeed, what would be required to be established is that she read those rules before submitting her entry. This is mere speculation. No support can be gained from the well-known "ticket cases" in the law of contract. Those cases establish that where an exemption clause is contained in a ticket, and the other party is not actually aware of the terms of the clause when the contract was made, the party seeking to rely on it cannot do so unless, at the time when the contract was made, reasonable notice was given to the other party: see Seddon and Ellinghaus, Cheshire and Fifoot's Law of Contract (9 th Australian Edition, 2008) at [10.28] and [10.70]; Oceanic Sun Line Special Shipping Company Inc v Fay [1988] HCA 32 ; (1988) 165 CLR 197 at 228-229. This principle has no application here, because as the authors of Cheshire and Fifoot observe at [10.71], it is necessary to determine with some precision at what point the contract was made. That cannot be done in the present case. What the composers and EMI would need to establish is that Ms Sinclair submitted her entry after the publication of the circular or after the July edition of Matilda and that each of those publications constituted reasonable notice. Having regard to Ms Sinclair's close connection with the Victorian Girl Guides, it is mere conjecture to say that this is what happened. It is equally probable that she heard of the competition by word of mouth and submitted her entry before the publication of those documents. Accordingly, it has not been established on the evidence that Ms Sinclair entered into a contract in writing on the terms contained in the circular, or, at least, that the contract included the term which provided for all "matter" to be the property of the Victorian Girl Guides. It follows that there was no assignment in writing to satisfy the requirements of s 5(2) of the British Copyright Act . ISSUE 2 --- WAS THE ASSIGNMENT "SIGNED"? Nevertheless, I will deal briefly with this issue. As I have said, Mr Catterns submitted that the requirement of writing was satisfied by Ms Sinclair's signature and initials on the manuscripts which were apparently submitted to the Victorian Girl Guides. This submission depends upon the proposition that the signature and the initials were placed there for two purposes, the first being to identify the work, the second to effect an assignment. It is plain in my view that the signature and the initials constituted identification of the work as one that had been composed and written by Ms Sinclair. There is simply no evidentiary basis for the proposition that the signature and the initials were placed on the manuscripts to serve any other purpose. In particular, there is no basis for suggesting that they were intended to perform the work of assigning the copyright to the Victorian Girl Guides. The two other rounds were not entered in the competition but Ms Sinclair donated the proceeds of sale of all three rounds to the Victorian Girl Guides. In my view, it is clear from this that Ms Sinclair acted upon the footing that she owned the copyright in all three rounds and that she made a gift of the proceeds of the sales, arranged by her, to the Victorian Girl Guides. The Victorian Girl Guides acknowledged this by thanking Ms Sinclair for her "gift" of the three rounds and her donation of the proceeds of sale. The letter is not a legal document and should not be construed as such. The reference to the "gift" was to the gift of the proceeds of sale of publication of the works, carried out by Ms Sinclair as copyright owner. The "wee note" of 22 February 1935 is to the same effect, as is the letter of 3 September 1935 informing Ms Sinclair of the receipt of a further sum of 13/7 for the Camp House Fund. I reject the submission made by Mr Catterns that it is to be inferred from the circumstances in which the competition took place that the Victorian Girl Guides would sell the winning round to raise money for the Fund. This is because the Guide Village News in the July 1934 edition of Matilda asks members to "let us have hundreds of entries" and "every entry helps to swell the Fund". Thus, what was intended was that hundreds of 6 pence entry fees would be paid which would raise money for the Fund, even after allowing for the payment of the 10/6 prize to the winning entry. There is nothing in this to suggest that the Victorian Girl Guides intended also to sell the winning entry, as copyright owner. Ms Sinclair's actions in printing the manuscript at her own expense and the correspondence to which I have referred are inconsistent with this. I am therefore satisfied that Ms Sinclair and the Victorian Girl Guides did not intend that Ms Sinclair would assign the copyright in "Kookaburra", as the winning entry, to the Victorian Girl Guides. I do not think that any real assistance is obtained from a consideration of the subsequent correspondence. It is true that in XIVth Commonwealth Games at 550---551, Gleeson CJ had regard to subsequent communications between the parties as a factor in determining whether the parties to the alleged contract evidenced an intention to make a concluded bargain. But that proposition is limited to communications between the actual parties to the alleged contract. His Honour stated that the position is not so clear with respect to internal memoranda or communications with third parties. Here, most of the communications referred to were between Ms Sinclair and third parties. The documents were contained in a joint tender bundle and were admitted without objection. Nevertheless, I have come to the view that they ought not to have been admitted as evidence. Even if the evidence of communications with third parties were admissible, it could be given little weight because the communications took place 20 to 40 years after the date on which "Kookaburra" was entered in the competition. The letter dated 4 August 1969 from the Victorian Girl Guides to Ms Sinclair seeking permission to publish "Kookaburra" in a forthcoming book of campfire songs is admissible. To the extent that any weight can be given to it, the letter points in favour of the conclusion that Ms Sinclair did not assign the copyright to the Victorian Girl Guides. The statements in Ms Sinclair's autobiography are not admissible because they are no more than personal reminiscences made by her 50 years after the date of the competition. Even if they were admissible, they could be given no weight because there are, as one would expect after such a large passage of time, some inaccuracies in her reminiscences. For example, Ms Sinclair said the competition was "not limited to entries within the Movement. " This is contrary to rule (c) of the competition as stated in the circular and repeated in the July edition of Matilda. There are four reasons for this. First, there is a well-known distinction in the law of copyright between the incorporeal right to the intellectual property, and the right to the physical property in a work: Interstate Parcel Express Co Proprietary Limited v Time-Life International (Netherlands) B.V. [1977] HCA 52 ; (1977) 138 CLR 534 at 550. It seems to me that the word "matter" is more apt to describe the physical property consisting of the manuscripts rather than the copyright in the works. Second, there are good practical reasons why the Victorian Girl Guides might have wanted to retain the material object of the works, rather than become a bailee. The works would be likely to have been needed for archiving purposes and the persons conducting the competition would hardly have been likely to want the responsibility of returning the physical manuscripts to the entrants. Third, if Mr Catterns' submissions were correct, the assignment would apply equally to all entrants in the competition. Thus, the winning and the losing entrants would all have been taken to have assigned their copyright to the Victorian Girl Guides. This does not seem likely. Fourth, the surrounding circumstances indicate that the purpose of the competition was to raise funds through the entry fees, rather than to swell the Fund by the sale of the winning entry. It is true, as the respondents submitted, that the authorities establish that no particular form of words is necessary to effect an assignment of copyright: see Murray v King (1984) 4 FCR 1 at 7, 13. However, in my view, this does not overcome the objections that I have listed above. This is because in order for the authorities such as Murray v King to apply, there must be some intention to assign copyright. As I have indicated above, in my view, it cannot be inferred on the evidence that either Ms Sinclair or the Victorian Girl Guides had the intention to effect an assignment of copyright. In any event, I do not consider that the words in question in the present case are sufficient to disclose, on an objective consideration, an intention to effect an assignment of copyright. However, the recitals to the tripartite Deed were "informal admissions". As was pointed out by J. D. Heydon in Cross on Evidence at [33420], such admissions may always be contradicted or explained by the maker, and it is for the Court to determine on the evidence what weight is to be given to such admissions. But such an admission may indicate a state of mind varying from a firm belief based upon a thorough investigation ... down to a wavering preference for one of two or more possible hypotheses none of which have been tested or determined. It is apparent that the admissibility of the evidence must be distinguished from its sufficiency to establish or support an affirmative conclusion in favour of the party who tenders it, when the burden of proof lies upon that party. It does not follow that, because such evidence is admissible, it is enough to prove the issue. It is obvious from the correspondence which preceded the Deed that Larrikin was a stranger to the dispute between the Public Trustee and the Libraries Board as to the ownership of the copyright. He accepted the Deed in good faith. It was of no moment to him because it provided that Larrikin obtained title through the Libraries Board. Accordingly, it would be quite wrong to treat the "admissions" in the Deed as having any evidentiary weight on the question of whether the Public Trustee was the holder of the copyright or whether the assignment by the Public Trustee was effective. Plainly, there are only two possibilities. Either the copyright was owned by the Public Trustee as trustee of Ms Sinclair's deceased estate, or by the Libraries Board by reason of the donation of records. Whichever of those two institutions owned the copyright, both have assigned it to Larrikin in a clearly documented chain of title in the Deeds, to which I have referred. What is more, they confirmed the assignment in the Deed of Confirmation made in 2008. There is no reason why Larrikin cannot rely on the 2008 Deed even though it was brought into existence after the commencement of these proceedings. That Deed was no more than an expression of the covenants for further assurance contained in the Deed made in 1990 and the Tripartite Deed made in 2000. I certify that the preceding one hundred and seventy-three (173) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Catterns QC with Mr C. Dimitriadis and Mr P.A. | preliminary question on ownership of copyright whether, by entering song into girl guides competition, author of copyright work assigned copyright to girl guides association the phrase "all matter entered to become the property of the guide association" not effective to assign copyright subsequent assignment of copyright to applicant effective communications with third parties which occurred twenty to forty years after the date of purported assignment not admissible to determine intention of parties informal admissions may be contradicted by maker, and it is for the court to determine on the evidence what weight is to be given to such admissions copyright evidence |
The Valuation was made on 4 January 2000 by Stanley Thompson Valuers Pty Limited (STV) which is now in liquidation. It was made for mortgage security purposes on the instructions of Colonial State Bank (Colonial). 2 The Valuation stated that in the valuer's opinion the property had a value of $5.1m. The valuer was Mr John Ewing who signed the Valuation in that capacity. It appears from evidence filed on the present motion that the signature is not that of Mr McDonald but is in fact that of Mr Rory O'Boyle, another STV employee. 5 The Statement of Claim alleges that the true market value was very substantially lower than the figure of $5.1m and that the Commonwealth Bank of Australia suffered loss and damage as a result of advancing money in reliance upon a negligent valuation. Other causes of action including claims under s 52 of the Trade Practices Act 1974 (Cth) are also pleaded. 6 STV was initially named as first respondent to these proceedings. However, the CBA has discontinued against it. The CBA is the successor in law to all of the rights and liabilities of Colonial. Whilst discontinuing its claims against STV, the CBA seeks to continue the proceedings against Mr McDonald and Mr Ewing. 7 The claim against Mr McDonald is brought only in negligence. No claim under s 52 of the Trade Practices Act or s 42 of the Fair Trading Act 1987 (NSW) is pleaded. 8 Mr McDonald seeks to strike out those paragraphs of the Statement of Claim which are pleaded against him. These paragraphs are [24], [29] and [37]. 9 Paragraph [24] alleges that the Valuation was prepared and signed by Mr McDonald and Mr Ewing. Paragraphs [29] and [37] allege that Mr McDonald owed a duty of care to Colonial and that the duty was breached. 10 Mr McDonald also seeks to strike out those parts of a cross-claim brought by Mr Ewing against Mr McDonald which are said to give rise to a claim for contribution or damages against him. 11 The motion is brought under O11 r 16 and O20 r 2. The principles which apply to the summary dismissal of a cause of action are well known. However, they are now to be considered in light of s 31A of the Federal Court of Australia Act 1976 (Cth) which provides that a proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success. 13 The first issue is whether the claim in [24] of the Statement of Claim that Mr McDonald signed the Valuation can go to trial. In support of his contention, Mr McDonald relies upon his sworn denial that he did not sign the Valuation and that he did not prepare it. 14 The issue turns upon whether further facts surrounding the circumstances in which Mr O'Boyle apparently came to sign the Valuation give rise to a triable issue. Those facts are deposed to in an affidavit of Mr Ewing. 15 The second issue is whether there is an arguable claim that Mr McDonald owed a duty of care to Colonial, independently of the duty of care owed by STV. 16 The third issue is whether Mr Ewing's cross-claim against Mr McDonald gives rise to an arguable case on two bases. The first basis is a claim for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). This depends solely upon whether the claim that Mr McDonald owed a duty of care to Colonial can go to trial. 17 The other basis on which the cross-claim is attacked is that it claims accessory liability under s 75B of the Trade Practices Act without satisfying the requirements of knowledge of the falsity of the representation which is said to underpin the claims. Thus, it is said that this aspect of the cross-claim cannot establish the necessary ingredients of the cause of action as stated by the High Court in Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661. I did not sign the valuation report. I did not prepare the valuation report. He also sets out some evidence as to the circumstances in which the Valuation was signed. 21 In summary, Mr Ewing's affidavit discloses at [2] that Mr McGarva, a director of STV, introduced Mr McDonald to Mr Ewing when he joined STV as the "Director of the Valuation Department". When he was an employee, Mr Ewing was supervised by Mr McDonald who reviewed most of his valuations. 22 Paragraph [2] continues by stating that from October 1999, ie three months before the Valuation was prepared, Mr Ewing became a contractor to STV. The practice from then on was that his draft valuations were sent to STV and that Mr McDonald signed the valuations in the capacity of "Director". 23 I will set out [4], [5] and [6] of Mr Ewing's affidavit in full. The references in [5] to "December" appear to be an error. It seems that Mr Ewing intended to refer to "January". To the best of my recollection, the draft report was by me completed in late December 1999. I left the report at the office of STV and I recall signing the valuation on 4 January 2000 at which time, Mr McDonald was absent on leave. It's a lot of money although it's over two levels, great fit out, great location and it's got a jetty. My concern is that it is strata titled. The top floor unit has also sold, the solicitor is faxing through the front page of the contract. It's on your desk, can you check it and sign it? When I attended the offices of STV on 4 January 2000, I observed that the valuation had not been signed. I rang McDonald and he said to get Rory to sign it and get it out. I put the report on Rory's desk, told him that Michael asked for him to sign off on this for him, which he did. I assumed that it had been checked by McDonald in accordance with the previous practice for directors to sign off on valuation reports as discussed above. The report would not have been issued without McDonald's authorisation. The affidavits of Mr McDonald and Mr Ewing were not filed in response to a direction to file evidence for the final hearing. They were filed only for the purpose of this motion. 25 Discovery has not yet been ordered. My ordinary practice is not to order discovery until the true issues are elucidated after the affidavit evidence is complete. 26 Mr McDonald's evidence consists of a bare denial of the allegations in [24] of the Statement of Claim. It fails to deal with the description given by Mr Ewing of the background and factual circumstances in which the Valuation came to be signed by Mr O'Boyle. 27 In my view it is plain from Mr Ewing's affidavit that a triable issue of fact is disclosed. It is true that [6] of his affidavit is not in admissible form for a final hearing. But that paragraph, read in the light of [2] and the conversation recorded in [5] gives rise to an arguable case that Mr McDonald reviewed and approved the Valuation and that he authorised Mr O'Boyle to sign it on his behalf. 28 If these facts are made good at the trial it would probably be sufficient to make out a case of preparation, within its ordinary meaning, as well as signature. At the very least it would be sufficient to make out a case that Mr McDonald supervised and authorised the release of the Valuation over his name. 29 Counsel for Mr McDonald sought to take a narrow approach to the meaning of [24] of the Statement of Claim and to what was to be gleaned from [6] of Mr Ewing's affidavit. 30 In my view this is not a proper approach to the present application. The authorities relating to the proper construction and effect of s 31A of the Federal Court of Australia Act were exhaustively reviewed by Rares J in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 at [31] --- [48]. • There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary judgment is sought to succeed at the final hearing. • Evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects. • Unless only one conclusion can be said to be reasonable, the discretion under s 31A cannot be enlivened. 32 It is true that summary dismissal applications are to be determined on the pleadings and any evidence before the Court; but at the heart of the exercise is the assessment on incomplete materials, of the prospects of success if the matter proceeds to a final hearing; Boston Commercial at [38], [48]. 33 It would be wrong to determine the application on a narrow approach to the pleadings where, as here, there is evidence, albeit incomplete, and perhaps at this early stage, ambivalent, which may at a final hearing, and with amended pleadings, produce a verdict for the applicant. 35 In that case a valuation report was signed by an employee of a firm which ceased to carry on business and the principal of which went into bankruptcy. The report was prepared for a building society that supplied a copy of the report to the purchasers of the property, omitting all reference to the name of the employee signatory and his firm. 36 The majority Justices, May LJ and Wilson J, held that the employee owed a duty of care to the purchasers. What underlies their observations at [44] and [61] are the concepts of assumption of responsibility and known reliance. 37 The facts deposed to by Mr Ewing in [2], [5] and [6] give rise to an arguable case in accordance with this principle. 38 The decision of the High Court in O'Brien v Dawson [1942] HCA 8 ; (1942) 66 CLR 18 at 32---33 does not appear to have any application to the principles which underlie the modern development of the law of negligence. O'Brien v Dawson stands for the proposition that, ordinarily, the acts of a director will be the company's acts, not those of the director; thus the director cannot, without more, induce the company to breach a contract or conspire with it to do so. But this does not address the considerations which underlie the law of negligence. This is because it is dependent upon the establishment of a duty of care on the part of Mr McDonald. I have held that there is an arguable claim that Mr McDonald was under such a duty. 40 The second aspect of the cross-claim is more problematical. Indeed, in my view, it cannot go to trial. 41 The cross-claim pleads three representations. The first is that in about 2000, Mr McGarva of STV represented to Mr Ewing that he had been named as an assured under STV's professional indemnity insurance and that he would continue to be named in the future. 42 The second representation is pleaded as a representation by silence. It is said that between January 2003 and 1 July 2004, STV sought and obtained professional indemnity insurance which did not name Mr Ewing as an assured; see [11], [14] and [16] of the second cross-claim. 43 It is then said in [21] that Mr McDonald knew that Mr Ewing was not included in the 2003-2004 policy and that Mr McDonald knew, at that time, that there was a possibility of a claim being made in relation to the valuation of the Cammeray property. 44 The third representation is then pleaded as a failure by Mr McDonald to inform Mr Ewing that he was not named as an insured in the 2003-2004 policy. 45 Mr Ewing pleads that he has suffered or may suffer loss or damage by the first, second and third representations and that the second and third representations give rise to accessory liability on the part of Mr McDonald. 46 The essential defect in this pleading is that the second and third representations cannot of themselves give rise to accessory liability. They are dependent upon the first representation and knowledge of the falsity of that representation. 47 Mr Neil SC for Mr Ewing submitted that the matters pleaded in [11] established "knowledge" by Mr McDonald of facts consistent with the making of the first representation made by Mr McGarva. 48 Nevertheless, Mr Neil fairly and properly conceded that he did not, and could not allege, actual knowledge by Mr McDonald of the first representation. 49 In my opinion, the matters pleaded in the cross-claim can give rise, at most, to an allegation of constructive knowledge of the falsity of the representation said to have been made by Mr McGarva. 50 The knowledge which is required to give rise to a claim of accessory liability is actual knowledge. Constructive knowledge is not sufficient; Yorke v Lucas at 667---668, 670; Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at [60] . See also Richardson & Wrench (Holdings) Pty Ltd v Ligon No 174 Pty Ltd (1994) 123 ALR 681 at 693. 51 Mr Neil accepted that his cross-claim on this count was not "orthodox" and that he could point to no authority to support it. The notice of motion dated 28 August 2006 and filed 31 August 2006 will be otherwise dismissed. | pleadings application to strike out statement of claim and cross-claim proper approach to meaning of "reasonable prospect of success" in s 31a of the federal court act requirement of actual knowledge of falsity of representation for accessory liability under s 75b of the trade practices act application allowed in part practice and procedure |
2 The appellant is self represented before this Court as he was before the Tribunal and the Federal Magistrates Court of Australia. 4 The appellant recited in his notice of appeal that he believed he had reasonable grounds to challenge the dismissal of his application; that he had only recently received a copy of the ex tempore reasons of Federal Magistrate Barnes; and leave would be sought to file additional grounds of appeal at a later stage. No such leave was sought. However, the applicant filed written submissions (a one page document) that should be taken as an amplification of the appellant's grounds of appeal. The additional contentions are these. First, the Tribunal misconceived its function by rejecting the appellant's contended well-founded fear of persecution based in part upon his membership of a political party, the Sri Narayana Dharma Paripalama ("SNDP") in Kerala, India. The error is said to be that the Tribunal rejected the plausibility of the appellant's fear of attacks upon him by members of a rival party, the People's Democratic Party ("PDP"), consistent with contended previous attacks by PDP members upon him, on the footing that the Tribunal "could find no independent country information to support attacks by the PDP on members of the SNDP". The decision of the Tribunal is said to be irrational, unsound, unreasonable and not supported by any evidence probative of findings rejecting the credit-worthiness of the appellant. 5 Secondly, the appellant says the Tribunal should have undertaken its own research "to find such information" or, alternatively, the Tribunal ought to have accepted the appellant's version of events (i.e., ought to have "given me the benefit of the doubt") as there was no evidence before the Tribunal upon which the appellant's claims ought properly to have been rejected. In the absence of any other evidence, reliance by the Tribunal solely upon no independent country information corroborating previous PDP attacks on SNDP members, as a basis for rejecting the appellant's evidence, was not open to the Tribunal as part of its fact-finding role. 6 Thirdly, the Tribunal reached its decision on "mere speculation and suspicion" when concluding that the appellant "was not targeted by the PDP". Fourthly, the appellant says that he also relies upon as part of the grounds of appeal before this Court, the grounds contained in his application and amended application before the Federal Magistrates Court of Australia. As to the application, the appellant contended that the Tribunal wrongly relied upon third party sources; disregarded evidence; the Tribunal member failed to apply his mind to the review task; the Tribunal reached wrong conclusions of fact; and wrongly contended that the appellant could relocate within India. 7 By the amended application, the appellant contended that the Tribunal failed to address the "real facts"; asserted before the Federal Magistrates Court the point concerning reliance by the Tribunal upon "no country information" as to PDP attacks upon SNDP members; contended that the Tribunal made factual errors; and contended that the Tribunal reached its decision "in haste". 8 The central matter relied upon by the appellant is that there was no evidence before the Tribunal upon which it could properly have reached the findings it made and that reliance upon the independent country information as a foundation for the Tribunal's finding was not open to it. The satisfaction of the Minister is a condition precedent to that obligation. The delegate of the Minister is in the same position as the Minister. The Tribunal exercises all of the powers and discretions conferred on the decision-maker under the Act . By s 420 of the Act , the Tribunal in reviewing a decision, is not bound by technicalities, legal forms or rules of evidence and must act according to substantial justice and the merits of the case. In undertaking the review function, the Tribunal is to pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick. By s 424(1) , the Tribunal in conducting a review may obtain information that it considers relevant and must have regard to that information in making the decision on the review. Provisions which confer upon the Tribunal a capacity to inform itself by information it considers relevant and provisions which free the Tribunal from technicalities and the formal rules of evidence are, like s 33 of the Administrative Appeals Tribunal Act 1975 (Cth), facultative provisions ( Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 628 [49] per Gleeson CJ and McHugh J) although the extent of that freedom in any given case might be "another question" ( Eshetu at [49]). Nevertheless, the Tribunal must reach conclusions which have a basis in evidence having rational probative force ( Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85 ; (1980) 31 ALR 666 at 685 per Deane J; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 367 per Deane J). 10 Although the Tribunal is not bound by rules of evidence, the underlying rules of rationality that guide notions of relevance and deductive and inductive reasoning inform the process of reaching a decision that is supported by evidence ( Rationality and Judicial Review of Administrative Action : Dr. G. Airo-Farulla, Vol. 24, Melbourne University Law Review, p 453: see also Reasonableness, Rationality and Proportionality : Dr. G. Airo-Farulla, Australian Administrative Law, edited by Groves and Lee, Cambridge University Press, 2007, Ch. 14; French J, Administrative law in Australia: Themes and values , Australian Administrative Law, Ch. 2). Describing the process of reasoning as irrational, illogical or based upon an unsound approach to the assessment of documents or that findings are not based on inferences of fact supported on logical grounds, may merely be an emphatic way of the appellant disagreeing with a finding of fact ( Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30 ; (2003) 198 ALR 59 per Gleeson CJ at [5]. Thus, it is necessary to identify the nature and quality of the contended error and the precise legal principle that attracts a particular legal consequence, such as error of law. The scope of the legal rubric is conventionally understood in terms of the well known passage from Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179 per Brennan, Deane, Toohey, Gaudron and McHugh JJ; Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 351 [82] per McHugh, Gummow and Hayne JJ. As to misconceptions which might suggest an unsupportable supposition on the part of the decision-maker, see Avon Downs Pty Ltd v FCT [1949] HCA 26 ; (1949) 78 CLR 353 at 360 per Dixon J; R v Australian Stevedoring Industry Board; Ex parte Melbourne Stevedoring Co. Pty Ltd [1953] HCA 22 ; (1953) 88 CLR 100 at 120 per Dixon CJ, Williams, Webb and Fullagar JJ. As to constraints upon a court interfering with a decision-maker's assessment of evidence, in exercising supervisory review of administrative decision-making, see Attorney-General (NSW) v Quin [1990] HCA 21 ; (1990) 170 CLR 1 at pp 35-36 per Brennan J. See also NAMM of 2002 v MIMIA [2003] FCAFC 32 per French, Lindgren and Finkelstein JJ; MIMIA v W306/01A [2003] FCAFC 208 per French, Hill and Marshall JJ; NACB v MIMIA [2003] FCAFC 235 per Tamberlin, Emmett and Weinberg JJ; W404/01A of 2002 v MIMIA [2003] FCAFC 255 per French, Lee and Carr JJ; NATC v MIMIA [2004] FCAFC 52 per Heerey, Sundberg and Crennan JJ; VWST v MIMIA [2004] FCAFC 286 per Kiefel, Marshall and Downes JJ, applying these principles. Likewise, the question whether a particular inference can be drawn from facts found or agreed is a question of law. That is because, before the inference is drawn, there is a preliminary question as to whether the evidence reasonably admits a difference conclusion. Accordingly, in the context of judicial review, the making of findings and the drawing of inferences in the absence of evidence is an error of law. On the other hand, there is no error of law simply in making a wrong finding of fact. Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, that would not amount to an error of law. A party does not establish an error of law by showing that the decision-maker inferred the existence of a particular fact by a faulty process, for example, by engaging in an illogical course of reasoning. Thus, at common law, want of logic is not synonymous with error of law. So long as 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. Such a determination might be characterised as irrational, illogical, arbitrary, capricious or made according to humour or private opinion rather than by reference to a reason or justice. Such a decision is unreasonable. However, for present purposes, I use each of these terms to describe a decision of the Tribunal based on findings unsupported by any evidence or based upon findings thought to be supported by inferences drawn from primary facts where those inferences are not open as a matter of law. Decisions made by the Tribunal in such circumstances are not made in the performance of the duty imposed on the Tribunal by the Act and thus involve jurisdictional error. Such decisions do not simply reflect insufficiency or inadequacy of evidence but rather an absence of any foundation in fact for the state of satisfaction or otherwise of the Minister or decision-maker. There can be no objection in principle to the Tribunal relying on "country information". The weight that it gives to such information is a matter for the Tribunal itself, as part of its fact-finding function. Such information as the Tribunal obtains for itself is not restricted to "guidance", as the appellants submitted. It may be used to assess the credibility of a claim of a well-founded fear of persecution. It is not, as the first appellant submitted, an error of law or a jurisdictional error for the Tribunal to base a decision on "country information" that is not true. The question of the accuracy of the "country information" is one for the Tribunal not for the Court. If the Court were to make its own assessment of the truth of "country information" it would be engaging in merits review. The Court does not have power to do that. The Tribunal's reasons for decision do not substantiate this assertion. It is plain that the Tribunal relied to a substantial extent on the inherent probability of some aspects of the first appellant's story, inconsistencies between different parts of his story and the fact of his frequent returns to Sri Lanka and the length of his sojourns there, to form its views about his credibility. In turn, it relied on its assessment of the first appellant's credibility in determining whether it accepted some of the "country information". ... The very function of the Tribunal was to assess the appellants' claims, both as to their inherent credibility and as to their consistency with other information known to the Tribunal about circumstances in the appellants' country of origin. The application document contains a short answer to question 40, "Why did you leave [India]? If I go back to India the police and local political people try to kill me. 19 The statement in support of the protection visa application recites that the applicant was born in Nedumungad Kerala in India. He is a Hindu by belief. After the death of his father, the appellant began working to support his mother. He adopted the Hindu faith and later became an executive member of the SNDP. In March 1989, he married. He has four children. He claimed that in June 2003 he opened a shop selling umbrellas with financial help from his wife's family. He asserted that in Kerala the "umbrella business" is controlled by members of the Muslim faith. It was the appellant's policy to sell his umbrellas at discounted prices. This was said to upset Muslim businessmen who sold umbrellas at higher prices. The appellant claimed that on 14 November 2003, two men, Mohamid Buzig and Mohamed Sulaiman came to his shop at about 8.00pm to pressure the appellant to increase the price of his umbrellas or give up the business entirely. The appellant claimed that these men beat him and cut his head with a knife. The appellant claimed that the police to whom he complained refused to help him. He claimed the hospital would not admit him. He was treated by private doctors although they refused to provide him with necessary medical certificates as the attack was by two Muslim men. He claimed he was taken to a friend's place for safety. He claimed friends and family advised him to leave India. He claimed that the PDP had a powerful network throughout India. He also claimed that he had antagonised a Hindu extremist movement described as the RSS and the VHP by asserting a divine connection for the SNDP. On 4 January 2004, the appellant left India for Singapore. He was refused protection there and returned to India on 14 January 2004 where he began living in Chennai at a relative's house. From there he made arrangements to obtain a visa to travel to Australia. He departed India on 8 August 2004. 20 The Minister's delegate refused the appellant's application for a visa. The appellant applied to the Tribunal for review of that decision on 11 October 2004. The appellant gave oral evidence before the Tribunal on 25 November 2004. The Tribunal affirmed the delegate's decision on 17 December 2004. The Federal Magistrates Court ordered on 18 April 2006 that a writ of certiorari issue to quash the Tribunal's decision and a writ of mandamus issue directing the Tribunal to consider the appellant's application according to law. 21 On 3 July 2006, the appellant gave oral evidence before the Tribunal. On 25 July 2006, the Tribunal published a decision affirming the delegate's decision. On 7 May 2007, the Federal Magistrates Court ordered by consent that the Tribunal's decision be quashed and the application be reconsidered by the Tribunal to be determined according to law. On 19 July 2007, the appellant gave oral evidence to a third newly constituted Tribunal. On 20 September 2007, the Tribunal published its decision. 22 In his evidence given to the first Tribunal on 25 November 2004, the appellant amplified aspects of his claim to a well-founded fear of persecution. The tape recording of evidence was available to the third Tribunal. The appellant told the Tribunal that the main reason for his well-founded fear was that Muslims wished to kill him because he was of the Hindu faith. The Tribunal member drew the appellant's attention to the fact that the appellant had not made that claim in his application for a protection visa or in the handwritten statement in support of the application. The appellant told the Tribunal that the person who wrote the application did not speak his language and possibly did not understand everything. The Tribunal member put to the appellant that the omission of any reference to this concern that Muslims wished to kill him by reason of his Hindu faith, as the main source of his "problems" was not simply a matter of "understanding". Plainly, the Tribunal member on 25 November 2004 thought it odd that such an important matter described by the appellant as the main reason for his difficulties and problems in India, was not recited plainly and clearly in the visa application and supporting statement. 23 Secondly, the Tribunal member on that date put to the appellant that he had failed to record in his visa application and supporting statement a claim that a bomb had been thrown at his house (intended for the appellant) that had detonated and, in the result, killed his dog. The Tribunal member put to the appellant that a language difficulty was difficult to accept as an explanation for the omission of this event in the primary application documentation. 24 Thirdly, the appellant showed the Tribunal member on that day a card describing the appellant as a committee member of the district committee of the SNDP. The SNDP was then a party in coalition government in Kerala State. The coalition was led by the Congress Party of India and included at least one Muslim party. The appellant told the Tribunal member that he attributed his "troubles" in India partly to political factors. The contention was that Muslim members of the PDP would seek to harm him because he was a committee member of the district committee of the SNDP, aligned with the party in power. The Tribunal member asked the appellant whether other committee members of the SNDP were threatened by Muslim men. The appellant told the Tribunal member that they were not so threatened as far as he knew. 25 The appellant also told the Tribunal that day that when living in Chennai in hiding he was not subject to any attacks. The appellant claimed that if Muslim members knew his place of hiding he would have been attacked. The appellant told the Tribunal that day that the prime motivation for the attack against him was one of religion by reason of his Hindu faith and that a major factor in his fear of attack by Muslim men was that he was a member of the SNDP, a Hindu party. He claimed that it was unlikely that he would be replaced as a district committee member for Kerala as no Hindu would want the job. The appellant claimed that there were about 200,000 people in his home town of which 40% were Hindu. The appellant gave evidence that he was in hiding from November 2003 until his departure for Singapore in January 2004. The appellant bore a scar on his head from the November 2003 attack. 26 The appellant gave evidence before a new Tribunal on 3 July 2006. 27 Before the new Tribunal, the appellant said that members of the PDP would kill him should he return to India. He said that his party was the SNDP. In response to a question as to why members of the PDP would wish to kill him, the appellant told the Tribunal that it was because of his Hindu religion. The Tribunal asked why the appellant was treated as prominent and a reason for specific targeting and the appellant responded that he was a "leader". The appellant explained that his executive membership of the SNDP meant that he was the head of the SNDP Branch in his city. The Tribunal asked the appellant about the assault in November 2003 and asked the appellant if he had suffered other harm. The appellant told the Tribunal that he had gone to Singapore from January 2004 to August 2004 and had then returned to India and stayed in Bombay. The Tribunal pressed the appellant about the possibility of relocating to other cities if he was fearful for his life in his home town. The appellant told the Tribunal that he had relocated to Madras to work in a hotel. He had been told that Muslim men were looking for him and so he left Madras. The appellant said that those who wished to harm him in Kerala had connections in Madras. The Tribunal asked the appellant why those who wished to harm him would pursue him to another State and he replied that those he feared had said that they would find and kill him wherever he may go. The appellant told the Tribunal on that day that although the State of Kerala is majority Hindu there are many Muslims where he lives and his wife was "even now having problems". 28 The Tribunal asked the appellant whether he had ever experienced any difficulties in dealing or interacting with Hindus. He replied that he had no problems with Hindus. The Tribunal put to the appellant that in his primary application he had said that he had experienced problems with Hindu extremists. The appellant said that the application was incorrect and that it was Muslim men with whom he had problems. The Tribunal put to the appellant that Kerala was in fact ruled by a coalition party made up of both Muslims and Hindus. The appellant agreed that in coalition Muslims and Hindus engaged with each other but nevertheless there were always problems between Muslims and Hindus. 29 The Tribunal on this day also raised the question of whether the appellant had suffered harm apart from the incident in November 2003. The appellant said that he had also been hit on the arm and in the leg. In response to further questioning, the appellant told the Tribunal that he had not suffered any other form of harm. The Tribunal put to the appellant that in the previous hearing he had told the Tribunal that a bomb had been thrown at his house. The Tribunal asked the appellant why he had not raised this matter when asked about further harm. He responded that the Tribunal had not specifically asked him about it. The Tribunal asked the appellant why he had not raised this incident of a bomb being thrown at his house and detonating, in his primary application and supporting statement. The appellant's explanation for the failure to raise this matter, as a fact demonstrating a well-founded fear of persecution from Muslim men either for political reasons or a combination of political or religious reasons, was that the application had been written by someone else on his behalf. 30 On 19 July 2007, the appellant gave evidence to the third Tribunal the subject of the present proceedings. The appellant confirmed that he had operated a shop in his home town selling umbrellas in 2003 when on 14 November 2003 two Muslim men attacked him, beat him and cut him with a knife in order to discourage him from discounting the price of umbrellas. The appellant showed the Tribunal the scar on his head. The appellant told the Tribunal that on 16 November 2003, two days after the attack, a bomb was placed in his house. The appellant explained that the bomb had been thrown at him. He ran away. The bomb detonated. His dog was killed. The Tribunal asked him why he had not mentioned the bombing incident in his application. The appellant responded that he did so. The Tribunal noted that it could not find any mention of the incident of the bomb in the appellant's application. The appellant said that the bomb incident had been mentioned in a second application. The Tribunal put to the appellant that it could not find a second application. The Tribunal member observed that the appellant had mentioned the incident of the bomb at the first Tribunal hearing and the appellant agreed with that chronology. 31 The appellant told the Tribunal that the day after the bombing incident, he sold his shop and went to Singapore. 32 The Tribunal asked the appellant to identify the reasons why he had been targeted by Muslim men. He said it was because of his membership of the SNDP and that he was being targeted by PDP Muslim men. The appellant repeated that he was an executive member of the SNDP in Nedumungad. The appellant explained that there are four executive members in his home town and each member has a responsibility to look after 40 families. The appellant said that executive members of the SNDP change each year and there are therefore presently executive members in Nedumungad. The appellant explained the scope of his role as an executive member. The Tribunal asked the appellant why other executive members of the SNDP could live safely in the appellant's home town without being targeted. The appellant explained that he was more effective and did a better job than others and thus attracted attention. The appellant also said that other members were in a different district and did not exhibit the additional complication of operating a shop attacked by Muslims. The appellant accepted that he had been targeted by Muslim men, members of the PDP, because he was an executive member of the SNDP and because he owned an umbrella shop that competed with Muslim shop owners. However, when the Tribunal put to the appellant that he would not be the subject of harm if he did not operate such a shop, the appellant said that his position as an executive member of the SNDP was the problem. The appellant then told the Tribunal that he had received a letter from his wife telling him not to return as Muslim men were seeking him out because of "the old revenge with the shop and the SNDP". 33 The Tribunal then put to the appellant that it could find no independent country information of attacks on SNDP members in Kerala State other than one report of an office being vandalised in June 2005 by another SNDP member. Nevertheless, the appellant contended that there is a real problem between Muslims and Hindus and in the preceding week, a bomb had exploded in Nedumungad. The Tribunal put to the appellant that it could find no information of such attacks on SNDP members. The appellant responded that Nedumungad was a small place --- just a village. The appellant repeated that PDP Muslim members would "get him and kill him" and the Tribunal put to the appellant that it could not identify any country information disclosing attacks upon SNDP members by PDP members in Kerala. The appellant continued to assert that such conduct is occurring. 34 The appellant confirmed that his claim was that he was targeted by Muslim men and not Hindu extremists. The Tribunal put to the appellant that he had been attacked in his shop for commercial reasons and not a Convention reason. The appellant said that the attack was due to his activity at the shop and by reason of his membership of the SNDP. The Tribunal also put to the appellant that his fears of attack as an SNDP member seemed odd when other executive members of the SNDP had not been attacked and there were no reports of any such attacks. The appellant told the Tribunal that his home town area is dominated by Muslims. 35 The Tribunal then isolated a range of background information. The Tribunal examined websites and literature explaining the history and the social, cultural and political values of the SNDP. The Tribunal examined a range of websites which explained the aims, structure and general activities of the SNDP. All of the sources are extensively identified at AB176 to AB179. I will not repeat them in these reasons. At AB179, the Tribunal examined website information and literature in relation to the PDP. Similarly, I will not recite the content of that analysis in these reasons. As to attacks upon members of the SNDP, the Tribunal noted that a June 2005 article reported the vandalization of a SNDP administrative office allegedly by supporters of an ousted SNDP Union president. The Tribunal could find no other information disclosing attacks on SNDP members from 2003 to the date of its decision and nor could the Tribunal find information describing violence by PDP members against SNDP members in the period from 2003 to the date of the decision, in Kerala. In the material accessed by the Tribunal to describe the aims, structure, general activities and political activities of the SNDP, the Tribunal noted articles confirming that the SNDP has a number of branches in Kerala with presidents, secretaries and Union committee members. The articles note that the general secretary in 2003 and 2007 was Vellappally Natesan and in June 2007, Dr. M.N. Soman was elected SNDP president. In October 2003, one month before the attack upon the appellant, the president of the SNDP was C.K. Vidyasagar. The "general activities" searches informed the Tribunal that the SNDP was involved in trade unionism, education policy, schools and colleges and operated a financing institution providing loans to members as well as technical training. The Tribunal's searches include material indicating the scope of the "political activities" of the SNDP. 36 Against this background, the Tribunal found it odd that having regard to the extensive available information on the structure, scope, general activities and political activities of the SNDP, there was no information which brought to light social disturbances in the form of attacks upon members of the SNDP from November 2003 to the date of the Tribunal hearing, by PDP members in Kerala. 37 Having reviewed all of the evidence given by the appellant, the Tribunal then at AB180 to AB182 set out its findings and reasons. 38 The Tribunal recited the appellant's claim to fear persecution in India because he will be, should he return, attacked or targeted by PDP Muslim men as he was a member of the SNDP in his home town of Nedumungad in Kerala from 2000 to 2004. The Tribunal noted that the appellant at that time owned and operated an umbrella shop which undercut competing Muslim shop owners. The Tribunal noted that the appellant claimed to have been beaten in November 2003 and attacked with a knife and that two days later his house had been bombed. The Tribunal noted that since his departure the PDP had threatened him by coming to his home in India and by telephone. The appellant feared that he would be killed by PDP members if he returned and that the police had failed to protect him since the incident on 14 November 2003. 40 It accepted that the appellant "may have been targeted" by Muslim shop owners on 14 November 2003 for undercutting other traders. It accepted that the appellant "may have been" an executive member of the SNDP. The Tribunal did not accept that the appellant had been targeted by PDP members for those two combined reasons. The Tribunal found that the appellant's testimony as to the individuals who had perpetrated the attack upon him on 14 November 2003 and the reasons for the attack were inconsistent with independent country information and "implausible amounting to a fabrication". It finds that other Muslims will not harass him for selling umbrellas cheaply in the future as he has stopped selling umbrellas and sold his shop. There was of course no direct inconsistency but simply an absence of country information in circumstances where the Tribunal had an expectation that the content of the appellant's claims would have been supported by some objective evidence of PDP attacks on SNDP members, if such conduct had been occurring. The Tribunal seemed to accept in terms of the quote at [40] that the appellant had been targeted by competing Muslim shop owners, for commercial reasons, namely, "selling umbrellas cheaply". The Tribunal then reinforced the importance of the perceived inconsistency by referring in the next and final paragraph at AB180 to no independent country information documenting attacks on members of the SNDP from 2003 but for one incident involving an SNDP administration office and, in particular, no independent country information documenting attacks on SNDP members by PDP members from 2003. 42 At AB180 and AB181, the Tribunal recited its reliance on online "Factiva" database information of major international and foreign language newspapers, magazines, wire services, journals and analyst reports, together with website information and particular articles, as the basis for no identifiable independent country information. The Tribunal then said that the absence of any information of attacks on SNDP members since 2003 by PDP members or otherwise meant that "there is no objective evidence to support [the appellant's] claims". It notes that the vandalization of a SNDP office was found in country research and [the Tribunal] would expect personal attacks on the SNDP and personal attacks by the PDP to be similarly reported. It considers that the lack of evidence of any attacks on the SNDP, or any attacks by the PDP on SNDP members is strong evidence that there is no evidence to support his claim. The Tribunal then made these findings: ... the Tribunal does not accept that the applicant was targeted by PDP members in 2003 because he was a member of the SNDP or for undercutting other Muslim umbrella sellers, or the combination of the two, that his house was bombed by members of the PDP in 2003 as he claims, that members of the PDP have threatened him by coming to his home in India and that he will be killed by PDP members if he returns to India. The Tribunal would expect that an applicant whose house had been bombed only days after the initial attack would recall this event in his original statement. The applicant did not directly comment on this in his reply to the S424A [letter from the Tribunal]. Secondly, the Tribunal although accepting that the appellant was an executive member of the SNDP, did not accept that he would be targeted by PDP members for that reason should he return to Kerala. The Tribunal concluded that such a claim was inconsistent with the appellant's own evidence that other SNDP executive members were living safely in Kerala. Further, the Tribunal was comforted in its view of that matter by the fact that research undertaken by the Tribunal of independent country information did not reveal any information of attacks by the PDP on SNDP members from 2003 to date, in Kerala. The third matter given emphasis by the Tribunal was a perceived inconsistency between the position adopted by the appellant at the Tribunal hearing on 19 July 2007 as compared with statements contained in the appellant's original application document. In his original application, the appellant claimed that he had been targeted by Hindu extremists. On 19 July 2007, the appellant confirmed that his claims were based upon conduct by Muslim extremists. The appellant had explained the inconsistency on the footing that a person other than the appellant had prepared his original application. Nevertheless, the Tribunal thought that inconsistency or at least difference of position, relevant. 48 Fourthly, the Tribunal identified matters it regarded as reflecting inconsistencies in the evidence given by the appellant concerning the role, in terms of persecution conduct, of his being a Hindu. At the second hearing he said that while he was targeted as a Hindu, it was because he was a leader. At the third Tribunal hearing he said he was targeted for being an executive member of the Hindu SNDP Party. It accepts that he may have been targeted for undercutting other Muslim umbrella sellers and that he was also a Hindu. However, as the applicant has since sold the shop it does not accept that he will be targeted just because he is a Hindu. The applicant also did not claim at the recent Tribunal hearing that he will be targeted in India just because he is a Hindu, rather that he was a executive member of the SNDP and similarly claimed at the second Tribunal hearing that he was targeted as he was a leader of Hindus, an executive member of the party, not just by being a Hindu. The Tribunal examined the content of the claims and sought to test the inherent probability of aspects of the appellant's story by reference to contemporaneous independent country reports. However, although the Tribunal substantially relied upon its unsatisfied expectation that independent country reports would have revealed attacks by members of the PDP upon SNDP members had they been occurring from 2003 until the date of determination, the Tribunal also made an assessment of the appellant's evidence to determine whether inconsistencies had emerged in the course of the appellant's evidence. The failure to mention the bombing incident immediately after the physical attack in November 2003, in the appellant's protection visa application, was a real matter of inconsistency of treatment by the appellant in the assertion of the central facts grounding a claim to a well-founded fear of persecution. The weight to be attributed to it was entirely a matter for the Tribunal and in attributing weight, the Tribunal elected to place emphasis upon the appellant's failure to deal with that matter in his reply to the S424A letter, at least to the satisfaction of the Tribunal. Secondly, the Tribunal thought that the appellant's evidence that other executive members of the SNDP were living safely in Kerala was inconsistent with a claim that Muslim members of the PDP would cause the appellant harm by reason of his executive membership or former executive membership of the SNDP. Additionally, the Tribunal thought that the change in position by the appellant from his initial statement that he had been targeted by Hindu extremists to an assertion that he had been targeted by Muslim extremists was a matter of relevance notwithstanding the appellant's explanation for the inconsistency. Finally, the Tribunal placed emphasis upon a perceived change in position by the appellant from one where he asserted that he was targeted in India because he was a Hindu to one where he was targeted because he was a leader as an executive member of a Hindu party. 51 It seems to me therefore that whatever the position might have been had the Tribunal simply relied upon an absence of corroborative independent country information as a sole foundation for rejecting the appellant's evidence, the Tribunal was entitled to have regard to independent country information in the context of its expressed concern about the inconsistencies in the appellant's evidence. The weight to be attributed to and accuracy as to those inconsistencies and the relationship between those inconsistencies and reliance upon independent country information was entirely a matter for the Tribunal. Accordingly, there was evidence before the Tribunal in the discharge of its fact-finding role that provided a foundation for the findings it reached. 52 Accordingly, the appellant has not made out the grounds of appeal contended for and recited at [3], [4], [5] and [6] of these reasons. As to the grounds recited in the application before the Federal Magistrates Court which are also relied upon as grounds of appeal before this Court, a review of the Tribunal's reasons does not support the contention that the Tribunal disregarded evidence or that the Tribunal member failed to apply his mind to the review task. The contention that the Tribunal reached wrong conclusions of fact is a matter of merits review. As to the amended application which the appellant similarly treats as grounds of appeal before the Court, there is no substance in the contention that the Tribunal failed to address the real facts. Having regard to the reasons of the Tribunal reflecting a review of the evidence given before the three Tribunal hearings and the response to the S424A letter, the appellant has not established that the Tribunal reached its decision "in haste". I have treated the appellant's reliance upon the matters raised by the application and amended application before the Federal Magistrates Court as matters alive for the purposes of the grounds of appeal simply because the appellant has not been represented throughout the various proceedings. 53 The appeal must be dismissed with an order that the appellant pay the first respondent's costs of and incidental to the appeal. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an appeal from the federal magistrates court of australia on the ground that there was no evidence before the refugee review tribunal which entitled the tribunal to reach the findings of fact it reached consideration of whether inferences might properly be drawn from facts found consideration of the appellant's contention that the decision of the tribunal was irrational, unsound, unreasonable and not supported by any evidence probative of findings rejecting the credit-worthiness of the appellant migration |
The respondent is the Australian Crime Commission ("the Commission"). The applicant claims four declarations. Two of the declarations claimed by the applicant relate to a summons issued to him under s 28(1) of the Australian Crime Commission Act 2002 (Cth) ("the ACC Act") and dated 27 January 2004. The declarations sought are a declaration that the summons is invalid and a declaration that the examination conducted pursuant to the summons was unlawful. The other two declarations sought by the applicant relate to a notice to produce issued to him under s 29 of the ACC Act and dated 19 February 2004. The declarations sought are a declaration that the notice to produce is invalid and a declaration that the production of documents and things purportedly pursuant to the notice to produce was unlawful. The applicant alleges that the respondent committed various breaches of the ACC Act and that that led to the alleged invalidity and unlawfulness. The respondent denies any breaches of the ACC Act, or in the alternative, denies that the alleged breaches led to the alleged invalidity or unlawfulness. The respondent did not argue that there are discretionary reasons for refusing the declarations. His case consisted of 13 documents which he tendered. One of the exhibits was an affidavit sworn by Mr Ian Andrew on 17 May 2006. Mr Andrew was a member of the staff of the Commission in 2004. His affidavit sets out in chronological order the history of the matter. The respondent's case consisted of an affidavit of Mr David Bruce Hellings. Mr Hellings was a member of the staff of the Commission. He was cross-examined at length by counsel for the applicant and, in due course, I will set out my findings in relation to his evidence. In terms of the facts, the starting point is an authorisation and determination made by the Board of the Australian Crime Commission ("the Board") at a meeting of the Board held on 13 May 2003. The authorisation and determination was called the "Australian Crime Commission Special Investigation Authorisation and Determination (Money Laundering and Tax Fraud) 2003" and the authorisation was expressed to be valid until 31 May 2004. I will refer to this as the 2003 authorisation and determination. It is common ground between the parties that the Board resolution making this authorisation and determination was passed at a Board meeting held on 13 May 2003 (see CC Pty Ltd v Australian Crime Commission [2007] FCAFC 96 ; (2007) 159 FCR 282). It appears that on 15 May 2003, the Chair of the Board signed a copy of the authorisation and determination, mistakenly asserting that it was made by resolution of the Board on 15 May 2003. The 2003 authorisation and determination was varied by a determination made by the Board by resolution passed on 4 December 2003. The determination was called the "Australian Crime Commission --- Operations and Investigations (Participants) Determination 2003". I will refer to this as the 2003 variation. Under the ACC Act, the Board may authorise in writing an investigation and may determine in writing that the investigation is a special investigation (s 7C(1)(c) and (d) and (3)). It may also determine in writing the class or classes of persons who are to participate in such an investigation (s 7C(1)(e)). In the 2003 authorisation and determination, the classes of persons to participate in the investigation were specified in Schedule 2 of the document. The purpose and effect of the 2003 variation was to make changes to the classes of persons who were to participate in the special investigation. On 27 January 2004, an examiner under the ACC Act issued a summons to the applicant under s 28(1) of the ACC Act. The summons had three documents attached to it, namely, a copy of the 2003 authorisation and determination (Annexure A), a schedule of documents and other things to be produced by the applicant (Annexure B) and a Statement of Rights and Obligations under s 29B of the Australian Crime Commission Act 2002 and Explanatory Notes (Annexure C). I will mention some matters about the summons which are relevant to the applicant's grounds for alleging that it is invalid. First, the summons states that the Commission "is conducting a special investigation pursuant to a determination of its Board, a copy of which is annexed to this summons as Annexure A". As I have said, a copy of the 2003 authorisation and determination was annexed to the summons as Annexure A. The summons did not have a copy of the 2003 variation annexed to it. Secondly, the summons states that the applicant is required "to attend at level 2, 383 Latrobe Street, Melbourne, on 17 February 2003 at 10.00 am before an Examiner at an examination to be held for the purposes of the above-mentioned special investigation to give evidence in relation to" his knowledge of, and involvement with, a number of topics which are listed in the summons. The summons refers to an Examiner, not the Examiner and it does not state that the applicant is summoned to give evidence as a witness. Thirdly, Annexure C to the summons sets out the rights and obligations in s 29B(1) and (2) of the ACC Act, but does not set out the rights and obligations conferred or imposed by s 29B(3) and (4) of the ACC Act. Finally, it is common ground between the parties that the examiner did not produce a record in writing of his reasons for the issue of the summons until after the summons had been issued. The plea in the respondent's defence is that the examiner recorded his reasons regarding the summons under s 28 of the ACC Act on 2 February 2004. The examination of the applicant commenced on 17 February 2004, continued on 19 February 2004 and then on subsequent days. I turn now to the notice to produce. The notice to produce was issued by the examiner on 19 February 2004 and it was served on the applicant on that date. The notice to produce had two documents attached to it, namely, a schedule setting out the documents and things to be produced by the applicant (Annexure A) and a Statement of Rights and Obligations under s 29B of the Australian Crime Commission Act 2002 (Annexure B). I will mention some matters about the notice to produce which are relevant to the applicant's grounds for alleging that it is invalid. First, the notice to produce states that the Commission "is conducting a special investigation pursuant to a determination of its Board dated 15 May 2003". Secondly, Annexure B to the notice to produce sets out the rights and obligations in s 29B(1) and (2) of the ACC Act, but does not set out the rights and obligations conferred or imposed by s 29B(3) and (4) of the ACC Act. Fourthly, the notice to produce requires production "forthwith", rather than within a particular period of time. Finally, as with the summons, it is common ground that the examiner did not record in writing his reasons for issuing the notice to produce before the notice to produce was issued. The plea in the respondent's defence is that the examiner recorded his reasons regarding the notice to produce on 25 February 2004. On 19 February 2004, the applicant purported to produce two digital versatile discs ("DVDs") under the notice to produce. The applicant claims that the circumstances surrounding the production were such that the production of the DVDs was unlawful. The evidence before me establishes that the applicant arrived in Melbourne from overseas on 14 February 2004. He went to a hotel. Members of the Commission arrived at the hotel with a search warrant which had been issued pursuant to s 3E of the Crimes Act 1914 (Cth). The Commission made forensic image DVDs of the hard disk drive of a portable computer in the applicant's possession. Members of the Commission suspected that there was information on the forensic image DVDs that would be relevant to the 2003 authorisation and determination, but which did not fall within the terms of the search warrant. A decision was made to issue a notice to produce under s 29 of the ACC Act. Mr Hellings, who was a financial investigator employed by the Commission in 2004, prepared an application for a notice to produce and it was endorsed by a Mr Ken Goodchild, who, at the time, was head of the money laundering and tax fraud determination. Mr Andrew's position in 2004 was Investigative Team Leader. During a break in the applicant's examination on 19 February 2004 and in the waiting room next to the examination room, Mr Andrew gave the applicant the forensic image DVDs. He then served the notice to produce on the applicant. The applicant was accompanied by his counsel, Mr David Galbally QC, and by his solicitor, Mr Michael Carr. The applicant produced the forensic image DVDs. Mr Andrew took them and asked another staff member to copy any readily available information from them. As I have said, Mr Hellings drafted the notice to produce and his evidence was that he did that on 18 February 2004. Mr Hellings said that he was present in the waiting room on 19 February 2004. Mr Hellings' evidence was that, in addition to himself, the other persons present were the applicant, Mr Galbally QC and Mr Carr, on the one side, and Mr Andrew and Mr Martin Taylor, a Commission lawyer, on the other. Mr Egglishaw conferred with Mr Galbally QC and then handed the DVDs back to Mr Andrew. I was present at this time because I was named in the notice as the ACC member of staff that Mr Egglishaw was to attend before for the purposes of producing the documents in the notice. He said that he believed the applicant's lawyers were also present. As I have said, Mr Hellings was cross-examined at some length by counsel for the applicant. There was a strong attack on his credit. In my opinion, Mr Hellings was a truthful witness and I accept his account of what took place in the waiting room on 19 February 2004. It is true that Mr Hellings did not have a clear recollection of all the events, but that is not surprising considering the time which had elapsed since the events took place. It is also true that Mr Andrew's notes do not refer to Mr Hellings being present at the time of production, but there could be a number of reasons for that, and the omission by Mr Andrew is not sufficient to dissuade me from the conclusion that Mr Hellings was an honest and straightforward witness and that he was present in the waiting room at the time the DVDs were handed back to the applicant and then produced. It will be necessary for me to address the proper construction of various sections in the ACC Act. A breach of a statutory provision does not necessarily lead to invalidity. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue. A summons issued under s 28 and a notice to produce issued under s 29 interfere with the rights of the citizen and, generally speaking, the courts will insist on strict compliance with conditions governing their issue. Against that background, the enactment of conditions which must be fulfilled before a search warrant can be lawfully issued and executed is to be seen as a reflection of the legislature's concern to give a measure of protection to these interests. To insist on strict compliance with the statutory conditions governing the issue of search warrants is simply to give effect to the purpose of the legislation. (1A) Before issuing a summons under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must also record in writing the reasons for the issue of the summons. (2) A summons under subsection (1) requiring a person to appear before an examiner at an examination must be accompanied by a copy of the determination of the Board that the intelligence operation is a special operation or that the investigation into matters relating to federally relevant criminal activity is a special investigation. (3) A summons under subsection (1) requiring a person to appear before an examiner at an examination shall, unless the examiner issuing the summons is satisfied that, in the particular circumstances of the special ACC operation/investigation to which the examination relates, it would prejudice the effectiveness of the special ACC operation/investigation for the summons to do so, set out, so far as is reasonably practicable, the general nature of the matters in relation to which the examiner intends to question the person, but nothing in this subsection prevents the examiner from questioning the person in relation to any matter that relates to a special ACC operation/investigation. (4) The examiner who is holding an examination may require a person appearing at the examination to produce a document or other thing. (6) In this section, a reference to a person who is an authorised person in relation to the ACC is a reference to a person authorised in writing, or a person included in a class of persons authorised in writing, for the purposes of this section by the CEO. (7) The powers conferred by this section are not exercisable except for the purposes of a special ACC operation/investigation. I will refer to that Act as the 2007 Amendment Act. (1A) Before issuing a summons under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must also record in writing the reasons for the issue of the summons. (2) A summons under subsection (1) requiring a person to appear before an examiner at an examination must be accompanied by a copy of the determination of the Board that the intelligence operation is a special operation or that the investigation into matters relating to federally relevant criminal activity is a special investigation. (3) A summons under subsection (1) requiring a person to appear before an examiner at an examination shall, unless the examiner issuing the summons is satisfied that, in the particular circumstances of the special ACC operation/investigation to which the examination relates, it would prejudice the effectiveness of the special ACC operation/investigation for the summons to do so, set out, so far as is reasonably practicable, the general nature of the matters in relation to which the person is to be questioned, but nothing in this subsection prevents an examiner from questioning the person in relation to any matter that relates to a special ACC operation/investigation. (4) The examiner who is holding an examination may require a person appearing at the examination to produce a document or other thing. (6) In this section, a reference to a person who is an authorised person in relation to the ACC is a reference to a person authorised in writing, or a person included in a class of persons authorised in writing, for the purposes of this section by the CEO. (7) The powers conferred by this section are not exercisable except for the purposes of a special ACC operation/investigation. The one qualification was in relation to a case where a summons had been issued before 29 September 2007 and was otherwise invalid because the record referred to in subsection 28(1A) of the Act was made after the summons was issued. (2) The summons is as valid, and is taken always to have been as valid, as it would have been if that Act had provided that the record could be made after the issue of the summons. There are two limbs to this submission, either of which, the applicant submits are sufficient to establish non-compliance with s 28(2). First, the document which accompanied the summons, purportedly as the copy of the relevant determination, was not a copy of the document which was before the Board at its meeting held on 13 May 2004. It is submitted that it was not a copy of the actual document because the document which accompanied the summons had the Chair's endorsement on it. The document or a copy of the actual document which was before the Board at its meeting held on 13 May 2004 was not tendered in evidence. It is not suggested that, in terms of the actual contents of the authorisation and determination itself, there were any differences between the document before the Board and the document which accompanied the summons; but rather, it is submitted that the latter was not an actual or facsimile copy of the former. It did not record the date and time at which it was made and it had the distinct appearance of a draft. A person facing an examination is given only limited information about the proposed examination and the questions he or she is likely to be asked at an examination. The principal provision in this regard is s 28(3), but even that provision is subject to the two qualifications referred to in the subsection. To understand the information which will be provided to a proposed examinee by virtue of the obligation in s 28(2), it is necessary to refer to s 7C(3) and (4) of the ACC Act. Before doing so, it must consider whether ordinary police methods of investigation into the matters are likely to be effective. Note 1: See also subsection 7G(4) for the voting rule that applies in relation to such a determination. Note 2: See also Division 2 for the examination powers available if there is a special investigation. The criterion, as laid down by the authorities, is to consider whether or not the copy differs from the original to such an extent that it would mislead any person of ordinary intelligence as to the effect of the original. Kay J continued: 'Then is there any untruth in this copy---untruth, I mean, upon an intelligent understanding of the Bills of Sale Act? In my opinion there is not. A true copy of a thing means a copy which is true in all essential particulars; the mere fact that a copy contains a blank which is immaterial, and cannot mislead anyone as to the effect of the instrument, does not make the copy an untrue copy within the meaning of the Act. A photocopying error may have led to an insignificant corner of a page, or the numbering of a page, being left out. The process of photocopying may have blurred a small section of the text, but a section which did not in the circumstances have any particular significance. There may be other illustrations. It is thus unnecessary for this Court to give consideration to the extent to which a document may fail accurately to reproduce every aspect of a warrant before it loses the character of a copy of that warrant within the meaning of s 3H(1). We doubt, however, that s 3H(1) calls for a facsimile of the warrant to be made available to the occupier of the premises. Whether a document is a copy of a warrant within the meaning of s 3H(1) is a question of fact to be determined in the light of the purpose of the Crimes Act following a comparison of the two documents and an assessment of the significance of any unauthorised differences between them. The process involved in the making of an authorisation and determination is such that it is likely to involve the preparation of a fresh document after the relevant Board meeting. It seems to me that, as long as the contents of the document are accurate, the statutory obligation in s 28(2) is met. As I have said, there is nothing in this case to suggest that the contents of the 2003 authorisation and determination were not accurate. The second limb to the submission that there was a failure to comply with s 28(2) is that the determination for the purposes of s 28(2) is not only the 2003 authorisation and determination, but also any amendment or variation thereto and, in this case, that includes the 2003 variation. It is common ground between the parties that the 2003 variation did not accompany the summons. In an analogous context, Merkel J, in A1 v National Crime Authority (1996) 67 FCR 464 , referred to the purpose behind the requirement in s 28(2) of the National Crime Authority Act 1984 (Cth) that a notice of reference accompany a summons. Section 28(2) refers to the determination that, relevantly, "the investigation into matters relating to federally relevant criminal activity is a special investigation". I think the respondent's submission is correct. The essential matters are the determination that the investigation is a special investigation and the matters set out in s 7C(4) (see [30] above). Those matters were in the determination which accompanied the summons and they were unaffected by the 2003 variation. The applicant was given notice of those matters and there is no evidence that he was misled by that part of the 2003 authorisation or determination which addressed the class or classes of persons who were to participate in the special investigation. I reject the first ground of challenge to the summons. The applicant's second ground of challenge to the summons is that it was invalid because it did not state that he was required to appear as a witness and it did not state that he was to appear before the examiner who issued the summons rather than an examiner. As to the former submission, a similar submission was made and rejected by me in GG v Australian Crime Commission [2009] FCA 759. It is submitted that the second summons was therefore deficient "on its face". The applicant referred to various sections in the Act which refer to a person appearing before an examiner in response to a summons as a witness: ss 25A(6), (7) and (8), 26, 27, 28 (heading), 30 and 31. I leave to one side the fact that a section heading is not part of an Act: Acts Interpretation Act 1901 (Cth) (" Acts Interpretation Act ") s 13(3). There is nothing in the Act which requires a summons to state that the person to whom it is directed is required to give evidence as a witness. It is not clear to me whether, by making this submission, the applicant was suggesting that he could only be required to give evidence as a witness in the sense that he could not be required to give evidence of his own activities or involvement in the activities of others. If he was suggesting that, it is plainly not a proposition supported by the provisions of the Act. The provisions of the Act have the effect of removing the privilege against self-incrimination: s 30(4) and (5) (see A v Boulton [2004] FCAFC 101 ; (2004) 136 FCR 420). He referred to a distinction between a general form of a summons and a summons of a witness. That matter may be accepted, but it does not assist in the proper interpretation of the ACC Act. Under the ACC Act, all examinees appear as witnesses and there is no need to refer to that fact in the summons. Furthermore, it seems to me strongly arguable that, read as a whole, the summons in any event makes it clear enough that the applicant is summoned to give evidence as a witness. The summons bears the heading "Summons to Appear Before the Australian Crime Commission". It refers to attendance, "to give evidence". It refers to obligations in s 30(1), (2) and (3) of the ACC Act and the first two of those subsections refer to a person appearing as a witness at an examination. As to the latter submission, the applicant submitted that the Act was quite clear in that it only authorised the examiner issuing the summons to summon the person to appear before him or her, not some other person. In this case, the applicant did appear before the examiner who had issued the summons. I have already referred to the amendments to s 28 effected by the 2007 Amendment Act. The applicant referred to the following documents: The Explanatory Memorandum for the Australian Crime Commission Establishment Bill 2002. The revised Explanatory Memorandum for the Australian Crime Commission Establishment Bill 2002. Explanatory Memorandum for the Australian Crime Commission Amendment Bill 2007. Second Reading Speech on 18 September 2007 in relation to the Australian Crime Commission Amendment Bill 2007. Second Reading Speech on 20 September 2007 in relation to the Australian Crime Commission Amendment Bill 2007. I set out the relevant passages from the third, fourth and fifth documents. As currently drafted, these provisions require a person to appear before or produce documents or things to the same examiner who issued the summons or notice. This provision is problematic in circumstances where the examiner who issued the summons or notice is on leave, ill or otherwise unavailable. The purpose of items 1, 3, 4 and 6 is to address this problem by allowing a person to appear before any examiner or supply any examiner with requested documents or things. An error or misstatement in the summons in referring to an examiner rather than the examiner in this case did not invalidate the summons. In my opinion, that submission is correct. On the face of it, the examiner's power in s 28 to summon a person is a power to summon a person to appear before that examiner. That conclusion follows from the language of the section. It is not obvious that there is any particular reason why the power should be so limited. Presumably, another examiner could acquaint himself with the material and conduct the examination. However, even if the section is so limited, I do not think a reference to an examiner in the summons invalidates the summons. The fact is that, in this case, the examiner who issued the summons made the summons returnable before himself. Whether the conclusion would be different if the point arose in the context of a person being prosecuted for failing to appear before another examiner is a point I need not address. I reject the second ground of challenge to the summons. The applicant's third ground of challenge to the summons is that the examiner failed to comply with s 29A(3) of the Act. A notation under s 29A(1) was included on the summons. (5) If a notation is cancelled by subsection (4), the CEO must serve a written notice of that fact on each person who was served with, or otherwise given, the summons or notice containing the notation. That was said to be a breach of s 29A(3) of the Act which applied not only to a person who was served with the summons, but also a person "otherwise given" the summons. Penalty: 20 penalty units or imprisonment for one year. Penalty: 20 penalty units or imprisonment for one year. I rejected the argument. The applicant submits that if this proposition is correct then it follows that the Statement should set out the obligations and rights in s 29B(3) and (4) either because the words 'otherwise given, a summons' in s 29B(1) have a different meaning from the same words used in s 29A(3), or because a person 'otherwise given, a summons' can fall within the terms of both s 29B(1) on the one hand and s 29B(2) and (4) on the other. The obligations and rights of the first class are set out in s 29B(1) and (2) and the obligations and rights of the second class are set out in s 29B(3) and (4). On this analysis, the written statement referred to in s 29A(3) must set out the obligations and rights set out in s 29B(1) and (2), but need not set out the obligations and rights in s 29B(3) and (4). First, the respondents' construction means the words 'otherwise given, the summons' are given the same meaning in the two sections. Secondly, the construction is consistent with the distinction suggested by the structure of s 29B between a person directly involved with the Commission or an examiner in that he or she has been served with a summons or otherwise given a summons by the Commission or an examiner, on the one hand, and a person to whom disclosure has been made, on the other. Thirdly, the respondents' construction avoids the practical difficulties that the applicant's construction creates in terms of the obligation placed on the Chief Executive Officer of the Commission by s 29A(5). Again, I have reached my conclusions independently of her Honour's decision. However, with respect, her Honour's reasons neatly summarise why in this case the applicant's submission must be rejected and I take the liberty of repeating them. The former is subject to ss 29B(1) and (2). The latter is subject to ss 29B(3) and/or (4). Consideration of the opening words of the provisions of ss 29B(1) to (4) supports this distinction (that is, the fact that s 29B(1) uses the words "served, or otherwise given" whereas ss 29B(3) and (4) refer to persons to whom disclosure has been made or information disclosed). This distinction indicates that the Act establishes two classes of persons for the purpose of these provisions, namely: - (i) persons who are served or otherwise given a summons or notice, and (ii) persons who are the recipient of disclosure by a person served or otherwise given a summons or notice, but who have not themselves been served or otherwise given a summons. This scheme is inconsistent with SS's case that the words "otherwise given" in s 29A(3) should be read as applying to a person who is the recipient of disclosure by a person served or otherwise given a summons or notice. Second, treating a person to whom disclosure has been made about a summons or notice as a person 'otherwise given' the summons or notice under s 29A(3) undermines the careful scheme of obligations imposed by s 29B. The reason for this is that the words 'or otherwise given' must take the same meaning wherever they appear in the ACC Act. Hence, s 29B(1), on SS's construction, would apply to a person to whom disclosure is made (and who happens to be given a copy of the summons or notice as part of that disclosure) under s 29B(2). Yet such a person would also be subject to the obligations imposed by s 29B(3). Similarly, if that person to whom disclosure is made under s 29B(2) (and who happens to be given a copy of the summons or notice as part of that disclosure) themselves makes a disclosure under s 29B(4) (and happens to be given a copy of the summons or notice as part of that disclosure) the person who is the recipient of the disclosure under s 29B(4) would also become a person subject to the obligations under s 29B(3), yet also (on SS's case) s 29B(1) as well. This makes the statutory scheme nonsensical. Third, and as the ACC pointed out, if SS's construction is correct then the CEO's obligation in s 29A(5) is unworkable. The CEO will know the persons served or otherwise given the summons by the ACC. The CEO cannot know the persons to whom a disclosure has been made in accordance with ss 29B(2) or (4). Such a disclosure is not a matter for the CEO. It is a matter for the person served or otherwise given the summons or notice by the ACC and the recipient of the disclosure. Yet SS's construction would require the CEO to give written notice of the cancellation of the notation to persons both served or otherwise given the summons or notice by the ACC and persons (unknown to the CEO) to whom such a person made disclosure (and so on in accordance with s 29B(4)). The applicant's fourth ground of challenge to the summons was that the examiner failed to record in writing his reasons for the issue of the summons (s 28(1A)) before he issued the summons. As I have said, it is common ground between the parties that, in this case, the examiner did not record in writing his reasons for the issue of the summons before he issued the summons. Counsel for the applicant relied on the decision of Smith J in Australian Crime Commission v Magistrates' Court of Victoria [2007] VSC 297 ; (2007) 173 A Crim R 572 in support of the proposition that a failure to record in writing the reasons for the issue of the summons before the issue of the summons rendered the summons and any examination conducted pursuant to it invalid. In that case, the proposition advanced by the applicant in this case was conceded by the Australian Crime Commission, although Smith J said that the concession was one which was properly made (at 578 [9]). The validity of the proposition depends on whether the temporal aspect of the first sentence in subs (1A) of s 28 also applies to the second sentence. It seems to me that there are arguments on both sides. In support of the applicant's submission, it can be said that the examiner must reach a state of satisfaction before issuing the summons and there is no reason to think that he or she could or should not record in writing his or her reasons at the same time. In support of the respondent's submission, it can be said that there is no obligation on the examiner to give reasons to the person summoned and that, as the record in writing referred to in s 28(1A) performs the function identified by Finn J in Barnes v Boulton [2004] FCA 1219 ; (2004) 139 FCR 356 at 363-364 [28] - [29] , there is no reason to require the record to be made before the summons is issued. (See also my discussion in AA v Board of the Australian Crime Commission [2009] FCA 642 at [26] - [30] ). I am disposed to think there is more force in the respondent's submission but, for reasons I will give, it is not necessary for me to finally decide the point. The amendments to s 28 effected by the 2007 Amendment Act are set out above. I refer in particular to Item 10 of Schedule 1 of the 2007 Amendment Act (at [26]). For the purposes of the present argument, I assume that the summons was invalid because the examiner did not make a record in writing of his reasons until after the summons had been issued. The applicant does not dispute that the effect of the amendments in 2007 is to validate the summons. However, he submits (and the respondent denies) that the amendments in 2007 did not validate the examination which was and remains unlawful. The applicant submits that a valid summons was a necessary pre-condition to a valid or lawful examination, and that, as the summons was not lawful at the time it was issued, the examination was, at that time, not lawfully conducted. That proposition may be accepted for present purposes. The point at issue is whether the amendments in 2007 validated not only the summons, but also the examination conducted following its issue. The applicant submits that it did not, and he relies on two particular points in support of his submission. First, he points to the common law right to silence which he submits is abrogated by provisions such as s 28 of the ACC Act. The amendments in 2007 should be strictly construed so as not to interfere with common law rights. The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights. Reference was made to Attorney General of New South Wales v World Best Holdings Ltd [2005] NSWCA 261 ; (2005) 63 NSWLR 557 , a case in which not only the constitution of the Tribunal was validated, but also its acts or omissions. That was, submits the applicant, to be contrasted with the fact that, in this case, the Parliament had only validated the summons. The effect of the construction of the amendments in 2007 advanced by the applicant would be that all existing summons are validated, but no examinations which had been held are validated. The practical effect of the amendments in 2007 would, on this argument, be very narrow. As to summonses previously issued, only those where the examination had not yet been held would, in a practical sense, be affected. The validation provision in the 2007 Amendment Act must be construed according to its terms. Even if it is appropriate to apply the approach to construction referred to by the High Court in Coco to a case where the examination has taken place and the question is whether the Parliament has "validated" not only the summons but also the examination, I think Parliament has expressed its intention in clear words in this case. Not only is the summons valid, but it "is taken always to have been as valid" as if the invalidating event had not occurred. To my mind, these words remove any suggestion that the examination which followed the issue of the summons remained unlawful. The other point to be made about the applicant's submissions is that he seeks to put more weight on the decision in Attorney-General for New South Wales v World Best Holdings Ltd [2005] NSWCA 261 ; (2005) 63 NSWLR 557 than it can reasonably bear. In my opinion, that case is no more than an example of how Parliament chose to validate acts in the particular circumstances of the case. I reject the fourth ground of challenge to the summons. (1A) Before issuing a notice under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must also record in writing the reasons for the issue of the notice. (2) A notice may be issued under this section in relation to a special ACC operation/investigation, whether or not an examination before an examiner is being held for the purposes of the operation or investigation. (3) A person shall not refuse or fail to comply with a notice served on him or her under this section. (3A) A person who contravenes subsection (3) is guilty of an indictable offence that, subject to this section, is punishable, upon conviction, by a fine not exceeding 200 penalty units or imprisonment for a period not exceeding 5 years. (3B) Notwithstanding that an offence against subsection (3) is an indictable offence, a court of summary jurisdiction may hear and determine proceedings in respect of such an offence if the court is satisfied that it is proper to do so and the defendant and the prosecutor consent. (3C) Where, in accordance with subsection (3B), a court of summary jurisdiction convicts a person of an offence against subsection (3), the penalty that the court may impose is a fine not exceeding 20 penalty units or imprisonment for a period not exceeding 1 year. (4) Subsections 30(3) to (5) and (9) apply in relation to a person who is required to produce a document or thing by a notice served on him or her under this section in the same manner as they apply in relation to a person who is required to produce a document or thing at an examination before an examiner. (1A) Before issuing a notice under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must also record in writing the reasons for the issue of the notice. (2) A notice may be issued under this section in relation to a special ACC operation/investigation, whether or not an examination before an examiner is being held for the purposes of the operation or investigation. (3) A person shall not refuse or fail to comply with a notice served on him or her under this section. (3A) A person who contravenes subsection (3) is guilty of an indictable offence that, subject to this section, is punishable, upon conviction, by a fine not exceeding 200 penalty units or imprisonment for a period not exceeding 5 years. (3B) Notwithstanding that an offence against subsection (3) is an indictable offence, a court of summary jurisdiction may hear and determine proceedings in respect of such an offence if the court is satisfied that it is proper to do so and the defendant and the prosecutor consent. (3C) Where, in accordance with subsection (3B), a court of summary jurisdiction convicts a person of an offence against subsection (3), the penalty that the court may impose is a fine not exceeding 20 penalty units or imprisonment for a period not exceeding 1 year. (4) Subsections 30(3) to (5) and (9) apply in relation to a person who is required to produce a document or thing by a notice served on him or her under this section in the same manner as they apply in relation to a person who is required to produce a document or thing at an examination before an examiner. The qualification was where the notice was issued before 29 September 2007 and it would otherwise be invalid because the record in writing was made after it was issued. (2) The notice is as valid, and is taken always to have been as valid, as it would have been if that Act had provided that the record could be made after the issue of the notice. As I have said, the 2003 authorisation and determination was made by the Board at its meeting held on 13 May 2003. The ACC Act does not require a notice to produce to contain a reference to the relevant authorisation and determination. The documents or things specified in a notice must be documents or things that are relevant to a special ACC operation/investigation, in this case, the investigation which is the subject of the 2003 authorisation and determination (s 29(1)(b)). The Act does not require the respondent to serve, with the notice to produce, a copy of the relevant determination as it does in the case of a summons issued under s 28 (s 28(2)). In these circumstances, I do not think the error as to the date of the Board's determination affects the validity of the notice to produce. I reject the first ground of challenge to the notice to produce. The applicant's second ground of challenge to the notice to produce is that the Statement of Rights and Obligations under s 29B of the ACC Act (Annexure B) which accompanied it did not comply with s 29A(3) of the Act. It did not, it is submitted, set out the obligations and rights in s 29B(3) and (4) of the ACC Act. The submission is the same as the submission made in relation to the summons and must be rejected for the same reasons (at [50]-[54]). I reject the second ground of challenge to the notice to produce. The applicant's third ground of challenge to the notice to produce is directed to the circumstances surrounding the production of the DVDs on 19 February 2009. The ground was formulated in various ways in the course of submissions. The declaration sought in the application is that "the Respondent's requirement, purportedly made pursuant to the Notice to Produce, that the applicant produce to one Ian Andrew the documents and things specified in the Notice to Produce, was unlawful". In the Statement of Claim, the applicant combined what are probably two challenges in the one plea. They are first that the notice to produce was invalid because it did not specify the person to whom the documents and things were to be produced, and secondly, even if the notice did do that, the production which took place was not in accordance with the notice. As to the second matter, it was said that the respondent required the applicant to produce the documents and things to Mr Andrew and that that requirement was unlawful and, as a result, the production was unlawful. In the course of his final address, counsel for the applicant applied for leave to amend the statement of claim to, in effect, put a further argument. The proposed plea was that the respondent rendered it impossible for the applicant to comply with the notice and thereby breached s 29(1)(a) of the ACC Act because the notice required production forthwith and yet Mr Hellings was not present or the respondent failed to inform the applicant that Mr Hellings was present. I refused the application to amend. It seemed to me that the application was made too late because it is possible the respondent may have called additional evidence had the allegation that Mr Hellings was not present been made at the outset. As it happens, I find that Mr Hellings was present in the waiting room and one of the limbs of the amendment would not have succeeded in any event. As to the other limb, namely, that Mr Hellings was present but did not inform the applicant of his presence, the proposed amendment is not only late but, for reasons I will give, would fail, having regard to my conclusions on the allegations which have been pleaded. Furthermore, the amendment may not be reasonably arguable. It is not clear to me how it is said that impossibility of performance by the applicant renders the respondent in breach of s 29(1)(a) of the ACC Act or how, even if breach by the respondent be made out, it would lead to the declaration claimed in the application. I begin with the submission that the notice to produce was defective because it failed to specify that the documents and things referred to in the notice were to be produced to Mr Hellings. The terms of s 29(1) of the ACC Act are to the effect that the person to whom the documents and things are to be produced is the same person before whom attendance is required. The respondent submitted that the notice to produce required production to Mr Hellings and that the requirement was clear having regard to the terms of the notice. The terms of the relevant part of the notice are set out above (at [14]). The notice to produce must be read as a whole and in a sensible fashion. When that is done, I think that the respondent's submission is right and the notice to produce complied with s 29(1) of the ACC Act. I turn now to the applicant's submission that the respondent required production to Mr Andrew and that that requirement was unlawful. I note that this point is not being raised in a context in which the applicant is being charged with a refusal or failure to comply with the notice to produce. His legal representatives were present at the time and there is no evidence from the applicant as to his state of mind at the time he handed the two DVDs to Mr Andrew. As I have said, I find that Mr Hellings was in the waiting room at the time the two DVDs were handed to Mr Andrew. In those circumstances, the issue is a simple one. Were the documents or things produced to Mr Hellings within s 29(1) in circumstances where he was in the room, but he did not serve the notice to produce and he did not physically receive the documents or things? Again, the answer to this question is to be found in the statutory context in which the word, "produce", appears. He concluded, in my opinion correctly, that the word is one 'that has not got an exact legal meaning, but requires an interpretation to be put upon it in the statute in which it occurs'. Hanfstaengl v American Tobacco Co [1895] 1 QB 347 at 355: and he saw the decision of the Court of Criminal Appeal in R v Amenores [1980] 2 NSWLR 34 as indicating that, in the present section, the word is used in its 'ordinary grammatical meaning' (at 37). In s 234(e) the legislature has used the phrase 'produced delivered or furnished to'. I do not think that the juxtaposition of these three terms should be seen as indicating an intention that each of them has a meaning separate and distinct from the other in the sense that they do not overlap. It may be, as his Honour was inclined to think, that 'produced' ordinarily means that the one person is presenting a document to the other whilst they are in each others presence. If this be so, then the purpose of 'delivered or furnished to' was, inter alia, to indicate that what was in contemplation in s 234(e) was not so limited and that the legislature was looking to a wide class of communication of the document to the relevant officer. It does not have to be the person specified in the notice. It seems to me that the physical presence of the person to whom documents or things are to be produced is probably necessary. Parliament chose not to prescribe a procedure requiring production simply to the Commission or any staff member of the Commission. On the other hand, Mr Hellings was present at the time of production and the applicant had previously met him. I do not think the person to whom the documents and things are to be produced need take actual physical possession of the documents or things. Documents or things may be placed on a table, or, if produced in large quantities, be in cartons which are immediately taken away by staff members of the Commission. In my opinion, the production which took place on 19 February 2004 was in accordance with the notice to produce and s 29(1) of the ACC Act. I reject the third ground of challenge to the notice to produce. The applicant's fourth ground of challenge to the notice to produce is that the notice is invalid because it required the documents or things specified in Annexure A to the notice to be produced forthwith. The applicant submits that the examiner was bound to grant the applicant a reasonable time within which to produce the documents or things specified in Annexure A and that "forthwith" was not a reasonable time. The applicant referred to the decision in Ganke v Deputy Commissioner of Taxation of the Commonwealth of Australia (1975) 25 FLR 98 and submitted that the examiner was bound under the ACC Act to allow a reasonable time for the production of the documents and things and that the respondent bore the onus of establishing that "forthwith" was a reasonable time. After the hearing, the applicant wrote to my chambers and referred me to the decision of Flick J in A. B. Pty Limited v Australian Crime Commission [2009] FCA 119. In that case, his Honour referred to a number of factors which are to be considered in determining objectively whether the period of time allowed for production in a notice under s 29 is reasonable. Some consideration could also be given to the amount of time an examiner thought appropriate; although that consideration would not be decisive. He referred to Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368, a case involving a notice under s 155 of the Trade Practices Act 1974 (Cth), and F H Faulding & Co Ltd v Commissioner of Taxation [1994] FCA 1492 ; (1994) 54 FCR 75 , a case involving a notice under s 264 of the Income Tax Assessment Act 1936 (Cth). In other words, this is a not a case in which the law must imply a requirement that the performance of a statutory obligation must take place within a reasonable time because, under the ACC Act, the examiner has the power to fix the time for performance. However, as the decision in A. B. Pty Limited v Australian Crime Commission [2009] FCA 119 illustrates, that does not mean that the examiner's decision as to the time within which documents or things must be produced is unexaminable. I do not need to examine in detail the grounds upon which an examiner's decision as to the time for production may be successfully challenged because I am satisfied that "forthwith" was a reasonable time in the circumstances of this case, or at least that the applicant has not established that an examiner could not reasonably take the view that it was a reasonable time. The documents or things in issue in this case were in the possession of the respondent on 19 February 2004. The applicant was present at an examination on 19 February 2004 and he was accompanied by his senior counsel and by his solicitor. The documents or things were handed to him and then he was served with the notice to produce. He then produced the documents or things in issue. He did not need time within which to locate the documents or things he was to produce and he had the opportunity "on the spot" to obtain legal advice. I reject the fourth ground of challenge to the notice to produce. The applicant's fifth ground of challenge to the notice to produce is that the notice was invalid because the examiner did not record in writing his reasons for issuing the notice until after the notice was issued. This ground raises the same matters as are raised in relation to the same ground with respect to the summons. For the same reasons, I reject this ground of challenge (at [55]-[66]). The applicant must pay the respondent its costs of the proceeding. I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | challenge to summons issued under s 28(1) of the australian crime commission act 2002 (cth) and subsequent examination whether summons invalid because determination accompanying summons as required by s 28(2) was not a facsimile copy of the relevant determination whether invalid because summons did not indicate that applicant had to appear "as a witness" and stated that applicant was to appear before "an" examiner and not "the" examiner whether invalid because summons failed to comply with s 29a(3) by not setting out rights and obligations in s 29b(3) and (4) in addition to those in s 29b(1) and (2) whether examination unlawful because examiner failed to record in writing reasons for issuing summons before he issued the summons administrative law |
The applicant, E. I. Du Pont de Nemours and Company (Du Pont), has filed a notice of opposition to ICI's application. I do not need to deal with all of those issues as, in my opinion, the applicant's claim fails at the threshold--there is no identity between any issue decided by Branson J or the Full Court, on the one hand, and any issue which falls for determination in relation to this opposed Divisional Application, on the other. It will be necessary to trace the various proceedings in a little detail in order to explain that conclusion. 3 On 12 March 2002 Branson J delivered reasons for judgment in two proceedings: N1248 of 1999, which related to Patent Application No 658005 and N1249 of 1999, which related to Patent Application No 654176. Each was an 'appeal' against a decision of a delegate of the Commissioner of Patents. Du Pont was the 'appellant' in each case and ICI was the respondent in each case, ICI being the applicant for each patent and Du Pont the unsuccessful opponent in each case. Two 'appeals' were heard together and decided at the same time in the same set of reasons ( E I Dupont de Nemours & Co v Imperial Chemical Industries PLC (2002) 54 IPR 304; (2002) AIPC 97---788; [2002] FCA 230). Claim 1 is the only independent claim . A working fluid composition as claimed in claim 1 wherein the heat transfer fluid (A) is a binary mixture consisting substantially of 1,1,1,2-tetrafluoroethane and difluoromethane. A working fluid composition as claimed in any one of claims 1 to 3 wherein the linear and branched hydrocarbyl groups specified for R 1 are unsubstituted and the carboxylic acid or carboxylic acid ester containing hydrocarbyl group specified for R 1 contains no other substituents. A working fluid composition as claimed in claim 1 substantially as hereinbefore described with reference to any one of the examples. The lubricant is at least partially soluble in each of the components of the heat transfer fluid and also in the fluid itself. The lower miscibility temperature of each composition was again determined. The compositions were prepared and the lower miscibility temperatures determined using the procedure described in Example 1. In Table 5 it will be noticed that the lower miscibility temperature of some of the compositions is quoted as being less than -50deg.C. This means that at -50deg.C phase separation was not observed. Moreover, binary mixtures of R-134a and R-32 and ternary mixtures of R-134a, R-32 and R-125 comprising different proportions of the constituent hydrofluoroalkanes to the mixtures exemplified above can also be used in combination with neopentyl polyol ester type lubricants to yield viable working fluid compositions. It is sufficient for present purposes to know that difluoromethane is known as R---32, 1,1,1,2---tetrafluoroethane is known as R---134(a) and pentafluoroethane is known as R---125. 9 Patent 54480/90, known as 'the Lubrizol Patent', was relied upon by Du Pont before the delegate as anticipating the patent under consideration. After describing the background of the alleged invention, referring to the ODP of CFCs, the patent states that HCFC-22 and HFC-134a are generally recommended as being alternatives to CFCs in refrigerant applications and that HFC-134a is particularly attractive because its ODP has been reported as being zero. The specification refers to the need for any proposed replacement refrigerant to be compatible with the lubricant in the compressor and the fact that the proposed new alternative refrigerants have solubility characteristics different from the refrigerants presently in use. The specification stated that the problem was particularly evident in automotive air conditioning since the compressors are not separately lubricated but a mixture of refrigerant and lubricant circulates throughout the entire system. It states that it is desirable for the lubricant to be soluble in the refrigerant at concentrations of about 5 to 15% over a temperature range from minus 40ºC to 80ºC. The specification also states that the refrigeration liquid must have acceptable viscosity characteristics, even at high temperatures, and should not have a detrimental effect on materials used as seals in compressors. The liquid composition is said to comprise two elements, being a refrigerant and a lubricant. Various alternatives of each, and combinations of those alternatives, are set out in the 26 claims. In each of the claims, more than 50% of the " composition " must be refrigerant and less than 50% must be lubricant. In some of the claims a more specific proportion is specified. Claim 1 and claims 4 to 9 all concern HCFCs and involve variations only in the lubricant. Lubrizol concedes that it cannot maintain those claims. However, the variation is in relation to the refrigerant rather than the lubricant. Claim 2 varies claim 1 by providing that fluorine is the only halogen in the fluorine-containing hydrocarbon (A). That is to say, the refrigerant must be an HFC. Claim 3 varies claim 1 by providing that the refrigerant must be R-134a. Lubrizol wishes to maintain claims 2 and 3 but accepts that it will be necessary for an amendment to be made to those claims if claim 1 is deleted. Claim 11 involves variation of the refrigerant disclosed in claim 10 and requires that the refrigerant must be R-134a. Claims 12 to 17 inclusive involve variation of the lubricant disclosed in claim 10. Claims 19 to 26 are all narrowing variations of claim 18 in which the variation relates to the lubricant. The variations of the lubricant in the claims involve changes in the definitions of those variables. The lubricants which are the subject of the patent are synthetic esters. Synthetic esters are the product of the reaction of acids with alcohols. The reaction produces esters and water. The process is referred to as esterification. The claims identify the classes of acids and alcohols which are capable of producing satisfactory esters. The essence of the alleged invention is the identification of a soluble organic lubricant which is suitable for use in refrigeration systems with HFCs generally and R-134a in particular. Putting it another way, the alleged invention is the identification of a lubricant having the properties described above in relation to HFCs generally and R-134a in particular. It is clear that as a purely intellectual exercise, this includes the mixtures of HFC's that are claimed as component (A) of claim 1 of the present application. Thus the intellectual component of the Lubrizol patent encompasses the present claims. But this is not sufficient to establish lack of novelty. In order to determine where the Lubrizol patent has planted its flag, it is necessary to ask what refrigerant compositions would the Lubrizol patent make public to the instructed reader. For this purpose it is necessary to look to the body of the description. Mixtures of HFC's are mentioned towards the end of the above quote. The intellectual content of the disclosure includes mixtures of HFC's, thus including compositions of the present application. I do not believe that mixtures of any fluorocarbons should be regarded as clearly disclosed. I consider it is reasonable to regard the citation as clearly disclosing mixtures of those fluorocarbons that are themselves specifically disclosed, either as individual components or components of mixtures. [In the present case, that is those that are identified by their code number, e.g. R-22, R-23, etc.] R-32 and R-125 are not specifically referred to in the description. Consequently, it is unlikely that a reader would consider that they had been taught mixtures of HFC's including R-32 or R-125. On this basis I consider that the Lubrizol patent does not disclose a mixture including either R-32 or R-125. The Lubrizol patent does not anticipate the present application. As this is not the case, the other documents are not relevant to this opposition. I observe that in ICI Chemicals v Lubrizol Corporation [1999] FCA 345 , 45 IPR 577 Emmett J concluded, apparently on the basis of a concession, that if the Lubrizol patent was valid it had been infringed when certain air conditioning and refrigeration systems were retrofitted using a refrigerant that was a ternary mixture of R-32, R-125 and R-134a and a lubricant that was a synthetic ester. The patent application requires at least 2 HFCs out of R-32, R-134a and R-125 and there is no mention of R-32 or R-125 in the Lubrizol patent. The answer to this argument in my view is that integer (A) of the invention of the Lubrizol patent is "a major amount of at least one fluorine containing hydrocarbon containing 1 or 2 carbon atoms" and the specification refers to mixtures of fluorine-containing hydrocarbons including binary and ternary mixtures. HFCs are fluorine-containing hydrocarbons. Even without the assistance of Professor Ball's evidence, I would have been inclined to conclude that integer (A) is to be understood as encompassing any mixtures of HFC containing one or two carbon atoms. Read as a whole, it seems to me, that the Lubrizol patent discloses an invention principally concerned with lubricants, albeit lubricants useful within refrigerant compositions. I understand the Lubrizol patent, as it seems to me that Emmett J did also, as disclosing in integer (A) of the invention a broad class of potential refrigerants, extending beyond those identified specifically in the preferred embodiments, with which the lubricant of integer (B) might be used. With the benefit of Professor Ball's evidence I am satisfied that a person skilled in the art to which the patent application relates would have so read it. The Lubrizol patent expressly refers to a fluorohydrocarbon mixture which does not include R-22. It cannot be understood as disclosing only mixtures which include R-22, an HCFC. In view of my earlier conclusions, it is unnecessary for me to give consideration to the issue of whether the Court may, in an appeal of this kind, allow an amendment to be made. The lubricant would be within claim 1 of Application 658005. 16 Branson J decided that the priority date was earlier than that claimed by the applicant. It was conceded that if that were the case, then the application was invalid. Amongst other things, it would plainly have been anticipated by Application 658005. However, Branson J went on to give consideration to the other grounds of opposition. Again, it was alleged that the Lubrizol patent anticipated the claims in question. He concluded, as he had in that decision that while the intellectual content of the disclosure includes mixtures of HFCs, thus including compositions of the present application, it did not in fact disclose a mixture including R-32, R-125 or R-227ea. For the reasons given in [68] above, I conclude that the delegate erred in reaching the above conclusion and that the Lubrizol Application does disclose ternary and higher mixtures of HFCs. Having regard to the highly particularised blends of refrigerants claims by the patent application, I conclude that it is not clearly established that the Lubrizol Application deprives the claims of novelty. The parties will have an opportunity to agree minutes of the orders to be made, including the order to be made as to costs. ICI sought leave to appeal pursuant to s 158(2) of the Patents Act. Integer (A) of the Lubrizol Patent requires that the liquid composition must comprise (in addition to a minor amount of a lubricant) a major amount of at least one hydrocarbon that contains both fluorine and one or two carbon atoms. That is to say, there are as many hydrogen atoms attached to the carbon atoms as possible and only single bonds exist between the carbon atoms. Thus, the specification states that each of the above three compounds is a fully saturated hydrocarbon chain. Each of them contains fluorine and each contains one or two carbon atoms. Thus, difluoromethane contains two fluorine atoms and one carbon atom. Tetrofluoroethane contains four fluorine atoms and two carbon atoms. Pentofluoroethane contains five fluorine atoms and two carbon atoms. Clearly, each of those compounds is encompassed by the description " fluorine-containing hydrocarbon containing one or two carbon atoms ". Thus, the use of a liquid composition described in Claim 1 of PA658005 is clearly disclosed by the Lubrizol Patent. That is to say, PA658005 is not an instance of the selection of something disclosed by the Lubrizol Patent by way of a further inventive step. It is no more than a particular example of the invention disclosed by the Lubrizol Patent. The correctness of that conclusion by the primary judge is attended with no doubt. Accordingly, there would be no utility in granting leave to appeal from her Honour's orders in relation to PA658005. In the circumstances, it is not necessary to consider the other ground upon which her Honour concluded that the opposition to PA 658005 should succeed. Divisional Applications are provided for by s 79B of the Patents Act. At that stage it was in identical form to the parent application. No notice of intention to file that Divisional Application was given to either Du Pont or the Court. The proceeding had been stood over by Branson J on 12 March 2002 to 5 April 2002 for submission of draft orders. It is noted that the specification of the current application is identical to the parent document. You will be contacted early in the new year to arrange a date for a hearing into the matter. A delegate of the Commissioner refused the Divisional Application on the basis it lacked novelty and refused an opportunity to propose further amendments. One ground of that decision was that there was an issue estoppel created by the judgment of Branson J but for the fact that the parties were not the same. ( Re Application by Imperial Chemical Industries PLC (2003) 60 IPR 610). Du Pont sought leave to appear before Crennan J as amicus curiae and submitted that it was an abuse of process for ICI to reargue before Crennan J a matter decided by Branson J. Leave was refused ( Imperial Chemical Industries Pty Ltd v Commissioner of Patents (2004) 213 ALR 399; (2004) 63 IPR 476; (2004) AIPC 92---055 at [36]). The matter proceeded in the absence of Du Pont. In making that ultimate finding of fact, it was not necessary for her Honour to deal with Claim 4 of the parent application, that is the claim to the specific ternary mixture of HFCs which the applicant now claims. Furthermore, her Honour's finding that integer (A) of the Lubrizol patent encompassed ternary and higher mixtures of HFCs and her implicit finding that the Lubrizol patent taught mixtures of HFCs is not to be confused with, or taken to be equivalent to, a much narrower finding that integer (A), or the Lubrizol patent as a whole, taught that is, disclosed for novelty purposes) the specific ternary mixture of HFCs which the applicant now claims. Her Honour made no such narrow finding and her judgment (at [144]) suggests to me that this was deliberate rather than constituting some inconsistency in her Honour's reasons. Such a narrow finding was unnecessary because it could not be said that the question of whether or not the Lubrizol patent taught the specific ternary mixture of HFCs now sought to be claimed "was a fact fundamental to the decision arrived at" as that phrase is explained by Dixon J. in Blair v Curran [1939] HCA 23 ; (1939) 62 CLR 464 at 532. For me to now consider that narrow issue, on evidence which was not before her Honour, cannot impugn her Honour's decision in relation to a much wider question of anticipation. Questions can arise as to whether such a broad claim in a patent (or even a divisional thereof) discloses, sub silentio, a particular compound from the broad class, which is the subject matter of a later application. In such cases, in the absence of a skilled addressee understanding or perceiving that the specific compound was part of what was taught by the patent or in the absence of an "enabling disclosure" of the particular compound claimed later, the earlier document does not necessarily disclose the particular compound claimed later, despite the fact that such a compound may be encompassed by a general disclosure. A sound account of the relevant distinctions between a "paper disclosure" and an "enabling disclosure" in the field of chemistry is given by Dr S D Barker in University of Georgia at 233 and 237. Not every disclosure is a "disclosure for novelty purposes. " Beecham's case, to which reference has already been made is apposite to this proceeding and illustrates this difficult point: Buckley LJ refers (at 288) to the fact that the parent patent in that case encompassed "the entire field of α-aminopenicillins . . . and literally thousands of these compounds could be made. " Buckley LJ also noted (at 286) that an inclusive claim in a patent of addition for "broad spectrum penicillins" must be treated as specifically claiming amoxycillin. Then (at 290), he found that the prior patent of addition contained " no disclosure or promise " or " teaching " that taught amoxycillin (emphasis added). Accordingly, there was no want of novelty, arising out of a paper disclosure in an inclusive phrase. Accordingly, I would find the present application, as proposed to be amended before the delegate, novel over the Lubrizol patent. In my view her Honour did not make any express finding on the subject matter of finding numbered (vi) above which I would regard as both careful and deliberate given her Honour's findings at [144] of her judgment. Accordingly, there is no genuine inconsistency between the finding numbered (vi) in [82] above and her Honour's conclusions in respect of the parent application. The Application was accepted on 15 March 2005. After advertisement, Du Pont filed the notice of opposition and correspondence followed between the parties in which Du Pont asserted, and ICI denied, that the decisions of Branson J and the Full Court created issue estoppels as to novelty which bound the conduct of the opposition proceedings. That denial led to the present proceeding for a declaration and other relief. The decision by Branson J as to the lack of novelty of Application 658005 was entirely based upon consideration of claim 1 in the light of the Lubrizol patent and the Full Court, on the leave application, approached the matter in the same way. Branson J noted that claim 1 was the only independent claim and dealt with it. It followed that all dependent claims, including claim 4, fell with the invalid principal claim 1. The fact that ICI might have sought to amend claim 4 is not relevant. It did not do so. What Crennan J called the narrow question simply never arose before, and was not considered by, Branson J. This explains the apparent contradiction between the approach to novelty taken in relation to Application 654176, on the one hand, and Application 658005 on the other, in the same set of reasons. When Branson J focused upon the refrigerant aspects of claim 4, she approached the issue in the same way and reached the same conclusion in substance as that later reached by Crennan J. If Du Pont's analysis were correct, the inconsistency between the two approaches by Branson J would be startling. Furthermore, it would be surprising if Branson J and the Full Court had dealt with the question of novelty of claim 4 of Application 658005 in the pre-emptory way that they respectively did if it had been considered as an independent claim. It is most unlikely that either would have disposed of the question without even noticing or discussing the issues which would clearly arise in that event, as exemplified by the decision of Branson J in relation to Application 654176 and Crennan J in relation to the Divisional Application in suit here. 29 As there is no identity between any issue found by Branson J, confirmed by the Full Court, on the one hand, and any issue for determination in the present application, on the other, there can be no issue estoppel ( Kuligowski v Metrobus [2004] HCA 34 ; (2004) 220 CLR 363 at [21] , [40]---[54]). 30 I cannot see that the questions raised by Du Pont as to the propriety of the filing of the Divisional Application by ICI have any relevance to establishing the issue estoppels pleaded. 31 The proceeding should be dismissed. The applicant is to pay the costs of the respondents. | issue estoppel no identity between issues patents amended divisional application accepted by delegate of commissioner for patents no issue estoppel arising from previous court finding of lack of novelty in relation to dependent claims of parent application estoppel intellectual property |
Sylvania is a platinum group metals (PGM) producer with tailings pre-treatment operations and shallow mining exploration interests located in South Africa's PGM-rich Bushveld Igneous Complex. Sylvania is listed on the Australian Stock Exchange Limited (ASX) and the Alternative Investment Market (AIM) on the London Stock Exchange. GAU is a mining exploration entity focussed on PGM projects in the Bushveld Igneous Complex in South Africa. GAU is listed on the ASX. GAU at material times had 132,941,627 shares on issue. On 11 May 2009, Sylvania announced an offer to acquire all of the fully paid ordinary shares in GAU on the basis of one Sylvania share for every 18 GAU shares. On 10 June 2009, Sylvania announced that it had increased the consideration payable to GAU shareholders to one Sylvania share to every 12 GAU shares. Based on the latest traded price of Sylvania shares (A$0.99) and GAU shares (A$0.049) on the ASX immediately prior to the announcement of 11 May 2009, the GAU offer represented an implied value of approximately A$0.0825 per GAU share and a premium of 68% on the pre-announcement price of a GAU share. On 30 June 2009, Sylvania and Ruukki Group Oyj (Ruukki) entered into a Merger Implementation Agreement (MIA) and announced a proposed merger between Sylvania and Ruukki by way of a scheme of arrangement between Sylvania and its shareholders. The offer of one Ruukki share for each 1.81 Sylvania shares as proposed represented a premium of 28% to the Sylvania share price on 29 June 2009 and a premium of 44% to the Sylvania 30 day volume weighted average price prior to 29 June 2009. On 3 July 2009, Sylvania lodged a bidder's statement in respect of the GAU offer with the Australian Securities and Investments Commission (ASIC). On 10 July 2009, Sylvania advised ASX that the bidder's statement had been dispatched to GAU shareholders. The bidder's statement recorded 10 July 2009 as the date of the GAU offer and that the GAU offer would close on 11 August 2009 at 5pm western standard time (WST) unless extended or withdrawn in accordance with the CA. By way of an announcement to the ASX on 31 July 2009, Sylvania declared the GAU offer unconditional. The announcement advised that as at 7.30am WST, Sylvania's relevant interest in GAU was 54.41%. On 3 August 2009, Sylvania gave notice to ASX in accordance with s 630(3) of the CA, of the status of defeating conditions under the bidder's statement. The announcement stated that the GAU offer was scheduled to close at 5pm WST on Tuesday 11 August 2009 and encouraged remaining GAU shareholders to accept the GAU offer as soon as possible. It also noted that as at 3 August 2009, Sylvania's relevant interest in GAU was 55.66%. A copy of the 3 August 2009 notice was also sent to GAU. On 4 August 2009, Sylvania's relevant interest in GAU had increased to 57.23%. On 6 August 2009, Sylvania's relevant interest in GAU had increased to 58.79%. On 7 August 2009, Sylvania's relevant interest in GAU had increased to 64.17%. On 10 August 2009, the day before the GAU offer was scheduled to close, Sylvania's relevant interest in GAU had increased to 71.03%. On 11 August 2009, the day the GAU offer was scheduled to close, there was a large number of acceptances. Sylvania's relevant interest in GAU increased to 89.82%. On 12 August 2009, Sylvania announced to the ASX that the GAU offer set out in the bidder's statement had closed at 5pm WST on 11 August 2009. As Sylvania did not have a relevant interest in the GAU of 90%, Sylvania advised the ASX in the announcement dated 12 August 2009 that compulsory acquisition under s 661A(1) of the CA would not proceed. Mr Grant Michael Button, Director and Joint Company Secretary of Sylvania, explained in his affidavit made 13 August 2009 in support of the originating process and read in the proceeding, why the plaintiff now seeks an order extending the period for acceptance of the GAU offer, or, in the alternative, obtaining the approval of the Court to compulsorily acquire the remaining securities. Mr Button says that at no time during the course of 11 August 2009 did he or the other directors of Sylvania receive any indication that such a large level of acceptances had been received. He says that if he had been informed in advance of the closing time of the increase in the relevant interest to 89.82%, he would have taken steps to extend the time for acceptance of the GAU offer before the closing of the bid. Mr Button says that on 12 August 2009 at 2.31pm WST, he and other Sylvania directors received an email from Computershare informing them that it had been brought to Computershare's attention that there was an additional acceptance of 50,000 shares which should have been processed on 11 August 2009, bringing Sylvania's total relevant interest to 89.86%. Mr Button says that he has also been informed by another director of Sylvania, Richard Rossiter and believes that Mr Rossiter was told by Roger Evans, on behalf of Ecrohold Pty Ltd, a GAU shareholder, that he had received notice on 12 August 2009 that his acceptance for 100,000 shares was defective and was not processed. In addition, Mr Button says he and other Sylvania directors are aware of a number of acceptances amounting to an additional 847,750 shares that were lodged after 5pm WST on 11 August 2009. A spreadsheet provided by Computershare on 13 August 2009 setting out the number of invalid acceptances was produced. Mr Button says at the date of his affidavit, Sylvania's relevant interest in GAU stands at 89.86%. He says that he and the other directors of Sylvania reasonably expect that an extension of the period for acceptance for two weeks time will then allow Sylvania's relevant interest in GAU to increase beyond 90%, which will allow Sylvania to compulsorily acquire the remaining shares in GAU under the operation of Pt 6A of the CA. Mr Button says he is not aware of any prejudice that will be caused to, or suffered by any party as a consequence of the extension of the period for acceptance of the GAU offer. Mr Button says it is his belief that if the offer period is not extended those GAU shareholders who have not had an opportunity to accept the GAU offer will, in the circumstances, suffer detriment. He says he believes this because Sylvania holds an 89.86% relevant interest in the GAU shares and will in any event, whether the application is successful or not, be able to reach the 90% compulsory threshold either in accordance with the "creep" provisions in s 611(9) of the CA pursuant to which Sylvania can increase its holding to 90%, or in accordance with a minimum holding buyback pursuant to ASX Listing Rule 3.8A and s 257B of the CA, which is a buy back of shares if the shares are less than a marketable parcel as defined in the ASX Listing Rules. Sylvania could then proceed to compulsory acquisition under the general powers in s 664A of the CA. Mr Button further points out that GAU has consented to the application to extend the period for acceptance of the GAU offer. A copy of a letter dated 13 August 2009 signed on behalf of GAU to that effect, was produced by Mr Button. A trading halt of the GAU shares was implemented at 12pm WST on 13 August 2009. As at the date of Mr Button's affidavit, there had been no trade in GAU shares since the closing of the offer period at 5pm WST on 11 August 2009. On 13 August 2009, Sylvania made an announcement to the ASX that it proposed to lodge an urgent application with the Court for orders extending the period for acceptances under the GAU offer and if the orders were made, Sylvania will issue a notice to ASIC, the ASX and all remaining GAU shareholders confirming that the GAU offer remains open. The affidavit of Ms Meredith Nancy Campion, legal practitioner, was also lodged in support of the originating process and formally read in the proceedings. Ms Campion is a partner at Clayton Utz, solicitors for Sylvania and has the carriage of the matter on behalf of the plaintiff. She explained that Radar Group Pty Ltd (Radar) was engaged with her assistance by Sylvania to assist with communication to GAU shareholders, following the announcement of the bid by Sylvania on 11 May 2009 and in connection with the bidder's statement despatched to GAU shareholders on 10 July 2009 (GAU offer). After the GAU offer closed, Sylvania, with the assistance of Ms Campion commissioned Radar to prepare a report in relation to the remaining shareholders in GAU. Radar contacted, or attempted to contact, the GAU shareholders who did not accept the GAU offer to ascertain whether those shareholders would be in favour of receiving the consideration offered by Sylvania under the GAU offer for their GAU shares. On 19 August 2009, Ms Campion received from Radar the report by Jonathon Younger, Managing Director of Radar, addressed to Sylvania, a copy of which Ms Campion produced annexed to her affidavit. The Radar report notes the following: 371 shareholders, holding 7.90% of the total shares on issue in GAU, were not contactable; of the 55 GAU shareholders asked the question "May I ask whether you would be interested in accepting the Sylvania Offer if Sylvania were able to extend the offer period? ", 35 GAU shareholders (representing 0.92% of the total number of GAU shares on issue) answered "yes", while 20 GAU shareholders (representing 0.26% of the total number of GAU shares on issue) answered "no"; and of the 61 GAU shareholders asked the questions "Would you be opposed to Sylvania proceeding to compulsory acquisition if you would receive the same consideration under the offer? ", 45 GAU shareholders (representing 0.90% of the total number of GAU shares on issue) answered "no", while 16 GAU shareholders (representing 0.38% of the total number of GAU shares on issue) answered "yes". Further, and alternatively an order that under s 661A(3) of the CA, the plaintiff may compulsorily acquire the remaining securities in the target company. Sylvania through its solicitors provided ASIC with copies of the originating process and supporting documentation. By email dated 19 August 2009, Stefan Pfeifle, Senior Lawyer Emerging, Mining and Resources at ASIC provided comment on the plaintiff's originating process and requested the plaintiff's solicitors to bring that comment to the attention of the Court, which the plaintiff's solicitors duly did. ASIC considers that the procedure for extending offer periods in s650C of the Act reflects this purpose by giving certainty to the market as to the circumstances in which an offer period may be extended. It is not analogous to the circumstances in Blaze Asset Pty Ltd v Target Energy Ltd where the market was informed that the offer period had been extended and the irregularity related to posting material to ASIC rather than lodging it with ASIC. Further, in ASIC's experience, it is not unusual for there to be a relatively high level of acceptances in the final stages of a bid. It is important for the market to be certain whether or not a bid has ended. ASIC, consistent with the advice provided to the plaintiff's solicitors did not appear at the hearing of the proceeding. First, the Court needs to determine whether, having regard to the circumstances of the case and the general objects of the CA it is appropriate to make an order extending a relevant period, or abridging a relevant period. Secondly, if those circumstances are made out, then the Court must address the question whether any substantial injustice has been or is likely to be caused to any person by the making of such an order. Questions of deliberate strategy and inadvertence may fall for consideration. However, it should be noted that s 1322(4)(d) does not condition the exercise of the Court's power on an applicant showing its conduct was due to inadvertence. In this regard, s 1322(4) may be contrasted with s 1325D under which the Court may declare any act, document or matter not invalid by reason of contravention of a provision of Ch 6, 6A, 6B or 6C, where regard must be had to whether the contravention was caused by a person's inadvertence or mistake, not having been aware of the relevant fact or occurrence, or circumstances beyond the control of the person. In my view, it is clear that mere "inadvertence" is not the sole or a governing criterion by which the Court may be moved to exercise its power under s 1322(4)(d), even though such a factor may be considered relevant. There is no doubt that s 1322 is intended to be exercised liberally, so as not to unreasonably stifle corporate and financial activity; that is to say, restrict such activity merely on technical grounds: Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd [2001] NSWCA 427 ; (2001) 166 FLR 144 , Giles JA (with whom Beazley JA agreed) at [74]; Re Insurance Australia Group Ltd [2003] FCA 581 ; (2003) 128 FCR 581 at [27] per Lindgren J; R e Wave Capital Limited [2003] NSWCA 131 ; (2003) 21 ACLC 1 , 995, French J at [30]; Re MacMahon Holdings Limited [2008] FCA 1079 , McKerracher J at [21]. But as it happened, the events of 11 August 2009, in terms of acceptances, did not come to the plaintiff's notice until after the end of the offer period. An opportunity was missed to extend the offer period. Counsel submits that no injustice is ascertainable as a consequence of the extension of the offer period. Counsel however accepts that it is true that the plaintiff waited until the last minute before considering whether to extend the offer period. He submitted that this was because there was no expectation of attracting the operation of s 661A of the CA. However, this should not be seen as a contemptuous disregard of s 650C. Counsel says it was more of a case of the plaintiff not being aware of the relevant occurrence and the resultant lost opportunity. Counsel submits there has been no delay. Consequently, counsel submits that the case is one of "missed opportunity" due to a lapse in the information available to the plaintiff. As noted above, ASIC have conveyed their comments about this aspect of the plaintiff's application in respect of which it has expressed "concerns". ASIC rightly point out that this case is not analogous to the circumstances in Blaze Asset Pty Ltd v Target Energy Limited where the market was informed that the offer period had been extended and the irregularity related to posting material to ASIC rather than lodging it with ASIC. ASIC also point out that although Sylvania did not know of the final level of acceptances until the end of the offer period, this will often be the case for many bids. In ASIC's experience, it is not unusual for there to be a relatively high level of acceptances in the final stages of a bid. ASIC, in summary, has expressed concern that extending the offer period in circumstances where no action to extend that bid was taken prior to the bid period, may conflict with the general principle in s 602(a) of the CA that takeovers take place in an efficient, competitive and informed market. It is important for the market to be certain whether or not a bid has ended. In my view, the plaintiff has not identified circumstances that should enliven the discretion of the Court under s 1322(4)(d) to extend the time for giving a notice under s 650C of the CA. I note and accept generally the propositions put forward on behalf of ASIC. In particular I accept the observation that it will be the case for many bids that the final level of acceptances are not known until the end of the offer period. I also accept that in ASIC's experience it is not unusual for there to be a relatively high level of acceptances in the final stages of a bid. In my view, a bidder, in such circumstances as the plaintiff here found itself, must be prepared to act appropriately and quickly as circumstances develop. In this case, as a result of the business or commercial judgments exercised by or on behalf of Sylvania, no steps were taken, albeit it was late in the piece to extend the offer period. It seems to me not appropriate, in such a case, that the bidder should expect that the Court will step in to remedy the lack of business or commercial judgment of the bidder to provide a further opportunity to extend the period of the offer. For the Court to be prepared to intervene after the event in such a circumstance would introduce an additional element into takeover practice that would be calculated to introduce unnecessary uncertainty in the market. In these circumstances, there is no relevant fact or circumstance illustrated by the evidence that should lead to the Court making an order along the lines sought. Accordingly, the application for an order in terms of para 2 of the orders sought should be refused. Division 1 deals with compulsory acquisition of bid class securities. This is so even if the bidder subsequently ceases to satisfy subparagraph (b)(i) because of the issue of further securities in the bid class. Note: Subsection 92(3) defines securities for the purposes of this Chapter. (2) For the purposes of subsection (1), disregard any relevant interests that the bidder has merely because of the operation of subsection 608(3) (relevant interest by 20% interest in body corporate). (5) This section has effect despite anything in the constitution of the company whose securities are to be acquired. It is in these circumstances, that Sylvania, under the takeover bid, by way of alternative relief seeks the approval of the Court to compulsorily acquire securities in the bid class. Surprisingly, there is apparently no authority providing guidance on the exercise of the Court's power to give its approval under s 661A(3). The terms of s 661A(3) on their face do not suggest any particular limitations, restrictions or qualifications on the exercise of the Court's power to grant approval. However, in accordance with usual principles, it is plain that such an approval power should be exercised having regard to the apparent purposes of the approval power created by the Parliament, to the context in which it appears in Pt 6A.1 of the CA, as well as generally to the objects and purposes of the CA as a whole. Note 1: To achieve the objectives referred to in paragraphs (a), (b) and (c), the prohibition in section 606 and the exceptions to it refer to interests in 'voting shares'. To achieve the objective in paragraph (d), the provisions that deal with the takeover procedure refer more broadly to interests in 'securities'. Note 2: Subsection 92(3) defines securities for the purposes of this Chapter. In DB Management the Court had to construe provisions of Ch 6 of the then Corporations Law (NSW) which regulated the acquisition of shares in companies, which are not dissimilar to the current provisions of Pt 6 of the CA. Section 701 enabled an offeror to acquire compulsorily outstanding shares after a takeover if certain conditions were satisfied. Section 703 dealt with the rights of holders of non-voting shares, renounceable options and convertible notes. Section 703(8) gave those holders the right to require the offeror to acquire their shares, options and convertible notes within three months of notice being given by the offeror that the offeror became entitled during the takeover period to not less than 90% of the voting shares in the company. Section 728(1) empowered ASIC to exempt a specified person or persons or specified class or classes of persons from compliance, either generally or in a particular case or classes of cases with Ch 6 or a specified provision or provisions of that Chapter. Section 730(1) empowered ASIC on application by the person or persons concerned or by a person or persons included in such a class or classes to declare in writing that Ch 6 should apply in relation to a specified person or persons or a specified class or classes, either generally or in a particular case or classes of cases, as if the specified provision or provisions of that Chapter were omitted or were modified or varied in the specified manner, and when such a declaration was made, Ch 6 applied accordingly. Section 731 directed ASIC in exercising its powers under s 728 and s 730 to take into account the desirability of ensuring that the acquisition of shares in companies took place in an efficient, competitive and informed market. The Court held that s 730(1) could be used to modify or vary s 701 in such a manner as to confer a right of compulsory acquisition of shares, allotted after an offer period, pursuant to the exercise of an option. It also held that the part referred by s 730(1) was not limited to the making of declarations affecting the person or persons who applied for a declaration under that section. The Court took account of the legislative history of the provisions under consideration. That is what compulsory acquisition is about. As the legislative history referred to above shows, the object of the legislation is to provide a regulatory scheme which enables a takeover offeror, who has achieved a prescribed level of acceptances, to compel people who have not accepted the offer to transfer shares, subject to appropriate safeguards to protect their interests. It is of little assistance, in endeavouring to work out the meaning of parts of that scheme, to invoke a general presumption against the very thing which the legislation sets out to achieve. Rather, the effect of giving the words of s 730 a literal meaning is that, although there is no such right which may be invoked by an offeror without need for further justification, the Commission has a discretionary power to create such a right, to be exercised in the light of the Eggleston principles and any other relevant considerations, having regard to the individual circumstances of a particular case, and subject to the possibility of judicial review. The Court, at 341 [47], confirmed that there was no warrant for giving the words of s 730 a meaning other than their literal meaning. Under the regulatory scheme considered by the Court in DB Management , as presently under Pt 6 of the CA, a disaffected or dissident minority shareholder could, and can seek administrative review of a decision of ASIC. In fact, when ASIC granted the modifications sought by Southcorp Wines Pty Limited in its takeover offer for the outstanding shares in Coldstream Australasia Ltd, including a right for a dissenting converting option holder to apply for relief in the manner contemplated by s 701(6) of the then Corporations Law , DB Management applied to the Administrative Appeals Tribunal (AAT) to review the decision of ASIC to make the declaration. That decision was affirmed by the AAT. DB Management then appealed from the AAT decision to the Federal Court of Australia pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), the decision of the primary judge (Whitlam J) dismissing the appeal was then the subject of a further appeal to the Full Court of the Federal Court, which was allowed. Ultimately, the High Court allowed the appeal against the Full Federal Court's decision. An issue pressed in DB Management concerned the right of an affected shareholder to be heard in opposition to the making by ASIC of the declarations sought. In the present case, the respondent option holders made submissions to the Commission opposing the declaration sought, and were heard before the Tribunal. Part 9.4A of the Law, which provides for review by the Tribunal of a decision by the Commission, requires, in s 1317D, that a person whose interests are affected by a decision must be informed of that person's right to have the decision reviewed by the Tribunal. The requirements of procedural fairness are not displaced by the statute [footnote omitted]. This latter provision was introduced as part of the Corporate Law Economic Reform Program Bill 1998 (Cth). The Explanatory Memorandum that accompanied the Bill provided a summary of key amendments proposed by the Bill. Consistent with the CASAC Legal Committee recommendations, both ASIC and the courts will be able to reduce the threshold in appropriate cases. 7.2 A majority shareholder will be able to apply to the Court to commence a compulsory acquisition where the compulsory acquisition threshold has not been satisfied (proposed subsection 661A(3)). The power has been added to the Bill to give additional flexibility to the compulsory acquisition procedure and to remove some of the arbitrariness of the 90 per cent threshold, particularly at the margin. Even more so, if a takeover offer was made for the placed shares and rejected. Regardless of how many securities holders apply to the court to stop an acquisition, once the court makes a decision in relation to one of them, that decision applies to all future or pending applications before the court on the particular compulsory acquisition (proposed subsection 661E(3)). Generally speaking, as the Explanatory Memorandum indicates, this power was created by the Parliament "to give additional flexibility" to the compulsory acquisition procedure and to "remove some of the arbitrariness of the 90 per cent threshold, particularly at the margin". As just noted, this was not a power that existed earlier or previously existed in the Court. The CASAC Legal Committee recommendations referred to in para 7.1 of the Explanatory Memorandum were those in the Legal Committee of the Companies and Securities Advisory Committee, Compulsory Acquisitions Report, January 1996. Should any such right include, or be confined to, instances where untraceable shareholders prevent the fulfilment of that test? Should any right to seek court approval substitute for, or be in addition to, the right in such cases to seek an ASC modification under s 730? It may be appropriate for compulsory acquisition to proceed even though the requisite test has otherwise not been fulfilled. The right to seek court approval should be in addition to the right to seek an ASC modification under s 730. However, the ASC may wish to make submissions to the court on relevant policy issues. It should have standing in any such application. [footnote omitted] The Commission further considered that the court should be able to deal with matters on the merits and not simply review any administrative decision of the Commission. Given this, the ASC should have the right to require an application to be determined by the court. 2.61 The Law Council said that this right should be in addition to the right to seek an ASC modification under s 730. This right should not be confined to instances where the presence of untraceable security holders prevents reaching the threshold. It should be in addition to the right to seek an ASC modification under s 730. The ASC should have the right to require that an application be dealt with by the court. It is clear enough from the terms of s 661A(3) itself, the purposes of Pt 6 of the CA set out above, generally speaking, and in particular the terms of the Explanatory Memorandum, supplemented by the recommendation of the Compulsory Acquisitions Report of the Legal Committee of the Companies and Securities Advisory Committee (January 1996), that Parliament did not intend there should only be a limited range of categories or circumstances in which the Court might consider that its approval to compulsory acquisition under s 661A(3) should be given. For my part, I would not seek to provide any exhaustive statement of the facts or circumstances that might be relevant to the exercise of the Court's power to give approval under s 661A(3). As noted, the Explanatory Memorandum makes it clear that this is a power that might, amongst other things, be exercised "at the margins". In my view, the present case is such a case. As explained above, when the offer closed at 5pm WST on 11 August 2009, the plaintiff's relevant interest was 89.86%. However the data relied on by the plaintiff's for 11 August 2009 as to the number of acceptances was only available for consideration after the end of the offer period, on 11 August 2009 at 5.13pm WST and thereafter on 12 August 2009. On 13 August 2009, the plaintiff became aware of the late acceptances. Just taking the acceptances position as it actually was at the close of the offer, it may be seen that this is a case at the margins. A 90% acceptance was required to trigger the compulsory acquisition procedure under s 661A(1). The actual percentage of acceptances was 89.86% at the close time. Thus, the plaintiff fell short by 0.14% from being in a position to act under s 661A(1). I consider this marginal factor, in all the circumstances of this case, to be sufficient to permit the Court to exercise its approval power, subject to any factors militating against the exercise of the approval power. However, there is an additional factor that I think is also relevant to the exercise of the approval power in this case. The facts show that if the late acceptances had been taken into account, the plaintiff's relevant interest in GAU at the end of the offer period, would have been 90.59%. I think this is relevant because it rather suggests to the Court that, rather than the plaintiff having struggled to achieve acceptances of nearly 90%, there was in fact growing support for the takeover. I note the survey evidence of Radar. I give it but passing consideration in this case, although it does suggest there is no significant opposition to the plaintiff's takeover. Given that the Parliament had in mind that the power under s 661A(3) to grant approval to a compulsory acquisition process in relation to a takeover might be utilised where a case falls at the margins, I consider approval to the compulsory acquisition process should, in principle, be given in this case. The final question is whether there is any, what might be called, disentitling conduct or factors that should lead the Court not to exercise its discretion. On the material before me, and the Court having brought to the attention of counsel for the plaintiff the need effectively to make full and proper disclosure of any such matters, there is no particular evidence of any contentious event or circumstance involving minority shareholders, of the type that gave rise, for example, to the litigation in DB Management . Rather, this is a case where, as noted, GAU does not oppose orders being made, either to extend the offer period under s 1322 or the giving of approval to compulsory acquisition process under s 661A(3). In all the circumstances, I do not consider that there is any evidence or any circumstance to be inferred to suggest that some injustice would be caused to some minority shareholder (or other person) if the Court were to give its approval to the compulsory acquisition process at this point. In that regard, I note that, unlike the position that pertained in the circumstances of DB Management where a dissident shareholder was able to seek administrative and later judicial review of the decision of ASIC to modify provisions of the then Corporations Law concerning a takeover, which right is retained in like circumstances under the CA (Pt 9.4A CA), there is no express right given to any person such as a minority shareholder to seek review of or intervene, or appear as an interested person in proceedings in the Court commenced under s 661A(3). No doubt the Court, under its general powers under the Federal Court of Australia Act 1976 (Cth) could require notice of originating process to be given to minority shareholders generally or particular persons who appear to have a special interest in the matter, but the CA does not in its own terms require it. Rather, as the Explanatory Memorandum set out in detail above discloses, in relation to the role of the Court in compulsory acquisition disputes, "the role of the Court will be to determine a fair price for the securities". A minority shareholder who opposes a compulsory acquisition proceeding under s 661A(3) has the opportunity to both object to the compulsory acquisition and to be heard on the question of value. Section 661B(1) provides that to compulsorily acquire securities under subs 661A(1) or subs 661A(3), the bidder must prepare a notice in the prescribed form that, firstly, informs the holders of securities that the bidder is entitled to acquire their securities under the relevant subsection and, secondly, informs the holders about the compulsory acquisition procedure including their right under s 661E to apply to the Court for an order that the securities not be compulsorily acquired. Section 661E(1) enables the holder of securities covered by a compulsory acquisition notice under s 661B to apply to the Court for an order that the securities not be compulsorily acquired. Under s 661E(2) the Court may order that the securities not be compulsorily acquired, but "only if the Court is satisfied that the consideration is not fair value for the securities". It should be noted that Pt 6A.2 deals with general compulsory acquisitions and buy outs and includes the holder's right to object to the acquisition (s 664E) and the Court's power to approve the acquisition (s 664F). In circumstances where a holder has a right to object and the Court to consider fair value under s 661E of Pt 6A.1 of the CA, I consider that the terms of Pt 6A.2 in this regard do not apply to a compulsory acquisition that occurs upon the approval of the Court even under s 661A(3). I further consider that in circumstances where the Parliament has provided for a minority shareholder to have the right to object and for fair value to be considered by the Court, it is not a necessary part of the legislative scheme that the Court, when considering an application for approval under s 661A(3), should provide for notice of the application for approval to be given to shareholders generally or shareholders who have not accepted the offer made in the takeover to date. The regulatory scheme, in my view, is founded on the understanding that, in circumstances where the Court considers it is appropriate to grant approval to compulsory acquisition under s 661A(3), then the compulsory acquisition should proceed on the understanding that the affected minority shareholders will subsequently be entitled to object to the acquisition and the Court to consider the question of fair value. As the High Court observed in DB Management , by reference to the legislative history of compulsory acquisition procedures in the United Kingdom and Australia, at 332 [21], such schemes are designed to prevent the "oppression of the majority by a minority". In my view, it follows that compulsory acquisition should be able to proceed with due expedition. I will hear from counsel as to the final terms of the orders to be made. I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | application for orders under s 1322(4) and s 661a(3) of the corporations act 2001 (cth) application for order under s 1322(4)(d) dismissed application for order under s 661a(3) granted corporations |
Relevantly, the applicant ("White"), a limited partnership, is the lessee of premises situated at Australia Fair Shopping Centre in Southport where it carries on a pharmacy business. It is approved, pursuant to s 90 , to supply pharmaceutical benefits from those premises. On or about 5 February 2007 the second respondent ("Verrocchi") entered into a lease of premises in Scarborough Street, Southport (the "Scarborough St premises") in relatively close proximity to those occupied by White. On 27 February 2007 Verrocchi commenced to carry on the business of a pharmacy at the Scarborough St premises. On 26 March 2007 a delegate of the Secretary granted him an approval to supply pharmaceutical benefits from those premises, acting pursuant to s 90. That decision is the subject of this application. 3 At all material times the Scarborough St premises were zoned pursuant to the Gold Coast Planning Scheme and the Integrated Planning Act 1997 (Qld) (the "Planning Scheme") for use as commercial premises but had not been approved for use as a shop, the use appropriate to use as a pharmacy. Under the Planning Scheme use as a shop is as a "self-assessable development", provided that the premises comply with applicable codes. This seems to mean that the occupier must decide whether the proposed use is permissible by assessing compliance with such codes. In the event of non-compliance, the occupier must apply for an appropriate permit. One applicable code was the Car Parking, Access and Transport Integration Code. To comply with this it was necessary that Verrocchi provide 6.7 car parking spaces per 100 square metres of gross floor area at the Scarborough St premises. This translated into a requirement that he supply 25 car parks. Only six car parking spaces were available. Thus the premises could not lawfully be used as a shop unless an appropriate permit had been obtained. No such permit was obtained. 4 These factual matters were, as I have said, agreed between the parties. Presumably acting upon that basis Rackemann DCJ, sitting in the Queensland Planning and Environment Court, concluded that the Scarborough St premises could only be used as a pharmacy if an appropriate permit had been obtained. I proceed upon that basis. 5 White submitted that in those circumstances s 90(4) deprived the Secretary of authority to grant approval to Verrocchi pursuant to s 90(1) with regard to the Scarborough St premises, he not being permitted under the law of Queensland to carry on business at those premises. The case has proceeded upon the basis that the words "carry on business" in s 90(4) mean to carry on the business of a pharmacist. 6 Whilst White's argument seems to be substantial, it is inconsistent with the decision of the Full Court in Secretary, Department of Health, Housing, Local Government and Community Services v Kaderbhai [1994] FCA 1197 ; (1994) 51 FCR 416. In order to understand this decision and some others, it is necessary to understand that at least until 30 June 2005 the Secretary could exercise the power conferred by s 90(1) only if the Australian Community Pharmacy Authority (the "Authority") established under s 99J of the National Health Act had recommended that such approval be granted. (See s 90(3B). ) Pursuant to subs 90(3C), that section and certain other subsections of s 90 were to cease to have effect not later than 30 June 2005. It is not necessary for me to address the current status of those provisions. Until 1995 the Authority was known as the "Pharmacy Restructuring Authority", the present name being adopted pursuant to the National Health Amendment Act 1995 (Cth). 7 In Kaderbhai , the Authority had recommended that a particular application not be approved upon the basis that no public need had been demonstrated. As a result the application was rejected by the Secretary's delegate. The relevant applicant applied to the Administrative Appeals Tribunal (the "AAT") for review of the Authority's recommendation and of the Secretary's decision. The AAT set aside both the recommendation and the decision. Both the Secretary and the Authority appealed from that decision to this Court. It does not say that the Secretary shall not approve a pharmacist whose premises are not approved and who is not registered as the owner of the relevant business under State or Territory law relating to control of pharmacies. At first glance it may seem to amount to no more than an expression of intention that the Act should not displace any such State or Territory law in accordance with s 109 of the Constitution . The Secretary, however, evidently takes the view that s 90(4) operates as a limitation on power and that an applicant must show that he is permitted under a law, such as the Pharmacy Act, to carry on business at the premises in respect of which approval is to be granted. The Secretary is plainly correct. The expression "Nothing in this section authorizes" signals a limitation on power. This expression is similar to the language limiting the legislative power of the Parliament employed in s 51(xxiiiA) of the Constitution . The permission contemplated by s 90(4) must be specific to "that pharmacist" in respect of the premises for which approval is to be granted. The permission required is not of a town planning or land use type, which would relate only to the premises. Because of the disempowering effect, the subsection requires the Secretary to at least consider whether a proposed approval would be nugatory where by reason of State law the pharmacist would not be permitted to carry on business at the proposed premises. The reason for this view appears to have been that s 90(4) was concerned with permission for the pharmacist to carry on business at particular premises, and not with any general limitation upon the use of such premises. White submitted that the passage in question was not a necessary part of the reasoning process in that case and that it should not be treated as binding for present purposes. Even if it is not part of the ratio of the case, it is a clear statement concerning the construction of the subsection. It was followed by Carr J in Battalis v Secretary, Department of Health, Housing and Community Services (1994) 34 ALD 483 at 488-489. Carr J considered that the relevant passage was part of the ratio of the decision. 9 White referred to two decisions of Judges of this Court in support of its interpretation of s 90(4). The first of these was the decision of French J in Chatfield . It is curious that the decision should be cited as being contrary to that in Kaderbhai , particularly as the passage relied upon was approved by the Full Court in that case. French J considered that "... the Secretary has no power to make an approval where State law would not permit the pharmacist to carry on business at the subject premises. " (Emphasis added) Whatever French J may have intended, the Full Court apparently considered that the statement was consistent with its decision in Kaderbhai . 10 White also referred to the decision of Kiefel J in Australian Community Pharmacy Authority v Eaves; Lowe v Australian Community Pharmacy Authority & Ors (1997) 47 ALD 664 at 667 and 669. That case was concerned only with a decision of the Authority, and not with a decision of the Secretary. The Authority was required to act in accordance with rules made by the Minister. One such rule provided that the Authority was to recommend approval if the pharmacist had demonstrated that he or she had a right to occupy the relevant premises. It was submitted that the right to occupy must include the ability lawfully to use the premises as a pharmacy. Kiefel J rejected this view, holding that the requirement of a right to occupy should not be given such an extended meaning. Her Honour seems to have accepted that the absence of town planning approval would be a relevant matter for consideration by the Secretary in deciding whether to grant an approval pursuant to s 90(1). It is, however, not clear that her Honour considered that absence of such approval would deprive the Secretary of power to grant approval. Her Honour was not referred to the decision in Kaderbhai . 11 The point involves construction of s 90(4) and concerns the circumstances in which the subsection operates to deny the Secretary authority to grant approval pursuant to s 90(1). White submitted that a town planning restriction was sufficient to activate the subsection. In Kaderbhai , the Full Court held, or at least proceeded upon the basis, that only a law of a State which prevented the relevant pharmacist from carrying on the business of pharmacy at the premises was relevant to the operation of the subsection, and that a town planning restriction upon use of the premises was not sufficient. None of the cases seems clearly to support White's submission, and Kaderbhai is to contrary effect. I am by no means satisfied that the decision in Kaderbhai was wrong. Whether the relevant passage in Kaderbhai be obiter or part of the ratio of the case, I should follow it, leaving it to the Full Court or the High Court to determine its correctness. 12 In the course of the hearing, I raised a question concerning White's standing as an applicant. I am satisfied that it had appropriate standing. 13 The application should be dismissed with costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. | power of the secretary to approve a pharmacist to supply pharmaceutical benefits limitations on that power imposed by s 90(4) administrative law |
I reserved the costs of the interlocutory process for submission by the parties. The application for extension of the orders presently applicable in relation to the eleventh defendant, Rold Corporation Pty Ltd (Rold), which was listed for hearing on 31 January 2007, is now listed for hearing on 26 February 2007. The definition of "individual property" and "corporate property" the subject of the Receiver Orders and the Asset Preservation Orders require variation as they included "Individual Bank Accounts and "Corporate Bank Accounts" respectively. These were terms used in the preceding orders but needed refinement as a bank account is not property. They are, however, to be the subject of ongoing asset preservation orders. A similar problem arises with the definitions of "Bowesco Property" in relation to the seventh defendant and "Corporate Property" in relation to the twelfth defendant as arise in relation to like definitions in the Receiver Orders applicable to the other defendants. Submissions were invited on the question of costs. Nothing was said on behalf of the defendants to disclose any basis upon which there should be a departure from the usual exercise of discretion in accordance with the proposition that costs follow the event. Although the contest at the hearing was narrowed to a debate about whether or not receivers should be appointed, it does not seem that any prior notice of that narrowing of the debate was given by the defendants to the plaintiff. The minute of orders submitted by ASIC following the judgment include a mechanism for ensuring that Court appointed receivers are alert to the difficulties which might arise in such cases and that they take appropriate advice so that if necessary an application can be made to the Court for directions. 13 In an affidavit filed following the judgment and sworn on 2 February 2007, Mr McMaster, one of the Court appointed receivers, disclosed that members of his firm, KordaMentha have been appointed as receivers to "two property assets" of the tenth defendant Silkchime. In his affidavit Mr McMaster set out the details of those two appointments. The appointment is limited to the ING Secured Property and does not cover all of the assets of Silkchime. The ING Secured Property has now been sold and settled. There are no further steps to be taken in respect of its realisation. Mr McMaster has been informed by Mr Zohar and believes that Mr Zohar is unaware of any allegation or any act, matter or thing that may give rise to a claim against the receivers in respect of the sale of the asset. The receivers have not yet retired. (ii) On 29 March 2006 St George Bank Ltd appointed Oren Zohar, David Winterbottom and Mark Korda to be the joint and several receivers and managers of Silkchime in respect of four vacant lots and one untenanted warehouse located at the property known as "Warwick Commercial Park" (St George Secured Property). Schedule H of the Report as to Affairs of Silkchime dated 2 March 2006, verified by Mr Carey, a director of the Warwick Entertainment Centre Pty Ltd, identifies an unsecured debt owing by Silkchime to Warwick Entertainment Centre in the sum of $12,673,372. 15 No submission has been made by any party raising any difficulty in respect of these appointments. The latter appointment is referred to in the affidavit of Mr Zohar sworn on 29 March 2006. At present there are no apparent difficulties arising from it. If and when a question arises relating to the enforcement of the Silkchime loan it would be prudent for the Court appointed receivers to take advice in respect of their position. The proposed orders are supported by affidavits of John Dury, a solicitor employed by Mony De Kerloy. 17 It appears that the sums claimed represent a total of $81,756.08 for work done for both Richstar and Healthcare together with an additional sum of $27,484.05 representing costs directly incurred by Healthcare. Mony de Kerloy had separate written retainer agreements with both Richstar and Healthcare. It appears from the affidavit material that the common work done also covered the costs of representing Mr Carey with whom Mony de Kerloy also had a separate retainer agreement. There were no retainer agreements in evidence with other defendants. The solicitors for the receivers referred in their submissions to a separate retainer agreement made with Redchime but there is no such written agreement exhibited to Mr Dury's affidavit. Counsel who appeared for Mr Carey, Richstar and Healthcare announced his appearance on behalf of all other defendants, save for Rold. The solicitors on the record for Westpoint Realty Pty Ltd (Westpoint Realty), the sixth defendant, were then Clavey Legal. However, Mr Clavey had no instructions in respect of these proceedings, did not raise any fees in respect of them and did not instruct counsel to appear on behalf of Westpoint Realty. Hammond Worthington were the solicitors on the record for Silkchime, the tenth defendant, and instructed Ms Coulson. It appears that Mr Hammond has informed the solicitors for the receivers that his firm and Ms Coulson will issue separate fee notes in respect of Silkchime. 18 The solicitors for the receivers referred to the separate retainer arrangements between Mony de Kerloy and Richstar, Healthcare, Mr Carey and (albeit unwritten) with other defendants. The receiver's submissions pointed out that where there are separate contracts, each client is liable for its own share of the solicitors' costs, that is, a proportionate part of the general costs plus costs incurred exclusively for its benefit. They contended that there is a presumption of several liability and the fact that a number of clients authorise a solicitor to act and say they will pay the solicitor does not mean that each has agreed to pay the whole of the costs and does not create a joint liability. The solicitors for the receivers noted that ASIC had accepted the reasonableness of the fees raised by Mony de Kerloy and saw no reason to dispute that assessment. 19 Mony de Kerloy's position was that the work performed by themselves and their counsel was necessary to be done for Richstar and Healthcare whether or not they were instructed by other defendants. The receivers, like ASIC, proposed that Mony de Kerloy seek an order that the Court receivers authorise the payment of the fees owing in respect of Richstar out of Richstar trust funds. The question of an authorisation by the receivers does not arise in relation to Healthcare as that company, having private receivers appointed under a security, is the subject of Asset Preservation Orders rather than Receiver Orders. 20 In their submissions to the Court the receivers repeated their position that Mony de Kerloy had entered into separate retainers with each of Mr Carey, Richstar and Healthcare, albeit there was no evidence of a separate written retainer agreement with Redchime. They pointed to the absence of evidence of retainer agreements with any of the other defendants. They pointed out that where a number of parties to an action enter into a single retainer with one solicitor each is presumed to be jointly liable for the costs incurred by that solicitor: Burridge v Bellew (1875) 32 LT (NS) 807. Where distinct parties enter into individual retainers with a solicitor the presumption is reversed and each client is liable for its own share of solicitor costs. The costs incurred are the amounts specifically in relation to that client and a proportionate share of general costs attributable to the other parties: Ellingsen v Det Shandinaskie Co [1919] 2 KB 567. They accepted that the presumption is rebuttable if evidence to the contrary is adduced. They submitted that the effect of making an order that Richstar and Healthcare pay the legal costs in effect on behalf of other defendants is that Richstar would bear those costs without any right of recovery from the other defendants. If Richstar were to pay more than its proportionate part of the common costs of the extension application it would be paying legal costs on behalf of the other defendants which it would have no right to recover from them. 21 In my opinion the work done by Mony de Kerloy for Richstar and Healthcare was inextricably linked to such work as it was necessary to do for all defendants in relation to the extension application. If it is accepted that the costs were reasonable, a position not disputed by either ASIC or the receivers, then the only question of principle is whether each of the defendants should bear severally a proportionate share of general costs. In my opinion, whether or not there were separate retainers, the various defendants represented by Mony de Kerloy were effectively jointly represented and the presumption in favour of several liabilities should be displaced. 22 The Court was assisted by counsel appearing for those defendants who had separate retainer agreements with Mony de Kerloy and for those who did not have specific retainer agreements. The representation assisted the efficiency and fairness of the hearing process. The issues with which each had to deal were substantially similar and substantially overlapping. It does not seem to be disputed that the fees raised against Richstar and Healthcare would have reasonably been raised against them if no other party had been represented. That is to say those fees were properly incurred to secure their legal representation even though that representation benefited other parties, whether they were the subject of retainer agreements or not and whether they were paying clients or not. I do not consider that potential creditors of Richstar and Healthcare are thereby unfairly prejudiced as the representation was representation to which those two companies were entitled in any event. The orders relevant to Richstar and Healthcare will be incorporated in the general orders relating to them. I do not propose, at present, to change the procedures by which legal fees and disbursements should be approved in relation to Healthcare. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French . | receiver and asset preservation orders costs of proceedings conflict of interest court appointed receiver privately appointed to same or related entities legal fees and disbursements incurred by defendants whether several or joint and several separate retainers presumption presumption displaced orders approving release of legal fees and disbursements approved corporations |
2 The orders sought in the Notice of Motion are opposed on the basis that such orders are neither justified nor necessary. I note that, since orders are sought against Maurice Blackburn, they have the necessary standing to appear and make submissions on this application. The case as presently constituted is set out in the Further Amended Statement of Claim (filed on 3 December 2007), which describes the group members as those persons who purchased and paid more than $100,000 for corrugated fibreboard packaging products in Australia during the period 1 May 2001 to 1 May 2005. As required by s 33X(1)(a) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act "), a notice to opt out of the representative proceeding was given to group members. By orders of 13 March 2008, I ordered that the notice be published by no later than 28 March 2008, and fixed the time and date by which a group member could opt out of the proceedings as 4 pm on 30 April 2008. The form of the notice was, after some discussion at the hearing, agreed by the parties, and provided information to group members about the nature of the proceedings and their rights in respect of it. On 26 March 2008, the opt out notice was duly published in nine metropolitan and regional newspapers around Australia. 4 After 13 March 2008, Mr Slade made public statements to various media bodies concerning the anticipated amount of damages he thought the Court might award if Jarra Creek were successful in the proceeding. The Visy parties contend that such statements were inaccurate, misleading and detrimental to the integrity of the opt out procedure. In addition, it is common ground between the parties that the ACCC never made any statement to the above effect. 6 In response to these comments, the solicitors for the Visy parties wrote to Mr Slade on 31 March 2008 and complained of the misleading and inaccurate nature of the statements published in "The Weekly Times". This qualification was not present in the article published in "The Weekly Times". 7 On 7 April 2008, Maurice Blackburn replied to the letter of 31 March 2008 and agreed that the article in "The Weekly Times" was not accurate in stating that the ACCC made the statements attributed to it. Maurice Blackburn acknowledged that the article should have stated that Jarra Creek alleged an overcharge of between 8 and 23 per cent during the relevant period, but rejected any suggestion that the inaccuracy could cause a person to be misled in any relevant way. In addition, Maurice Blackburn offered an undertaking to the Visy parties that it would not in the future say that the ACCC alleged an overcharge of between 8 and 23 per cent. Maurice Blackburn also pointed to Mr Slade's qualifications of his comments, which made it clear that he considered that the range of the overcharge was open to different estimates, and to the various publications of the ACCC which refer to estimates of "typical cartel overcharges" of 10 per cent or more. 8 The next event was the filing of the Notice of Motion by the Visy parties on 11 April 2008. In particular, the Visy parties say that the references by Mr Slade to damages in the amount of hundreds of million, or even a billion, dollars could not be reasonably supported and should not have been attributed to the ACCC. The Visy parties also emphasise that Mr Slade's comments that Maurice Blackburn wanted people to know what possible benefits they might obtain as a result of their decision to remain in the group or to opt out of it indicates that Mr Slade was conscious of the importance and potential effect of his statements vis-à-vis the opt out process. 13 In relation to Mr Slade's references to a range of figures between 8 and 23 per cent, the Visy parties also say that these statements are misleading because they convey that the percentages relate to an assessment of loss on a per annum basis rather than in respect of the total five year period. 14 Although the attribution of the statements to the ACCC is acknowledged to be incorrect, counsel for Maurice Blackburn sought to minimise the importance of such an attribution. Counsel argued that the ACCC had made several statements in various publications which, taken together with inferences which can be drawn from the judgment of Heerey J in the proceeding between the ACCC and the Visy parties and others (see Australian Competition and Consumer Commission v Visy Industries Holdings Pty Limited (No 3) [2007] FCA 1617) , support the inference that the ACCC held a view that an overcharge in the order of 10 per cent existed in this case. Counsel for Maurice Blackburn also submitted that there was some qualification of the range of between 8 and 23 per cent overcharge in the Further Amended Statement of Claim at [100]-[103], which points to the necessity for discovery before damages can be further particularised. 15 Counsel for Maurice Blackburn further submitted that, when considering the effect of the statements, regard should be had to the fact that the group members, as defined, are not simply a general cross-section of the public, but rather the specific group of persons or entities who have contracted for more than $100,000 worth of packaging products over the five year period. It is said that such persons should be treated as a "sophisticated" class of people who would be more likely to consult legal advisers and rely on their own business acumen rather than accept, without qualification, broad assertions by Mr Slade. I am not persuaded that such an inference can reasonably be drawn in the present case. The fact that someone pays $100,000 or more for packaging products does not, in my view, mean that they are more or less astute or more or less likely to be influenced by false representations in this matter than any other members of the community. 16 In considering this application, I am conscious of the uncertainty which must surround any quantification of damages at such an early stage in the proceeding, before the settlement of pleadings, return of subpoenas, full discovery and filing of evidence. However, it is necessary to ensure that the appraisal by an applicant (or any group member in a representative proceeding) of its position is not artificially inflated as to the likely monetary rewards which will flow from the litigation. This is particularly important in a complex representative proceeding, where it might be said that a group member will generally be less likely to opt out of the proceeding when the return, in its perception, is likely to be great. Of course, this may not always be so, and there may be particular circumstances apart from the amount of the prospective return, such as a desire to exercise greater control over the litigation process or the ventilation of specific issues, which could have an impact upon the decision to opt out. 17 Notwithstanding attempts by counsel for Maurice Blackburn to downplay the significance of the incorrect attribution to the ACCC, I consider that it was an important misrepresentation. This is because it is reasonable to conclude that the view of the ACCC --- given its detailed knowledge of the alleged cartel arrangement, its resources and its statutory function --- would carry significant weight with the group members in this case, and perhaps engender in them an erroneous assumption that the view of Mr Slade or Jarra Creek in relation to the eventual outcome of the case is a view shared by the ACCC. Although Maurice Blackburn has not hesitated to acknowledge the inaccuracy of the attribution of the relevant comments to the ACCC and has also offered not to repeat those comments, no satisfactory public acknowledgment has been made. Moreover, Mr Slade has not given any explanation of the basis on which the comments were made and what mechanisms are now in place to ensure they are not repeated. 18 In my view, the statements by Mr Slade are capable, on one reading, of misleading group members. In particular, the incorrect attribution of their content to the ACCC imparts to those statements a quality of authority that they would not otherwise attract if they were seen as coming only from Jarra Creek or its legal representatives. Indeed, this impression of greater authority is especially important when statements are made in the context of an opt out procedure, where group members are attempting to decide whether it is in their best interests to remain a part of the group or seek to conduct separate litigation. In particular, the reference to a total overcharge of one billion dollars could have a significant impact on a group member's opt out decision. 19 In this case, I consider that there is a need to publish a correction of the misstatements and that as a consequence the date by which a notification of opting out should be given to the Court is deferred by one month. I do not think that an inter partes undertaking by Maurice Blackburn to the Visy parties is sufficient to remedy the potential impact of the false statement in this case. Accordingly, I shall order that a correcting statement be published forthwith. The form and content of that correcting notice should be the subject of discussion between the parties, however it should as a minimum include (i) a correction of the misstated attribution; (ii) a statement that the opt out date has been extended from 4 pm on 30 April 2008 to 4 pm on 30 May 2008; and (iii) a statement of the difficulty of quantifying at this stage the amount of damages that might eventually be awarded by the Court if the representative proceeding is successful. I direct that, once the parties agree on the form of the notice, it should be sent to my Associate in chambers within three days of the date of these reasons for approval by the Court. If agreement cannot be reached, the points of difference should be identified, and the competing forms of notice sent to my Associate in chambers within three days of the date of these reasons, with brief reasons, for settlement by the Court. By adopting this course, the Court seeks to make it perfectly clear to anyone presently within the group that the integrity of the opt out process is closely monitored by the Court in order to ensure that it is properly carried out. 20 With respect to the other relief sought by the Visy parties, I do not think that an injunction against Maurice Blackburn is necessary. As I have noted, Maurice Blackburn proffered an undertaking not to repeat the comments which attribute certain representations to the ACCC. A restraining order would, in my view, be inappropriate in such circumstances. I have no doubt that this judgment will induce caution on the part of Maurice Blackburn in the future. In addition, I do not consider that there are reasonable grounds established for any inference that Mr Slade has made other similar statements, and so I am not prepared to order that he file an affidavit particularising any such further statements. 21 I consider that the applicant should bear the costs of correcting the statement in relation to the ACCC. 22 The costs of this application are reserved. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | opt out process integrity of process affected by statements of legal representative whether statements misled group members need for correcting publication. representative proceedings |
I also have before me an application by the defendant for an adjournment of the application on the footing that over some period of time there has been before the Deputy Commissioner an application by companies within the consolidated group of companies, of which Video and Audio (Australia) Pty Ltd is one, for a refund of GST which would, if paid, fall in for the benefit of this defendant. The amount of tax due to the plaintiff is, as at 15 January 2008, $224,400.92, and there are increments upon that amount as between 15 January and today. 2 If the tax audit conducted by the Deputy Commissioner results in a favourable determination to the defendant, an amount of 441,000-odd dollars would become payable to either the defendant or entities within the consolidated group. The Deputy Commissioner puts submissions to me that even if the refund became payable, those moneys would not become payable to the defendant. However, there is material filed in relation to the scheme of arrangement which suggests that if this refund fell in according to a favourable determination, it would not form part of the scheme debts. The analysis of the claim and the conduct of the audit leading to a determination by the Deputy Commissioner as to whether a refund is due and payable has been proceeding for some little time. That application is put on the footing that an interim decision or, at least, a recommendation has been made by the audit investigation group to the relevant decision-maker concerning the defendant's application. The interim recommendation apparently is that the application for a refund is to be rejected. That decision, once made by the decision-maker, is to be the subject of review, and it is anticipated that a period of one month will enable sufficient time to determine the ultimate merits of that application. It is clear that the defendant is insolvent, subject to this question of the refund. I am not satisfied that there are circumstances which would warrant granting an adjournment. 5 I am not satisfied that the circumstances are special. The position in this matter is that the audit has progressed and the application for winding up has been adjourned on a number of occasions, pending the anticipated determination, favourably, to the defendant of that refund. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for an order that the defendant be wound up in insolvency under the provisions of the corporations act 2001 (cth). insolvency |
They should be read with those reasons. Defined terms used there are repeated in these further reasons. 2 The issue before the Court concerns orders appropriate in connection with the winding up of a managed investment scheme. At the conclusion of the former reasons I stated that the Court should hold over for final consideration the application for the orders pending final advice from BankWest as to the availability of finance to demonstrably enable the completion of the development in question and compliance by the plaintiffs with directions giving to them the opportunity of responding to adverse submissions made by the Australian Securities and Investments Commission (ASIC). I also stated that the plaintiffs should be aware that they were in breach of the law and that unless the circumstances are established where the Court's discretion can be exercised in favour of the orders which they propose, particularly as a consequence of certainty in relation to bank finance for the development, the Court would not countenance the continuation of the application indefinitely. 3 On behalf of the plaintiffs further affidavits from Mr McNamara have been filed sworn on 9 March 2007, 3 April 2007 and 11 April 2007. 4 In his first affidavit, Mr McNamara filed evidence of the Facility Terms documents executed by the first plaintiff with BankWest together with a deed of priority. He stated he believed the funding arrangements were now in place. In his second affidavit, he annexed a copy of a letter dated 29 March 2007 from BankWest confirming that the facility was now in place. Additionally, he annexed a copy of a further letter from BankWest dated 2 April 2007 stating that the facility is no longer subject to the condition set out in cl 13 of the Special Conditions of the Facility Terms. That condition was that BankWest has received the final Court order allowing completion of the project by the first plaintiff and perusal of it to confirm its acceptability to the Bank to provide the facilities for the subdivision. In the third of the above affidavits, Mr McNamara annexed a copy of an email from BankWest received on 10 April 2007 stating that the Bank was satisfied with the valuation that the plaintiffs provided as required by the conditions of the letter of offer (item 2 of cl 4 --- Conditions Precedent). 5 In the first of the above affidavits, Mr McNamara also stated that accounting anomalies as raised by ASIC were being addressed. In his second affidavit, he set out the steps taken by the plaintiffs in connection with those issues. 6 In supplementary submissions the plaintiffs have addressed each of the factors raised by ASIC. These have received further submission in a reply from ASIC which in turn has prompted a plaintiffs' response. The following are the issues addressed in those submissions. In particular, the number of investors exceeds three and a half times the legislated limit of 20 investors appearing in s 601ED(1) of the Corporations Act 2001 (Cth) (the Act). 8 A total of $3.399 million has been raised from 72 investors (affidavit of Glenda Currie sworn 5 December 2006). The plaintiffs submit that while the amount invested is significant, that does not constitute a factor against the proposed orders. Rather, there must be an assessment of the risks to those investors if the final proposed orders are made. It is submitted that providing the risk is sufficiently small, the amount involved and the number of investors is only relevant to the adverse consequences that would flow if the orders were not made which, in the plaintiffs' submission, would be a result of significant losses. 9 The plaintiffs contend also that the mere numerical ratio by which the number of investors exceed the legislated limit of 20 investors does not equate to the proposition that the breach is hence three and a half times more serious. It is submitted that requires the Court to have confidence that the investors' interests are protected in an appropriate manner. ASIC acknowledges an attempt to provide such protection in the form of reporting requirements and the role of the proposed supervisor. 11 The plaintiffs submit that from the point of view of investors the changes to the operation of the scheme, through to conclusion as it would be under the proposed orders, are minimal. This is because the Trust Deed remains in force and effect and the investors' rights under the Deed are not fundamentally altered. The fact the scheme completion entails additional reporting requirements that were not part of the Information Memorandum is said not to materially alter or detract from investors' rights. Rather, they enhance investor protection. Investors' rights are also extended in that the first plaintiff's obligations, as trustee under the Trust Deed, would entail in the event of the orders being made, a further level of obligations and responsibilities under the proposed orders and the Compliance Plan. The result of the voting was that there were 2 570 000 valid proxy votes, 220 000 late proxy votes and 255 000 votes cast at the meeting. All of those votes were in favour of the resolution. The total votes received represented 89.6 per cent of the total votes available (Ms Currie's affidavit sworn 5 December 2006). ASIC contends that the late or informal proxies should not be included, so that the final result was that there were votes cast in respect of 83 per cent of available votes. 13 The plaintiffs contend that the informalities do not detract from all of the votes showing a uniform assent in favour of the proposed orders. Further, the percentage of votes was high and there were no votes in opposition. 14 As the plaintiffs point out, in Lake Coogee 60 ACSR at [18], I accepted that the correct approach was that the Court should take into account both those who voted for the resolution and the interest of those who did not vote. However, I added that 'the very high level of those who did vote results in consideration of the factor being a significant one supporting the existence of exceptional circumstances in favour of the course urged by the plaintiffs'. 16 ASIC accepts that the accounts have been rectified. It says, however, that the Deed of Deferral does not clarify the problem of ambiguously worded management fees (see Ms Currie's affidavit sworn on 5 December 2006). It submits there remains a potential for difficulties at the completion of the scheme as a consequence. The plaintiffs respond that as the process to completion is to be conducted within the parameters of the proposed orders, any such difficulties (which they say are presently speculative) could be dealt with by the regime set up by those orders. In particular, the Supervisor would have sufficient powers to deal with any such issues, including reporting to the Court. However, ASIC acknowledges that the payment of fees to the plaintiffs is subject to the reporting and supervision elements of the plaintiffs' proposed orders. As to any other remaining drawdown conditions, it is not possible to satisfy them all in advance but they will be dealt with on an ongoing basis with the reporting requirements under the Compliance Plan and ample protective measures, including the Supervisor's powers and the power to report to the Court. 18 In relation to a point made by ASIC that the reason for the increased requirements for bank finance has not been explained to investors, the plaintiffs say that an additional order could be included in the final orders requiring the plaintiffs to report to all investors within 14 days with an explanation of the reasons why there has been a need for such increase in funding together with the requirement that the report be annexed to an affidavit to be filed at Court. I accept that suggestion. They submit this does not create any particular risks to the investors. ASIC, however, draws attention to dicta from Barrett J in Australian Securities and Investments Commission v Koala Quality Produce Ltd (2002) 41 ACSR 628 at [5] to the effect that he could not think of circumstances in which a court might think it appropriate to decline to order winding up of an unregistered scheme under s 601EE of the Act except perhaps where satisfactory remedial measures of some kind were 'virtually complete'. ASIC submits that with a better part of the year to go for completion of the scheme, it could not be said to be in the category of 'virtually complete'. 20 The plaintiffs reply again that delay is not itself a risk in the situation where there is a residential subdivision project and where the anticipated completion date does not in fact create any extra risks. 21 In my view the satisfactory remedial measures here are able to be described as 'virtually complete'. Whatever might have been the previous position, the meeting involved a process of detailed explanation, disclosure and frankness by the plaintiffs. 23 ASIC acknowledges the proposed role of the Supervisor and his access to the records of the business. It acknowledges that the Investigating Accountant (Mr Fraser) suggests that investors will be better served by completing the scheme as opposed to winding it up and that the balancing of the various factors is the task of the Court. 25 The plaintiffs draw attention to the statement by Mr Fraser in his report (at p 9) (see Ms Currie's affidavit) where he notes that 'the return to investors would be substantially higher under a winding up option which involves the completion of the development as compared to a winding up via a formal Liquidation whereby the Liquidator is unable to complete the development'. The submission is that being imperfect, the proposals do not meet that which the legislature has said is required in the circumstances. The requirement that the plaintiffs observe all of the procedures and imperatives under the Compliance Plan. Compliance procedures 1-12 comprehensively dealt with a range of matters pertaining to the management of the project, including a range of financial and record keeping matters, liquidity, external service providers, training, related party issues, complaints and the recording of breaches. 2. The Compliance Plan sets up specified functions of the Investigative Accountant (Mr Fraser) at 2.3, and of the Compliance Officer at 2.4, importantly including reporting requirements to the Investigative Accountant (by the standard reports at appendix 4) and to the Board and ASIC if necessary. 3. By par 4.3 of the proposed orders, Mr Fraser (as Supervisor) is to have all of the powers of a liquidator under the Act. He is to have unrestricted access to all of the books and records of the plaintiffs. 4. The Supervisor is to be provided with the monthly reports referred to in 1 above and is to provide quarterly reports to the Court (par 4.7). 5. Upon completion of the project, the first plaintiff is to provide to the Court a detailed report, on oath, as to the winding up of the scheme and all receipts and payments made in the winding up and in complying with the orders. Further, that ASIC has not specified deficiencies save that a different course than that chosen by the legislature is proposed. I agree with the plaintiffs that the fundamental question is whether in all the circumstances including the provision of the protection orders, there are sufficient protections to investors so as to enable the orders to be made. It is said this should not be found to be inadvertent and it is material. 30 In my view these considerations are factors from the past now to be weighed in the context of what has been proposed by the meeting and the protections which are included in the proposed orders. 32 The plaintiffs rely on the advice from Mr Fraser previously quoted. The plaintiffs stress that the prospects of issues of this sort arising have been minimised by the steps taken by the plaintiffs to address each of the issues raised by Mr Fraser in his email. It is said that process is not possible on the plaintiffs' existing evidence so that the submission in this respect is not founded on evidence and is conjectural. 35 The plaintiffs again rely on Mr Fraser's statement in the executive summary. This has been addressed in (a) above. 39 ASIC also submits that the key consideration is whether on reviewing the factors addressed here and in its earlier submissions the Court can be confident that the public interest is served and the position of investors will be enhanced in the way the plaintiffs advocate while being protected by appropriate means so that the worst financial consequences are avoided. 40 Further that the factors to be considered having been outlined, it is the plaintiffs' obligation to persuade the Court that their proposal is appropriate. The contraventions were inadvertent and did not, in themselves, indicate that investors were at risk in terms of their funds and the represented return. 2. The plaintiffs have given full co-operation to ASIC and to the Court. 3. The plaintiffs convened a meeting of investors to vote on scheme completion by the plaintiffs under the proposed orders. Investors were given an expert accountant's report, comprehensive legal advice prepared by Mr John Vaughan (see Ms Currie's affidavit) and a full explanation of the circumstances leading to the meeting in the explanatory meeting. 4. At the meeting of investors on 1 December 2006, the resolution was passed by a large majority (see Ms Currie's affidavit). 5. Bank finance is in place and the latest projections are for completion and issue of new titles by 31 January 2008. 6. The proposed orders (as presented to the meeting of investors) contain a range of protections and safeguards for investors. 7. The consequences of not making the orders would be for the formal winding up of the scheme by a liquidator, with the adverse financial consequences for investors identified by Mr Fraser in his executive summary. 43 In the reasons in Lake Coogee 60 ACSR at [11]-[15], I reviewed the relevant authorities. I have regard to those here in exercising the discretion. 44 In my view the public interest dimension would be best favoured by the orders being made. That is, I consider that these are exceptional circumstances and that in the public interest it would be preferable for the orders to be made rather than for winding up to otherwise take place. I reach that view because of what I consider to be the strength of the protections provided in those proposed orders. In particular, they provide for the ongoing possibility of the involvement of the Court. Bank finance is an established reality. Further, subject to the addition of the order which I have accepted in the course of these reasons, the investors are fully informed as to the issues involved and a very significant majority of them support the course of action. 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. | managed investment scheme failure to register scheme proposals by investors to complete scheme land purchased and substantial number of lots sold developer seeking to wind up scheme upon completion of development bank finance now finalised other adverse issues addressed orders in manner permitting completion of residential development the subject of the scheme approved corporations |
A determination was made by the Military Rehabilitation and Compensation Commission that liability should be accepted for the condition of schizophrenia. That determination was subsequently revoked and the applicant applied for review by the Administrative Appeals Tribunal. On 19 March 2004 the Tribunal determined that the applicant was entitled to compensation for schizophrenia and alcoholism pursuant to s 124 of the Safety, Rehabilitation and Compensation Act 1988 (Cth); the incapacity was partial in that the applicant suffered an 80 per cent loss of capacity to work; and the compensation related to the period from 3 April 1976 to 2 April 1978. The issue of costs was not addressed in the reasons. Another member of that Tribunal determined, on 27 April 2005, that the respondent should pay the applicant's costs up to and including the time of receipt by the applicant's solicitors of a letter of offer of settlement from the respondent on 21 August 2002. 2 The letter in question was forwarded by the respondent about seven months prior to the hearing. It was entitled 'Without Prejudice save as to Costs' . It advised that the respondent was prepared to accept liability for the applicant's claim and to pay compensation for the period from April 1976 to February 1979. It went on to state that, should the offer not be accepted, the letter would be relied upon in relation to the question of costs if the matter proceeded to a hearing. Apply to have any costs the applicant would otherwise be awarded up to the date of this letter reduced by the amount of costs our client incurs from the date of this letter. The offer was clear in its terms and the applicant had elected to a hearing despite the offer. 4 The Tribunal's decision was the subject of an appeal heard by Greenwood J [2006] FCA 33. His Honour dismissed the appeal. In his Honour's view, whilst the letter did not amount to a 'calderbank' letter, that did not mean that the Tribunal was obliged to disregard it in the exercise of its discretion and order that the respondent pay the applicant's costs for the whole of the proceeding. That was a matter within its discretion. 5 The applicant seeks to appeal from his Honour's decision. An appeal was not however filed within the time limited by the rules and the applicant seeks leave to bring an appeal. The judgment was delivered on 2 February 2006. The applicant's solicitor says that he forwarded a copy of it to counsel the following day with a request that counsel contact him to discuss an appeal. Counsel did not however do so until 23 February 2006 because he had been absent from chambers. There is no suggestion that the applicant's solicitor made any enquiry as to counsel's availability. The only inference I can draw is that he did not note the time limited for an appeal and follow the matter up. He does not say he took any other step other than delivery of the brief to counsel with the message I have outlined. 6 An application for Leave to Appeal was filed approximately one week outside the time limited for the rule. The applicant's solicitor says that he does not consider that the respondent is prejudiced by such a delay. 7 Order 52 rule 15 fixes the time within which a notice of appeal must be filed and served. Order 52 rule 15(2) provides that a Court or a Judge may give leave to file and serve a Notice of Appeal 'for special reasons' . The reference to 'special reasons' in this context connotes a ground which justifies a departure from the general rule, something which takes the case out of the ordinary. 8 It does not appear to me that a solicitor's lack of awareness of the time limit or a solicitor's oversight in ensuring that it is observed can amount to a special reason in the sense mentioned. The rule is not directed to such a circumstance, without more. This was the view expressed by Muirhead J in Wolcott v Davies (1984) 4 FCR 124 at 128. Nor does the respondent's lack of prejudice by reason of the delay of itself provide special reasons. The rule looks to something connected with the applicant, which might provide an excuse. At most, the lack of prejudice might confirm the appropriateness of the exercise of a discretion. 9 The respondent did not argue that the applicant also required leave to appeal because it was from an order only with respect to costs (see s 24(1A) of the Federal Court of Australia Act 1976 (Cth) . Leave is rarely given on such an issue. 10 The question of the applicant's prospects of success on appeal are relevant to both requirements for leave. The applicant clearly lacks any reasonable prospects. There is no principle of law, which would deny the letter relevance to the exercise of the Tribunal's discretion, as his Honour held. The letter was clear in its meaning and the applicant and his solicitor would have understood its effect. 11 The applicant is not able to satisfy the requirement of O 52 r 15(2) that special reasons should be shown and leave to appeal should be granted for that reason and because there is no real prospect of overturning the order for costs. 12 There remains the question of the costs of this application. 13 The usual order for costs would be that the applicant pays the respondent's costs given that he sought the leave of the Court. In the present case, the applicant did attempt at the outset to follow the procedure of a written case (see O 52 r 15A) no doubt in order to limit costs. For a combination of reasons, the matter proceeded by way of written argument and an oral hearing. Neither were extensive. It had concerned me that the applicant was exposed to additional costs because the Court set the matter down for hearing without appreciating he was attempting to have the matter dealt with on the papers. The respondent however points out that, whilst it was prepared to follow that course and provided its written case within the time limited by O 52 r 15A(3), the applicant did not. It was subsequent to that that a date for hearing was provided. The applicant did not provide submissions until the day before the hearing. In these circumstances if there were any additional costs incurred they were largely brought about by the applicant not following the rules for the process he initiated. 14 The application for leave to file and serve an appeal from the decision of Greenwood J given on 2 February 2006 is refused. The applicant is to pay the respondent's cost of the application. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. | leave to file and serve a notice of appeal out of time whether special reasons shown by solicitor's oversight relevance of prospects of success practice and procedure |
The domain name for the website is InsuranceNEWS.com.au. The respondent ("JEM") also operates a website which provides articles on developments in the insurance industry. The domain name for its website is "InsuranceNewsAustralia.com". 2 In the Court below, JEM obtained an order restraining the McMullan interests from using the domain name "InsuranceNEWS.com.au". The Federal Magistrate held that the two domain names were "so similar that they are likely to mislead or deceive". He considered that JEM had made out its case under s 52 of the Trade Practices Act 1974 (Cth) ("the Act "). 3 The essential issue for resolution on the appeal is whether it was open to his Honour to make an order against the McMullan interests under the Act on the evidence before the Court below. In that regard, the Court is required to examine whether the Federal Magistrate failed to determine whether JEM's website had an inherently descriptive or distinctive name and, if descriptive, whether the name had acquired a secondary distinctive meaning through extensive use. 5 Apart from identifying the names of the two relevant websites, his Honour observed that the McMullan interests' service is free and is reliant on advertising income. JEM, on the other hand, provides insurance news stories to subscribers by email in accordance with a password-protected log on service. It relies on subscriptions rather than advertising revenue. The McMullan interests' website has a thin orange line across the top of the page but no other colour background. The word "NEWS" in the domain name is coloured bright orange. Each article is accompanied by a large coloured banner provided by an advertiser. He then said that the domain names are "remarkably similar" and likely to cause confusion. JEM has a loyal subscriber base, with a relatively small turnover or "churn" rate amongst subscribers. At [64] he referred to "the descriptive nature of the words". 12 Although there is no precise finding to this effect the Federal Magistrate appears to accept that the words "insurance" and "news" and "Australia" were words which are "descriptive" rather than "distinctive". It would be surprising if any other result ensued because they are self-evidently descriptive words. Although more than one descriptive word is combined, each component retains its descriptive significance in relation to the services at issue; the combination results in a composite that is itself descriptive: see Brookfield Communications Inc v West Coast Entertainment Corporation [1999] USCA9 74 ; 174 F3d 1036 (1999); Finance Express v Nowcom Corporation 564 FSupp2d 1160 (2008). 13 Moreover, the Federal Magistrate's comparison of the two domain names by substituting "company" for "com" and "Australia" for "au" is misplaced. The ".com" top-level domain signifies the sites' commercial nature, and the ".au" signifies where the domain is registered: see connect.com.au Pty Ltd v GoConnect Australia Pty Ltd (2000) 178 ALR 348 ; Prime Publishers Inc v American-Republican Inc 160 FSupp2d 266 (2001). The Federal Magistrate's commentary about the similarity in capitalisation of the website names is also not significant as web addresses are not capital-sensitive. 14 Significantly, I cannot see that his Honour made any finding about whether the words which comprise JEM's web address had acquired a secondary distinctive meaning through extensive use. That is because he appeared to consider that it did not matter whether they had or had not. It was sufficient, according to his Honour, in order to grant the relief sought by JEM, to find that the names were similar and the websites had a similar appearance. That is despite his earlier acknowledgement that a party does not obtain a monopoly over a name which is merely descriptive. 15 At [40], his Honour referred to JEM's businesses having "a good will that is worthy of protection". That is not a finding that its domain name has acquired a distinctive meaning by extensive use. It is merely an acknowledgement of the existence of an ongoing business. Nor is evidence concerning the number of 'hits', referred to at [47] of the reasons for judgment below, evidence that the domain name had acquired a distinctive meaning through excessive use. 16 JEM changed its website name to its current name in June 2004. There was no evidence in the Court below that its name had acquired a distinctive meaning through extensive use. As counsel for the McMullan interests observed in the absence of evidence supporting a finding of distinctive use and, in the absence of such a finding, JEM's claim could not properly succeed in the Court below. 17 In connect.com.au Pty Ltd, Emmett J observed at [57] that for a descriptive name to become distinctive, "a very substantial amount of use in the relevant market would be necessary for it to acquire any secondary meaning". Application to like businesses would not ordinarily mislead the public: see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216. Because it is descriptive it is equally applicable to any business of a like kind. Its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. 19 Similar observations have been made by Stephen J at 228 in the Hornsby Building case and by a Full Court of this Court in Dodds Family Investments Pty Ltd & Anor v Lane Industries Pty Ltd & Ors (2003) 26 IPR 261. 20 At 228 - 229 in the Hornsby Building case, Stephen J (with whom Jacobs J agreed) referred to the use of descriptive words in a business name as not entitling a claim for a monopoly in these words. At 229, his Honour referred to the concept stressed by Emmett J in connect.com.au Pty Ltd that "(t)here is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name". See also Barwick CJ at 221 (with whom Aickin J agreed). Merely descriptive words will not ordinarily effect such an association: per Gummow, French, Hill JJ. So much is evident, at least, when it is remembered that one site is a free service and another a subscriber based service --- thereby lessening possible confusion. As described by the Federal Magistrate the appearance of the two websites is not sufficiently similar to give rise to confusion on the basis of appearance alone or in combination with the names. The fact that some interested people may be confused between the two sites is an insufficient basis to establish a reasonable likelihood of an appreciable or relevant confusion. That is especially so where there is no finding as to whether the number of possible confused people was significant or otherwise. See Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181. The lack of a finding about whether the words --- insurance, news and Australia - had acquired a distinctive meaning through extensive use is fatal to JEM's ability to maintain the orders it secured below. His Honour did not deal with the claim made by JEM under the tort of "passing off". Rather, his Honour found it unnecessary due to his finding that the respondents succeeded under the TPA. It may be likely that no such claim could be established. In any event, the parties consider, and I agree, that no different result would ensue concerning the passing off claim. The appeal should be allowed, the operative orders below set aside and the appellants should have their costs of the appeal and of the proceeding below. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | misleading or deceptive conduct where parties offer online insurance news services whether domain name inherently descriptive or distinctive if name found descriptive whether name had acquired a secondary distinctive meaning trade practices |
2 This is the second occasion upon which the Applicant has sought Mareva orders of the kind now sought including an order directing the Second Respondent to bring into the Commonwealth of Australia and deposit in an account in a bank headquartered within the Commonwealth, funds in an amount of US$2 million or AU$2,854,700.00 and an order requiring the Second Respondent to deliver up his current passport to the Court. 3 On the first occasion such relief was sought, Kiefel J on 10 March 2005 declined to make orders of the Mareva kind but did make Anton Pillar orders by which the Respondents were ordered to permit the Applicant's solicitor, Mr Peter Mills, and other nominated persons together with independent supervising solicitors to enter the premises of the Respondents and search for, inspect and remove into the custody of the nominated individuals, documents listed in Schedule A of that order. The Respondents were also ordered to deliver up to the Applicant all originals and copies of the documents and classes of documents identified in Schedule A to the order. See: Lifetime Investments Ltd v Commercial (Worldwide) Financial Services Pty Ltd [2005] FCA 226. 4 Kiefel J declined to make a Mareva order on the basis that the evidence did not establish a real risk that the Second Respondent might dispose of or deal with his assets. Her Honour observed that the evidence established that the First Respondent did not have any assets. Her Honour further observed that the Applicant must establish a sufficient likelihood of risk which, in the circumstances of the particular case, justified an asset preservation order. 5 The Applicant now contends that since then, circumstances have changed and material is now available arising out of the execution of the Anton Pillar orders and other material which reveals facts from which, on an interlocutory basis, a conclusion can safely be reached that the Applicant has a demonstrated claim of real strength against both Respondents, inferences of dishonest conduct and the secretion of monies on the part of the Second Respondent are plainly open and there is a real risk that either the Second Respondent or third party entities controlled by the Second Respondent will dispose of "assets (including claims and expectancies) so as to frustrate the process of the Court by depriving the plaintiff of the fruits of any judgment obtained in the action": Jackson v Stirling Industries Ltd [1987] HCA 23 ; (1987) 162 CLR 612 per Deane J at 625. 6 The Applicant says this is the class of case where an analysis of the essential character of the conduct of the Second Respondent reveals duplicity and dishonesty and in such a case, the Court will readily draw an inference of real and serious risk to the Applicant of dissipation of assets, particularly movable assets. Accordingly, it will be necessary to examine the foundation of the Applicant's claims in a little more detail than usual for interlocutory purposes. 7 Accordingly, the Applicant seeks orders appropriately framed to serve the purpose of preventing the Second Respondent from effecting such a deprivation: Jackson v Stirling Industries Ltd (supra) at 625. 8 Orders are not sought against the First Respondent since, on 16 February 2006 a liquidator was appointed by the Supreme Court of Queensland to the First Respondent on the application of an unsecured creditor, Mr Roger de Saint Quentin. By operation of s471B of the Corporations Act 2001 (Cth), the Applicant cannot proceed with the present action against the First Respondent (which is being wound up in insolvency) or proceed with enforcement process in relation to property of the First Respondent except with leave of the Court and on such terms as the Court determines. No application has yet been made for leave to proceed against the First Respondent. The Applicant says, based upon searches and enquiries reflected in the affidavit material that the First Respondent has no identifiable assets. The Applicant says it is presently assessing its position in relation to the First Respondent. 9 On 19 April 2006, the liquidator wrote to Forbes Dowling, Lawyers, the agents for the solicitors for the Applicant advising that the liquidator would not appear at the hearing of the Notice of Motion and had no objection to the orders sought. Notwithstanding that letter, no interlocutory relief (and no leave) is sought against the First Respondent, in liquidation. 10 The immediate focus for final relief in the action and presently interlocutory relief is the conduct of the Second Respondent, the causes of action the Applicant says it has against the Second Respondent and the risk of the Applicant being deprived of an effective remedy consequent upon a trial as a result of the Second Respondent dealing with his assets and the assets of entities under his control. 11 The Second Respondent says that nothing has changed since 10 March 2005, no assets have been dissipated and any steps taken by the Second Respondent in relation to his assets or assets vested in the trustee of his family trust simply have the effect of building assets within the jurisdiction which will ultimately be amenable to any process undertaken by the Applicant for recovery of any judgment which the Applicant might obtain. Having said that, the Second Respondent does not, in terms, concede that assets vested in the trustee of the Second Respondent's family trust are amenable to execution or a tracing order in respect of the claims made by the Applicant against the Second Respondent. I will deal with the resolution of those objections at the conclusion of these Reasons. In making observations about the evidence and the history of events, I have excluded any evidence I have ruled inadmissible. 13 Counsel for the Second Respondent, Mr O'Donnell QC raises four further threshold matters. First, the Applicant is an entity incorporated in the West Indies, has no assets in the jurisdiction and carries on no business within the Commonwealth of Australia. Accordingly, the usual undertaking as to damages is, in truth, meaningless. Secondly, quantification of the loss flowing from the interlocutory orders sought will be difficult and hence the discretion should be exercised against making any order. Thirdly, in the event the Second Respondent is successful in the proceeding, he will be left in a position of seeking to recover costs and any damages pursuant to the usual undertaking, in the West Indies. Fourthly, Mr O'Donnell QC also says the Applicant has brought proceedings and seeks interlocutory relief based upon a contract and a Deed of Guarantee and Indemnity both dated 30 March 2001 both of which are susceptible to stamp duty either pursuant to the Stamp Act 1894 (Qld) or the Duties Act 2001 (Qld) and the duty has not been paid. It follows, it is contended, as a result of either or both Acts that neither instrument is available for use "in law or equity or for any other purpose and must not be received in evidence in a legal proceeding, other than a criminal proceeding": s487(1) , Duties Act 2001 (Qld), s4A Stamp Act 1894 (Qld). 14 Accordingly, Mr O'Donnell QC contends that the statutory prohibition arising out of the failure to pay stamp duty has the result that any claim by the Applicant based upon the documents or the underlying causes of action founded upon the documents, is not presently judiciable. Such a claim might be made judiciable by payment of the duty or an undertaking by the Applicant or its solicitor to pay any duty demonstrated to be payable in respect of the instruments. 15 Since the failure to pay stamp duty is said to present an absolute bar to any relief final or interlocutory founded upon either the documents or any underlying causes of action, I invited Mr O'Donnell QC to identify the basis upon which either document is an instrument susceptible to stamp duty under the relevant legislation. Mr O'Donnell QC was not able to do so and sought leave to make further written submissions on the point. 16 I gave leave to make further submissions by 4.00pm on Monday, 24 April 2006. 17 The Applicant seeks Mareva orders pending the trial of the action. I also made directions that the Applicant provide submissions in response to the stamp duty point and in response to objections to evidence by the Second Respondent by 10.00am on Thursday, 27 April 2006. The objections to evidence had been provided to counsel for the Applicant shortly before the commencement of the hearing and could not be dealt with on the day. It also seemed to me to be important to resolve the controversy between these parties by a trial of the proceeding as soon as possible both in order to determine the claims of the Applicant and to identify the horizon by which the Mareva orders would be discharged upon the Second Respondent being successful in the action. Accordingly, I allocated provisional trial dates of 28, 29 and 30 June 2006. Should the trial proceed on those dates, the Mareva orders will be in place for approximately two months. The Applicant to give discovery of its documents by 4.00pm, 19 May 2006. The Second Respondent to inspect the Applicant's document by 4.00pm, 26 May 2006. 3. The Second Respondent to give discovery of its documents by 4.00pm, 26 May 2006. 4. The Applicant to inspect the Second Respondent's documents by 4.00pm, 2 June 2006. 5. The Applicant to file and serve all statements upon which it intends to rely at the trial of the action, by 4.00pm, 23 May 2006. 6. The Second Respondent to file and serve all statements upon which it intends to rely at the trial of the action, by 4.00pm, 16 June 2006. 7. The proceeding to be listed for review at 9.30am on Tuesday, 20 June 2006. 8. The directions hearing at 9.30am on 25 May 2006 is to be vacated. 9. The matter is to be listed provisionally for trial on 28 June 2006, 29 June 2006 and 30 June 2006. 10. Costs of this directions hearing are to be reserved. Since then, interlocutory steps have progressed in a fashion with a number of delays. The Applicant attributes those delays to the Respondents and is critical of their conduct. The Second Respondent says, in response, that the Applicant has been dilatory in the prosecution of the litigation. It will be necessary to refer to the sequence of events in some detail. The Applicant sought to bring this further application ex parte . However, having regard to the history of the events and the passage of the litigation, the matter was listed on notice to both the liquidator and the Second Respondent notwithstanding that, in the ordinary course of events, an application for a Mareva order would be considered ex parte in the face of urgency and a contention of real risk to the Applicant arising out of facts reflected in supporting affidavits. 23 The affidavit evidence of the Applicant is in these terms. 24 The Applicant is a company incorporated on 10 January 2000 in Saint Vincent and the Grenadines, West Indies. The Managing Director of the Applicant is Mr Joseph Severin. The Applicant Company is a personal investment vehicle of Mr Severin. At some time during the course of 2001, Mr Severin had discussions with a Mr John Wilch about international financial transactions. Mr Wilch introduced Mr Severin to a number of people with whom Mr Severin might invest funds. Mr Wilch was associated with a company called Bainton Investments Pty Ltd ("Bainton") located in Canada. Mr Severin was told by Mr Wilch that Bainton provided investment advisory services. 25 In March 2001, Mr Wilch told Mr Severin that Mr David Wallader was a financial adviser and investment professional. Mr Severin says that on 1 March 2001 he spoke from Grenada on the telephone to Mr Wallader who told him he was a veteran of banking transactions and was a dealer in bank debenture notes. Mr Severin has never met Mr Wallader. Mr Wallader told Mr Severin in April 2001 that he had interests in the cattle industry. Mr Severin also has interests in the cattle industry. Mr Severin says these common interests made him trusting of Mr Wallader. 26 Mr Severin says that he agreed to apply the Applicant's funds to an investment in bank debenture notes and transfer US$2 million to Mr Wallader for investment for that purpose. Mr Severin says he always regarded Mr Wallader as the principal in this arrangement. 27 Mr Wallader sent Mr Severin an agreement to facilitate the investment. The agreement was one made between the First Respondent described as the "Opportunity Provider" and the Applicant described as "The Capital Investor". The agreement is a two page document which records that the parties have entered into the agreement for the purpose of creating profits by a mode of investment described as "Private Placement High Yield Investment". The Opportunity Provider was to facilitate the investment of the funds. 28 The Capital Investor agreed to provide the Opportunity Provider with US$2 million described as "The Principal Sum", under a "joint venture agreement between the Opportunity Provider and The Capital Investor ... only on the basis that the said joint venture agreement protects and guarantees the return of The Principal Sum to The Capital Investor at the end of the said joint venture agreement. At this time, the Opportunity Provider agrees to return The Principal Sum in its entirety to The Capital Investor. The document provides by clause 7 that all profit arising from the investment is to be the "property of The Capital Investor in shares equal to an amount of net 100% per week to The Capital Investor for a term of 40 weeks from the start of trading". Notwithstanding clause 7, the distribution of profits, made weekly, from the capital invested was to be 82.5% to the Applicant, 5% to Mr Wallader and 12.5% to Mr John Wilch and an entity described as "Bainton Management Ltd". It seems for the purposes of the agreement that Bainton Management and Mr Wilch are one and the same. The duty assumed under the agreement by the First Respondent was to provide the Applicant with the "contracts and expertise, advice, information and know-how to enable the purpose of the investment to be realised and [shall] provide management advice and information to The Capital Investor". 30 Mr Severin on behalf of the Applicant signed the agreement dated 30 March 2001 at Grand Anse, St Georges, Grenada and faxed it to the First Respondent care of Mr Wallader. Mr Wallader signed the document and on 2 April 2001 wrote to Mr Severin thanking him for the documents, confirmed the execution of the document, noted where profits from the investment were to be transmitted and said "it is expected that the contracts [investment contracts] will be drawn during the latter part of this week and the start date should be within the nominated time. You have the details of my Company Bank Account. Once you have remitted the funds, would you kindly forward a copy of the remittance documents so I may communicate with my bank if required". The letter bears the signature of W D Wallader. No objection is taken to paragraph 9 of the affidavit of Mr Severin exhibiting the letter from the First Respondent signed by Mr Wallader which exhibits a clear and precise example of Mr Wallader's signature. 31 The agreement of 30 March 2001 further provided that the Opportunity Provider agreed to provide the Applicant with a guarantee. The documents also included a Deed of Investment Guarantee and Indemnity . That document was signed by Mr Severin and faxed to Mr Wallader. It contemplated a guarantor "unconditionally and irrevocably guaranteeing to the investor (the Applicant), the repayment of The Principal Sum (US$2 million) and Dividends AND the Guarantor as a separate and independent principal obligation indemnify and hold safe the investor against any loss or expense whatsoever and howsoever arising in connection with the investment". 32 The document defined the guarantor by reference to a schedule, described the guarantee as a continuing guarantee, acknowledged that the guarantor had obtained independent legal advice as to the effect of the document and recognised that the guarantee would be valid notwithstanding certain nominated events. 33 The difficulty with the document is that the schedule nominating the identity of the guarantor simply recited the name of the First Respondent which was the principal under the related agreement in any event. Mr Severin says the guarantee was to be a personal guarantee by Mr Wallader not simply another documented commitment by the First Respondent. It seems the document as submitted to Mr Severin contained the reference to the First Respondent in the schedule as guarantor. Mr Severin says he simply did not read the document properly and assumed Mr Wallader was the nominated guarantor. 34 Mr Severin says that on 30 March 2001 he caused a bank transfer to be made on behalf of the Applicant of US$2 million into an account nominated by Mr Wallader. The funds were transferred to the credit of an account in the name of the First Respondent with the National Australia Bank Ltd bearing an account description COMWFUSD1 and an additional code described as SWFT Code NATAAU3304B. Mr Severin says that the National Australia Bank records verify the transfer and that at no stage either orally or in writing has either Respondent contended to Mr Severin that the funds have not been received. On 29 March 2001, Mr Severin sent Mr Wallader a letter by facsimile confirming the instruction to his bank to transfer funds to the credit of the First Respondent at the above account. 35 Mr Severin says that on 22 May 2001 he received a copy of a letter from Mr Wilch to Mr Wallader which had the effect of advising Mr Severin that Mr Wallader had not been able to place the Applicant's funds into a pool for investment for particular reasons. 36 Mr Severin says that since that time, he has not received any further correspondence from Mr Wallader or the First Respondent advising him of the actual location of the Applicant's funds or the placement of those funds for investment purposes. 37 Mr Severin says that subsequent to the provision of the Applicant's funds for investment and the expiry of the 40 weeks contemplated by the agreement, Mr Severin spoke to Mr Wallader regularly about when the funds would be returned. These telephone calls took place frequently, often daily. Mr Severin says he always initiated these calls. Mr Wallader apparently never returned any telephone calls. Mr Severin says that on pressing for information about the return of the funds, Mr Wallader's tone became evasive. Mr Severin says he was given many assurances by Mr Wallader that the funds would be returned in the near future. Mr Severin made a demand upon Mr Wallader for return of the funds in early 2002 by telephone and sought return of the funds by facsimile letter sent to Mr Wallader in July or August 2002. 38 Within six months of the transfer of the Applicant's funds to the First Respondent, Mr Severin spoke with Mr Wallader and was told that notwithstanding the reference to Bainton Management in the agreement of 30 March 2001, neither Bainton Management nor Mr Wilch continued to have a role in the performance of the investment agreement. Accordingly, Mr Severin did not pursue Mr Wilch about the matter further. 39 Mr Severin says that on two or possibly three occasions in telephone discussion with Mr Wallader between June 2003 and 1 March 2005, Mr Wallader told Mr Severin the Applicant's funds had been moved to Switzerland where other entities were in charge of them. Mr Wallader did not identify any individual or the relevant entity involved, the nature of that entity or any details of how the Applicant's funds were held. Mr Severin says that notwithstanding these things, the Applicant did not commence legal proceedings for some considerable time because Mr Severin believed that the Applicant's funds were to join a "pool" for investment with other funds and if that pooled investment could not be achieved the funds would be returned to the Applicant. 40 Mr Severin says that he ultimately elected to appoint commercial agents, Australian Receivables Pty Ltd ("ARL"), to try and recover the funds either from the First Respondent or Mr Wallader. 41 Ms Lisa Busch is an account manager employed by ARL. ARL received instructions on 22 July 2004 from the Applicant to try and recover the Applicant's funds from the Respondents. On 23 July 2004, Ms Busch spoke on the telephone to Mr Wallader and asked him what his intentions were about repayment of the Applicant's funds. Mr Busch says the conversation was lengthy and pleasant. Ms Busch says Mr Wallader's advice was that "repayment of the Applicant's funds 'wasn't an issue' and the Applicant could wait for the investment to mature in 45 to 50 days with interest but if the Applicant wanted the money to be withdrawn it would still take 45 to 60 days to retrieve the funds". 42 Mr Severin expressed scepticism about this advice from Mr Wallader. On 28 July 2004, Ms Busch conveyed that scepticism to Mr Wallader in a telephone call and on the same day ARL sent a letter to Mr Wallader by facsimile advising that ARL had instructions to exhaust all avenues of recovery of the Applicant's funds should the redemption of the investment not be resolved immediately. ARL sought confirmation in writing from Mr Wallader explaining the process necessary to redeem the investment. ARL advised that upon receipt of satisfactory proof that the monies would be available within 60 days, no legal proceedings would be necessary. This confirmation was sought by 4 August 2004. 43 On 3 August 2004, Ms Busch received a letter from Mr Wallader on the letterhead of the First Respondent. He came to me through a party based in Canada. The request was to place funds in a 'high yield program' which are completed in United States dollars and that investment, in this case, lodged for investment 'off shore', not in Australia. Funds are held in a pool pending entering into a program, and can only be entered into a program when sufficient funds are available and a program is also available. There is no time given or guarantee when a fund may start to earn. This has never been received from Lifetime Investments Ltd or Mr Severin. I do not have an address of Mr Severin or any contact numbers of Mr Severin. I do have contact numbers and address of the party in Canada. Any such documentation will be strenuously defended as the company does not hold the funds. There is no objection, however written request for withdrawal is required. Please consider the time difference we all encounter in communication with off shore Constituents. He has been unavailable for the past few days due to conference and court commitments. Payment will be in United States dollars. I undertake to have this matter resolved without delay and time being of the essence. Mr Wallader describes the instrument as a "notice of withdrawal". Ms Busch says she had further conversations with Mr Wallader in which Mr Wallader said he could not disclose information concerning the placement of the funds due to reasons of confidentiality. 45 Ms Busch says that in order to secure the redemption of the investment, she drew up a document she described as a "notice of withdrawal". The document was faxed to Mr Severin, signed by him and on 11 August 2004 the document dated 5 August 2004 was sent by facsimile transmission to Mr Wallader and the First Respondent. The document required a refund of US$2 million being the amount of the funds deposited with the First Respondent pursuant to the agreement of 30 March 2001. The notice nominated the trust account of ARL at the National Australia Bank as the account for receipt of the monies and provided the details of the account. 46 Ms Busch says the notice of withdrawal was formulated simply to provide the instrument Mr Wallader asserted was necessary in order to effect the refund of the monies. 47 On 11 August 2004, Ms Busch spoke by telephone with Mr Wallader to confirm the transmission of the notice of withdrawal by facsimile. Mr Wallader confirmed the relevant facsimile transmission number. 48 On 17 August 2004, Ms Busch spoke with Mr Wallader. Mr Wallader told Ms Busch that he would be in Singapore for a few days. Ms Busch suggested Mr Wallader might like to take the opportunity of meeting with ARL's managing director, Mr Paul Cooney who would also be in Singapore at that time. Ms Busch says that Mr Wallader's disposition and manner in the conversation changed immediately. Mr Wallader became abrupt and curt. Mr Wallader said that he would be flying from Singapore that night to go to Europe to "try and fast track the withdrawal of the funds". Ms Busch says this was the only conversation or other communication in which Mr Wallader provided any indication of the location of the funds. Ms Busch asked Mr Wallader for the details of the solicitor for the Respondents and Mr Wallader refused to give Ms Busch those details. Mr Wallader said he was "doing everything he could". 49 On 24 August 2004, Mr Cooney sent Mr Wallader a letter again confirming the transmission of the notice of withdrawal on 11 August 2004 and confirming ARL's authority to receive the funds and, in effect, therefore provide the Respondents with a good "discharge" upon receipt of the funds. 50 On 20 August 2004, Ms Busch received an email from Mr Wallader's email address under the name of Mr Wallader. Mr Wallader referred to the facsimile of 11 August 2004 and Ms Busch's telephone conversation which he says took place on 18 rather than 17 August 2004. Therefore settlement draw down will be 17 October, 2004, plus the normal Bank remittance/transfer time of the remittance of funds. It is noted that funds are to be placed in an account with the National Australia Bank --- your [ARL] trust account. I assume that such an account is a US dollar account as the party will be lodging funds in USD currency. No liability of cost of conversion or delay in acceptance of the funds will be the care of the remitter. Our company does not owe your Client; your Client wished to enter into an investment which now he has nominated 'no further interest in the investment'. I, on behalf of Commercial Worldwide Financial Services Pty Ltd, have lodged the notice of withdrawal and you have now been advised of the settlement date. 52 The notice of withdrawal had been signed by Mr Severin. 53 Ms Busch says that the statement in the email of 20 August 2004 was the first occasion either orally or in writing that Mr Wallader asserted to Ms Busch that the First Respondent did not owe the Applicant the monies demanded. 54 Ms Busch says that the reference in the email to ARL establishing a clear understanding with Mr Severin of the investment before making "threats" seemed odd. Ms Busch says she had spoken to Mr Wallader on a number of occasions and on three occasions to her recollection Mr Wallader suggested the Applicant knew and understood the investment was unreliable as to its date of refund or return. 55 On 25 August 2004, Ms Busch sent Mr Wallader an email noting the proposed settlement date for draw down of the funds of 17 October 2004 and the nomination of ARL's National Australia Bank trust account. Ms Busch confirmed that the account was not a US dollar account however the National Australia Bank had been advised of the expected transfer and all costs of transfer would be accepted by ARL. As to the question of further proof of ARL's authority, Ms Busch sent a further copy of the letter from Mr Cooney and noted that ARL had been provided as proof of the debt with a copy of the agreement of 30 March 2001. Ms Busch requested further confirmation that the notice of withdrawal had been lodged with the "investment group" spoken of by Mr Wallader. 56 On 27 August 2004, Mr Wallader telephoned Ms Busch and told her he was not in Australia but that the Respondents were happy with the form of the notice of withdrawal provided by the Applicant and its agents and that he would be returning to Australia in a week and a half at which stage Ms Busch would be provided with confirmation of the location of the funds. 57 On 9 September 2004, Ms Busch attempted to further contact Mr Wallader and was advised by a person who described herself as Mrs Wallader that Mr Wallader would be returning to Australia in a further three weeks. We must insist that you provide this office with evidence from an appropriate party, directly involved with this transaction, which confirms the monies are being withdrawn from the investment and will be deposited into the bank account details previously provided to you. Documented clarification is also necessary on this point. In that email Mr Wallader says that he is tired of Ms Busch's unwarranted criticism. Mr Wallader says that he will consider what action might be taken against ARL, Ms Busch and possibly the applicant company should Ms Busch wish to continue pressing her position. Mr Wallader describes Ms Busch's conduct as continual harassment. As to the observation that the agreement did not require a 60 day notice of withdrawal, Mr Wallader observed that Ms Busch had embraced the notion of a notice of withdrawal and a 60 day period of notice. Mr Wallader repeats that ARL has been advised that the notice of withdrawal has been accepted and a date arranged for settlement of the return of the investment funds. Mr Wallader describes the pressure from Ms Busch for further confirmation as harassment and the suggestion that the managing director of ARL might meet with Mr Wallader in Singapore as audacious. In the context of Mr Wallader's annoyance about pressure for confirmation by Ms Busch, Mr Wallader reiterates strongly the arrangements in relation to the withdrawal of funds, the acceptance of the settlement date of 17 October and the settled arrangements as to the banking details for receipt of the refund of the investment monies. 60 Mr Wallader seems to be sufficiently annoyed about the demands from Ms Busch that he suggests he might take legal action against her. As to the request for information concerning the investment of the monies, Mr Wallader says, "We will discuss your request for additional information to be supplied. Confidential means --- secret, private entrusted with confidence --- I have such an arrangement with others and I will not break that confidentiality without legal advice". 61 Mr Wallader seems to be talking about the confidentiality of the arrangements he has with others as to the investment which prevents him from advising his own contracting party of the details of the investment of that party's monies notwithstanding the description in the agreement of the Applicant as a joint venturer with the First Respondent. I am comfortable with the matters referred to by you as harassment are taken to whatever authorities you deem appropriate, as the history of the file supports the consistent request and in fact the agreement, that some evidence supporting the assertions that a notice of withdrawal has been given and that the funds will be paid on 17 October. I do not believe there has been inappropriate contact with you in all the circumstances. We have provided all of the details requested by you, and have consistently asked for some satisfactory form of confirmation that this is not just a delaying tactic. I am sure you appreciate that the sum involved is not insignificant, that you have had control of the funds for a long period, and that my client is seeking repayment of the principal sum only. It is encouraging that we have your emailed advice that it will be repaid, but we simply seek some form of confirmation that this is the case. Mr Wallader said he would "sought it out when he was back in the country". Ms Busch suggested Mr Wallader was not out of Australia and Mr Wallader replied, "I've only just returned". Ms Busch sought confirmation that nothing had changed concerning the refund of the monies and Mr Wallader confirmed 17 October 2004 as the drawdown date for the refund. 64 On 19 October 2004, Ms Busch telephoned Mr Wallader as no information had been received as to the refund. Mr Wallader said the drawdown had not occurred because 17 October 2004 was a Sunday. Mr Wallader said he would be "in contact" with "people" about the drawdown. Ms Busch asked if she could contact the relevant people. Mr Wallader declined and said he did not know where he stood legally in giving their details. 65 No refund occurred on 17 October 2004 or at all. 66 Ms Mustafa-Ay is a solicitor employed by Harwood Andrews, the solicitors for the Applicant. On 11 October 2004, Ms Mustafa-Ay wrote to the First Respondent addressed to Mr Wallader confirming the arrangement for the drawdown and refund of the monies on 17 October 2004. On 22 October 2004, the solicitors for the Respondents, Watts & Company, wrote to Harwood Andrews proposing repayments of US$50,000.00 per month without admission of liability but put on the basis of a "gesture of goodwill ... until such time as our client is able to arrange for repatriation of the principal of USD$2m (million)". Likewise, would you please identify any documentation which has the implication, either express or implied of investing any personal liability in Mr Wallader. We look forward to hearing from you within seven days. It is Exhibit "EMA3" to the affidavit of Ms Mustafa-Ay filed 10 March 2005. It is marked "without prejudice". No objection is made to the exhibit. In terms, the letter does not make an offer but rather states a proposition, namely, "Our client is attempting to ensure the urgent repatriation of the funds to this jurisdiction from their external source, and would expect that upon receipt of the monies, settlement of the repayment of funds due to your client can take place within 14 to 21 days". 75 For present interlocutory purposes, I am prepared to accept that there is compelling evidence that Mr Wallader nominated a National Australia Bank account in the name of the First Respondent as the account to which the investment monies were to be transferred and that the monies were so transferred. I also accept that the monies were transferred for the purposes of the agreement of 30 March 2001 and were to be applied for investment purposes on the terms and conditions of that agreement. Moreover, I accept that the Applicant has not received any part of the US$2 million and no explanation has been given either orally or in correspondence or by affidavit in these proceedings as to the location of the funds, the nature of the investment, the entity holding the funds, whether the funds have been invested at all or any explanation of any dealing in relation to the funds. The Applicant sought to penetrate that iron curtain by securing access to documents pursuant to the Order of Kiefel J on 10 March. That Order required the Respondents to "forthwith upon service of a sealed copy of this order deliver up to the Applicant all originals and copies of the documents and classes of documents enumerated in Schedule A". The Order was executed at 4 Covey Street, Chermside. Mr and Mrs Wallader were present. After discussion between Mr Wallader, Mr Mills and Mr Virgo concerning legal representation on behalf of the Respondents and related matters, the order was executed and an arrangement made with the solicitors for the Respondents to remove the documents and equipment to the office of Mr Mills, subject to a certain undertaking. The following morning, the solicitors for the Respondents were to attend the offices of Mr Mills, examine the documents and consider objections to production of the material. 81 The Respondents failed to file a Defence on or before 25 April 2005. 82 On 18 July 2005, the Applicant filed an Amended Statement of Claim. 83 On 20 July 2005, the lawyers for the parties attended a case review conference before Deputy District Registrar Reynolds who made orders that the Respondents be given leave to file and serve their defence by 9 August 2005 and inspection of the documents by the Respondents for the purpose of separating the documents into those the subject of a claim for privilege and those not so subject, be completed by 9 August 2005. 84 On 28 July 2005, the solicitors for the Respondents requested a deferment of the sorting task for a period of eight weeks due to a medical condition suffered by the Second Respondent which would require surgery for the removal of a kidney. 85 On 10 August 2005, the solicitors for the Respondents requested an extension of time by consent for the inspection of documentation until 9 October 2005 and advised that the Second Respondent would resist "any application to enforce the terms of Deputy Registrar Reynolds' order of 20 July 2005 in relation to the inspection of documentation". Ms Mustafa-Ay asserts that since the orders of 16 March 2005 virtually no actions have been taken that she is aware of by the Respondents to undertake the prioritisation task of sorting the documents into the categories of privileged and non-privileged documents, pursuant to the Order of Kiefel J and the subsequent order of Deputy District Registrar Reynolds. 86 During March 2005, a dispute arose between the Applicant's solicitors and the supervising solicitors as to the scope of the role of the supervising solicitors in perusing each and every document. It seems the Applicant's solicitors took the view that the role of the supervising solicitors was to supervise the sorting process to be undertaken by the Respondents and their legal advisers. 87 On 15 November 2005, the supervising solicitors made an application before his Honour Justice Spender, in effect, for directions. 89 On 9 February 2006, since the Respondents had failed to compile a list asserting a claim for privilege within the time limited by the order, the Court advised the Applicant that it was now at liberty to inspect the documents produced to the Court by the supervising solicitors. Counsel for the Applicant saw these documents in Melbourne for the first time in the week beginning 13 February 2006. 91 Having examined those documents the Applicant's legal advisers sought in late March 2006 to bring on this application ex parte . However, the Court required the Notice of Motion to be heard inter-parties. The affidavit of Ms Mustafa-Ay exhibits documents which she describes as copies of documents photocopied at the Federal Court consequent upon the failure of the Respondents to file a list asserting a claim for privilege in respect of any document, within the time limited by the order of Spender J. The Second Respondent objects to paragraph 43 of Ms Mustafa-Ay's affidavit referring to "documents seized from the Respondents" and paragraphs 44 and 45 of Ms Mustafa-Ay's affidavit exhibiting true copies of documents marked Exhibits "EMA9" and "EMA10" on the ground that the documents "are not proved simply by saying that they were taken from an identified place". 92 Ms Mustafa-Ay, by paragraph 9 of her affidavit, deposes to execution of the Anton Pillar order by her agent, Mr Mills, and the identification by her agent of ultimately seven to nine boxes of documents taken into the possession of her agent although initially 47 boxes of documents were removed from 4 Covey Street, Chermside. Ms Mustafa-Ay says on information and belief from Mr Mills that the number of boxes initially taken at the time of execution of the order might have been substantially less had Mr and Mrs Wallader assisted by identifying the materials relating to the order. The affidavits of Mr Mills describe the execution of the order. 93 Ms Mustafa-Ay deposes to the order by Kiefel J directing the delivery of the documents taken from 4 Covey Street, Chermside into the possession of the supervising solicitors and the order of Spender J directing those solicitors to deliver the seized documents to the Federal Court. 94 Ms Mustafa-Ay further deposes to the Court's letter of 9 February 2006 sent to her confirming liberty to the Applicant to inspect the documents so delivered. Ms Mustafa-Ay deposes to the steps taken by her agent, Forbes Dowling Solicitors (Mr James Morgan) to then inspect and make copies of particular documents from those documents delivered to the Court by the supervising solicitors. Paragraph 43 refers to documents seized by the Respondents which suggests a reference to the documents seized pursuant to the Anton Pillar order since no other documents have been seized from the Respondents. The conjunction of paragraphs 43 and 44 make that clear because Ms Mustafa-Ay refers to each document as a photocopy of a document made by officers of the Federal Court Registry staff under the supervision of Mr Morgan. Some of those copy documents are the documents Ms Mustafa-Ay says are produced before her marked "EMA9" cross referenced to a bundle of documents delivered to the Court marked documents 1 to 125. Those copy documents forming Exhibit "EMA9" are said by Ms Mustafa-Ay to be some of the documents from documents 1 to 125 thought by Ms Mustafa-Ay to be relevant for present purposes. Perhaps paragraph 44 ought to say that the documents "EMA9" are copies of those documents delivered to her by her agent and she is informed by Mr Morgan and verily believes the documents sent to her are true copies of those made by the Federal Court Registry staff under his supervision on 10 February 2006. However, Mr Morgan is Ms Mustafa-Ay's agent expressly for the purpose of copying the delivered documents and I infer that Mr Morgan's knowledge is imputed to his principal and Ms Mustafa-Ay can speak directly of the documents having established the material facts of the sequence described above. Similarly, the documents forming Exhibit "EMA10" cross referenced to Appendix 2 and numbered "A1" to "A21" are produced to Ms Mustafa-Ay as true copies of the documents made by Federal Court Registry staff under the supervision of Mr Morgan. 95 I am satisfied for interlocutory purposes that the documents marked "EMA9" and "EMA10" are admissible. Appendices 1 and 2 identifying each document within "EMA9" and "EMA10" is attached to Ms Mustafa-Ay's affidavit. 96 By paragraph 46, Ms Mustafa-Ay deposes to and exhibits ("EMA11") an inventory list prepared by the solicitor supervising the execution of the Anton Pillar order, of documents taken from 4 Covey Street, Chermside. Ms Mustafa-Ay by paragraph 46 ought to swear to information from the author of the document as to the authorship of the list and assert a belief in the information. The Applicant has proffered an undertaking to put such a paragraph in admissible form. Such an undertaking should be made good by Ms Mustafa-Ay filing a further affidavit within 14 days of publication of these Reasons swearing to the source of the information and her belief. 97 Document 0012 of "EMA9" is a document which bears the title "COMMERCIAL WORLDWIDE FINANCIAL SERVICES PTY LTD --- National Australia Bank --- USD A/C". 98 The document describes debit and credit entries to the account for the period "1/3/2001 to 30/6/2001". The first entry on 1 March 2001 is the receipt of US$1 million from Mr Roger de Saint Quentin (see paragraph [8] of these Reasons). The account shows a credit entry on 4 April of US$2,000,100.00 described as "One Our Clients". The account shows two debit entries on the following day, 5 April 2001. The first is a withdrawal of US$250,000.00. The second is an amount of US$1,760,000.00. The description field for the second account contains the letters CPFS. The document does not bear an account number. CPFS may be an acronym for Commercial and Primary Financial Services Pty Ltd ("CPFSP/L"). Document "A19" is a bank statement for that company for an account at the Bank of Queensland Ltd Account BSB 124-001 --- USD Foreign Currency Account 170415, for the period 1 June 2001 to 1 July 2001. 99 At 1 June 2001, the opening balance was US$1,125,000.00. On 6 June 2001, a total of US$250,000.00 was transferred to two accounts at the Bank of Queensland Ltd, 93-170415 and 90-170415. 100 On 19 June 2001, US$40,000.00 was transferred to "Asia-Pacific Corp". On 19 June 2001, US$110,000.00 was transferred to Account 94-170415. On 1 July 2001, the closing balance of the account was US$725,000.00. Interest on the account of US$3,774.86 was credited to Account 90-170415. 101 Bank statements for CPFSP/L for Bank of Queensland Account BSB 124-001, USD Foreign Currency Account 170415 for the important period of the transfer on 5 April 2001 (that is, statements for the period 1 April 2001 to 1 May 2001) from the USD account of the First Respondent at the National Australia Bank into the Bank of Queensland USD account are not available and were not produced to the solicitors for the Applicant on execution of the Anton Pillar order. Nor were documents relating to the Bank of Queensland Accounts 90-170415, 93-170415 and 94-170415 produced to the solicitors on execution of the Anton Pillar order. However, the statements that were produced for CPFSP/L show that monies were transferred from the CPFSP/L account to each of Accounts 90, 93 and 94 --- 170415. The date of the credit in the First Respondent's account is close to the instruction date by Mr Severin to the Applicant's bank. If acted upon reasonably promptly, the international electronic transfer to the First Respondent's account is likely to have occurred on or about 4 April. I am also prepared to infer for interlocutory purposes that the substantial transfer on 5 April to "CPFS" was a transfer to the USD account at the Bank of Queensland of CPFSP/L. Further, I infer for interlocutory purposes that the withdrawal of US$250,000.00 occurred with the consent and approval of Mr Wallader. 103 Mr Wallader, by his pleading, does not admit the receipt of the Applicant's funds and has elected not to swear and file an affidavit responding to the matters asserted against him and the chronology of communications deposed to in the Applicant's affidavits. Mr Wallader is in a position as the principal individual involved in the events for the Respondents to say that the Applicant's funds were not received into the First Respondent's account (if it be the case) or that the funds were invested in a particular way, at a particular place, in a particular class of investment and the person or entity by which the investment was undertaken. 104 If the investment was made and the funds lost, Mr Wallader could simply say so and depose to the relevant particulars. However, Mr Wallader chooses to put the Applicant to proof at a trial of an action. Whilst Mr Wallader is entitled to so plead and has no obligation to file any affidavit material in answer to the Applicant's motion, he ought not to be surprised if, in the face of compelling evidence of a transfer of AU$2,854,700.00 into his care for the purpose of providing the Applicant with "expertise, advice, information and know-how to enable the purpose of the investment to be realised" [29], inferences are drawn against him. 105 For interlocutory purposes, I am prepared to infer that Mr Wallader has received the Applicant's funds and has applied those funds to his own use or to his use and that of his wife whether in his own name or that of his wife or through one or more companies of which he and his wife are shareholders and directors. I infer from the facts of the conduct alleged against Mr Wallader that he has dealt with the Applicant's funds so as to obfuscate the ultimate transfer or use of the funds. 107 The First Respondent is an Australian proprietary company registered on 30 August 1991 which commenced operation on 15 November 1991. From 27 October 1998, the registered office of the First Respondent has been 4 Covey Street, Chermside West which is the principal residential address of Mr Wallader and his wife, Mrs Jill Margaret Wallader. It is also the principal place of business of the First Respondent. There are two $1 shares issued in the First Respondent. Mr and Mrs Wallader each hold one share. Mr and Mrs Wallader have each been a director of the First Respondent since 3 September 1991. Accordingly, on or about 30 March 2001 when the Applicant transferred US$2 million into the account of the First Respondent, both Mr and Mrs Wallader were directors of the company. Mr O'Donnell QC accepts that if US$2 million was transferred into the account of that company, Mr Wallader must be taken to have known that such a substantial sum was paid to the account and if the money was transferred or dispersed from that account, Mr Wallader must be taken to have known, consistent with his governance duties as a director of the company, of the application of the funds. Similarly, Mrs Wallader must also be taken, consistent with her governance duties as a director of the company, to have known of the receipt of the monies and the application of the funds particularly since the company is one in which there are only two issued shares to a husband and wife both of whom are directors and the company conducts its affairs at a registered office and principal place of business at the residential home of those individuals. 108 Facsimile transmission sheets make reference to a company described as Commercial and Primary Financial Services Pty Ltd . That company is an Australian proprietary company registered on 12 November 1990. From 27 October 1998, the registered office of the company has been 4 Covey Street, Chermside West. Mr Wallader and Mrs Jill Wallader have each been a director of the company since 26 November 1990. The principal place of business of the company has since 29 January 1999 been the residential home of Mr and Mrs Wallader at 4 Covey Street, Chermside West. Mrs Jill Wallader has been the Company Secretary since 26 November 1990. There are two ordinary $1 shares, one each held by Mr and Mrs Wallader. 109 D & J Wallader Pty Ltd is the trustee of the Wallader Family Trust. The trustee is an Australian proprietary company registered on 18 May 1999. From 18 May 2000, the registered office and principal place of business of the company has been 4 Covey Street, Chermside West. Mr Wallader and Mrs Jill Wallader have each been a director of the company from 18 May 1999 and Mr David Wallader has been the Company Secretary since 18 May 1999. There are two issued $1 shares in the company, one share each held by Mr and Mrs Wallader. The company in its capacity as trustee of the Wallader Family Trust is the owner of Colinton Station . That pastoral property is operated by Colinton Station Pty Ltd which was formerly called Dairy World Pty Ltd . That company was registered on 17 May 2000. The registered office and principal place of business of that company is 4 Covey Street, Chermside West. Mr and Mrs Wallader have each been a director of that company from 17 May 2000 and Mr Wallader has been the Company Secretary from 17 May 2000. There are 100 issued ordinary shares of $1 each. Mr and Mrs Wallader each hold 50 fully paid shares in the company. Colinton Station Export Pty Ltd is an Australian proprietary company registered on 2 February 2004. Its registered office and principal place of business is 4 Covey Street, Chermside West. The directors are Mr and Mrs Wallader and Mark David Wallader. Mr William Wallader is the Company Secretary. There are 400 ordinary $1 shares issued in the company. Mr and Mrs Wallader each hold 150 shares and Mark David Wallader holds 100 shares. 110 A question then arises as to the evidence the Applicant has adduced of the manner of the use or application of the funds. By paragraph 3, the Second Respondent was at all material times a director and shareholder of the First Respondent and a provider of financial advisory services. By paragraphs 4 and 5, the Second Respondent represented to Mr Severin that he was very experienced in banking and investment and debentures and a financial adviser with international expertise. 112 By paragraphs 6, 7 and 8, the Applicant entered into the agreement of 30 March 2001 on the terms pleaded and transferred US$2 million to the First Respondent's account. By paragraph 9, the First Respondent by Mr Wallader admitted that it failed to implement the investment. By paragraph 10, the First Respondent is indebted to the Applicant in the sum of US$2 million and by Mr Wallader's email of 3 August 2004, the First Respondent has admitted the debt. By paragraph 11, the debt has not been paid despite demands. 113 By paragraph 12, the agreement was rescinded in 2002 by reason of a total failure of consideration and either by reason of breach or conduct giving rise to rescission, the Applicant has suffered loss. 114 By paragraphs 14, 15, 16, 17 and 18, the Second Respondent by a Deed of Guarantee and Indemnity guaranteed the repayment of the funds transferred to the First Respondent on certain written terms and terms implied by law. Alternatively, the giving of a guarantee by the Second Respondent was a pre-condition to the transfer of the funds to the First Respondent. Notwithstanding the endorsement of the name of the First Respondent in the schedule to the guarantee instrument, the parties understood by reason of representations by Mr Wallader that the purpose and intention of the document was that the Second Respondent became a guarantor of the obligations of the First Respondent. 115 By paragraph 19, the Second Respondent is estopped from denying his position as a guarantor. 116 By paragraph 20, the conduct of Mr Wallader in transmitting the guarantee instrument and failing to indicate the manner of the endorsement of the Schedule, constituted conduct inducing the Applicant to enter into the agreement. 117 By paragraph 21, the Applicant says the conduct is misleading and deceptive conduct in contravention of the Fair Trading Act (Qld) 1989 and the Trade Practices Act 1974 (Cth) and the Second Respondent is a person involved in that contravention. 118 By paragraph 22, the conduct of Mr Wallader was unconscionable conduct in contravention of s.51AB of the Trade Practices Act . 119 By paragraph 25, the proposed investment was a financial product for the purposes for the Corporations Act 2001 (Cth) and the conduct of the Second Respondent constituted false and misleading conduct contrary to s.1041E(c) of the Corporations Act 2001 (Cth). 120 By paragraphs 28, 29, 30, 31 and 32, the Second Respondent held himself out as an investment and business financial adviser making a series of representations as to his skill, experience and background. The relationship between the Applicant and the Second Respondent was a fiduciary relationship imposing duties upon the Second Respondent to act in good faith, make proper disclosure, properly account to the Applicant and discharge a series of duties pleaded at paragraph 31. 121 By paragraph 32, the Second Respondent breached those duties. 122 By paragraphs 33 and 34, the Second Respondent owed the Applicant six pleaded duties of care and the Second Respondent has breached those duties. 123 By paragraph 34A, the Applicant says that by reason of the agreement, the transfer of the funds to the First Respondent, the failure to invest the funds and the failure to refund the monies upon demand being made, either the First Respondent or the Second Respondent holds the funds or properties purchased by the use of the funds on a resulting, implied or constructive trust for the Applicant. By reason of the same matters, the Applicant says it is unconscionable for the Second Respondent to retain the benefit of the funds and in the alternative, by reason of the same matters, the Second Respondent has been unjustly enriched . The Applicant says it is entitled to restitution. 124 By paragraph 35, the First Respondent constituted itself a trustee for the funds and the Second Respondent procured a misappropriation of the funds. 125 The remedial orders claimed are damages in the sum of US$2 million and equitable damages, damages against the Second Respondent pursuant to contraventions of the Fair Trading Act and the Trade Practices Act , a declaration that the Second Respondent holds the funds or any property purchased with the funds on a resulting implied or constructive trust , such other orders as effect restitution, an inquiry as to damages and a tracing order . The Applicant says it simply does not know how the money has been used or applied by Mr Wallader except to say that US$250,000.00 was withdrawn by Mr Wallader on 5 April 2001 from the account of the First Respondent to which the Applicant's funds were transferred and US$1,760,000.00 was transferred to another account controlled by a company controlled by Mr Wallader and his wife. Certain documents arising from those searches are exhibited to the affidavit of Mr Mills. One such document is the Deed of Settlement for the Wallader Family Trust which reveals a field of beneficiaries of the trust associated with the family interests of Mr and Mrs Wallader. The income of the trust is subject to discretionary distribution by the trustee amongst the field of the beneficiaries. Similarly, the trustee stands possessed of the capital of the trust on or prior to the termination date for one or more of the beneficiaries as the trustee determines in its discretion. 129 The documents reveal that the trustee of the trust entered into a contract to acquire Colinton Station on 19 October 2000 and the transfer instruments were lodged on 16 February 2001 well prior to the transfer of the Applicant's funds to the First Respondent. Settlement of the acquisition seems to have occurred on 1 March 2005. The property was purchased for $2,500,000.00. 130 Mr and Mrs Wallader continue to retain ownership of the first three properties described at paragraph 127 and the trustee retains ownership of Colinton Station . Nevertheless, the Applicant is apprehensive that some of the investment funds have been applied to particular purposes associated with some of these properties. For example, Document 0013 which is a statement of expenses for the purposes of National Australia Bank Account No. 46 872 7272 for the trustee of the trust for the period 22 December 2000 to 29 March 2001 shows an expenditure of $1,882,563.02 for the purchase of Colinton Station and Document 0051 shows a cheque drawn on that account for the same amount. The documents do not reveal the source of the further amount of $617,000.00 (approximately) required to complete the settlement of the transaction. Document 0024 shows the receipt of funds into the same account of $1,894,657.06 but no document reveals the source of those funds. A spreadsheet Document 0044 shows the transfer of $1,894,657.06 for the purchase of Colinton Station on 1 March 2001. The documents reveal some information for a No. 2 Account at the National Australia Bank in the name of the First Respondent - Account 62-775-0665. The bank statement for the No. 2 Account for the period of the transfer of the Applicant's funds to the First Respondent and the period 16 March 2001 to 11 April 2001 does not show any substantial deposit which might be consistent with the withdrawal of US$250,000.00 from the First Respondent's USD account on 5 April 2001. The documents obtained on the Anton Pillar order show that on 29 May 2001 ("A18") the operator of Colinton Station purchased equipment to the value of $121,496.10 and on 17 May 2001 ("A17") equipment purchases by the operator in the form of machinery totalling $552,256.50. The Applicant says the documents produced on the Anton Pillar order do not demonstrate the source of the funds for those acquisitions. 131 The Applicant says that although it is conceded that the two residential properties, the unit and the pastoral property remain in the ownership of the same individuals and the entity from the date of purchase, there have been significant dealings in the properties. On 28 February 2005, the Kings Beach unit and Chermside properties were encumbered in favour of a Mr Francesco Paul Predebon in support of a $700,000.00 advance. On 19 December 2003, Rabobank Australia Ltd took a security in respect of Colinton Station in support of an advance of $2.3 million and on 6 February 2006 a further advance secured over the Bridgeman Downs property was taken in favour of Pepper Finance Corporation Limited for $561,400.00. 132 Mr Watts, the solicitor for the Second Respondent deposes on information and belief from the Second Respondent that the advance of $561,400.00 was used to discharge an existing liability to the Bank of Queensland of $200,000.00 and to fund running expenses incurred by Colinton Station Pty Ltd in respect of the pastoral property. Mr Watts says that he is informed by the Second Respondent that monies borrowed by Mr and Mrs Wallader for the benefit of the operator of the pastoral property and the owner (trustee) of the property were on-lent to each entity and those monies are repayable to Mr and Mrs Wallader. In other words, the Second Respondent says that there is an additional asset available to him comprising the debt owed to Mr and Mrs Wallader. Mr Watts does not describe the nature of any security in respect of those advances or on-lending. The Applicant says each of the other items of expenditure seems substantial and a round number. No documents are provided in support of those expenditures and no affidavit is sworn directly by Mr Wallader. The Applicant says one should view those claimed expenditures with a degree of caution. 135 In short, the Applicant says that $361,400.00 has been expended on running expenses for the pastoral property, a further $700,780.00 has been expended in connection with the property, equipment purchases in connection with the property have been made of $121,496.10 and $552,256.50 and the balance of purchase monies of approximately $617,000.00 has been appropriated to facilitate the settlement of the transaction. Although explanations are offered for these expenditures and the source of securities identified, no documents detailing with any precision the source of the funds and the content of expenditures have been produced or sworn to by Mr Wallader. 136 There is one further matter addressed by the Applicant which is said to found apprehension and risk. Ms Mustafa-Ay deposes to certain steps taken by the Australian Federal Police to effect a search warrant at the premises of the supervising solicitors on 22 March 2005 pursuant to s.3E of the Crimes Act 1914 (Cth). Objection to the references to the Australian Federal Police are taken on the grounds of both relevance and form. Ms Mustafa-Ay does not depose properly to the source of the information and assert a belief in the information. Ms Mustafa-Ay does depose to information provided to her by Mr Catlin, counsel for the Applicant concerning statements made by one Mr Glen Wright, a representative of the Australian Federal Police who attended Court on a particular occasion and advised the Court that the Australian Federal Police were in the course of investigating potential counterfeit securities breaches of the Crimes (Currency) Act 1981 (Cth). Mr Catlin has not sworn an affidavit about that matter but has informed his instructing solicitor who has deposed to the matter. Although investigations by the Australian Federal Police as to whether Mr Wallader has engaged in any conduct which might involve a contravention of Commonwealth law (which presumably is denied) do not give rise to any inferences concerning any such matters, the question of whether the Australian Federal Police are in the course of examining a certain question is, it seems to me, relevant to the question of whether that matter elevates the risk that a person who might be the subject of such an investigation may be inclined to sell assets, realise their monetary value and deal with those assets in a way which might ultimately have the effect of depriving the Applicant of the benefit of a judgment. 137 As to that matter, the Applicant relies upon an argument put this way. The documents obtained in execution of the Anton Pillar order contain a number of documents which comprise letters apparently signed by Mr Wallader on the letterhead of the First Respondent addressed to note holders concerning dealings in United States Federal Reserve notes. For example, Document 0057 is a letter dated 31 July 2000 addressed to Ms Onate acknowledging receipt of United States Federal Reserve notes relating to a 1934 Note series with a printed face value of US$500 million handed to Mr Wallader for authentication. A letter dated 2 November 2000 from Mr Wallader addressed to a note holder, Mr Quiambao, speaks of Mr Wallader returning to the Philippines to purchase for US$100,000.00 United States Federal Reserve notes Series F to the value of US$500 million "per piece" involving 250 pieces. Letters marked "A10.1", "A10.2", "A11" and "A12" involve two letters from Mr Wilch to Mr Wallader on 15 February and 6 April, 2000 in relation to the release by St David's Investment Trust of original copies of "Victory Bonds" having a current market value of US$170 million and arrangements for establishing a credit line derived from the bonds. Documents "A11" and "A12" are two letters signed by Mr Wallader dated 16 November 1999 and 19 April 2000 addressed to a Mr Ramamurthy concerning arrangements for the safekeeping of Victory Bonds Certificates and the authentication of the bonds. 138 In order to understand the context of these documents, Ms Mustafa-Ay deposes to a search she conducted of a website for the United States Department of the Treasury : Bureau of the Public Debt . The Department Treasury has published information under the description of "Examples of Known Phoney Securities". Philippine Treasury Certificates, Victory Series 66, commonly known as Philippine Victory Notes, were issued in 1944 by the Philippine Government. These currency notes were for use only in the Philippines, which at the time was a dependency of the United States, and were obligations of the Philippine Treasury. At that point, other denominations of the Philippine Victory Notes, Victory Series 66, were no longer regarded as legal tender but could be exchanged or replaced at par, without charge, for legal currency until July 30, 1967. After that date, Series 66 was considered demonetized. If these notes are presented to you and purported to have current value today, it is a scam. The general proposition put to investors concerning these documents is that the United States shipped them to Philippine Freedom Fighters during World War II to help finance the war effort. Federal Treasury says that many individuals have brought to the United States Treasury so-called "Federal Reserve" metal boxes containing various denominations of United States currency. These notes are said to have issued in 1934 and are said to have a face value of US$100 million or US$500 million denominations. The United States Treasury says the certificates are fraudulent and were never issued by the United States Government. 140 The documents obtained on the Anton Pillar order contain photocopies of individuals holding sheets of what appear to be United States dollar certificates. Document 55 is a copy of a Federal Reserve note depicting Benjamin Franklin marked US$500 million. 141 It may be that these documents are simply consistent with efforts by the First Respondent, Mr Wallader and Mr Wilch to determine whether any such instruments are authentic and if so whether they are capable of redemption. The existence of the documents may be consistent with some other conduct. In any event, the presence of the documents is a matter relevant to the question of apprehended risk although for present purposes I place little weight on that material at all. 142 There is one further matter related to both the receipt of the investment funds by the First Respondent from the Applicant and the question of dealings by Mr Wallader in Federal Reserve Notes. Ms Mustafa-Ay deposes at paragraph 56 of her affidavit filed 6 April 2006 to a discussion with a Federal Police Officer concerning the examination of documents held by the supervising solicitors arising out of the Anton Pillar order. A copy of a letter from Mr Wallader on the letterhead of the First Respondent to Mr Wilch dated 22 May 2001 was amongst those documents and obtained by the Australian Federal Police pursuant to a search warrant. Ms Mustafa-Ay does not depose to a belief in the information provided by Mr Moore. Ms Mustafa-Ay does say that she caused a further search to be made of documents lodged with the Federal Court by the supervising solicitors, so as to obtain a copy of the letter. Ms Mustafa-Ay says that she believes the failure to locate the document amongst the documents located at the Federal Court of Australia is due to the supervising solicitors not lodging that document. Ms Mustafa-Ay says she forwarded a copy of the letter dated 22 May 2001 forming part of "EMA12" to Mr Severin who advised her that it is the document he refers to at paragraph 9 of the Statement of Claim. Counsel for the Second Respondent says the letter should have been proved formally and particularly by a handwriting expert. An examination of the letter reveals a clear and precise signature which is identical to the signature appearing on the letter signed by Mr Wallader referred to at paragraph [30] of these Reasons and identical to the signature appearing on the contract signed by Mr Wallader and marked Annexure "PJW7" to the affidavit of Mr Watts sworn 20 April 2006. It seems to be open to conclude simply by examination of the signatures that the signature on the letter of 22 May 2001 is that of Mr Wallader. As to the matter concerning the Applicant's investment funds, the letter is marked with the description, as a reference, "Investment. USD2 million Joseph Severin" . This will be done on my return however if the Client requires his money returned I will attend to this. The money is sitting in the account in USD as undertaken, ready to be added to profits of more than USD500 million, returning a minimum of 100% per week. I am of the understanding that a trading program is set to trade just to settle the boxes. Once they [the boxes] were photographed the owners took them back to the hills and buried them once again. Presentation of documentation and photographs were accepted by the purchaser with the comment that the material presented was impeccable. Boxes have been legally entrusted to my company to complete, settle and disburse funds. The transfer has also been accepted by the trust taking them into Treasury. 146 Moreover, Mr Watts deposes on information and belief to market appraisals obtained by Mr Wallader in respect of the two residential properties and the unit and the mortgages secured by those properties. Mr Watts says the properties secure a total debt of $1,261,000.00 producing a net equity of between $600,000.00 and $700,000.00 having regard to the value of between $1,860,000.00 and $1,980,000.00. No information is provided in relation to the value based on market appraisal or otherwise of Colinton Station . 147 Mr Watts exhibits to his affidavit ("PJW7") a contract dated 5 April 2006 for the purchase by D & J Wallader Pty Ltd as trustee of the Wallader Family Trust of a further pastoral property described as Nurinda which is said to be contiguous with Colinton Station . An auction took place on Wednesday, 5 April 2006 which led to the purchase. The deposit is recited as $1,000.00 and the purchase price is recited as $1.3 million. The Applicant says one should approach the authenticity of the contract with some degree of caution because the deposit amount of $1,000.00 seems oddly low and the date of the contract is immediately before the date of filing of the Notice of Motion. I propose to proceed on the footing that the contract is a legitimate contract deriving from an auction of the pastoral property by public auction on 5 April. It seems unlikely that Mr Wallader on behalf of the trustee would have instructed a bid to have been made bringing into existence an unconditional contract at the auction as a contrivance. Moreover, the material does not demonstrate that Mr Wallader knew of an impending application for an asset preservation order. The contract is due to settle on 3 May 2006. It seems to me that the acquisition of the property ought to be allowed to proceed particularly since an order preventing settlement will affect the rights of bona fide third parties. However, any further dealing in the property ought to be the subject of an order so as to preserve what is, in effect, the aggregated asset of Colinton Station and Nurinda . Although his Honour the Chief Justice of the Supreme Court of New South Wales, Gleeson CJ in Patterson v BTR Engineering (Aust) Ltd (1989) NSWLR 319 (Gleeson CJ, Meagher JA and Rogers A-JA) observed at page 321 that "... in addition to any other considerations that may be relevant in the circumstances of a particular case, as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that by reason of the defendant's absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied", their Honours Gaudron, McHugh, Gummow and Callinan JJ in Cardile v LED Builders Pty Ltd [1999] HCA 18 ; (1999) 198 CLR 380 at 408 observed that the applicant "has to show a reasonably arguable case on legal as well as factual matters ". 2. The Mareva order for the preservation of assets is an expression of the development of doctrines and remedies to protect the integrity of the processes of the Court in the administration of justice. The scope of the order to be made in a particular case is conditioned by the source of the remedy and the power conferred by s.23 of the Federal Court Act 1976. 3. In respect of orders sought against parties to the proceeding against whom final relief is framed, the focus of the order is directed against the frustration of the Court's process. If relief is available against non-parties, the focus of the Court's intervention must be the administration of justice: Cardile v LED Builders Pty Ltd (supra) at page 401, paragraph 42. 4. The evidence may establish deliberate blurring and attempts at transferring of property rights and interests which go beyond mere mixing or intermingling of affairs and in the light of such evidence, there is a sufficient basis for the grant of the relief: Cardile v LED Builders Pty Ltd (supra) at page 402, paragraph 47. 5. Although the relief takes effect in personam, the availability of an equitable or other proprietary remedy such as tracing may be sufficient to constitute a substantive right in aid of which the Mareva relief, in personam, might go. Cardile v LED Builders Pty Ltd (supra) at page 405, paragraph 55. 6. The evidence may establish that the directors of a company against whom proceedings are brought are "mere conduits" for the transmission to a third party of funds received by a respondent. Such directors may exercise control over other entities which have received funds transferred by an applicant to a respondent on a certain basis. In our opinion, such an order may, and we emphasise the word 'may' be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over or is otherwise in possession of, assets, including 'claims and expectancies' of the judgment debtor or potential potential debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor". The application of that principle is a matter of law although discretionary elements are involved. 8. In Patterson v BTR Engineering (Aust) Ltd (1989) NSWLR 319 at page 325, Gleeson CJ accepted the force of the criticism of the proposition that an applicant must show a "more than usual likelihood" of a defendant dealing with or disposing of his assets so as to defeat a plaintiff's claim. His Honour observed that "it may be that all that is meant is that the facts of the case disclose circumstances giving rise to such a likelihood other than the bare circumstances, which exists in the 'usual' case, that one person is being sued by another". His Honour also rejected a balance of probabilities test as too inflexible observing that "it is not difficult to imagine situations in which justice and equity would require the granting of an injunction to prevent dissipation of assets pending the hearing of an action even though the risk of such dissipation may be assessed as being somewhat less probable than not " . In Patterson v BTR Engineering (Aust) Ltd (1989) NSWLR 319, the conduct in issue concerned a senior employee of BTR purchasing major items of equipment from overseas suppliers through a company interposed by the employee between the supplier and BTR. The employee fraudulently procured the overpayment by BTR for equipment purchases thus securing a secret commission of substance. This is a case in which the plaintiff claims that the defendant, making use of a corporation controlled by him, fraudulently misappropriated a large sum of money which, if it is still under the control of the appellant would be quite likely to constitute, directly or indirectly the bulk of his assets. As Giles J held, the nature of the scheme in which, on the evidence to date, the appellant appears to have engaged, is such that it is reasonable to infer that he is not the sort of person who would, unless restrained, preserve his assets in tact so that they might be available to his judgment creditor. The Applicant may choose to lodge a proof of debt in the liquidation of the First Respondent. That proof might be accepted. If rejected, the Applicant may challenge the rejection. The liquidator might well consider whether monies have been transferred by individuals to other entities in circumstances which confer a basis for a claim by the liquidator against particular parties. It may be that certain third parties will be obliged to disgorge property or otherwise contribute to the funds or property of the First Respondent in satisfaction of an accepted or demonstrated claim against the First Respondent. The Applicant may seek to pursue an equitable or other proprietary remedy tracing its interest in the fund or the chose in action which may stand outside the liquidation rather than a claim for damages. 11. The Applicant has a prima facie case of a claim for monies had and received against the First or Second Respondents and may seek to pursue tracing remedies either at common law subject to the limitations upon the common law remedy or more particularly a tracing order in equity or particular declarations of charge again subject to the limitations upon the equitable remedies. As to those matters see: Recovering Lost Assets: Tracing at Common Law and in Equity , Mr David Murr SC (2006) 27 Australian Bar Review, 174. 12. A claim against either the First or Second Respondent for monies had and received will give rise to a prima facie obligation to make restitution to the Applicant, in the sense of compensation for the benefit of any unjust enrichment. In Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17 ; (1998) 164 CLR 662 at 673, Mason CJ, Wilson, Deane, Toohey and Gaudron JJ observed: "The common law right of action may arise in circumstances which also give rise to a resulting trust of specific property or funds or which would lead a modern court to grant relief by way of constructive trust. However, notwithstanding that the grounds of the action for recovery are framed in the traditional words of trust or use and that contemporary legal principles of restitution or unjust enrichment can be equated with seminal equitable notions of good conscience, the action itself is not for the enforcement of a trust or for tracing or the recovery of specific money or property. It is a common law action for recovery of the value of the unjust enrichment and the fact that specific money or property received can no longer be identified in that hands of the recipient or traced into other specific property which he holds does not of itself constitute an answer in a category of case in which the law imposes a prima facie liability to make restitution". 13. It may be, with the benefit of proper discovery and non-party discovery, that the passage of the actual funds will be identified beyond the account of CPFSP/L in a way which reveals the acquisition of specific assets out of the funds (or a part of the funds) or accounts (intermingled or mixed) which support a tracing order or a declaration of charge or a constructive trust. The Applicant claims by way of final relief the subsistence of a constructive trust and a tracing order. 14. In this case, the evidence for interlocutory purposes, establishes a strong prima facie case that monies were transferred by the Applicant to the First Respondent controlled by Mr and Mrs Wallader to be applied for a particular purpose in reliance upon Mr Wallader. A substantial proportion of the funds were transferred to another company controlled by Mr and Mrs Wallader. Mr Wallader chooses not to admit the receipt of the funds and has elected not to swear any affidavit disclosing the treatment of the funds. In the period since the receipt of the funds, the Applicant has expended significant sums in improving assets under his control or under the control of proprietary entities of which he is a director. Although there is no evidence that the actual funds transferred on or about 30 March to the First Respondent have been applied in a particular way (apart from the transfer of substantial funds to the account of CPFSP/L and the withdrawal of US$250,000.00) or to a particular asset, the inference is open that Mr Wallader has applied the monies to his own advantage or to the advantage of himself and his wife whether directly or by the vehicle of companies controlled by him. 15. Although the events leading to the agreement of 30 March 2001 and the transfer of the Applicant's funds occurred in March 2001, the evidence for interlocutory purposes, establishes an explanation for the election on the part of the Applicant not to commence proceedings until either it became clear that the investment would not be made by Mr Wallader or until efforts by ARL and the Applicant's solicitors failed to result in a refund of the investment monies as promised by Mr Wallader. 16. Although the Second Respondent says the action has been on foot for a year, the Applicant secured access to the documents pursuant to the Anton Pillar order relatively recently on 10 February 2006. Whilst the Respondents were not able to undertake the task of categorising of the documents into the privileged and non-privileged groups for eight weeks due to an illness on the part of Mr Wallader and other delays were explained on the basis of Mr Wallader suffering a bee sting which provoked an allergy reaction, the Respondents failed to comply with directions orders and ultimately took no step to assert privilege of any kind in respect of the documents. The Applicant was in effect held out of the benefit of the Anton Pillar order from the date of execution on 14 March 2005 until counsel for the Applicant saw the documents in Melbourne for the first time in the week beginning 13 February 2006. The execution of the Anton Pillar order failed to reveal bank statements for the National Australia Bank account to which the Applicant's funds were transferred and nor do the documents reveal the field of documents comprehended by paragraph 1 of Schedule A. 17. The conjunction of the failure on the part of the Second Respondent to effect a refund of the investment monies by the First Respondent as promised by him, his election to remain silent concerning the application of the funds and any material particular in relation to them, his election to put the Applicant to proof as to the receipt of the funds by the First Respondent, the delays in dealing expeditiously with the claim of privilege either on the ground of legal professional privilege or the privilege against self-incrimination thus preventing the Applicant from securing access to documents arising out of the execution of the Anton Pillar order, is evidence which has a strong bearing on the risk of a dealing in the assets of the Second Respondent or entities controlled by him so as to defeat the benefit of any judgment in terms of the relief claimed in the Statement of Claim. Although the Second Respondent says that the Applicant could and should have brought applications for third party discovery against various banks and other parties to discover the chain of dealing in the Applicant's funds, the Applicant is entitled to proceed on the basis that execution of the Anton Pillar order would properly reveal the receipt and treatment of the monies. 18. Although it is true that the real property assets of Mr and Mrs Wallader and the trustee of the Wallader Family Trust remain in place and unrealised, there have been substantial dealings in the assets and the creation of charges. Mr Wallader has not sworn to the value of the assets directly. Mr Watts has sworn to information from Mr Wallader of information given to Mr Wallader by a valuer but limited to the three domestic properties. No evidence has been provided of value in relation to Colinton Station . 19. It seems to me that by reason of all these factors, there is, in the light of all the material, a risk of dissipation of assets or a risk of a further dealing in assets which would be prejudicial to an effective remedy ordered in favour of the Applicant consequent upon a trial of the action. 20. In Cardile v LED Builders Pty Ltd (supra) at page 404, their Honours referred to a number of considerations demanding care in the exercise of the power to grant a Mareva order including difficulties associated with the quantification and recovery of damages pursuant to the undertaking should it transpire that the order ought not have been granted (see paragraph 52), the identification of the trigger events leading to dissolution of the order, discretionary considerations (see paragraph 53), the availability of and possible failure of the Applicant to take other proceedings which might be efficacious and the conditioning of the grant of the relief upon an undertaking by the Applicant to ensure as far as is possible, the expedition of the proceedings (see paragraph 53). 21. In this case, it may be difficult to assess and quantify damages pursuant to the undertaking as to damages. However, the strength of the claim is compelling. The difficulty of quantification of the claim might weigh more heavily in the exercise of the discretion if the Second Respondent had proffered some explanation as to the location of the funds or provided an explanation, by affidavit, of the apparent inconsistency between his election not to admit receipt of the monies and the sequence of oral and written communications contained in the affidavits of the Applicant. The Directions Orders provide for a trial of the action in approximately two months which provide the Second Respondent with a clear commitment from the Applicant to prosecute the action and the horizon by which the orders might be dissolved. The Second Respondent remains at liberty to make an application for security for costs should he choose to do so. 22. On the question of the susceptibility of the two instruments to stamp duty under Queensland legislation, that matter need not be resolved as the Applicant has now provided an undertaking to pay any stamp duty assessed to be payable in respect of the Agreement or the Deed of Guarantee and Indemnity. I am not prepared to make either of the first two orders. As to the third, the proposed amendment simply adds a prayer for relief based upon alleged contraventions of a number of provisions of the Corporations Act 2001 (Cth) and particularly sections 588FDA , 588FB and 5961(b). On 28 April 2006, when pronouncing the orders, I observed that it was not appropriate to grant leave to amend by simply adding a prayer for relief. What is required is the formulation of proposed paragraphs of an amended pleading which pleads material facts establishing the elements required by the sections and a prayer for relief which properly arises from those facts. The Applicant proposes to formulate a further Amended Statement of Claim and serve the proposed amendment on the solicitors for the Second Respondent by Monday, 8 May 2006. On the assumption that any amendment to the pleading will be opposed, the Applicant will need to make a further application for leave to file and serve a further Amended Statement of Claim. 150 For these Reasons, I made the orders of 28 April 2006 and now publish these Reasons. Paragraph 3. Identification only. Admissible. Paragraph 5. Contextual narrative only. Admissible. Primary affidavit of Mr Severin does speak for itself. 3. Paragraph 7. Narrative only. The Reasons of Kiefel J speak for themselves. Inadmissible. 4. Paragraph 9. Relevant to the chronology of proceedings between the parties and the evidence of access to the documents the subject of the Order of Kiefel J. Admissible. 5. Paragraph 20. The paragraph describes the conversation between the deponent's agent, Mr Mills, and the solicitors supervising the execution of the Anton Pillar order. The paragraph ought to say that the deponent is informed by and the deponent verily believes the information. Leave given to put the paragraph in proper admissible form. 6. Paragraph 21. Similarly, leave given to put the paragraph in proper admissible form. 7. Paragraphs 27 and 28. Statements made in reliance upon documents arising out of the execution of the Anton Pillar order. For the reasons identified at paragraphs [91] to [96], those documents are admissible ("EMA9" and "EMA10"). Since the conclusions are reliant upon Documents 44, 66 and 84, the paragraphs are admissible. 8. Paragraph 33. The paragraph refers to the representation of the Second Respondent by particular solicitors in respect of a particular matter. The fact of representation on that matter is not relevant and the paragraph does not refer to the deponent's conversation with any person by which the information is communicated nor does the deponent express any belief in any information. Inadmissible. 9. Paragraph 34. The paragraph refers to a statement that the Australia Federal Police attended upon the solicitors supervising the execution of the Anton Pillar order to execute a search warrant to examine those documents. The fact of the activity of the Australian Federal Police in relation to matters having a bearing upon the conduct of the Second Respondent (innocent or otherwise) is relevant to risk. The paragraph does not identify the source of the information or express any belief in the information. Leave is given to put the paragraph in proper form. 10. Paragraph 35. The paragraph deposes to a representative of the Australian Federal Police, Mr Wright, informing the Court of certain matters. The facts deposed to reflect a conversation between the deponent and counsel for the Applicant, consisting of a report of the attendance of Mr Wright at Court and steps taken by the Australian Federal Police. See paragraph 136 of the judgment. Although the evidence is information on information, I propose to admit the evidence. 11. Paragraph 37. The affidavit of Ms Busch speaks for itself. The paragraph is inadmissible. 12. Paragraph 41. The paragraph forms part of the narrative only. The affidavit of Ms Busch speaks for itself. Admissible as to the narrative on the part of Ms Mustafa-Ay. 13. Paragraph 42. The paragraph exhibits ("EMA8") the submissions of Mr Catlin from the application before Kiefel J which are relied upon in this application. The submissions are exhibited as a matter of caution in the event that the submissions were not retained on the Court file. Admissible. 14. Paragraphs 43, 44 ("EMA9"), 45 & ("EMA10"), 46 & ("EMA11"). See paragraphs [91] to [96]. To the extent that it is necessary for Ms Mustafa-Ay to say that she, as principal, is informed by her agent and verily believes the matters so discussed, leave is given. 15. Paragraphs 47, 48, 49, 50 and 51. Admissible for the reasons identified at paragraphs [91] to [96]. 16. Paragraphs 54 and 55. The facts deposed to are relevant to the question of risk. Rather than Mr Catlin of counsel preparing and filing an affidavit in a matter in which he appears as counsel, the proper course is to communicate the information relevant to the question in issue to his instructing solicitor to depose to the request made of Mr Catlin and exhibit the document which provoked the request referred to in paragraph 54. The affidavit ought to identify more particularly that Ms Mustafa-Ay is informed by Mr Catlin and verily believes that documents of a particular description were provided to Mr Catlin and that she is informed by Mr Catlin and verily believes that the four documents making up "EMA12" are true copies of the documents from that source. Leave is given to put the information and belief in proper form. 17. Paragraph 56. The paragraph refers to information provided to the deponent by Mr Moore of the Australian Federal Police. The deponent does not swear to a belief in the information. The paragraph refers to speculation as to a reason why a document may not have been among the documents delivered to the Federal Court of Australia. Ms Mustafa-Ay has the conduct of the litigation on behalf of the Applicant and in the conduct of the matter, Ms Mustafa-Ay postulates an explanation for the document not being among the records delivered to the Federal Court. Although speculation, identification of the source of the document consequent upon Court orders in the course of the matter, falls within the scope of a matter about which Ms Mustafa-Ay may speak. To the extent that Ms Mustafa-Ay does not swear to a belief in the information given to her by Mr Moore, leave is given to swear to such belief. The paragraph is admissible. 18. Paragraph 57. Paragraph 57 assumes two facts. First, that the funds passed to the account of CPFSP/L and passed from that account to a place unknown. The paragraph asserts that Ms Mustafa-Ay does not have knowledge or instructions from the Applicant which contradicts the assumed inferences or otherwise provides an explanation for movement of the funds. Mr Catlin says the paragraph was incorporated in the affidavit in an attempt to make full disclosure and demonstrate that the Applicant had no other information which might affect inferences arising from other material facts. The paragraph is admissible simply as to the source of information and instructions by the Applicant. 19. Paragraphs 58, 59, 60, 61, 62, 68, 69, 70, 71, 72. These paragraphs contain factual assertions by way of synthesis of documents arising out of the execution of the Anton Pillar order. The Second Respondent says the documents are not properly proved and the documents speak for themselves. As to the first, see paragraphs [91] to [96]. As to the second, the facts deposed to arise out of the documents and are merely an explanation of content directing the reader to those parts of the document to which emphasis is given by the Applicant. Those paragraphs do not represent a substitution for the documents. The paragraphs are admissible. 20. Paragraph 73. The paragraph refers to a search of a website described as a site of the United States Department of Treasury, Bureau of Public Debt website . The paragraph exhibits an extract from the website ("EMA15") which records statements of position by the Department of Treasury concerning the historical treatment of notes, bonds, securities and instruments described as Federal Reserve Notes ("FRNs"). The website also describes FRNs dating from or around 1934 which seem to have originated in the Philippines and are denominated in amounts of up to US$500 million. The paragraph in its present form is not admissible. The assertions contained in the explanations from the site provide a contextual reference to documents obtained on execution of the Anton Pillar order which may or may not explain the nature and origin of the documents. Ms Mustafa-Ay ought to depose to the conduct of the website search, the making of the extract of the information and a belief in the information contained in the extract. Leave is given to put the information and belief in proper form. 21. Paragraphs 73 to 80. To the extent the paragraphs rely upon documents obtained upon execution of the Anton Pillar order, the documents are admissible. The paragraphs otherwise represent the deponent's explanation of the relevant elements of the document. The paragraphs are admissible. 22. Paragraph 78. The paragraph ought to recite a belief in the information provided to the deponent by Mr Morgan. Leave is given to put the material in proper form. The second sentence is inadmissible. 23. Paragraph 80. As to the first sentence, the statement is by way of reference to Document "A9" and is admissible. The second sentence is not admissible. Paragraph 10. To the extent that the Applicant relies upon information as to value of properties, the Applicant says that it is content to rely upon the Second Respondent's valuations where based upon expert evidence. Otherwise, the paragraph is admissible. 2. Paragraph 11. The paragraph refers to previous correspondence between ARL and the Second Respondent. The Second Respondent objects that the correspondence is not identified. The paragraph ought to refer to the correspondence exhibited to the affidavit of Ms Busch and for interlocutory purposes I infer that the deponent is making such a reference. As to the final sentence, to the extent that the statement purports to be information and belief from an experienced legal practitioner as an expert in international investment transactions, such evidence might be admissible but not in such a limited form. The sentence is inadmissible. 3. Paragraph 12. By paragraph 12, the deponent comments upon matters in her knowledge in the conduct of the litigation to the effect that no material, oral or written, has been provided from the solicitors for the Second Respondent demonstrating that the Applicant's funds have been safely secured to the use of the Applicant. Ms Mustafa-Ay can so depose. To the extent Ms Mustafa-Ay seeks to rely upon a particular letter or communication, the deponent should provide the best evidence of that communication. If it is written, it should be exhibited. If it is oral, it should be deposed to. However, the statement by itself is admissible and the utility of the evidence is simply a question of weight. 4. Paragraph 13. The first statement as to the belief of Ms Mustafa-Ay is inadmissible. The second sentence deposing to inquiries by inquiry agents retained by the Applicant to the effect that the Applicant has no confidence in the promise of the Second Respondent to refund the monies is irrelevant as the Second Respondent does not admit receipt of the monies. The third sentence dealing with the relativity between the Applicant's claim and the value of the assets of the Second Respondent is not cross-referenced to any particular evidence of value relied upon at the date of swearing of the affidavit. To the extent that the sentence is a conclusionary statement having regard to what was then known of the value of the assets of the Second Respondent, the secured debt and the Applicant's claim, the evidence is admissible although entirely overtaken by other evidence. Paragraph 2. Explanation given. Paragraph admissible. 2. Paragraph 8. Objection abandoned in light of undertaking by Applicant. 3. Paragraph 11. To the extent that Mr Severin asserts that the funds were to be invested for a 40 week period, that contention is not in issue. To the extent that Mr Severin says he understood the guarantee to be a personal guarantee, that matter is in issue. The content of the understanding has been subsequently pleaded by the Applicant and the subject of a defence by the Second Respondent. The paragraph is admissible. 4. Paragraphs 20 and 21. The paragraphs assert a belief (based upon the earlier paragraphs of the affidavit and the matters deposed to by Ms Busch and Ms Mustafa-Ay) held by Mr Severin that the Applicant's funds have been placed outside the jurisdiction. The paragraph was relied upon in the initial application on the basis of making a full disclosure of Mr Severin's understanding of the events for the purposes of an ex parte application. For that purpose it was admissible but for present purposes it is conclusionary and is overtaken by other evidence. Similarly, paragraph 21 is admissible. 5. Paragraph 22. The paragraph identifies the source of the information and the belief in the information and searches and is admissible. The evidence is overtaken by subsequent events relating to the liquidation of the First Respondent. 6. Paragraph 23. The deponent can speak to the documentation he received and the fact of no other information or documentation. The paragraph is admissible. 7. Paragraph 25. The deponent can speak to a concern which logically follows as a statement of his attitude arising out of the facts concerning the chronology of his dealings with Mr Wallader. The paragraph is admissible. 8. Paragraph 26. The third sentence is inadmissible. 9. Paragraph 27. The stamp duty point is abandoned. The agreement does speak for itself. The deponent's statements are explanatory of the matters that follow in the balance of the paragraph and are admissible. The final sentence as to the deponent's belief and assertions is inadmissible. 10. Paragraph 28. The paragraph deposes to a conversation with Mr Wallader. The evidence is admissible. The second and third sentences are not admissible. Paragraph 23. The sentence under challenge is based upon information from Mr Severin and fails to swear to the belief in the information notwithstanding that Mr Severin swears to the matter himself. Leave is given to put the statement in proper form. The third sentence is argumentative and inadmissible. The fourth sentence deposes to Mr Wallader not saying at any time that the funds were or had been in Switzerland. Ms Busch can swear to that matter within her own knowledge. The next sentence concerning information from Mr Cooney concerning information from Mr Severin of statements made by Mr Wallader is not admissible. 2. Paragraph 24. As to paragraph 24.3.1, the Applicant relies upon the Second Respondent's valuation evidence where based upon expert evidence. As to paragraph 24.3.2, the sentence is simply descriptive of the attachment and seeks to give guidance as to a material matter. As to paragraph 24.3.3, the Applicant relies upon the Second Respondent's valuation evidence where based upon expert evidence. Any such matters are to be put in proper form by the Applicant filing, by the appropriate deponent, any additional affidavit material pursuant to the undertaking within 14 days of publication of these Reasons. 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 Greenwood. | application for mareva orders application made inter-parties in the course of the litigation consequent upon access to documents obtained in execution of an anton pillar order consideration of discretionary factors consideration of the strength of the case demonstrated on the applicant's affidavits consideration of the character of the conduct alleged against the applicant consideration of the orders sought by way of final relief in the proceeding. practice and procedure |
The High Court held that certain provisions in an agreement negotiated between a corporation and a union did not pertain to the relationship between the corporation as employer and all persons employed in a single business or part of a single business of the employer, within the meaning of s 170LI of the Workplace Relations Act 1996 (Cth) ("the WR Act") (as the WR Act then stood). As a result, it was held that the agreement could not have been certified validly pursuant to what was then s 170LT of the WR Act . The two sets of claims in this proceeding both have some relationship with the judgment in Electrolux . 2 The first claim is for breach of contract. The applicant, Australian and International Pilots Association ("AIPA") claims that it entered into a binding contract with the respondent, Qantas Airways Limited ("Qantas") in the course of negotiating a new certified agreement. Certain provisions, which had been part of the certified agreement between AIPA and Qantas at the time of the judgment in Electrolux , had not been included in the new certified agreement because it was thought that their presence might jeopardise the certification of that agreement. It was contended that those provisions had been placed in a separate agreement. There is a substantial issue as to whether any concluded agreement about those provisions ever came into existence. AIPA contended that, although there was no express agreement as to the duration (in terms of starting and finishing) of the obligations under the contract, the gap was filled by an implied term. If there was a concluded agreement, there is an issue as to whether it is enforceable, or is an agreement not intended to create legal relations, but binding in honour only. If there was a binding contract, there is no real dispute that Qantas was in breach of it. There are issues, however, as to what, if any, remedies should be granted. Such issues include whether AIPA suffered any loss it can claim as damages for breach of contract, what was the quantum of its loss if it did suffer such loss, and whether some form of order by way of specific performance can, or should, be made. 3 The second claim is that, in the last days of the operation of the certified agreement that was in force at the time of Electrolux , Qantas failed to comply with its obligations under that agreement. Claims are made for penalties for contraventions of various terms of that certified agreement and for consequential orders in relation to those penalties. The terms concerned are among the provisions that were identified as possibly falling outside s 170LI of the WR Act . Not surprisingly, Qantas relies on the unenforceability of those terms of the certified agreement as a result of Electrolux . Qantas also contests the proposition that it failed to comply with its obligations as expressed in those terms. Subsequent major amendments to the WR Act have changed the numbering and wording of numerous provisions. 170LI Nature of agreement (1) For an application to be made to the Commission under this Division, there must be an agreement, in writing, about matters pertaining to the relationship between: (a) an employer who is a constitutional corporation or the Commonwealth; and (b) all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement. (2) The agreement must be made in accordance with section 170LJ, 170LK or 170LL. 170LJ Agreement with organisations of employees (1) The employer may make the agreement with one or more organisations of employees where, when the agreement is made, each organisation: (a) has at least one member employed in the single business or part whose employment will be subject to the agreement; and (b) is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement. (2) The agreement must be approved by a valid majority of the persons employed at the time whose employment will be subject to the agreement. (3) The employer must take reasonable steps to ensure that: (a) at least 14 days before any approval is given, all the persons either have, or have ready access to, the agreement, in writing; and (b) before any approval is given, the terms of the agreement are explained to all the persons. ... 170LM Making the application for certification (1) The application for the Commission to certify the agreement must state that it is made under this Division. ... (5) If the agreement was made in accordance with section 170LJ or Division 3, a valid majority of persons employed at the time whose employment would be subject to the agreement must have genuinely approved the agreement. ... (10) The agreement must specify a date as the nominal expiry date of the agreement, and that date cannot be more than 3 years after the date on which the agreement will come into operation. (2) The agreement ceases to be in operation if: (a) its nominal expiry date has passed; and (b) it is replaced by another certified agreement. 8 Section 170M(2) provided that if, in accordance with s 170LJ, one or more organisations of employees made the agreement with the employer, the agreement bound that organisation or those organisations. 9 Definitions relevant to the provisions I have quoted were found in both s 4(1) and s 170LB of the WR Act . In particular, "constitutional corporation" was defined in s 4(1) as meaning, among other things, "(c) a body corporate that is, for the purposes of paragraph 51(xx) of the Constitution , a trading corporation formed within the limits of the Commonwealth". There is no dispute that Qantas is such a corporation. Section 170LB(1) relevantly defined "single business" as "(a) a business, project or undertaking that is carried on by an employer". 10 Section 178 of the WR Act conferred on this Court power to impose a penalty on a person bound by a certified agreement who had breached a term in that agreement. Pursuant to s 178(4) , the maximum penalty that can be recovered from a body corporate in respect of each breach at the relevant time is $33,000, unless the breach continued for more than one day, in which case an additional $16,500 can be imposed for each day on which it continues. Section 178(5A)(c) empowered an organisation bound by a certified agreement to sue for and recover a penalty for a breach of a term of that agreement. Section 178(6) empowered the Court to order an employer to pay to the employee the amount of any underpayment if the employee had not been paid an amount that the employer was required to pay under an agreement. Section 356 of the WR Act provided that a court that imposed a monetary penalty under the WR Act may order that the penalty, or part of it, be paid either into the Consolidated Revenue Fund or to a particular organisation or person. Its membership is open to pilots, and a number of pilots employed by Qantas are members of AIPA. 12 Qantas is a constitutional corporation for the purposes of the WR Act , by virtue of being a trading corporation formed within the limits of the Commonwealth of Australia. Qantas conducts an airline. For this purpose, it employs a number of pilots. Qantas operates flights to and from a number of places in countries other than Australia. These flights are referred to as "long haul" flights, and some of Qantas's employee pilots are engaged wholly or mainly in flying aircraft on long haul flights. Both parties accept that the employment of pilots to conduct long haul flights is a single business, or a part of a single business, of Qantas. This was the sixth collective agreement between AIPA and Qantas since provisions relating to enterprise bargaining had been introduced into the Industrial Relations Act 1988 (Cth), which was renamed as the WR Act in 1996. Because the agreement was the sixth in a series, it was known colloquially as "EBA6", and it is convenient to refer to it by this title in these reasons for judgment. EBA6 was certified by the Australian Industrial Relations Commission on 4 July 2003. Its nominal expiry date, inserted pursuant to the requirement found in s 170LT(10) of the WR Act , was 30 June 2004, but it remained in force in September 2004, pursuant to s 170LX, because it had not yet been replaced by another certified agreement. Indeed, negotiations for the agreement that replaced EBA6, the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 ("EBA7") had not yet begun. 14 Part 11 of EBA6 was headed "Association Business". RELIEF FROM FLYING FOR ASSOCIATION BUSINESS The following arrangements apply to enable Association members to be reliably available to attend to Association duties and responsibilities. 45.1 Association President The Association President ("the President") is entitled to relief from flying under clause 46.4.1 and a pre-allocation of flying under clauses 27.6.1 and 46.4.2. 45.2 President's designates Associated with the office of the President, the President's designates are entitled to relief from flying equivalent to the credited hours allocated to the President for flying or leave, and a pre-allocation of flying under clause 27.6.1. 45.3.3 The President (or designate) will endeavour to give Aircrew Operations as much notice as possible of any requirement for displacement under this Agreement. (b) In any bid period, if fewer than 175 hours are utilised by Association members, the balance will be carried forward. (c) A maximum of 350 hours may accumulate in the "Time Bank". 45.4.2 Leave Bank (a) Pursuant to clause 28.28, a leave bank is established and maintained. (b) The value of a "Leave Bank" day will be the value of the applicable bid period divisor divided by 38. 45.4.3 Additional flying hours re-credited to hours banks If an Association member flies additional credited hours during the bid period in which he or she has been released from Company duties for the purpose of carrying out Association duties or obligations, those additional credited hours will first be "re-credited" to the respective bank, less any hours calculated at the rate of the applicable bid period divisor divided by 38 for each day spent on Association business, before any payment for additional credited hours is made to the member. 45.5 Using the hours banks for Association business 45.5.1 An Association member who is required by the President (or designate) to attend to Association business: (a) may access the provisions of the Time Bank; (b) may access the provisions of the Leave Bank; or (c) may be removed from a pattern or patterns, in which case the member: (i) will be pattern protected for the credited hours value of the pattern or patterns, less the credited hours value of any Time Bank of Leave Bank days spent on Association business; (ii) will be available for offsets in accordance with clause 27.16.5(i); (iii) May be awarded or assigned an offset against the pattern protected hours in accordance with clause 27.16.5(g) with any remaining pattern protected hours becoming fixed; and (iv) If not awarded or assigned an offset against the pattern protection, will have the pattern protected hours offset by an equivalent deduction from the Time Bank or Leave Bank. 45.5.2 When a member is required to attend to Association business during a period of annual or long service leave, credited hours may be debited from the Time Bank or Leave Bank so that the infringed day(s) of leave are re-credited to the member. 45.5.3 At the request of the President, days may be blocked on a member's bid line with a "nil credited hours value". 45.5.4 Where a member is a BLH or RLH in a bid period and he or she is required to carry out Association duties, the member will receive credited hours calculated at the rate of the applicable bid period divisor, divided by 38, for each day that those duties are required to be undertaken and those credited hours will be deducted from the Time Bank or Leave Bank. 46. ASSOCIATION PRESIDENT 46.1 General The provisions of this clause apply to a pilot during his or her tenure of office as President of the Association ("the President"). To the extent of any inconsistency between the provisions of this clause and any other provisions in this Employment Contract, the provisions in this clause will prevail. 46.2 Pay The President will be paid a salary (calculated in accordance with clause 24.2) appropriate to the aircraft type on which he or she is flying. 46.3 Method of payment The President will be paid in pay periods 1, 2, 3 and 4 of each bid period an amount calculated on the basis of one 26th of the prescribed pay and the appropriate allowance provided in clause 46.2. 46.4 Scheduling 46.4.1. The President is entitled to relief from flying equal to the bid period divisor for his or her category. 46.4.2. Notwithstanding clause 46.4.1, the President is entitled to a pre-allocation of not less than 80 credited hours of known flying for each bid period, after consultation with the Company to select flying before it is made available before bidding (under clause 27.6.1). 46.4.3. Any flying allocated to the President for which he or she is not available will be re-allocated at the Company's discretion either in accordance with the provisions of clause 17 (in which case the quota provisions of clause 17.4.3 will not apply), or in accordance with the provisions of clause 27.21. 46.4.4. Open time will be allocated in accordance with the provisions of clause 27.21 (Allocating open time flying) except that the Company may displace the President from any allocated pattern. 46.4.5. The President may trade patterns with a pattern line holder or with a supervisory crew member in accordance with clause 17.4.6 or with open time in accordance with the provisions of clauses 27.21 and 27.22. 46.4.6. The Company may require the President to fly or exceed his or her allocation of credited hours. 46.4.7. The President may consult with the Company about the scheduling of designated duty free days. For the purpose of clause 27.17 (Duty free time at a crew member's base), the President will be deemed a pattern line holder. 46.5 Annual leave The President's annual leave will be planned and taken as mutually arranged except that the Company may assign leave when his or her annual leave is in excess of the standard prescribed in clause 28.14. 46.6 Changeover of President 46.6.1. When the Association elects a new President, the provisions of this clause 46 (with the exception of scheduling) will apply to the new President on and from the date of his appointment as President and will cease to apply to the outgoing President on and from that date. 46.6.2. Any scheduling issues arising from the change-over of Presidents will be discussed among the Company, the outgoing President and the new President with a view to making arrangements that are acceptable to all three parties. 15 Some other provisions of EBA6 were relevant to the operation of the provisions in Pt 11. There are numerous references to cl 27, a very long and complex clause relating to scheduling and hours of work, the details of which it is unnecessary to set out for present purposes. 16 Clause 46.2 also refers to cl 24.2 of EBA6, which prescribed the rate of pay for a crew member appointed by Qantas to an administrative supervisory appointment. The rate consisted of various components, for which provision was made elsewhere in EBA6, added together. 17 These provisions in cll 45 and 46, and the other provisions to which I have referred that operated in conjunction with those clauses, had first entered a collective agreement between AIPA and Qantas in the agreement that immediately preceded EBA6 ("EBA5"). The expression "Association Business Provisions" was sometimes used to refer to some or all of these provisions, although it is not always clear whether it was used in reference to cl 45 alone, cll 45 and 46, or those two clauses and the other provisions of EBA6 that related to them. In the first place, existing certified agreements might turn out to be wholly invalid because they contained provisions about matters that did not pertain to the relationship between employers and their relevant employees ("non-pertaining provisions"), and the Commission had therefore lacked power to certify them. The second implication was that, if future agreements were to be negotiated, care would have to be taken to avoid including non-pertaining provisions, which would lead to the Commission refusing to certify the agreement altogether. 19 At least the second of these implications was not lost on AIPA. It was preparing to enter into negotiations with Qantas for EBA7. Please confirm that any provisions in Certified Agreements, Safety Net Awards or other industrial agreements between the Company and AIPA which may be affected by the recent High Court's decision in Electrolux impacting upon any decisions by the Australian Industrial Relations Commission, will be transferred, without negotiation, into side agreements between us. 20 It should be noted that, although written at the outset of negotiations in respect of EBA7, this letter did not refer only to those negotiations. It was expressed to cover three classes of documents: certified agreements; safety net awards; or other industrial agreements. At the time, in addition to EBA6, which related to long haul flying, AIPA and Qantas were parties to a certified agreement that related to short haul flying, which was due to reach its nominal expiry date in September 2005. The evidence suggests that there may have been other documents caught by the description in the letter of 29 September 2004. One was an award dealing with the integration of two separate awards relating to domestic and international flying respectively, which had been made to accompany the merger of Australian Airlines and Qantas in the mid 1990s. Another suggestion was an agreement relating to the seniority of pilots as between Qantas and its subsidiary that operated an airline called Jetstar. 21 Negotiations for EBA7 opened with a meeting on 29 September 2004. The negotiators on behalf of AIPA were Alana Starke, Captain Bryan Welch, Andrew Marshall and Ely Nejadiran (whose surname changed during the course of negotiations to Jensen). Ms Starke was employed by AIPA with the title General Counsel. Under her contract of employment, her responsibilities were such that she was effectively AIPA's Chief Executive. Captain Welch was an elected Vice-President of AIPA, who was given principal responsibility for the negotiations for EBA7. Qantas was represented by Julian Hailes (Manager, Industrial Relations), Vanessa Webber, Peter Broschofsky, Captain Peter Wilson, Darren Ziegenfusz and Mark Wagner (or Wagener). Initially, Captain Manning as Qantas's Chief Pilot, and Captain Robin Holt as President of AIPA, each addressed the meeting. These addresses were regarded as opening the negotiations formally, and setting their tone. What then happened in the meeting is the subject of varying accounts given in evidence by Captain Welch, Ms Starke and Mr Hailes, and found in notes taken at the time by Ms Nejadiran/Jensen, Mr Hailes and Ms Webber. It is clear that there was some discussion about Electrolux . Ms Starke appears to have raised the issue, although Captain Welch's recollection is that he raised it first. Ms Starke also appears to have referred to her telephone conversation with, and letter to, Ms Bussell, although Ms Starke did not recall having made any such reference. The meeting was certainly aware of a proposal to remove any non-pertaining provisions before the terms of EBA7 were finalised, and to put those provisions into a separate document. The Qantas management team did not reject this idea. In his evidence, Mr Hailes said that he had not considered the issue previously. It also appears that, at the meeting on 29 September 2004, Qantas tabled its log of claims, a document setting out the changes it sought to make to the terms of EBA6 so that EBA6, as modified, could become EBA7. 22 A further meeting occurred on the following day, 30 September 2004, at which the same persons (other than Captain Manning and Captain Holt) attended. At this meeting, the AIPA log of claims was tabled, setting out the changes AIPA sought to have reflected in the new agreement. This document consisted of a cover sheet, three pages containing proposed clauses and a page headed "ANCILLARY MATTERS TO BE RESOLVED". There were seven items listed. 23 Towards the end of the meeting, there was a brief discussion about this item. Again, the accounts of Captain Welch, Ms Starke and Mr Hailes differ about what was said, as do the records found in the notes of Ms Nejadiran/Jensen, Mr Hailes and Ms Webber. Speaking broadly, the evidence led on behalf of AIPA is to the effect that agreement was secured to the transfer of non-pertaining provisions to side agreements. Ms Nejadiran's note and Captain Welch's recollection (perhaps prompted by the note) is of Mr Hailes saying "That should be okay. " Mr Hailes and Ms Webber do not support such a firm agreement. I infer that, at that time, there was at least a recognition by both parties that it was in their interests to facilitate the removal of provisions that might jeopardise the certification of EBA7, and that transferring such provisions to some other form, not involving submission for certification, would be an option. In addition, Captain Welch was keen to make the point that any provisions transferred should not be altered. He did not want either party taking advantage of the post- Electrolux environment by seeking to renegotiate what had been agreed for EBA6 but could not be transferred to EBA7. Captain Welch expressed this view. Mr Hailes understood that AIPA did not want changes made to any transferred provisions. He wrote in his notes "AIPA wouldn't see change". 24 At a minimum, after the meetings of 29 and 30 September 2004, Qantas understood that AIPA wished to have removed from EBA7 any provisions that might put at risk the certification of EBA7, by being found to be non-pertaining provisions. Qantas also understood that AIPA wished to have these provisions expressed, without change, in some other instrument. Qantas did not reject this proposition. Indeed, it is clear that Qantas was quite prepared to entertain such an idea. 25 On 15 December 2004, the Workplace Relations Amendment (Agreement Validation) Act 2004 (Cth) commenced to operate. Its effect was to validate all provisions of existing certified agreements that were not non-pertaining provisions. Its operation was retrospective. Accordingly, from the point of view of AIPA and Qantas, EBA6 continued in operation except to the extent of any non-pertaining provisions that it contained. The first of the considerations referred to in [18] above was therefore no longer a consideration. Any invalidity would only extend to non-pertaining provisions in EBA6. 26 Negotiation of the terms of EBA7 continued over some 10 months following the meeting of 30 September 2004. Little or no mention was made during that time of the Electrolux issue. Mr Hailes did give evidence that, at some time during that period, he received a phone call from Ms Starke, apparently unprompted by any specific incident, in which Ms Starke raised the question of the kind of document into which possibly non-pertaining provisions would be transferred. She mentioned the possibility of a deed, and Mr Hailes rejected that. Ms Starke was not asked about any such conversation. It is not clear whether it took place during the period of negotiation of the terms of EBA7. 27 On 4 August 2005, a document entitled " EBA7 Terms of Settlement " was signed by Mr Hailes on behalf of Qantas and Captain Holt on behalf of AIPA. The document reflects the fact that EBA6 was regarded as the basis for negotiations, and records terms that the parties had agreed on by way of changes to what was in EBA6. Clause 4 contained provisions relating to superannuation, in which AIPA acknowledged that certain specified provisions would not form part of, or be included in, the new certified agreement, but that a designated letter of agreement would be voted on as part of the new agreement. It is agreed that any provisions identified under this review as being non-pertaining will be transferred into side agreements between the parties. 28 On 14 September 2005, the election of a new Committee of Management of AIPA was finalised. Captain Ian Woods was elected to succeed Captain Holt as President. The change of regime involved a change of attitude to some issues affecting members of AIPA. Captain Woods had been a member of the AIPA Committee of Management. On 12 July 2005, when the Committee of Management had resolved to accept the EBA7 Terms of Settlement (subsequently signed on 4 August 2005), and to recommend acceptance by the members of AIPA, Captain Woods had spoken and voted against this proposal. He and the new officers also had views that there should be changes to the way in which AIPA was administered, which would involve more of the administration work being done by elected officers, rather than by employed personnel. 29 In the meantime, a joint working party was proceeding to convert the terms of settlement of 4 August 2005 into a document that could be put to a vote of the relevant employees of Qantas for their approval, as a step towards a certified agreement. On 19 September 2005, the working party dealt with the question of non-pertaining provisions. It was agreed that cll 45 and 46 of EBA6 should be removed from the new certified agreement. There was some discussion about the nature of the document into which those provisions ought to be placed. A note of the meeting of the working party, made by Mr Hailes, records that the provisions would "come out into MOU/Deed or similar". The word "Deed" is then crossed out. Similar agreement was reached in relation to other provisions that related to cll 45 and 46, particularly cl 28.28 (the leave bank provisions) and various provisions of cl 27, particularly those that bore on pre-allocation of flying to the President and other officers of AIPA. 30 The process of drafting EBA7 was finalised on 28 September 2005. At the same time, Captain Holt and Mr Hailes signed a document entitled " EBA7 (2005-2006) Explanatory Note ", designed to be distributed to those employees entitled to vote in relation to the proposed EBA7. The Explanatory Note was divided into two parts. Part 1 was entitled "Matters included in the new Agreement". Part 2 was described as "Additional matters agreed between the parties as part of EBA7 negotiations but which are NOT included in the new Agreement". Part 2 included the superannuation provisions referred to in [27] above. Administrative Issue: Matters not pertaining to the employment relationship 2.1 The Electrolux case During the course of EBA7 negotiations, as part of an administrative exercise, the parties were obliged to comply with the AIRC's directions about the removal of provisions that do not relate to the employment relationship and which have been held, pursuant to the decision of the High Court of Australia in the Electrolux case, cannot be included in Certified Agreement. These types of provisions are referred to as "non-pertaining matters" and their inclusion would render an Agreement incapable of certification. 2.2 AIPA's claim in EBA7 AIPA's log of claims included the following claim: "The parties agree to review provisions in existing industrial agreements between Qantas and AIPA to identify whether, pursuant to the Electrolux decision of the High Court of Australia, there are any non-pertaining provisions in those agreements. It is agreed that any provisions identified under this review as being non-pertaining will be transferred into side agreements between the parties. " The Company agreed to the claim. 2.3 Review of current Certified Agreement After reaching agreement on AIPA's claim, the parties have reviewed the current Certified Agreement and independently concluded that provisions dealing with leave bank and Association Business/ Association President meet the "non-pertaining matters" principle. 2.4 Transfer of provisions on leave bank and Association Business/ President into MOU The parties have agreed to transfer into a Memorandum of Understanding (MOU), without negotiation of any of the relevant terms in the provisions, those matters that do not comply with the AIRC's requirements for certification. They include the leave bank provision (previously clause 28.28) and the whole of part 11 including clause 45 (Association Business) and clause 46 (Association President). 2.5 Transfer of clauses which make reference to Association Business/ President into MOU Additionally, the following clauses which either directly or indirectly relate to, or contain references to, clause 45 (Association Business) or clause 46 (Association President) have been transferred without negotiation into the MOU: Clause No. Heading/Subject matter 17.1.5 Trading Patterns (supervisory crew members may trade with AIPA's President and the Vice-President Flight Engineers) 26.18.8 Supervisory flight crew, administration and training SIOs and the Association's President (reference to the payment of the AIPA's President in the context of that office being regarded as a supervisory appointment) 27.6.1 Pre-allocating flying for pilots (flying for AIPA's President and designates will be pre-allocated) 27.4.2(b)(ii) Pattern line construction - Determining the number of pattern lines to be constructed for each category at a base station - Dividing total credited hours by the divisor (the number of pattern lines to be constructed for each category takes into account the allocation of flying to AIPA's President and designates) 27.6.2 Pre-allocating flying for FEOs (flying for AIPA's Vice-President Flight Engineers will be pre-allocated) 27.21 (Explanatory note) Allocating open time flying (reference to scheduling for AIPA's President) 27.21.5 Order of priority for allocating open time flying (order of priority provides for AIPA's President and Vice-President Flight Engineers to be considered the most senior pilot and flight engineer respectively) Priority 10 of Open time table (Early Closure) Priority 10 in Early Closure provides for any additional credited hours resulting from a trade offered or awarded to AIPA's Vice-President Fight [sic] Engineers to be debited against the quota of flying for supervisory crew members as provided in clause 27.16 (pattern protection) Priority 10 of Open time table (Normal Closure) Priority 10 in Normal Closure provides for allocations to AIPA's Vice-President Flight Engineers to be made without limiting the normal entitlement for the classifications. No such document had been produced, even in draft form. 32 During October 2005, a copy of EBA7 and the Explanatory Note was provided to each employee of Qantas entitled to vote on the agreement. There was also a subsequent document entitled "Clarification Notice", signed by Captain Holt and Mr Hailes, distributed to those employees. The voting period closed on 3 November 2005. A majority of those eligible to vote approved EBA7. 33 In the meantime, Ms Starke was giving attention to the question of certification of EBA7, in anticipation of a favourable vote. On 31 October 2005, Ms Starke emailed Ms Bussell about what would be required to make an application to the Commission for certification, and suggested that such an application could be filed on the morning of 4 November 2005. Ms Bussell replied that Qantas was working towards lodging an application on that morning. I'm travelling to LST today, and will send a document through to you or arrange for that to be done once it's ready. 34 Ms Starke was travelling to Launceston on 1 November 2005 to assist in a legal proceeding in which two members of AIPA were involved. On the evening of 2 November 2005, after the first day of the hearing of that legal proceeding, Ms Starke produced the first draft of a memorandum of understanding. It was in the form of a legal document. Clause 1 listed the parties (Qantas and AIPA). Clause 2 dealt with interpretation and definitions. COMMENCEMENT AND DURATION OF MOU 3.1 This MOU will come into effect upon certification by the AIRC of the EBA7 Certified Agreement. 3.2 Notwithstanding the nominal expiry date in the EBA7 Certified Agreement this MOU will continue to operate beyond that date and can only be varied, replaced, rescinded or terminated by agreement between the parties. 4. AGREEMENT FOR CONTINUATION OF BUSINESS ARRANGEMENT PROVISIONS 4.1 As part of an administrative exercise during the course of EBA7 negotiations, the parties were obliged to comply with the AIRC's directions about the removal of provisions that have been held, pursuant to the decision of the High Court of Australia in the Electrolux case, cannot be included in the Certified Agreement. 4.2 The parties acknowledge that various provisions contained in EBA6 dealing with Leave Bank and Association Business/Association President ("the business arrangement provisions") meet the "non-pertaining matters" principle in the Electrolux case and cannot be included in the EBA7 Certified Agreement. 4.3 Notwithstanding clauses 4.1 and 4.2, by entering into this MOU the parties affirm: 4.3.1 the business arrangement provisions; and 4.3.2 the parties' agreement reached as part of EBA7 negotiations to transfer into this MOU, without negotiation of any of the relevant terms in the provisions, the business arrangement provisions in order to ensure their continued operation. 35 There were four remaining clauses and four schedules. Each clause referred to a schedule. Clause 28.28 of EBA6 was referred to in cl 5, and found in Sch 1. Clause 45 of EBA6 was referred to in cl 6 and found in Sch 2, cl 46 in cl 7 and Sch 3, and various provisions of cl 27 in cl 8 and Sch 4. This draft was forwarded to Ms Bussell and Mr Hailes by an AIPA staff member on Ms Starke's instructions on the morning of 3 November 2005. A second draft, containing some corrections, was forwarded to Mr Hailes late in the afternoon of the same day. COMMENCEMENT AND DURATION OF MOU 3.1 This MOU will come into effect upon certification by the AIRC of the EBA7 Certified Agreement. 3.2 Notwithstanding the nominal expiry date in the EBA7 Certified Agreement this MOU will continue to operate beyond that date and can only be varied, replaced, rescinded or terminated by agreement between the parties. COMMENCEMENT AND DURATION OF MOU 3.1 This MOU will come into effect upon certification by the AIRC of the EBA7 Certified Agreement (EBA 7) and will continue in force until the expiry of the nominal expiry date of EBA 7. 3.2 Notwithstanding clause 3.1 this MOU can be varied, replaced, rescinded or terminated by agreement between the parties. ACKNOWLEDGMENTS BY AIPA 8.1 AIPA acknowledges that in agreeing to this MOU, Qantas is assuming the risk of legal action from employees covered by EBA 7 who may be detrimentally affected by the application of the MOU. 8.2 AIPA agrees that: (a) it will not support any legal action by an AIPA member in relation to the application of the MOU, in particular, alleging a breach of EBA 7 by virtue of the application of this MOU; (b) in the event that legal action is taken against Qantas by virtue of the application of this MOU, AIPA and Qantas will renegotiate this MOU to address the alleged breach and to prevent further legal action being taken; and (c) in the event that an employee is successful in any legal action against Qantas in relation to the application of this MOU, AIPA will bear 50% of the amount awarded against Qantas. 38 This clause was the subject of negotiation in subsequent drafts, particularly modifications recognising that AIPA might also be sued by an employee, and making the obligation to contribute 50% of the amount awarded in any such proceeding a reciprocal obligation. Neither party appears to have taken objection to the presence of such a clause in the memorandum of understanding. COMMENCEMENT AND DURATION OF MOU 3.14.1 This MOU will come into effect upon certification by the AIRC of the EBA7 Certified Agreement (EBA 7) and will continue in force at least until the expiry of the nominal expiry date of EBA-7, subject to clause 4.2. 4.2 Notwithstanding the passing of the nominal expiry date of EBA7, if the parties have commenced negotiations for a new Agreement, this MOU will continue in force until the new Agreement is certified. 4.3 Notwithstanding clauses 4.1 and 4.2, this MOU can be varied, replaced, rescinded or terminated by agreement between the parties. 3.2Notwithstanding clause 3.1 this MOU can be varied, replaced, rescinded or terminated by agreement between the parties. COMMENCEMENT AND DURATION OF MOU 4.1 This MOU will come into effect upon certification by the Australian Industrial Relations Commission of EBA7 and will continue in force at least until the nominal expiry date of EBA7 at which time the MOU ceases to apply, subject to clause 4.2. 4.2 Notwithstanding the passing of the nominal expiry date of EBA7, if the parties have commenced negotiations for a new Agreement, this MOU will continue in force until the new Agreement is certified. 4.3 Notwithstanding clauses 4.1 and 4.2, this MOU can be varied, replaced, rescinded, extended or terminated by agreement between the parties. 41 This draft formed the basis of discussions at a meeting between representatives of AIPA and Qantas on the afternoon of 10 November 2005. In the meantime, Captain Woods took office formally as President of AIPA on 4 November 2005. On the following Monday, 7 November 2005, AIPA's annual general meeting was held. Captain Holt handed over the presidency to Captain Woods at that meeting. The practicalities of the change of leadership led to an adjournment of the proposed hearing in the Commission, with respect to the certification of EBA7, from 7 November until 16 November 2005. 42 By letter dated 15 November 2005, Captain Woods sought Ms Bussell's agreement to a further postponement of the hearing. The letter advised that AIPA had received legal advice that questioned the validity of the ballot in which EBA7 had been approved. Qantas refused to consent to any postponement, with the result that the hearing took place on 16 November 2005. 43 Representing AIPA at the Commission hearing were Ms Starke, Captain Woods and Ms Jensen. At the outset, Ms Starke on behalf of AIPA applied for an adjournment of the hearing. 44 Ms Starke then said that "the issue relating to the memorandum of understanding remains in contention". She referred to agreement during the negotiations to review the certified agreement with a view to removing provisions not pertaining to the employment relationship and to transfer them into other agreements between the parties. In particular the application of the memorandum of understanding in terms of its duration and in effect its continued operation past the nominal expiry date in EBA7 has not been agreed. 45 Ms Starke repeated "the MOU remains unsettled" and informed the Commission of the meeting of 10 November and of the five drafts that had been exchanged between the parties. She told the Commission that AIPA had drafted a clause that provided that the MOU would come into effect on certification of EBA7 and would continue in force at least until the nominal expiry date of EBA7. She said that there was also a clause that, if the parties had commenced negotiations for a new agreement, then the MOU would continue in force until the new agreement was certified. She told the Commission that "Qantas has in fact rejected the provision that the MOU would continue in force while the parties are in negotiations for a new agreement, until the new agreement is certified. " She informed the Commission that Qantas had agreed to provide for the MOU to be extended by agreement. She referred to "AIPA's understanding...that the MOU would continue to operate beyond the nominal expiry date until a new agreement is certified" and told the Commission that "At no stage during negotiations did Qantas disclose or even suggest to AIPA that the period of operation of the MOU would be anything less than what would occur under a certified agreement", or that the MOU would not have the same de facto operation beyond the nominal expiry date. Had it been we would have been in discussions on it. It's important to note, Commissioner, that the explanatory note accompanying the distribution of the new agreement did not disclose that limitation to employees. You've had over a week now, with the new team, and Qantas. You haven't reached agreement yet. What's the chance of reaching agreement? 47 Subsequently, the Commissioner looked at the Explanatory Note that had been distributed to those who were to vote on the EBA7, and to the absence of any reference to a date, or to the life of the MOU. Ms Starke agreed that there was no such reference in the Explanatory Note, and also pointed out that there had been no discussion between the parties on the issue "now being proposed by Qantas. That's what I'm saying. It doesn't say how long that MOU would go for, and going from your comments that seems to be the difference. You said the MOU - you wanted a deed, they wanted an MOU. You agreed to an MOU. They then wanted until the certified agreement went to its normal date. Then you say no it could be longer than that. But none of that was a matter that went to members was it? But we were asking for something that would have a long term operation, ie the deed. 49 Captain Woods then addressed the Commission, followed by the advocate appearing on behalf of Qantas, who opposed the request for an adjournment. Ms Starke replied, and the Commissioner then refused to grant an adjournment. The Commissioner proceeded to consider whether to certify EBA7, pursuant to s 170LT of the WR Act . On the same day, he decided to certify EBA7, thereby bringing it into effect on that day. 50 By letter dated 9 December 2005, AIPA advised the Commission that it was in dispute with Qantas, and sought a recommendation of the Commission that "Qantas honour its agreement" as reflected in cl 2.4 of the Explanatory Note distributed to those eligible to vote on EBA7. The letter advised the Commission that Qantas had asked that AIPA execute the memorandum of understanding by close of business on the day of the letter, in default of which Qantas would consider the memorandum of understanding to be withdrawn. It is further formally demanded that Qantas retract its threat to withdraw or otherwise cease to be bound by the Agreement referred to in the Explanatory Memorandum unless AIPA agrees to accept that the term of the Agreement be taken to continue in force only until the nominal expiry date of EBA7 and will then cease to apply. AIPA requires an assurance not later than 5.00 pm on Friday 9 December 2005 that the demands above referred to will be complied with in default of receipt of which AIPA will be in dispute with Qantas as to the matters above referred to. 51 Ms Bussell responded to this letter, and also to the letter to the Commission, by letter dated 12 December 2005. This letter referred to Draft 5 of the memorandum of understanding, which had been supplied to AIPA representatives at the meeting on 10 November 2005, and to subsequent discussions about that draft. It said that at no time had Qantas advised or threatened that it would withdraw the memorandum of understanding unless it was signed by AIPA by close of business on 9 December 2005. The letter also said that Qantas was still awaiting a response from AIPA in relation to Draft 5 of the memorandum of understanding. 52 On 13 December 2005, Captain McNeil wrote again to Ms Bussell. (d) If there was any doubt about that (AIPA says there isn't) there can be no doubt that the agreement is in force now and Qantas is not entitled to threaten to not observe its agreement to force AIPA to accept a narrower view of its term of operation. Please advise whether Qantas Airways Limited considers that the Agreement referred to in the Explanatory Note is in force and will be honored [sic]. 53 The letter then set out the five versions of the commencement and duration clause that had appeared in the five successive drafts of the memorandum of understanding. If the provisions of the Agreement referred to in the Explanatory Memorandum were agreed as between AIPA and Qantas Airways Ltd and were lifted from EBA6 and agreed "without negotiation" why and when and by whom did Qantas Airways Ltd decide that it wished a shorter term of operation for the Agreement than EBA7? My suggestion is, that we submit the dispute, which exists to conciliation by the Australian Industrial Relations Commission. Our submission to the AIRC, consonant with what the Commission said when certifying EBA7, is that the Agreement, be accepted by Qantas Airways Ltd and AIPA as binding in its terms. The Australian & International Pilots Association is being disadvantaged by the recent and continuing refusal of Qantas to give effect to the Agreement referred to in the Explanatory Memorandum. Both the President and I made application for leave to attend to urgent AIPA business. Both applications were refused. That seems to convey to AIPA that Qantas now does not regard the Agreement as binding upon it. I will be very pleased to hear to the contrary and await your urgent advice. 54 On 16 December 2005, Ms Bussell wrote to Captain McNeil. The parties have been in discussions since 3 November in relation to various machinery issues such as definitions, acknowledgments, commencement and duration. Once these matters have been agreed the MOU will be referred to senior management. In the Company's view, this is not inconsistent with the Explanatory Memorandum. At this stage, no agreement on the MOU has been reached as the Company is awaiting a response from AIPA in relation to Draft 5 of the MOU. We note the Company did not agree to the duration clause in Draft 1 and 2 of the MOU as suggested in your letter. Draft 1 of the MOU was sent to the Company on 3 November 2005 at 11:45am. A further version was emailed to the Company at 5:03pm which contained administrative changes. The Company provided its amendments to AIPA in relation to Drafts 1 and 2 on 4 November 2005 which included an amended duration clause. The Company does not believe the Australian Industrial Relations Commission (AIRC) has jurisdiction to deal with this matter and accordingly, reserves its right to raise any jurisdictional concerns should the matter be referred to the AIRC. We await your response to Draft 5 of the MOU so that the matter may be referred to senior management. 55 On the same day, AIPA's Industrial Officer, Richard Jennings, wrote to Ms Bussell in reply to her letter. AIPA is quite prepared to have that said. 56 On 12 January 2006, Captain Perry McNeil, the Secretary of AIPA, wrote to John Borghetti, Qantas's Executive General Manager. The reason given is that while the Protocol governing such release is agreed and accepted, AIPA must agree to any such arrangement ending on the nominal expiry date of EBA7. Our concern is that without some understanding that the Protocol (which is long established) will continue beyond the nominal expiry date of EBA7, negotiations directed to a mutually acceptable EBA8 will take place in circumstances where the office holders of AIPA are not free to attend to them. We have sought the good offices of the AIRC to suggest a formula to overcome this problem. You will appreciate that under present conditions, office holders must utilise their personal holiday or long service leave to carry out the duties which they were elected to perform. This itself limits opportunities for dialogue and constructive discussion and has led to a measure of exasperation which is not helpful to the Company or to AIPA members. We would certainly appreciate your good offices and those of Mr. Geoff Dixon in overcoming this situation even on an interim and without prejudice basis that involves no concession by Qantas. 57 On 17 January 2006, Captain Woods also wrote to Mr Borghetti, concerning relief from flying duties for AIPA business. The letter referred to the fact that "these conditions were agreed to be transferred to a Memorandum of Understanding ( MOU ) in conjunction with the certification of EBA7. This was obviously intended to be a reference to 20 January 2006. Such a meeting apparently took place. On 23 January 2006, Phoebe Emery on behalf of Qantas forwarded by email to Mr Jennings and Ms Jensen Draft 6 of the memorandum of understanding. The email informed Mr Jennings and Ms Jensen that "Once we have agreement from you on Draft 6 of the MOU we will forward the document to senior management for consideration. COMMENCEMENT AND DURATION OF MOU 4.1 This MOU will come into effect upon an agreement in principle being reached between the parties and will expire on 31 December 2006. 4.2 Notwithstanding clause 4.1, this MOU can be varied, replaced, rescinded, extended or terminated by agreement between the parties. 4.3 Negotiations for such variation, replacement, rescission, extension or termination by agreement between the parties shall commence no later than 30 June 2006 and shall be sought to be concluded no later than 30 September 2006. We note the MOU as amended will be taken as operative as of today's date. 60 On 21 February 2006, Captain Woods wrote to Geoff Dixon, Managing Director and Chief Executive Officer of Qantas, referring to a meeting on 10 February 2006, at which Mr Dixon had apparently stated that Qantas's lawyers were looking at the memorandum of understanding, and asking whether Mr Dixon was in receipt of the lawyers' advice and was in a position to sign off on the memorandum of understanding. As you are aware, Qantas has had concerns and reservations about this arrangement for some time. These concerns are shared by others. After careful consideration, we believe the arrangement should not continue and Qantas will not be signing the MOU outlining financial support for AIPA. 62 By 23 September 2005, Captain Woods had become aware that he had sufficient support within the Committee of Management to be elected as the next President of AIPA. He was in fact declared elected on 4 November 2005, and took over from Captain Holt in the course of the AIPA annual general meeting on 7 November 2005. As you would know, I expected to be on annual leave until the end of November, and on Long Service Leave from Dec 20th. Nevertheless, taking this leave will now, not be appropiate [sic] and also unnecessary. His reference to "the next BP" was a reference to a bid period, being a period in respect of which pilots were entitled to bid for particular schedules within the roster of pilots for that period. 64 On 7 November 2005, after the annual general meeting at which he had taken over as President, Captain Woods went to the office of Captain Manning, Qantas's Chief Pilot. Present at the time were Captain Kearns, a Deputy Chief Pilot, and Mr Hailes. The purpose of the visit was to inform Qantas management that Captain Woods was now the President of AIPA, and to request that he be paid the appropriate rate of salary, calculated in accordance with cl 24.2 of EBA6, as required by cl 46.2, and that, in lieu of his annual leave, he be given the entitlement of the President to relief from flying, pursuant to cl 46.4.1. Captain Kearns responded to the request by saying that the entitlements were not available because they were already being utilised by Captain Holt, the outgoing President. 65 After this meeting, Captain Woods contacted Ms Bussell to complain that Qantas was not giving effect to cll 45 and 46 of EBA6 in relation to the provision of what he called "Presidential leave" and in respect of arrangements to pay him his salary entitlement. Ms Bussell responded that the memorandum of understanding had not been signed, and was therefore not in effect. 66 The failure of Qantas to change the nature of the leave taken by Captain Woods, to provide him with relief from flying in accordance with cl 46.4.1 of EBA6, to allow him pre-allocation of flying in accordance with cl 46.4.2 of EBA6, and to pay him a salary calculated in accordance with the provisions of cll 24.2 and 46.2 of EBA6 are the basis for the claims that Qantas contravened those provisions. 67 There are also allegations of contravention of cl 45.3.1(a) by refusing to release AIPA members from duty to enable them to attend to AIPA duties and responsibilities. On 28 October 2005, Captain Holt, as President of AIPA, signed a form applying for Captain Simon Tuma, a member of AIPA, to have 8 November 2005 blocked from duty, so that Captain Tuma could attend an AIPA Committee of Management meeting on that date. On 10 November 2005, Captain Woods, as AIPA President, signed two similar forms. One sought to have leave already granted to Captain McNeil re-credited, "due to AIPA duties. " The other sought to have Captain Ian Smith, also an AIPA member, released from a trip on 11 November 2005, "To attend to URGENT AIPA Scheduling duties. " Qantas did not accede to any of these requests. It is thereby alleged to have contravened cl 45.3.1 of EBA6 on three different occasions. 68 The relevant decision-maker in Qantas management was Drew Richardson, General Manager, Flight Operations, Business Support. Mr Richardson gave evidence that, up to the certification of EBA7, Qantas continued to apply the provisions of EBA6, including cll 45 and 46, as if they were valid. Past practice when there had been a change of President of AIPA had involved stopping the pay of the outgoing President immediately, but processing the additional salary for the incoming President during a later pay period. For some reason that is not clear, additional salary for Captain Woods was never processed in accordance with this practice, and there was never any back pay paid to him. In respect of the change in the character of leave for Captain Woods, Mr Richardson was aware of the request made by Captain Woods to Ms Tu. In consultation with Captain Wayne Coombes, a decision was made not to grant the request at that time. In terms of your request to have the 28 day period of annual leave between 9 November 2005 and 6 December 2005 removed from your roster and recredited, Wayne Kearns was looking at this issue. In Wayne's absence my directions are that the leave cannot be removed from your roster and be recredited to you. Wayne returns next Monday 21 November 2005 and no doubt will be in touch. Until then please work on the basis that the leave will not be removed from your roster. 70 Mr Richardson's evidence was that no further decision was made about the request to re-credit Captain McNeil's leave. 71 So far as the requests for leave for Captain Tuma and Captain Smith, Mr Richardson described them both as "challenging". He gave evidence of the practical difficulties of rostering, so as to ensure that all scheduled flights had appropriate crewing arrangements. In fact, the rostering system adopted by Qantas made allowances for unexpected sick leave and potential disruptions to schedules, by rostering a greater number of pilots in any period than would actually be required to fly scheduled flights. It also had the capacity to offer additional flights to some pilots, subject to the requirements for sufficient rest periods between flights. Mr Richardson conceded in cross-examination that Captain Tuma's request had been received prior to the commencement of the bid period on 31 October 2005, and that it would have been possible to roster someone else for the flights for which Captain Tuma was eventually rostered, so as to make him available to AIPA on 8 November. It would also have been possible to wait and see how the availability of pilots turned out, closer to 8 November, rather than rejecting Captain Tuma's request immediately, as was done. From the available records of Qantas, it also appears that there was likely to have been at least one pilot available during the period of Captain Smith's request. The agreement was said to fall within the first class referred to in Masters v Cameron [1954] HCA 72 ; (1954) 91 CLR 353 at 360, or into the "fourth class", said to be identified by McLelland J in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 at 628. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. At 360-361, the High Court went on to point out that, in each of the first two cases, there is a binding contract, but not in the third. 75 There must be some doubt as to whether a case described in these terms falls within a fourth class, additional to those described in Masters v Cameron . Assuming the existence of a binding agreement, it is always open to the parties to that agreement to vary it by adding additional terms. Viewed in that light, the so-called fourth class appears not to differ from the first or second classes referred to in Masters v Cameron . Although the New South Wales Court of Appeal upheld McLelland J's judgment, there is no reference in the judgment of McHugh JA, with whom Kirby P and Glass JA agreed, to Masters v Cameron , or to a "fourth class". If they did not, the formal contract would give effect only to the agreed terms and conditions of the correspondence. The case, therefore, is one where the parties were bound by the informal agreement but expected to make a further contract which by consent might contain additional terms: Sinclair, Scott & Co Ltd v Naughton. 76 In the present case, there is no indication that either AIPA or Qantas gave expression to the possibility that there would be any need for them to agree to extra terms. The question in the present case is whether the case falls within the first or third category in Masters v Cameron . The attempt to rely on a fourth class seems to have been prompted by the fact that, following the signing of the Explanatory Memorandum, AIPA and Qantas did negotiate upon and apparently agree to an additional term, relating to the sharing between them of any liability that might arise from the transfer of terms that were formally in EBA6 into a document other than EBA7. 77 The contention that the terms of settlement amounted to a final agreement between the parties is difficult to sustain. It was not until after the terms of settlement had been signed and the parties had engaged in the task of converting them into detailed documents that attention was given by either party to identifying the non-pertaining provisions that ought to be removed, to ensure the certification of EBA7. There had been a concern on the part of some people within AIPA that cll 45 and 46 of EBA6 and the other provisions relating to those clauses would probably fall into that category, but there is no evidence that any negotiation took place about the content of any alternative document until after the terms of settlement had been signed. 78 By 28 September 2005, when the Explanatory Memorandum was signed, the provisions that would be transferred into another document had been identified, and were listed in the Explanatory Memorandum itself. Indeed, cl 2.5 of that document uses the past perfect tense, so as to convey to the reader that the memorandum of understanding is already in existence. Little, if any, weight can be attached to this fact in determining whether there was a final agreement. Clause 2.5 is inconsistent with cl 2.4 of the Explanatory Memorandum, which records merely that the parties "have agreed to transfer" the non-pertaining provisions into "a" memorandum of understanding. The statement in cl 2.5 that, in relation to the additional provisions there listed, this had already been done, was incorrect as a matter of fact. 79 It is common ground between AIPA and Qantas that, as at the date of the Explanatory Memorandum, there had been no express agreement as to the starting date for the relevant side agreement, or as to its finishing date. It is also common ground that some provision fixing the duration of any agreement about those matters was an essential term, without which there could not be a binding agreement. The case for AIPA is that the absence of this essential term is cured by the implication of a term to the effect that the side agreement would be of the same duration as EBA7, ie that it would start to operate when EBA7 was certified and would continue in operation until EBA7 was replaced by a further certified agreement, or otherwise ceased to be binding. 80 Before considering whether the suggested implied term meets these criteria, it is necessary to deal with one argument. That argument is based on the proposition found in the judgment of Kaye J, with whom Marks and Teague JJ agreed, in Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695 at 702, that "the law does not permit a court to imply a term into a bargain between parties for the purposes of making their bargain an enforceable contract. " If this proposition is to be taken at face value, it is hard to see how most of the cases in which it has been held that there are implied terms in contracts could have been so decided. There have been numerous cases in which courts have held that implied terms that the performance of agreed obligations take place within a reasonable time, or that a party may bring about the termination of agreed obligations by giving reasonable notice, are available to ensure the binding nature of those agreed obligations. In the words of the Privy Council in the B.P. case, such implied terms are "necessary to give business efficacy" to the contracts of which they are found to be part. The danger of taking the proposition expressed by Kaye J at face value is obvious. Such a proposition could lead to arguments akin to those about whether the chicken came before the egg, or the egg before the chicken. Was there already an agreement, so that it can be supplemented by an implied term to give it efficacy, or was there no binding agreement because there was no express agreement about the subject matter of the implied term? In my view, Kaye J intended to mean no more than that the parties must have agreed to be bound by the obligations they have expressed in their negotiations, before the question whether a term can be implied to give that agreement efficacy can be addressed. It is on that basis that I approach the present case. 81 There can be little doubt that AIPA and Qantas had reached agreement by 28 September 2005 that the provisions of EBA6 referred to in cll 2.4 and 2.5 of the Explanatory Memorandum were not to appear in EBA7, but were to appear in a separate document. AIPA's case depends upon the assumption that 28 September 2005 was the final point in negotiations between the parties about the issue, so that, but for the gap sought to be filled by the implied term, there was a complete agreement. The case for Qantas is that the production of the Explanatory Memorandum on 28 September 2005 was merely a stage in ongoing negotiations, as a result of which it became clear that there was no agreement between the parties. 82 Counsel for AIPA objected to evidence about negotiations between the parties after 28 September 2005, except to the extent that their content might cast light on the meaning of terms already expressed between the parties, as was suggested in Australian Broadcasting Corporation v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550 per Gleeson CJ, with whom Hope JA and Mahoney JA agreed. In my view, what took place between AIPA and Qantas after 28 September 2005 is relevant in determining whether there remained matters unresolved between the parties. If one of those unresolved matters was the question of duration, then there was no concluded agreement, because an essential term was never agreed. 83 Before examining the relevant communications between the parties subsequent to 28 September 2005, it is worthwhile to apply the criteria in the B.P. case to the implied term advanced by AIPA on the pleadings. In this respect, it is clear that the alleged implied term cannot survive being tested against the third criterion, that the term must be so obvious that "it goes without saying". 84 The parties were agreeing to transfer the non-pertaining provisions into a document separate from EBA7 on the assumption that, in the light of Electrolux , they were provisions that would not be acceptable to the Commission and would therefore prevent the certification of EBA7. It is true that there was no absolute recognition that the non-pertaining provisions fell outside the description in s 170LI(1), namely matters pertaining to the relationship between an employer and the relevant employees. As appears from my examination of the implications of Electrolux in [113]-[116] below, certainty about whether a particular provision did or did not fall within s 170LI(1) would have been extremely difficult to achieve. Nevertheless, it is clear that the parties, and particularly AIPA, contemplated that cll 45 and 46 and the related provisions, as they appeared in EBA6, might very well be unenforceable as a matter of law. If this had not been the case, there would have been no suggestion from either party that those provisions should be removed from EBA7. On this basis, it is legitimate to ask (as the mythical officious bystander might have asked) whether it was obvious that the starting points of the obligations would be the commencement of the operation of EBA7. If it be accepted that the parties were transferring the non-pertaining provisions into a separate document in order to ensure their continued operation as enforceable provisions, there would be every reason why such an agreement should operate as soon as it was reached, and not await the certification of EBA7. The circumstance that Qantas had continued to apply the Association Business Provisions in EBA6 does not diminish the force of this proposition. Objectively, it appears more likely that the parties would want any agreement to have been binding forthwith, rather than from a later date. 85 Similarly, the question of a date of termination of the obligations did not necessarily have a relationship with the duration of EBA7. In this respect, the parties could have chosen a termination date, or mechanism, from a range of possibilities. For instance, it might have been agreed that the side agreement should continue to operate until such time as one or other party terminated it by giving some agreed period of notice. A specific termination date might have been chosen, with or without the possibility of termination by notice. The existence of such a range of reasonable possibilities is fatal to the satisfaction of the third criterion in the B.P. case. It must be remembered that the criteria in the B.P. case must be satisfied by a particular term. It is not open to the Court to choose from a range of possible implied terms, for the purpose of making an agreement into a final one. The particular term advanced must be so obvious that it is unnecessary to express it, because both parties will recognise that it is present in their agreement. The implied term pleaded in the present case clearly does not satisfy that requirement. 86 The negotiations between the parties subsequent to 28 September 2005 confirm that, as at that date, the implied term pleaded was not at all obvious. In her first draft of the memorandum of understanding, Ms Starke chose a different term altogether. Her proposal was that the agreement would come into effect on certification of EBA7 and continue to operate forever, unless varied, replaced, rescinded or terminated by agreement between the parties. Qantas responded with a proposal that the side agreement expire on the nominal expiry date of EBA7. Only then did Ms Starke, on behalf of AIPA, propose something like what is now said to be the obvious term, in an attempt to ensure that the side agreement should continue in force if EBA7 endured beyond its expiry date, in accordance with s 170LX of the WR Act . In her submissions to the Commission on 16 November 2005, when she was seeking to have the application for certification of EBA7 adjourned, Ms Starke did not contend that there was a binding agreement containing an implied term that the memorandum of understanding would have the same duration as EBA7. She contended that there was no completed agreement. It may be true that her perception of the situation was not conclusive of the non-existence of a binding agreement. It is equally true that the term that AIPA now contends was so obvious as to go without saying was not obvious to Ms Starke, who had the principal responsibility for finalising the memorandum of understanding on behalf of AIPA. 87 At a very late stage in the trial of the proceeding, in submissions in reply, counsel for AIPA applied to amend the statement of claim, so as to allege in the alternative an implied term to the effect that the agreement containing the non-pertaining provisions would come into operation immediately and would continue until either party terminated it on reasonable notice. I reserved the question whether leave to amend at that stage ought to be granted. As I have said, the objective observer of the terms expressed in the Explanatory Memorandum of 28 September 2005 would have been more likely to have formed the view that the terms agreed on would come into effect immediately, and would continue until terminated by reasonable notice. Such a term is more obvious than the one originally pleaded in this case. The question remains, however, whether it is so obvious that it goes without saying. Given the existence of a range of possible provisions as to duration, it is impossible in my view to select any one as being the obvious provision, so that any expression of a term as to duration was unnecessary. 88 The subsequent negotiations of the parties about the wording of a duration clause are inconsistent with any proposition that they must be taken to have accepted that any particular term relating to duration was so obvious that its content did not require expression for the agreement to be binding. The reality is that the parties did not regard themselves as having reached a concluded agreement about the non-pertaining matters at 28 September 2005. What remained to be done was not a mere drafting exercise, but the negotiation of the terms of the agreement proposed. The correspondence between the parties about the content of the duration agreement is clear evidence of this. So also is the negotiation that took place about the sharing of any liability that might arise from the implementation of the proposed agreement. It is a reasonable inference that it was not until some time after 28 September 2005, and probably when they were exchanging drafts in November 2005, that the parties began to realise that there were potential legal difficulties confronting the proposal to transfer the non-pertaining provisions into another document. The principal difficulty was obvious. At the time when they were agreed, and were included in EBA5 and EBA6, on the assumption that the provisions were valid, there was no difficulty about the effect that they had in relation to the obligations of Qantas under EBA5 and EBA6. Once the provisions were removed, however, and the terms that they had qualified were left unqualified in EBA7, those terms would become enforceable under the WR Act in their unqualified form. It would have been possible for an inspector, or an employee whose employment was subject to EBA7, to institute a proceeding pursuant to s 178(1) of the WR Act (as it then stood), seeking to recover a penalty in respect of any breach of any term of EBA7 brought about by an attempt to modify the operation of the terms of EBA7 by applying any of the non-pertaining provisions. It seems that this realisation gave rise to Qantas's proposal in relation to the sharing of liability. Far from refusing to countenance this proposal, on the basis that there was already a concluded agreement, AIPA proposed a modification of the clause that would provide equivalent protection to AIPA in the event of any liability. The course of these negotiations is evidence that the parties were still in negotiation about what would be the terms of any memorandum of understanding that might be entered into in consequence of what was said in cll 2.4 and 2.5 of the Explanatory Memorandum. 89 Counsel for AIPA relied on authorities in which it was held that agreements were subject to implied terms that their duration would match the duration of other agreements to which they were related. The specific cases are Gibson Motor Sport Merchandise Pty Ltd v Forbes [2005] FCA 749 and Caltex Properties Ltd (in liq) v Love and Ors (unreported, Supreme Court of Western Australia, Parker J, 14 May 1995). These cases turn on their own facts. They do not establish the existence of any principle that, because two agreements can be said to be related, a term must be implied into the one lacking any express term about duration that its duration will match that of the other, the duration of which has been agreed expressly. 90 The positions adopted by the parties after 28 September 2005 do not suggest that they regarded themselves as having arrived at a concluded agreement. As I have said, the submissions that Ms Starke made to the Commission on 16 November 2005 did not involve any assertion that there was a concluded agreement between AIPA and Qantas. On the contrary, AIPA through Ms Starke clearly represented to the Commission, and to the Qantas representatives who were present, that there was an outstanding matter between the parties, namely the duration of the memorandum of understanding. It was not until 9 December 2005 that AIPA, through Captain McNeil, began to assert in correspondence to Qantas that there was a binding agreement. In his letter of that date to Ms Bussell, Captain McNeil demanded that Qantas "acknowledge as in force and binding" the agreement referred to in the Explanatory Memorandum. The letter referred indirectly to the question of duration, but contained no express assertion that there had been agreement as to any particular duration. This assertion did not come until Captain McNeil's letter dated 13 December 2005 to Ms Bussell. In his letter dated 16 December 2005 to Ms Bussell, Mr Jennings was not quite so bold, suggesting only that the memorandum of understanding "should have the same currency as EBA7. " Nor did AIPA subsequently assert its claim that the duration of the memorandum of understanding had already been determined. Captain McNeil put the case for a longer duration than that proposed by Qantas in his letter to Mr Borghetti dated 12 January 2006. Captain Woods's letter dated 17 January 2006 to Mr Borghetti also seeks to make the case for the continued operation of the Association Business Provisions, by way of persuading Qantas, rather than making a claim that Qantas was bound by a concluded agreement that included a provision as to duration. As the subsequent correspondence shows, there was further negotiation between the parties, leading to AIPA's acceptance "under protest" of yet another formulation, proposed by Qantas, of the duration clause. By that time, the Qantas representatives had made it clear that any final agreement was dependent upon the approval of Qantas's senior management. Negotiations came to an end when Mr Dixon made it clear in his letter of 14 March 2006 to Captain Woods that Qantas would not sign the memorandum of understanding. 91 Of course, what the parties thought their position was after 28 September 2005 is not conclusive as to whether an agreement had been reached at that date. What they represented to each other after that date does have significance, however, in the determination of that issue. It is significant (although again not conclusive) that, with the possible exception of Captain McNeil in December 2005, nobody on either side of the negotiations actually expressed the view that final agreement had been reached. All acted as though this had not occurred. 92 The demonstrated perceptions of the participants in the relevant events and the objective assessment of the evidence both lead to the same result. There was a course of negotiations that began in September 2004 and continued until March 2006, when they ended with disagreement about what the proposed agreement should provide as to its duration. That was a matter acknowledged by both AIPA and Qantas in this proceeding to be an essential term of any agreement between them. The case put by AIPA seeks to rule a line through that course of negotiations on 28 September 2005, and to contend that what was expressed in the Explanatory Memorandum amounts to a concluded agreement. The gap left by the absence of any agreement about duration is said to have been filled by an implied term. The implied term was first expressed in one form, and then, at a late stage and in the alternative, in another. It is not possible to say that there was an implied term in either form. Neither can be said to be so obvious that it goes without saying. Both are among a range of possible provisions that might equally well have been made for duration. None of the possibilities stands out from within the range as the obvious one. As a matter of fact, the continuation of negotiations makes it impossible to draw the line proposed by AIPA. The result is that no concluded agreement was ever reached. To the extent to which it is based on such an agreement, AIPA's claim in this proceeding must be dismissed. 93 In deference to the full argument about other issues related to AIPA's contract claim, and in case an appeal court should take a different view about the existence of a concluded agreement, I should state briefly my views about three other issues: whether the parties, if they did reach a concluded agreement, intended it to be legally binding; whether AIPA suffered loss and damage from Qantas's failure to comply with the terms of the agreement; and whether any remedy other than damages should be granted in the event of a finding that there was breach. 94 As to whether the parties intended to create a legally binding agreement, or an agreement binding in honour only, there are factors pointing in both directions. The refusal of Qantas to enter into a deed, accepted by AIPA, and the choice of "memorandum of understanding" as the title of the document, again accepted by AIPA, suggests that there was no intention to create legal relations. The title is not conclusive, however. The course of negotiations, particularly the detailed attention given by both parties to the precise wording of the document, tends to suggest that they were looking towards the letter, rather than merely the spirit, of an agreement, and therefore towards enforceability. Again, this is not conclusive. Nor is the history of the provisions that were being transferred from EBA6 into the memorandum of understanding. When they were first negotiated as part of EBA5, and carried into EBA6, the non-pertaining provisions were assumed to be enforceable. Following Electrolux , the parties were of one mind that the non-pertaining provisions were, at least potentially, unenforceable at law. This potential unenforceability and its possible effect in jeopardising the certification of EBA7 constituted the motivation for placing the non-pertaining provisions in another document. In these circumstances, it is difficult to say that the history of the provisions gives a clue either way as to whether the parties were agreed that the provisions should be legally enforceable or binding in honour. What seems to me to be the decisive factor in favour of legal enforceability is the agreement about the clause relating to the sharing of legal liability. Once it was realised that Qantas's compliance with the non-pertaining provisions, in a document outside EBA7, could place Qantas in a difficult position in the event of conflict between its obligations under EBA7 and its obligations under any separate agreement, the parties had a choice. They could have chosen expressly to make the memorandum of understanding binding in honour only, and liable to give way in the event that any actual conflict appeared. Alternatively, they could have done what they did, which was to assume that such conflict would occur and to make provision for the sharing of any liability flowing from it. This agreement suggests to the objective observer that both parties regarded the obligations under the transferred non-pertaining provisions as legally binding, so that provision needed to be made for the actuality of conflict between those provisions and the provisions of EBA7. For this reason, if it had been necessary to do so, I should have had little difficulty in finding that the agreement between AIPA and Qantas, to be expressed in the memorandum of understanding, was legally binding. 95 The question of damage flowing from Qantas's non-observants of the agreement is more difficult. It is necessary to detail some further facts. The claim consists of two elements. One is the salary of Peter Somerville, who was engaged as the General Manager of AIPA from 24 April 2006. The second is a payment made by AIPA to Captain Woods, designed to compensate him for the failure of Qantas to pay his salary at the rate designated for the President by cl 46.2 of EBA6. 96 At the same time as Captain Woods became President of AIPA, on 7 November 2005, Captain McNeil became Secretary, Captain John Dowe Assistant Secretary and Captain Andrew Percival Treasurer. The new regime was determined to reform the manner in which AIPA was administered. At that time, Ms Starke was employed as Legal Counsel and Industrial Relations Manager. By November 2005, Ms Starke's salary package was $292,723. 98 It is apparent that Ms Starke's responsibilities were substantially wider than the title of her position suggested. When Captain Woods and his team took office, they intended to make substantial changes to the way in which AIPA was administered. Those changes involved utilising cll 45 and 46 of EBA6 and the related provisions, so as to make best use of the AIPA elected officers in the day-to-day management of AIPA. According to Captain Woods's calculation, cll 45 and 46 and the related provisions of EBA6 made available to AIPA the equivalent of the full-time services of two pilots, who would be paid by Qantas. It was intended to establish a secretariat in the office of AIPA. One of the full-time equivalent positions would be shared between Captain McNeil, Captain Dowe and Captain Percival, who would run the secretariat. The other full-time equivalent position would be shared between Captain Woods and a Vice-President. The intention was that the officers would be more directly involved in the affairs of AIPA. Captain Woods proposed that Ms Starke's role should be recast as that of General Counsel, and that she would be engaged more than she had been in the representation of AIPA and its members in courts and tribunals. There appears to have been a disagreement between Captain Woods and Ms Starke about her reassignment. On 17 November 2005, the day after she had appeared for AIPA in the Commission to oppose the certification of EBA7, Ms Starke was dismissed from her employment. 99 On 18 November 2005, Captain McNeil sent a memorandum to all AIPA staff and Committee of Management members, detailing the nature of the restructure that was proposed. Mr Jennings was to head an industrial advocacy unit. One other person was named to be part of this unit as a consultant and the memorandum said that other experienced officers would be expected to join the unit in 2006. The legal unit was to remain in place "as a functional unit separate from, but reporting directly to, the Secretariat. " Four persons, including Ms Starke and Ms Jensen were named as working in the legal unit. Another named person was to be personal assistant to the President and the head of the secretariat. Two more were described as having modified roles within the new structure. The names of the Accounts Manager, the Communications Coordinator and the Administrative Assistant (Communications) were also given. It was made clear that "All administration management, tasking and coordination are now the responsibility of the A.I.P.A. 's Secretariat. " The legal and industrial advocacy units and the office administration were all to report to the secretariat. 100 Following the certification of EBA7, Qantas ceased to approve applications by pilots for relief from flying under the Association Business Provisions. Initially, both Captain McNeil and Captain Woods were on leave in November, and were able to devote their leave time to working in the AIPA office as planned. Thereafter, each had some sick leave. Captain Woods injured his knee and was on sick leave for approximately six months from some time in January 2006. In addition, each utilised rostered days off to perform work for AIPA. When Captain McNeil had to return to regular flying, he continued to provide as much assistance as he could until the end of March 2006, when he resigned as Secretary of AIPA. In his evidence, Captain Woods characterised Captain McNeil's resignation as "for family reasons and for reasons that I appointed Mr Somerville as a general manager". Captain Dowe also spent time in the office regularly and continued to do so until June 2007. So did Captain Percival, to the extent of approximately one day per week over the first 12 months, although it is not clear whether he continued to work in the AIPA office after that time. 101 Mr Somerville commenced work as General Manager of AIPA on 24 April 2006, although the terms of his contract of employment were not finalised until 7 July 2006, when a written contract was signed. From April until June or July 2006, he worked on a part-time basis. Thereafter, he worked full-time. Mr Somerville's salary was calculated in accordance with a formula set out in the contract of employment, based on hourly rates payable "to B744 First Officers". Mr Somerville's salary was approximately $175,000 per annum. Attached to his contract of employment was a schedule containing the position description. The position was described as "General Manager & Industrial Relations Manager". The tenor of Captain Woods's evidence was to minimise the range of duties Ms Starke performed and maximise those of Mr Somerville. He described the duties and responsibilities listed in Mr Somerville's contract of employment as the minimum that Mr Somerville was required to perform. I take the summary of Ms Starke's areas of responsibility, which I have set out in [96] above, and her evidence of what she did, as closer to the fact than Captain Woods's account. 103 In effect, when Captain Woods and his team came to office, Ms Starke was the Chief Executive Officer of AIPA. From July 2007 Mr Somerville was the Chief Executive Officer of AIPA. His remuneration was significantly less than that of Ms Starke. 104 AIPA's claim for damages equal to Mr Somerville's salary is based on the proposition that his appointment was necessary because Qantas's failure to give effect to the provisions formerly in cll 45 and 46 and the related provisions of EBA6 made it impossible for AIPA to operate according to its planned restructure, and therefore necessitated Mr Somerville's engagement. I do not think that the evidence establishes this causal link. In his evidence-in-chief, Captain Woods was asked, in the context of the proposed restructure, whether any consideration was given to employing anyone in the role of General Manager or Chief Executive Officer. Had - if the association developed as was expected, then down the track, we believed that the workload on the secretariat and the office of the president would be such that we could justify the employment of a general manager. 105 Captain Woods was then asked if this option was taken up, what was intended for the President and the Secretary. He said "different work". He then explained the nature of the different work contemplated. There was no evidence that the restructuring had not led to a situation in which there was a need, or a desire, to appoint a general manager by the time of Mr Somerville's appointment. Although Captain McNeil's memorandum of 18 November 2005 was quite specific as to the roles of a number of named people, there was no evidence as to who was employed in the AIPA office or what their duties and functions were by April or July 2006. Legal work had been outsourced to a law firm, and lawyers were no longer employed. There was no specific evidence of the work that Captain McNeil, Captain Dowe and Captain Percival had done in the AIPA office, and how this compared to the duties and functions of Mr Somerville. There is nothing that would enable a determination to be made of whether Mr Somerville's range of duties extended beyond that of the elected officers when they worked in the office. Captain Woods delegated some of his functions to Mr Somerville. 106 In addition, to facilitate his own involvement in the administration of AIPA, despite the failure of Qantas to apply EBA6 provisions that were not included in EBA7, Captain Woods was able to negotiate with Captain Manning an arrangement under which Captain Woods would only apply for and be allocated two-thirds of the normal pilot's allocation of duty. This gave him some time to attend to the business of AIPA. When Qantas threatened to revoke this arrangement in July 2007, Marshall J granted an interlocutory injunction to preserve the arrangement until the hearing and determination of this proceeding or further order. The question whether all or any of Mr Somerville's salary can be regarded as loss by AIPA attributed to Qantas's failure to give effect to the provisions remains open so far as the evidence goes. 107 The issue of the amount paid by AIPA to Captain Woods to make up for the refusal of Qantas to pay him at the rate of salary required for the President can be dealt with more easily. The payment was an entirely voluntary one by AIPA, which was under no obligation to reimburse Captain Woods for any loss of entitlement under the former cl 46 of EBA6. In its March 2006 meeting, the COM resolved that AIPA will bear this cost and seek reimbursement from Qantas as part of the litigation. Until now the office of President has not been entitled to remuneration, but in view of the fact that Qantas has withdrawn its financial support for the office of President, AIPA is pleased to offer you an annual remuneration package as President in the amount of $4,500.00 payable in fortnightly instalments. 108 It is my view that the voluntary nature of the payment is sufficient to break any causal link between Qantas's failure to give effect to the provisions concerning the salary of the President, even if enforceable, and the cost to AIPA of making up Captain Woods's salary. 109 For these reasons, I am of the view that, even if a binding agreement existed between Qantas and AIPA with respect to the application of the removed provisions, AIPA has failed to prove that it suffered loss and damage as a result of any breach of that agreement or, if it has, has failed to prove the amount of that loss and damage. 110 There was also a claim for specific performance of the alleged contract. In the course of argument, it became clear that, in the exercise of the ordinary discretion attaching to the consideration of remedies in the nature of specific performance, the Court would be very unlikely to order that Qantas perform the terms of the supposed agreement containing cll 45 and 46 and the related provisions of EBA6. One issue is the difficulty of enforcing those provisions in the light of Qantas's conflicting obligations under EBA7. It would be unlikely that the Court would order Qantas to allow the AIPA President priority in bidding for scheduled flights, when it had obligations to conduct its rostering process in accordance with EBA7. Similarly, it would be unlikely that the Court would impose on Qantas potential liability for contempt of court when making its decisions about operational requirements following the making of applications for relief from flying. In the course of submissions, AIPA refined its specific performance claim to one seeking an order that Qantas execute an agreement in the terms of the relevant clauses of the Explanatory Memorandum dated 28 September 2005, with the addition of an appropriate duration clause. As a matter of discretion, I would also have refused to make such an order. By the time of the trial of the proceeding, EBA7 had passed its nominal expiry date. I was told by counsel that the parties were engaged in prolonged negotiations for an agreement to replace EBA7. In the circumstances, it seemed unlikely that any agreement in terms of cll 45 and 46 and the related provisions of EBA6 would have a significant time to run, at least in terms of the duration clause primarily advanced by AIPA. 111 For all of the above reasons, AIPA's amended application must be dismissed, so far as it seeks orders dependent upon the establishment of the existence of a binding contract between AIPA and Qantas. The dispute between the parties is about whether those provisions pertained to the relationship between Qantas as employer and its employees who were long haul pilots. No issue was raised about whether those employees were employed in a single business, or a part of a single business. 113 The provisions that were agreed in Electrolux obliged the employer to deduct from wages to be paid to persons who might become employed by the employer in the future, and to pay to the Union, a fee, described as a "bargaining agent's fee". The provisions thus had three significant characteristics. First, they obliged the employer to deduct money from wages that would otherwise be paid to an employee, and to pay the money deducted to a party other than the employee. Second, the intended recipient of the money was the union that was party to the agreement with the employer. Third, the provisions bound the employer in relation to persons whom it might choose to employ in the future, and who chose not to belong to a relevant union. 114 In Electrolux , the High Court affirmed the line of authority consisting of R v Portus; Ex parte ANZ Banking Group Ltd [1972] HCA 57 ; (1972) 127 CLR 353 and Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees [1994] HCA 34 ; (1994) 181 CLR 96. Each of those cases involved claims made by unions which, if acceded to by employers, would have obliged the employers to deduct from wages earned by their employees amounts by way of union dues, and to pay those amounts to the relevant union. In each case, it was held that such claims did not pertain to the relationship between employers and employees in their capacity as such. In Alcan , the High Court was invited to overturn Portus , but declined to do so. The claims in question in Portus and Alcan had both the first and second characteristics of the provisions in question in Electrolux . 115 In Electrolux at [9]-[11], Gleeson CJ appears to have identified the first of those characteristics as the reason for holding that the provisions in question in that case did not pertain to the relationship between an employer and its employees. The approach of McHugh J at [82] was to analyse the employer's obligation more closely, and to identify a number of factors that his Honour saw as taking the payments outside the relationship of employer and employees. His Honour said that the debt due by a future new employee to the union, about which the employer was obliged to inform the new employee, was not shown to be a debt relating to the employment relationship. In his Honour's view, the provision related to the relationship between the union and non-members to be employed at the employer's workplace. His Honour took the view that strengthening the position of unions at the workplace, "without more", did not make the provision a matter pertaining to the requisite relationship. Finally, his Honour said that, because the fee was not deducted pursuant to any agreement or authorisation from the employee, there was no nexus between the obligation imposed on the employer and the requisite relationship. At [165], Gummow, Hayne and Heydon JJ approved the statement of Merkel J at first instance, which identified a number of features of the provisions in question in Electrolux . The employer was to act as the union's agent in entering into a contract with new employees requiring the employees to employ the union as bargaining agent. The relationship between employer and employee was one of agency, requiring the employer to contract with its employees on behalf of the relevant union, as its agent. The agency was for the benefit of the union, rather than for the benefit of the employee upon whom the liability was to be imposed involuntarily. The provision could be characterised as a claim for payment for the union's services in securing the new employee's terms and conditions of employment, although the new employee would only have commenced employment after the date of the agreement. Kirby J dissented. At [239], Callinan J also preferred the approach of Merkel J to that of the Full Court. At [241], his Honour referred specifically to the first characteristic, with the added element of the involuntariness of the payment to the union on the part of an employee who was not a union member. His Honour described the relevant relationship between the employer and the non-unionist employee as an involuntary contract for the payment of an exaction sought to be made by a third party on the employee. 116 Clauses 45 and 46 and the related provisions of EBA6 are of a very different character from the provisions that were the subject of Electrolux . They involve none of the three significant characteristics of the provisions the subject of Electrolux . There is no obligation on Qantas to deduct money from wages or salary that would otherwise be paid to any of its employees, or to pay any amount so deducted to any party other than Qantas. AIPA is not the intended recipient of any money from Qantas. The provisions in question in this case bind Qantas in relation to its existing employees, particularly those who are already members of AIPA. The provisions bear no resemblance to those that were the subject of Portus or Alcan . Any debts created by cll 45 and 46 and the related provisions of EBA6 are debts due from Qantas to its own existing employees, and relate to the relationship between Qantas and its own employees. The provisions do more than simply strengthen the position of AIPA, although they are certainly intended to accomplish that. They accomplish it by regulating the hours of work of Qantas's employees and the amounts of money to be paid to those employees. No question of deduction of any money from anything that would otherwise be paid to an employee arises. No agency relationship between AIPA and Qantas could possibly be created. There is no question of payment by any non-member to AIPA. 117 Clauses 45 and 46 and the related provisions of EBA6 have substantial similarities to some of the provisions with which French J was concerned in Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 2) [2004] FCA 1737 (2004) 138 IR 362. At [73] - [79] , his Honour analysed Electrolux , in an effort to distil the appropriate test for determining whether a matter pertains to the relationship of employers and employees. At [96]-[103], his Honour dealt with provisions of a log of claims setting out circumstances in which employees might be absent from their duties and yet still to be paid while they attended various kinds of union meetings, including board of management meetings, discussions between management and the union, and training and education courses organised by the union. The hours of an employees' [sic] availability for work and the conditions under which an employee may be absent from that work and whether or not he or she can be paid during that absence, in my opinion, lie at the heart of the employer-employee relationship. They affect employer and employee in their capacities as such. It is no answer to that proposition to say that these provisions affect employees in their capacity as union members. So much may be correct, but if the provision in question also affects the employment relationship in a direct way that is neither consequential nor remote it pertains to the employer-employee relationship. Argument by reference to the multiple capacities of employees can lead into a morass of fine distinction. So maternity leave, leave to perform jury service and leave to train in the military reserve may all be said to attach to people in their capacities as parent, citizen, military reservist respectively. In my opinion, the provisions of such clauses pertain to the employment relationship. 118 At [100]-[103], his Honour reached the conclusion that one provision did not involve a matter pertaining to the employment relationship. That provision would have entitled employees not rostered for work to be paid for attendance at union meetings. 119 I respectfully adopt the approach of French J. Provisions requiring an employer to permit an employee to engage in activities that are not part of the normal employment duties of that person, during times when that person would normally be expected to be engaged in duties on behalf of the employer, clearly pertain to the relationship of employer and employee. Provisions that require the employer to continue to pay the employee, even when the employee is engaged in those activities, also pertain to the relationship of employer and employee. Clause 46 of EBA6 deals with the times when the President of AIPA, an employee of Qantas, and the designates of the President of AIPA, also employees of Qantas, are to be relieved from what would otherwise be their obligations to perform duties for Qantas. Those provisions deal with a form of leave. It is true that AIPA is intended to benefit from the leave taken by those employees, because the purpose of taking that leave is for those persons to attend to the business of AIPA. The fact that this is the intended purpose of the leave detracts not at all from the fact that the provisions are provisions relating to leave, and are therefore at the heart of the employment relationship. Clause 46 of EBA6 relates partly to the calculation of the salary to be paid to one of Qantas's employees, who happens also to be the President of AIPA, and partly to the determination of the times during which that person will be required to perform duties on behalf of Qantas. Again, such provisions are at the heart of the employment relationship, and the fact that AIPA is a beneficiary of their application does not change the character of the provisions. 120 It follows that cll 45 and 46 and the related provisions of EBA6 fell within s 170LI(1) of the WR Act . EBA6 was properly certified, and AIPA and Qantas were bound by it, including by those provisions. In the event that Qantas is found to have been in breach of any of the terms of those provisions, Qantas is liable to penalties pursuant to s 178(1) of the WR Act . It is therefore necessary to turn to the question whether there were such breaches in the period leading up to 16 November 2005, when EBA7 was certified and EBA6 ceased to apply. 121 In the first place, Qantas was clearly in breach of cl 46.2, coupled with cl 46.6.1, of EBA6 in failing to pay Captain Woods at the rate of salary calculated in accordance with cl 24.2, in respect of the period from 7 November until 15 November 2005. With one exception, the evidence is to the effect that Qantas had adopted a practice of continuing to apply all provisions of EBA6 (including those that had been identified and agreed upon as possibly non-pertaining provisions) for as long as EBA6 remained in force. The exception is the evidence of what Ms Bussell said to Captain Woods on 7 November, when he complained to her that EBA6 was not being applied, after he had spoken with Captain Manning, Captain Kearns and Mr Hailes. Ms Bussell indicated that the non-pertaining provisions would not have force until the memorandum of understanding was signed. Even if there was a practice of applying EBA6 in its entirety, it is clear that it was not applied in one respect. The payment of additional salary to Captain Woods was never processed, as it would have been if Qantas had followed its usual practice of paying a newly elected President in arrears from the date of taking office. On the basis that cl 46 is an enforceable provision, Qantas offered no argument against the conclusion that it was in breach in this respect. Qantas and AIPA have agreed that the amount of the underpayment is $1,385.83. There will be an order that Qantas pay that sum to Captain Woods. 122 Questions of relief from flying, pursuant to cl 46.4.1, and pre-allocation of a flying roster in respect of a bid period, pursuant to cl 46.4.2, are more difficult. The only occasion on which Captain Woods sought pre-allocation of flying was by means of his email to Ms Tu on 23 September 2005. Although he regarded himself as certain to be the next President of AIPA, on 23 September 2005, Captain Woods was not yet the President. Nothing in cl 46 of EBA6 required Qantas to permit him to avail himself of the pre-allocation provision until after he became President. There was therefore no contravention of cl 46.4.2 as a result of the failure to accede to the request of 23 September 2005. 123 The issue of breach of cl 46.4.1 involves questions of construction. When he went to see Captain Manning, Captain Kearns and Mr Hailes on 7 November 2005, Captain Woods was unquestionably the President, and unquestionably entitled to relief from flying, subject to the operation of cl 46.6. He was at that stage on annual leave. Both by his email to Ms Tu on 23 September 2005, and by his request to Captain Manning and Captain Kearns, Captain Woods was seeking to defer what remained of his annual leave, and to avail himself of the President's entitlement to relief from flying. Captain Woods's description of this entitlement as "Presidential leave" was inaccurate. The only kind of leave to which cl 46.4.1 of EBA6 entitled the President of AIPA was relief from flying duties that would otherwise be required of the President, to the extent to which cl 46.4.1 provided for such relief. At no time between 7 November and 15 November 2005 was Captain Woods rostered to fly. Although theoretically he could have been asked to fly, even while on annual leave, he was not. There were no flying duties from which he could have been relieved. 124 The attempt by AIPA to construe cl 46 as entitling Captain Woods to change the nature of his leave must fail. By cl 46.5, the President's annual leave is to be planned and taken "as mutually arranged", except to the extent that Qantas was permitted to assign leave when the President's annual leave exceeded the standard prescribed in cl 28.14 of EBA6. The requirement of mutuality makes it clear that Captain Woods could not insist unilaterally on the revocation of his existing entitlement to annual leave, and its substitution by an obligation to undertake duties, subject to relief from flying. Further, what cl 46.6.2 described as "scheduling issues arising from the change-over of Presidents" were required to be discussed between three parties (Qantas, the outgoing President and the new President) "with a view to making arrangements that are acceptable to all three parties. " These "scheduling issues" are expressed to be an exception to the provision in cl 46.6.1 that the provisions of cl 46 apply to a new President on and from the date of appointment and cease to apply to the outgoing President on and from that date. It is clear that the "scheduling issues" to which cl 46.6.2 refers are those found in cl 46.4 which is headed "Scheduling", and which includes matters such as relief from flying and pre-allocation. It is probable that, on 7 November 2005, when Captain Woods went to Captain Manning's office, Captain Kearns was attempting to refer to cl 46.6.2 when he said that the entitlement to relief from flying was not available because it was already being utilised by Captain Holt. In any event, it is clear that, before he became entitled to either relief from flying or pre-allocation, Captain Woods was obliged to engage in a discussion of the kind required by cl 46.6.2. No such discussion ever took place, so that Captain Woods did not become entitled to relief from flying or pre-allocation by 16 November 2005, when EBA6 ceased to have any operation. 125 For all of these reasons, the only breach of cl 46 in respect of Captain Woods was the failure by Qantas to pay Captain Woods his salary at the rate required by cl 46.2 in respect of the period from 7 to 15 November 2005. 126 So far as the request for Captain McNeil's existing leave to be "recredited", and to be substituted by relief from flying as a designate of the President, pursuant to cll 45.2 and 46.4.1 of EBA6, AIPA's claim for a penalty must fail for the same reasons as the claim for reallocation of Captain Wood's leave. Nothing in cll 45 and 46 entitled Captain McNeil to replace existing leave with duty time subject to relief from flying. Because he was on leave, Captain McNeil had not been allocated any flying in the period between 9 and 16 November 2005. Again, even if he could have been requested to undertake flying duties despite being on leave, there is no evidence that any such request was made. Nor could there have been any breach of cl 45.3.1(a) in respect of Captain McNeil. Because he was on leave, there were no duties from which Captain McNeil could be released. 127 Qantas did not take issue with the proposition that each of Captain Tuma and Captain Smith was a designate of the President in respect of the requests for release from duty referred to in [67] above. Each of those requests was made for the purpose of enabling Captain Tuma and Captain Smith to attend to AIPA duties and responsibilities. Subject to "demonstrable operational requirements", cl 45.3.1(a) obliged Qantas to release Captain Tuma and Captain Smith from duties on the dates requested. The phrase "demonstrable operational requirements" has two significant elements. First, whatever scheduling constraints are relied on to exclude the obligation to release the President's designates from duties must be "requirements". Operational inconvenience is insufficient. Second, the operational requirements must be "demonstrable". That is to say, the requirements must be capable of being demonstrated. It is Qantas that must produce evidence to demonstrate that those requirements existed, if it wishes to avoid findings that it is in breach of cl 45.3.1(a) in respect of Captain Tuma and Captain Smith. The state of Qantas's records did not enable it to discharge this evidential onus. They did not enable the reconstruction of the flying rosters as they were at the relevant dates. To the extent to which Qantas was able to produce documentary records, those records tended to suggest that it would have been possible for Qantas to have substituted another pilot for Captain Tuma on 8 November 2005, and another pilot for Captain Smith on 11 November 2005. Mr Richardson's evidence as to why the two requests were refused was not given in terms of operational requirements. He described the requests as "challenging", and gave evidence of practical difficulties. The evidence led by Qantas did not demonstrate that operational requirements prevented the granting of the requests. In fact, the request of Captain Tuma was made before the commencement of a bid period on 31 October 2005, at a time when it would have been possible for Qantas to allocate to someone else the duties subsequently allocated to him. Even if that had not been done, it would have been possible for Mr Richardson to hold Captain Tuma's request until he knew with greater accuracy how many spare pilots he had to cover any illness or other emergency on 8 November, and to make a judgment as to whether he could have acceded to the request. Instead, Mr Richardson simply refused Captain Tuma's request at an early stage. Captain Smith's request was made closer to the time when he sought to be relieved from duty, but Mr Richardson and his staff made no real attempt to ascertain whether operational requirements prevented the granting of the request. 128 It follows that Qantas was in breach of its obligations pursuant to cl 45.3.1(a) of EBA6 in refusing to release Captain Tuma from his allocated flying duties on 8 November 2005, and Captain Smith from his allocated flying duties on 11 November 2005. There was no breach in respect of the refusal to change the character of the leave already granted to Captain McNeil. In relation to the breaches of cl 45.3.1(a), because they are two breaches of a single term of EBA6, there may be a question whether they arose out of a course of conduct by Qantas, and are therefore required by s 178(2) of the WR Act to be treated as a single breach. Questions of the quantum of any penalty need to be determined. If penalties are imposed, there will be a question pursuant to what was at the relevant time s 356 of the WR Act , as to whether the normal order should be made, that the penalty be paid to AIPA, or whether all or part of any penalty should be paid into the Consolidated Revenue Fund. In any event, an order pursuant to s 178(6) of the WR Act should be made in respect of the sum of $1,385.83 to which Captain Woods is entitled, and which has not been paid. There may be questions of the payment of interest on that sum. With the exception of orders relating to those matters, the application must be dismissed. In addition, counsel for Qantas foreshadowed that, in the event that AIPA's claim based on the alleged contract were to fail, he would seek to argue that s 347 of the WR Act (as it then was) does not apply to the whole proceeding, and would seek an order that AIPA pay Qantas's costs of so much of the proceeding as relates to the claim based on an alleged contract. 130 Because there are so many outstanding questions, it will be necessary to adjourn the proceeding for further hearing on a date to be fixed. I certify that the preceding one hundred and thirty (130) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | whether binding agreement industrial negotiation for certified agreement agreement to place in separate document terms potentially preventing certification of agreement whether negotiation of separate document complete no agreement as to duration whether implied term as to duration whether intention to create legal relations whether loss and damage proved whether specific performance would be granted contract |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse to grant a protection visa to the appellant. 2 The appellant is a citizen of Thailand, who arrived in Australia on 22 November 2006. She entered on a visitor's visa. On 28 December 2006 she lodged an application for a protection visa with the Department of Immigration and Multicultural Affairs, claiming to have a well-founded fear of persecution by the father of her children and his family following her refusal re-convert to Islam. A delegate of the first respondent refused the application for a protection visa on 18 January 2007. 3 In refusing the application for a protection visa on 18 January 2007, the Minister's delegate did not accept that the appellant had a genuine fear of harm and found that there was not a real chance of persecution occurring. As a result, the Minister's delegate found that the appellant's fear of persecution (as defined under the Refugee convention (United Nations Refugee Convention 1951 as amended by the Protocol (1967) Relating to the Status of Refugees)) was not well founded. 4 On 16 February 2007 the appellant applied to the Tribunal for a review of that decision. However, she later decided that she did not like the teachings of Islam and converted back to Buddhism. She claimed that her boyfriend and his family threatened to kill her if she did not convert back to Islam. At the time the appellant was pregnant with her boyfriend's child. The appellant claimed that her boyfriend kept their children and continued to threaten to kill her. The evidence before the Tribunal was that the applicant and her ex-partner had two daughters born on 16 September 2003 and 16 September 2006. During the hearing before the Federal Magistrate, however, the appellant advised the Court that the children were twins born on 16 September 2003. The applicant also told the Federal Magistrate that she and her ex-partner were never officially married. The appellant returned to her family home but then went into hiding after her ex-partner's family sent people to her family home to say she would be "dead soon". The appellant told the Tribunal that the anger of her ex-partner and his family towards her was "mainly" because she wanted access to the children, as well as because of religion. 6 The Tribunal disregarded the information provided in the appellant's protection visa application as inaccurate and unreliable because it had been completed by a third party and contradicted the appellant's oral evidence. The Tribunal was satisfied that "the essential and significant reason for any hostility that [the appellant's] ex-partner, his family or their friends might show [the appellant] in the future will not be one of those in the Convention. " The Tribunal did not find the appellant a credible witness as she "considerably exaggerated the level of hostility" shown towards her by her ex-partner and his family. The Tribunal was therefore satisfied that the appellant could return to Bangkok with only a remote chance of being seriously harmed. The appellant claimed that the Tribunal: failed to consider the appellant's claims of "forced conversion and re-conversion and the threats to [her life] upon re-conversion"; erred in holding that the appellant's partner retained custody of the children for personal reasons rather than Convention reasons; and breached s 424A of the Migration Act 1958 (Cth) ("the Act ") by failing to notify her of its concerns regarding the credibility of her account. 8 The Federal Magistrate found that the Tribunal clearly considered the appellant's claims. It was further noted that questions of fact were to be resolved by the Tribunal as it saw fit. The Federal Magistrate did not find any reviewable error in the Tribunal's finding that the appellant's former partner kept the children from her for personal reasons, rather than Convention reasons and her Honour noted that the Tribunal's findings were open on the evidence. 9 Her Honour found that the Tribunal had no obligation under s 424A of the Act to notify the appellant about its concerns regarding the credibility of her account, as this was part of its assessment of evidence or thought processes. The Federal Magistrate further noted that, as the Tribunal had "expressly disavowed reliance" on the appellant's protection visa application, there was no requirement for the Tribunal to send a s 424 letter. That material was not part of the reason for affirming the decision of the Tribunal (applying MZXGB v Minister for Immigration and Citizenship [2007] FCA 392). The appellant claimed that the Federal Magistrate had erred in finding no error in the Tribunal's decision, and "the Tribunal erred make [sic] finding about the domestic violence and the ground of "Particular Social Group". He also sought leave to file an amended notice of appeal. 12 The grounds not pressed were the general assertion that the Tribunal had erred in dealing with the conversion issue and the attack on the Tribunal's finding relating to domestic violence. 13 The appellant pressed an attack on the failure of the Tribunal to deal with a claim that the appellant had been persecuted by reason of her membership of a particular social group. That social group was identified as "women practising Buddhism who married or formed a relationship with a Muslim partner and had given up practising Buddhism, had become Muslims and then reconverted to Buddhism. " It was conceded that this argument had not been advanced before the Federal Magistrate. 14 The appellant sought leave to add additional grounds. In substance these grounds sought to convert what had been general attacks on the Tribunal's fact finding to "no evidence" grounds. Her Honour erred in not making a finding that the Tribunal had erred in making findings of critical facts in respect of which there was no evidence to support the finding. The Tribunal has made a mistake when it said that my partner keeping the children and denying me custody of my own children is not for Convention reasons but personal problems between us. The Tribunal has not seen the reasons why my children were forcefully taken away from my and even how the Police did not come to my help. Even if I can return to Bangkok, as per the Tribunal, what about my children. That is why I say that the Tribunal has not considered my case. The Tribunal should have properly considered my case when my partner and his family decided to keep my children, when considering their ages and should have come to me. I granted the appellant leave to argue the additional grounds. 17 The "no evidence" grounds cannot succeed. There was evidence before the Tribunal which supported each of the relevant findings. The appellant gave evidence to the Tribunal. The Tribunal recorded that she had claimed that her partner had threatened to kill her many times. The threats had allegedly been made since she left him. She responded that she did not know. She added that she had visited her children, in the company of "well regarded people", on three occasions. I asked her if she had been harmed in any way on these occasions. She said that she had not, saying they had just sworn at her. I asked her why they were angry with her, to which she responded that it was "maybe because I did not want to convert", and because she and her partner had argued, and she wanted to have her children back so they had argued about that. She stated that she believed that the main reason for their anger towards her stemmed from the fact that she wanted custody of the children. She responded that she had asked a few lawyers about this, but had been told she had no right as they had her husband's name and lived at his home. I also have regard to the evidence from the US State Department (2006) which indicates that forced religions (sic) conversions are very rare, and also that Moslems in the north of Thailand, where they are so heavily out numbered by Buddhists, would be unlikely to participate in a campaign of threats on the basis of religion, particularly when the authorities would take strong action to stop them doing so. Therefore I have some doubts about the truthfulness of her account in this regard, and am not satisfied that her return to Buddhism played anything more than a peripheral part in the animosity towards her. However it is not implausible that, after what appears to have been an acrimonious ending to the couple's relationship, her ex-partner and his family decided to keep the children in their household. Under these circumstances it is entirely plausible that, on three occasions when she visited her children since leaving that household, the family had "sworn at" her. However she does not claim that they physically harmed her in way on any of these occasions, and I am satisfied that they did not. I accept that this is a difficult and sad situation for her. However the fact that he and his family have kept the children does not appear to have any link with any of the reasons within the Refugee's Convention but, rather, arises from purely personal problems between the parties. The applicant herself gave evidence that their anger towards her was "mainly" because she wanted access to the children. For these reasons I am satisfied that the essential and significant reason for any hostility that her ex-partner, his family or their friends might show her in future will not be one of those in the Convention. I am satisfied, for the reasons set out above, that the applicant has considerably exaggerated the level of hostility they have shown her, and I do not accept that she was threatened with any serious harm in Bangkok. I am satisfied that she could return to Bangkok, where the chance of her being seriously harmed would be remote. Some of the appellant's evidence was accepted. Other parts of that evidence, particularly that relating to the making of threats against her and the predominant reason for the disharmony between her and her partner were not accepted. Furthermore the Tribunal was not satisfied that she had been persecuted in the sense defined by s 91R of the Act or that the dispute between the parties could be attributed to Convention related reasons. Her religious beliefs were not "the essential and significant reason" for the hostility shown towards her by her partner's family. Their religious differences were but a peripheral factor in the deterioration and conduct of their relationship. 21 The other ground which was argued was that the Tribunal had erred by failing to consider whether the appellant had been persecuted by reason of her membership of a particular social group. This ground was not raised expressly before the Tribunal nor was material presented by the appellant which made it necessary for the Tribunal to consider and determine the issue. Even if it be assumed, in the appellant's favour, that a particular social group of the kind identified by counsel existed, the Tribunal's findings that the appellant had not been subject to conduct which amounted to persecution means that she does not satisfy the Convention definition of a "refugee". If she was not persecuted the question of the reason for any alleged persecution does not arise. It cannot, therefore, be said that the Tribunal's failure to deal with the issue meant that a claim which might have been dispositive of the application had been ignored: see NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 ; (2004) 144 FCR 1 at [63] . In any event this was not a ground that was argued before the Federal Magistrate. I note also that, when asked by the Tribunal whether she knew of any other women who had a similar problem to her in Thailand, she answered that she did not. 22 The appeal should be dismissed 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 Tracey. | appeal from federal magistrate affirming decision of refugee review tribunal where appellant sought leave to add additional grounds of appeal where appellant claimed the tribunal erred in making findings of critical facts where there was no evidence to support the finding where appellant claimed the tribunal had erred by failing to consider whether the appellant had been persecuted by reason of her membership of a particular social group no appellable error made out. migration |
City Pacific Income Fund (the "Income Fund") is a similar entity. For the purposes of the Act City Pacific Limited ("City Pacific") was, until recently, the responsible entity of the Mortgage Fund. It is also the responsible entity of the Income Fund. City Pacific, allegedly as the responsible entity for the Mortgage Fund, is the first plaintiff. In its capacity as responsible entity of the Income Fund, City Pacific is a member of the Mortgage Fund. In that capacity, City Pacific is the second plaintiff. The first defendant ("Mr Bacon") is the Chairman of Trilogy Funds Management Limited ("Trilogy"), the second defendant. Trilogy and the third defendant ("Balmain") have entered into a joint venture and, for the purposes of the joint venture, have incorporated the fifth defendant ("Balmain Trilogy"). The venture involves Trilogy becoming responsible entity of the Mortgage Fund. On 25 June 2009 he chaired a meeting of Fund members (the "meeting") at which the proposal was considered and purportedly adopted (the "purported resolution"). City Pacific seeks a declaration that such adoption, and the subsequent alteration of the records of the Australian Securities and Investment Commission ("ASIC") giving effect to it, were ineffective to remove City Pacific as responsible entity of the Mortgage Fund. Prior to the meeting, City Pacific sought to restrain adoption of the proposal pending hearing of these proceedings. I declined to grant interlocutory relief. City Pacific alleges that the purported resolution did not comply with the provisions of Division 2 of Part 5C.2 of the Act ("Division 2"), in particular s 601FM. The first, second, third and fifth defendants (the "BT defendants") do not concede that there has been any failure to comply with the requirements of the Act. To the extent that any non-compliance may be established, they seek to rely on s 1322 of the Act. The resolutions must be extraordinary resolutions if the scheme is not listed. It further submits that the purported resolution did not satisfy that requirement and is void. The BT defendants submit that: City Pacific opposes any application for relief pursuant to s 1322 , asserting either that the section does not apply or that in the exercise of my discretion, I should decline it. Firstly, prior to the calling of the meeting, there had been a degree of dissatisfaction amongst Mortgage Fund members concerning City Pacific's performance as responsible entity. Such dissatisfaction had led to the establishment of an "action group". The "steering group" of the action group approached companies which might have been suitable to replace City Pacific. Trilogy was one of the companies approached. It was the only company to show any interest. Although this information explains events which have occurred, it has no direct relevance for present purposes. Secondly, with the notice of meeting, Mr Bacon forwarded an explanatory memorandum purporting to explain the purpose of the proposal. On 4 June 2009 ASIC wrote to Mr Bacon identifying "a number of concerns" in connection with the explanatory memorandum. They were discussed under the following headings: ASIC asked that Trilogy issue "further disclosure" addressing these issues and ensure that members of the Fund had adequate information to make an informed decision. It asked that such information be provided in sufficient time to enable members to consider it prior to the meeting but, in any event, not later than 10 June 2009. On 5 June 2009 McCullough Robertson, the solicitors for City Pacific, wrote to Mr Bacon suggesting that the proposal did not comply with s 601FM of the Act, in that it was one combined resolution rather than two, discrete resolutions. They also raised a number of other concerns, including the alleged inadequacy of the explanatory memorandum. The solicitors asserted in paras 38-41 of the letter that: Notwithstanding the list of issues we have raised with respect to the disclosure in the explanatory memorandum, both the resolution proposed at the meeting and the voting process are fatally flawed and if the meeting proceeds any resolution adopted will be invalid. We therefore require within five business days of this fax, Trilogy/Balmain to advise members of the Fund and issue a public statement confirming, this proposed meeting has been abandoned because the resolution and voting process are defective. If this does not occur, our client in its capacity of responsible entity of the Fund will have no alternative but to apply to the court for an injunction restraining the meeting from proceeding. Our client's preferred course of action would be for the members to abandon this meeting, prepare an appropriate and compliant notice of meeting, resolutions, explanatory memorandum and proxy form and then set a new date for the meeting. On 10 June 2009 Trilogy and Balmain issued a further document relating to the proposed resolution. It comprised a series of questions and answers, apparently designed to meet ASIC's requirements and also to rebut certain "misrepresentations" allegedly made by City Pacific. They took the opportunity to inform members that since issue of the notice of meeting, proxies representing over 328 million units had been lodged in connection with the proposal. This represented about 37.5% of the total number of units. Of those proxies, 97.5% were in favour of it. Mr Bacon pointed out that in order that the proposal be adopted, it was necessary that votes representing 50% of the total number of units be cast in favour of it. On 11 June 2009 Clayton Utz, solicitors for Balmain and Trilogy, responded to McCullough Robertson's letter of 5 June 2009. They denied that any adoption of the proposal would be invalid and dealt with certain other matters. In the proceedings for interlocutory relief City Pacific challenged the validity of the proxy procedure adopted by Trilogy and Balmain and also asserted that the explanatory memorandum was misleading. City Pacific has abandoned those complaints. However it asserts that the progressive disclosure of information may have influenced the way in which members voted. In effect it suggests that those who voted earlier may have relied upon the earlier explanatory memorandum which, it says, did not provide sufficient, or sufficiently accurate, information to enable members to vote on an informed basis. It submits that this consideration may be relevant to the exercise of any discretion. City Pacific relies upon a graph which is exhibited to the affidavit of Jason Weathered filed on 13 July 2009. The graph plots the number of units represented by proxy votes received on each business day from 25 May until 26 June 2009. It distinguishes between votes cast for and votes cast against the proposal. The graph shows that from 25 May 2009 until 1 June 2009 proxy votes "for" the proposal were received at an accelerating rate, peaking on 1 June, on which day "for" votes, representing 85 million units, were received. Thereafter, there was an irregular downward trend until 17 June 2009. It then rose to a peak of between 30 and 40 million units, declined until 24 June 2009 and thereafter, levelled out. On the other hand, "against" votes came in at a very low rate until about 9 June 2009 when the rate began to increase gradually, peaking on 22 June 2009, at something more than 35 million units, declining sharply until 24 June 2009 and then flattening out. City Pacific submits that the decline in the number of "for" votes received after 1 June 2009 and the increase in the numbers of "against" votes should be attributed to its own response to the explanatory memorandum, sent out on 5 June 2009. It points out that the decline continued after Mr Bacon issued the additional information required by ASIC. It also points out that after City Pacific issued a replacement proxy form, the rate of return of proxies increased, although the increase appears to have been reflected in votes for and in votes against. City Pacific submits that I should infer that those who voted for the proposal prior to 5 June 2009 may have voted against it had they had the supplementary information supplied by it and by Mr Bacon. With all respect to those who prepared the graph, I have great difficulty in drawing any firm inferences from it. It is difficult to know whether people are likely to vote early or late in respect of such a matter. One suspects that the peak voting periods will be early, that is shortly after receiving the notice, and late, that is shortly before the meeting. The graph may support that intuitive suspicion. I am unable to place any great weight upon the graph. Mr Ellis, the chief executive officer and managing director of City Pacific, was invited to speak, which invitation he accepted. He explained that City Pacific was concerned about the validity of the proposal and referred to my views expressed in the course of the interlocutory hearing. He said that City Pacific was concerned about the alleged inadequacy of the information provided by Balmain and Trilogy and referred to the fact that ASIC had agreed that the material was inadequate. He also referred to concerns as to the validity of the proxy process. He then addressed the merits of the resolution. Mr Andrew Griffin then addressed the meeting on behalf of Balmain Trilogy. He is the group chief executive of Balmain and also joint chief executive officer of Balmain Trilogy. He referred to the interlocutory proceedings, the recent history of the Mortgage Fund and the circumstances leading up to Balmain and Trilogy's involvement in its affairs. He then addressed the merits of the proposed resolution. The chairman then invited questions. At the conclusion of the period allowed for questions the vote was taken. About 7,000 members (out of a total of about 11,000) voted for it. Those votes represented over 86% of the total number of units in the fund. Of those attending at the meeting (ie excluding proxy votes) votes in favour represented 87% of units. The vote was carried, on the defendants' calculation, by votes representing 57% of the total number of units held by persons entitled to vote. City Pacific puts the percentage at something over 54%. Nothing turns on the difference. SECTION 601FM --- ONE RESOLUTION OR TWO? Save for the last sentence of s 601FM(1) , s 601FM applies to listed and unlisted registered schemes. The last sentence in s 601FM(1) requires that, in the case of an unlisted scheme, the resolutions must be extraordinary resolutions, that is they must be adopted by votes representing 50% or more of the total number of units in respect of which votes may be cast. The wording of s 601FM(1) suggests a conscious intention that there be two resolutions. However the introductory words of subs 601FM(2) suggest only that removal and choice of a replacement must occur at the same meeting. Further, s 601FM(2)(a) (dealing with notification to ASIC) refers only to "the resolution". Counsel for the BT defendants point to s 252L which deals with meetings of scheme members. Section 252L(1B)(c) contemplates, in the case of a listed registered scheme, that there will be "a resolution" to remove a registered entity and appoint a replacement. The apparent inconsistency is obvious. It is also curious that, pursuant to s 601FL (dealing with the retirement of responsible entities), a retiring responsible entity must call a meeting to explain its reasons for retiring and to permit members to choose a replacement. In the event that the members do not do so, the responsible entity may apply to the Court for appointment of a temporary responsible entity. Sections 601FN and 601FP contemplate such an application in those, and other, circumstances. It is difficult to see why those provisions should not apply for the purposes of s 601FM. City Pacific places some significance upon s 601NE. It submits that Parliament intended that at a meeting called to change responsible entities, members should have the option of removing the serving responsible entity and allowing the scheme to be wound up. This seems quite unlikely, particularly as s 601NB provides for winding up at the instigation of the members. The winding up of such a scheme will generally be undertaken by the responsible entity, save in the circumstances contemplated in s 601NF(1). It seems unlikely that Parliament expected that members who had gone to the trouble of removing the responsible entity would be happy to see the scheme wound up by that entity. In my view the requirement in s 601FM , that the two matters be addressed at the same meeting, and that in s 601NE , are meant to ensure that members address both questions so that a scheme is not left without a responsible entity. One other possible reason is that Parliament wished to ensure that members should first consider whether the existing responsible entity should be removed, and only then consider a possible replacement. In other words, Parliament intended that the two questions be considered discretely and on their individual merits. That would be a paternalist, and somewhat unrealistic, approach. It would seem quite risky for members to seek to remove a responsible entity without having a firm plan for its replacement. Another possible purpose emerged in the course of the plaintiffs' submissions. They point out that the effect of the proposal was that they could not vote on either question. City Pacific and an associated company, Contra Proferentum Pty Ltd ("Contra Proferentum") each hold units in the Mortgage Fund in their own rights. However, if the scheme is listed, the responsible entity and its associates are entitled to vote their interest on resolutions to remove the responsible entity and choose a new responsible entity. It might be argued that this possibility underlies the requirement for two resolutions. Section 253E seems to assume that a responsible entity of a listed scheme will have an interest in both its removal and its replacement, and that express statutory authority was necessary in order to enable such an entity to vote on its own removal and replacement. If so, then the responsible entity of an unlisted scheme would be disqualified from voting on both removal and replacement. One can imagine circumstances in which an outgoing responsible entity would have an interest in the replacement resolution. An obvious example would be where the proposed replacement was an associated company. There are others. I will return to that question and to City Pacific and Contra Proferentum's voting rights at a later stage. In summary, I accept that s 601FM(1) contemplates two resolutions. The term "resolution" is defined in the Shorter Oxford Dictionary (4th ed, Oxford University Press, 1993) as: "A formal decision or expression of opinion by a legislative assembly, committee, public meeting, etc.; a formulation of this. " The Macquarie Dictionary (4th ed, The Macquarie Library, 2005) defines the term relevantly as "A formal determination, or expression of opinion, of a deliberative assembly or other body of persons. " Despite looser usage, the word describes a decision and not the process for proposing or adopting it. Thus, in s 249D , the Act speaks of "any resolution to be proposed". See also, for example, s 249L(1)(c) and s 249N(1). However the usage is not uniform. See, for example, s 249L(2). When one "moves" a resolution, one proposes its adoption, but the proposal is not, itself, a resolution. The plaintiffs' submission is that, for the purposes of s 601FM(1) , each of the two questions must be proposed as the separate subject matter of different votes and accordingly voted upon separately. It detracts from their argument that when Parliament wished to achieve that purpose in connection with the election of directors, it did so in a somewhat different way. See s 201E , expressly requiring separate votes. It is, I think, possible to construe s 601FM(1) in the following way: In the present case, the proposal involved two decisions. Each was voted upon and adopted by the requisite majority. Those advancing the proposal chose to cast their motion in a way which avoided the risk of removal without replacement. As counsel for the BT defendants have pointed out, they could have proposed two separate motions, each expressed to be dependent upon the adoption of the other. Prima facie that would have met the criticism made by the plaintiffs in this case. Nonetheless they submit to the contrary. They submit that to do so would have been to negate the asserted intention of Parliament that members have the option of allowing the scheme to be wound up pursuant to s 601NE. I do not accept that Parliament had such an intention. I have given my reasons. The terms of s 601FM(2)(a) are not consistent with a construction of s 601FM(1) which makes validity of any removal and replacement dependent upon there being two votes. The purpose of the reference to both removal and replacement is designed to ensure that both questions are addressed. Section 601NE probably has a similar purpose and provides an ultimate "fall back" position. The requirement that members vote on both matters does not mean that they must vote separately on each. There were two resolutions (or decisions), but they were adopted by one vote. Had Parliament intended that there be separate votes, it would have used language of the kind found in s 201E. No point would be served by so conditioning the validity of a vote which, by definition, must represent 50% of the total voting entitlement. In those circumstances, I conclude that neither the purported removal of City Pacific as responsible entity, nor the appointment of Trilogy as its replacement was invalid for non-compliance with that requirement. In this regard, the plaintiffs submit that on the proper construction of the section, Division 2, as a whole, particularly s 601FJ , and the Act, as a whole, the removal and replacement are invalid, ineffective or void. Great weight is placed upon s 601FJ(2). Section 601FJ is headed "Changes only take effect when ASIC alters record of registration". Section 601FJ(1) provides that a company named in ASIC's records as responsible entity of a scheme remains in office until the record is altered to name another company. Section 601FJ(2) seems to be connected with, but subordinate to, s 601FJ(1). My immediate perception is that s 601FJ(2) qualifies the operation of s 601FJ(1) , ensuring that a change in the register will be ineffective if it is based upon a notice asserting a change which was effected otherwise than in accordance with Division 2. Section 601FJ(1) provides that a replacement is not effective until ASIC's record is altered. Section 6701FJ(2) must, therefore, be referring to the efficacy of the change in that record. Nonetheless it must follow that failure to proceed in accordance with Division 2 may, in at least some circumstances, lead to the process of removal and replacement being "ineffective". They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. ... A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. The Shorter Oxford Dictionary (4th ed, Oxford University Press, 1993) defines the word "accordance" as: "Agreement; conformity; harmony. " The word "conformity" is defined as: "Correspondence in form or manner ( to, with ); agreement in character; likeness; congruity. ... Action in accordance with some standard; compliance ( with, to ); acquiescence ... ". The BT defendants submit that the words do not generally prescribe strict compliance. In MTM Funds Management Ltd v Cavalane Holdings Pty Ltd (2000) 158 FLR 121, Austin J helpfully summarized a number of the cases. However his Honour was concerned with a slightly different question. For present purposes, it is necessary that I go to those cases. In the present case, I am of opinion that the bill of sale is not so intricate, by reason either of its length or the manner in which it is expressed, as to place any real difficulty in the way of the borrower. It is in substance made in accordance with the statutory form, and I think it is not invalid on any of the grounds which have been suggested. But it is only necessary that it should follow the form in substance. But a divergence only becomes substantial or material when it is calculated to give the bill of sale a legal consequence or effect, either greater or smaller, than that which would attach to it if drawn in the form which has been sanctioned, or if it departs from the form in a manner calculated to mislead those whom it is the object of the statute to protect. In estimating the effect of a divergence, one must not take into consideration for the moment the provision of s.9 , that the bill of sale if it varies from the form is to be void, for owing to this statutory penalty no material variation can in the end have any legal effect at all. If so, the variance is material, and the bill of sale is not in substantial accordance with the statutory precedence. Whatever form the bill of sale takes, the form adopted by it in order to be valid must produce, not merely the like effect, but the same effect --- that is to say, the legal effect, the whole legal effect, and nothing but the legal effect which it would produce if cast in the exact mould of the schedule. Such a test as this contains no element of uncertainty, is one which every lawyer throughout the kingdom is competent to apply, and is based upon a method of interpretation familiar to our courts. This is the construction we are prepared to put upon the section, and we proceed accordingly to inquire on which side of the line the bill of sale before us falls, if this test is to be applied. We have no doubt that the expression connotes a substantial measure of consistency, but, beyond making that observation, we do not think it is particularly helpful to substitute for the statutory expression some other expression of closely similar meaning. (iii) to a journey being "undertaken in accordance with the terms and conditions of [the workers] employment" should not be construed as requiring that the relevant journey was one which the worker was contractually bound to take. In the context of the particular circumstances to which sub-par. (iii) is confined, that is to say a case where a worker has been " required " by his employer or by the demands of his work to reside temporarily or in a particular place, it would be arbitrary and unfair to construe the requirement that the journey be "in accordance with the terms and conditions of his employment" in a way which would exclude a return journey which was in the contemplation of both employer and worker at the time the worker went to the temporary location, which was made with consent of the employer and which was consistent with the terms and conditions of the employment. In the context of sub-par. (iii) the words "in accordance with" should be construed as meaning "in conformity with" or "consistently with". The primary thrust of the Division is that replacement is to be effected by extraordinary resolution at a meeting called in accordance with the Act. The members of the scheme both must resolve to remove the existing responsible entity and choose a replacement. The requirement for an extraordinary resolution is significant for present purposes. Such a resolution requires the support of holders of 50% of the total number of possible votes. To achieve success in such an undertaking is no mean feat. The adoption of such a resolution says much about the wishes of the members. It is difficult to see why Parliament would have intended that a resolution having such wide support be invalid merely because there was one vote rather than two. As I have said, the absence of any clear purpose underlying the alleged requirement that there be two distinct votes militates against such a construction. However, if that construction be accepted, the same consideration militates against construing s 601FJ(2) as invalidating a resolution adopted in breach of such requirement. Further, as was pointed out in Project Blue Sky (1998) 194 CLR 355 at [100] invalidity may not be the only basis for restraining action in reliance upon a non-compliant resolution. Even an irregularity not leading to invalidity may be a basis for such relief. A preliminary question arises as to the application of s 1322 to a resolution which does not comply with the requirements of s 601FM. The plaintiffs submit that s 601FJ(2) manifests an intention that any such irregularity render such resolution invalid, and so implicitly excludes the operation of s 1322. They rely upon the decision of the High Court in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 275-279, and the decision of the New South Wales Court of Appeal in BP Australia Ltd v Brown (2003) 58 NSWLR 322. David Grant (1995) 184 CLR 265 concerned the operation of s 1322(4) upon an application to set aside a statutory demand made outside the period prescribed for so doing. The relevant provision provided that such an application "may only be made within 21 days after the demand is so served". The Court held that the clear wording of the section, its history, the purpose which the statutory demand fulfilled and the consequence of non-compliance militated against the intention that time for compliance could be extended pursuant to s 1322(4). In BP Australia Ltd v Brown (2003) 58 NSWLR 322 the Court of Appeal came to a similar conclusion concerning a specified time limit in another provision of the Corporations Act , also providing that an application "may only be made" within a specified time and with a specific provision limiting the capacity to extend time. Neither case bears much similarity to the present circumstances. The plaintiffs' case, at its highest, depends upon the proposition that s 601FJ(2) invalidates proceedings not taken in accordance with Division 2. However it is quite clear that s 1322(4) permits the remediation of invalidity, which term I take to include ineffectiveness, the word used in s 601FJ(2). Something more is needed in order to exclude the operation of s 1322. In both David Grant (1995) 184 CLR 265 and Brown (2003) 58 NSWLR 322 the relevant sections, in terms, prescribed the only circumstances in which the relevant applications could be made. In both cases other circumstances also suggested that it was not intended that s 1322 should apply. In their submissions concerning the applicability of s 1322 , both sides seek to rely upon s 601QA. That section authorizes ASIC to exempt a person from a provision of Ch 5C. The plaintiffs submit that it would be inconsistent with the existence of such power in ASIC for the Court to have power, pursuant to s 1322 , to remedy any non-compliance with a provision of that chapter. That submission assumes that ASIC's power may be exercised retrospectively, a proposition about which ASIC apparently has doubts. See Re Westpac Banking Corporation (2004) 53 ACSR 288 at [16]. The BT defendants submit that the existence of such a power demonstrates that compliance with the provisions of Ch 5C is not mandatory. I derive no assistance from either submission. In my view, s 1322 operates in connection with proceedings pursuant to s 601FM. I propose to deal firstly with the operation of s 1322(2) upon the basis that the alleged non-compliance is a procedural irregularity which may be validated pursuant to that section. I will then deal with the operation of s 1322(4) on the basis that s 1322(2) does not operate to validate the consequences of any irregularity. Counsel for the BT defendants submit that the decision in Howard v Mechtler (1999) 30 ACSR 434 is authority for the proposition that a meeting or resolution passed at a meeting is such a proceeding. In that case Austin J certainly treated a meeting as being a proceeding for the purposes s 1322. However, I doubt whether, in declaring that the relevant resolution was ineffective by virtue of failure to comply with the equivalent of what is now s 201E , his Honour was acting pursuant to s 1322. Austin J raised that ground of invalidity after argument and received written submissions concerning it. His Honour's reasons suggest that he was declaring invalidity upon the basis of his construction of the relevant section rather than exercising a discretion to invalidate an otherwise valid resolution. I think it is fair to say that in some cases irregularity has been regarded as procedural rather than substantial primarily according to the degree of injustice or inconvenience caused rather than according to the nature of the irregularity. If so, and assuming that the irregularity is procedural, the BT defendants may rely upon the operation of s 1322(2) to avoid invalidity of the resolution. The fact that one is considering the validity of a proceeding does not necessarily mean that any possible cause of invalidity is procedural. The plaintiffs submit that the taking of only one vote deprived them of their entitlement to vote on the question of replacement. However the form of the proposal did not, itself, have this effect. Their disenfranchisement was the consequence of the operation of s 253E. The section suggests that a responsible entity has an interest in both its removal from that position and the choice of any replacement. The final sentence of s 253E would otherwise be unnecessary. It is not difficult to identify reason for treating the outgoing responsible entity as being interested in the choice of a replacement. Firstly, the removal and replacement are closely associated. The enthusiasm of the members for removal will almost certainly depend upon the availability of a suitable replacement, unless they were willing to wind up the scheme. In that case, one might expect them to proceed pursuant to s 601NB rather than by way of application pursuant to s 601FM(1). A responsible entity who did not wish to be removed might make it known that it was hostile to any proposed replacement. If it held sufficient votes to influence the outcome, such a disclosure might dissuade other members from voting for its removal. In those circumstances, and given that both matters must be resolved at the same meeting, one would be inclined to think that the responsible entity was sufficiently interested in the replacement to be disqualified from voting on that issue. Further, if the responsible entity were removed, but no replacement was chosen, the outgoing responsible entity would be obliged to apply for the winding up of the scheme. As I have previously pointed out, it would normally be responsible for supervising that winding up. Thus it would, in effect, continue as responsible entity and would, presumably, derive a benefit from so doing. In that way, too, it would have an interest in the choice of a replacement. In the circumstances I am not satisfied that either City Pacific or Contra Proferentum would have been permitted to vote on a separate motion to choose a replacement responsible entity. There has been no suggestion that the proposal was drawn in order to cause disenfranchisement. It must be taken at face value. Section 601FM prescribes the procedure for removing and replacing a responsible entity. In that sense it is procedural. Given the requirement that such steps be effected by extraordinary resolutions, the form in which it is cast is significantly less important than absence of a quorum, a matter expressly defined to be a procedural irregularity. Absence of a quorum will mean that a resolution may be adopted by the vote of a smaller number of persons than is contemplated by law or by the relevant constitutional document. That is not a risk in the case of an extraordinary resolution, given the requirement for a 50% vote in favour of the relevant proposal. The plaintiffs submit that the decision in Wagner v International Health Promotions (1994) 15 ACSR 419 is authority for the proposition that failure to comply with a mandatory requirement such as that in s 601FM cannot be characterized as a procedural irregularity. However that was a quite different case. There was simply no resolution as to insolvency. In the present case, the members resolved both that City Pacific be removed and that Trilogy be appointed. I am of the view that the alleged non-compliance, that is failure to conduct two separate votes, would have been a procedural irregularity. To the extent that the purported resolution might be invalid, such invalidity would have been cured by s 1322(2). I do not understand the plaintiffs to seek a declaration of invalidity pursuant to s 1322(2). It is insufficient for the plaintiff to say that the resolutions were irregularly passed, and those resolutions have caused injustice. In my view, the plaintiff must show that there may have been a different result, if the proper notice had been given. Nobody attending at the meeting, other than City Pacific and Contra Proferentum, opposed the proposal being considered and adopted in accordance with the notice of meeting. It is common ground that City Pacific and Contra Proferentum had insufficient votes to change the outcome. The plaintiffs bear the onus of establishing injustice for the purpose of s 1322(2). See Howard v Mechtler (1999) 30 ACSR 434 at 441. The plaintiffs have not satisfied that onus. The section authorizes the Court to 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 the Act, or in relation to a corporation, is not invalid by reason of any contravention of a provision of the Act, or a provision of the constitution of a corporation. There is no reference to an act "in relation to" a scheme or a provision of the constitution of a scheme. However the purported resolution was clearly "under" the Act. It has not been suggested that any relief sought in connection with the purported resolution is beyond the power conferred by s 1322(4). In order that the Court may make an order pursuant to s 1322(4)(a) it must be satisfied as to one of the three following matters: In every case the Court must also be satisfied that no substantial injustice has been, or is likely to be, caused to any person. Presumably, the conferment of power to validate an act, matter, thing or proceeding which is "essentially of a procedural nature" supplements the power conferred by s 1322(2) to rectify a procedural irregularity, and therefore applies to a situation in which s 1322(2) would not operate. As I understand the BT defendants, they submit that it is just and equitable that an order be made validating any invalidity, and that no substantial injustice has been, or is likely to be, caused to any person. The plaintiffs submit, firstly, that such an order "would not address the operation of s 601FJ(2). " They submit that it is possible for a resolution to be validly passed but, nevertheless, to be ineffective in bringing about a change to the responsible entity, if it is not in accordance with s 601FM , and therefore not in accordance with Division 2. I find this argument very difficult to understand. It seems to me that if the resolution did not validly remove City Pacific and appoint a replacement, then it cannot be described as having been validly passed. If an invalid resolution is validated by declaration pursuant to s 1322(4) , the effect must be to render it valid and, therefore, a proper basis for notification to ASIC pursuant to s 601FM(2) , justifying a subsequent change in ASIC's records pursuant to s 601FJ(1). It may be that the effective date of the change would be later in time that it would have been had the resolution been valid ab initio, but that question has not been argued and appears not to be relevant for present purposes. I accept that for the purposes of s 1322(4) , the BT defendants bear the onus of establishing that it is just and equitable that an order be made and that no substantial injustice has been, or is likely to be, caused to any person. It is submitted by the plaintiffs that the possibility of a different result if the "irregularity" had not occurred is sufficient to raise the issue of substantial injustice. It is said that in order to exclude that possibility, the BT defendants must exclude the possibility that the result of the vote might have been different if the issues had been voted upon separately. It is said that in order to be so satisfied I would have to hear evidence from members representing at least 50% of units entitled to vote on the resolution as to how they would have voted had they voted separately. This argument appears to owe something to perceptions which led to the assertion (now abandoned) that the explanatory memorandum was misleading or deceptive and that this was a basis for invalidating the resolution. In Peters' American Delicacy Co Ltd v Heath (1938-1939) 61 CLR 457, similar arguments were considered and discarded. The objections to the speeches cover much of the same ground as objections to the circular. ... but in my opinion the answer to these objections (as also to the objections against the circular) is that the whole matter was fully discussed and debated at the meeting. The directors put their views through the chairman and the company's solicitor. A solicitor and another speaker for the objectors contested the statements of the chairman and of the company's solicitor, contended that the proposed alteration would be unfair to the partly paid shareholders ... Thus it appears to me that the whole matter was put before the shareholders. They were given quite full information. Any further information which they desired was available to them, including the opinions of counsel. No charge of fraud or of bad faith is made, or, if made, could on the evidence be supported. There is no evidence that the alteration was made with the object of oppressing a minority or to deprive a minority of its rights. Whenever a controversy arises as to what is the wisest course to pursue, and particularly when the matter in issue involves the alteration of existing rights (real or supposed), statements will probably be made on each side which the other side regards as unfair or inaccurate and which may in fact be unfair or inaccurate. There is, in my opinion, no authority to support the proposition that the fact that statements which are not true in fact were made at a shareholders' meeting has the effect of invalidating a decision reached at the meeting. If this were the law, then, as two inconsistent statements can never both be true, it would only be necessary for any dissentient shareholder to make a statement or series of statements which were plainly inconsistent with other statements made at the meeting in order to procure the invalidation of any resolution passed. This is pure speculation. The evidence clearly indicates to the contrary. In particular, no member other than City Pacific and Contra Proferentum expressed any opposition to the motion being put in the form appearing in the notice of motion. There was no suggestion that any entity other than Trilogy should be considered for appointment as the replacement responsible entity. The notice of meeting was given well in advance of the meeting. Had any member wished to propose different resolutions he or she could have done so. Had members felt that they would prefer to consider the two questions separately, and to vote on them separately, they could have asked for the opportunity. Whether or not it was granted may have depended upon the views of the members. It may have been necessary that there be another meeting. These were all questions for the members to consider at the meeting. It was open to persons who had cast proxy votes prior to the meeting to withdraw their proxies by attending at the meeting and voting on the basis of the additional information provided by the BT defendants and the information provided by the plaintiffs. Whilst it is a bare possibility that the outcome may have been different had the two matters been voted upon separately, the fact that the resolution was passed as an extraordinary resolution is strong evidence to the contrary. In my view, the fact that the holders of more than 50% of the units voted for the proposal, and the absence of any sensible basis for inferring that the result may have been different had the two questions been voted on separately, lead inevitably to the conclusion that it is just and equitable that effect be given to the resolution. I say that notwithstanding other considerations identified by the plaintiffs as relevant to the matter, including those going to the exercise of my discretion, I have dealt with most, if not all, of them elsewhere in my reasons. It also follows that no substantial injustice has been caused, or would be likely to be caused, to any person in the event that a validating order were made pursuant to s 1322(4). If it were necessary I would make an appropriate order pursuant to s 1322(4). However I will hear submissions as to forms of order and as to costs. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. | challenge to the effectiveness of a purported change of responsible entity pursuant to s 601fm of the corporations act 2001 (cth) (the "act") proper construction of s 601fm whether s 601fm requires one resolution or two separate resolutions whether the purported removal and replacement of the responsible entity under s 601fm is invalid, ineffective or void having regard to s 601fj , division 2 and the act as a whole whether adoption of resolutions at a meeting is a procedural irregularity for the purposes of ss 1322(1) & (2) of the act whether failure to conduct two separate votes pursuant to s 601fm was a procedural irregularity whether invalidity cured by s 1322(2) whether an order should be made under s 1332(4) validating any invalidity corporations |
Since 1975 I have been arguing with Centerlink (sic) about their duties and obligation to me. It has got to the suitation (sic) that the Centerlink (sic) physchirist (sic) Peter Clarke believes I am mentally unstable. Now I cannot talk to anyone without threatening to kill even the police have told me I am mental. Therefor (sic) because of Centerlink (sic) and being in jail at times I am now sueing (sic) Centerlink (sic) for $2,700,000 for all the stress agrevation (sic) stupidity and time in jail that Centerlink (sic) has put me through for not doing their job in the first place Why $2,700,000 I don't know Its the number that jumps into my head. 4 There was a directions hearing on 1 April 2008 at which Mr Pickering did not appear. I was invited to consider dismissing the application on that day due to default of appearance. I declined to do so on the basis that Mr Pickering was unrepresented and had not received, as I was informed, any notification of intention to apply for dismissal on the grounds of non-appearance. 5 Accordingly, on that day I adjourned the Centrelink motion to be listed on a Friday as requested by Mr Pickering. I made orders for service of submissions which Mr Pickering has confirmed this morning he has received. Although he did not specifically confirm having read the submissions, he did offer an opinion as to their quality. I have taken it that he has had an opportunity to read them. (3) The Court may receive evidence on the hearing of an application for an order under subrule (2). 8 As observed by Heerey J in Duncan v Lipscombe Child Care Services Inc (2006) 150 IR 471, s 31A of the Federal Court Act 1976 (Cth) was introduced to establish a lower standard for strike outs (either of claims or defences) than that previously laid down by the High Court's decisions in Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner of Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125. Nevertheless, while the test is lower, as Barrett J in Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 held, for the purposes of the comparable provision in New South Wales ('without reasonable prospects of success') meant 'so lacking in merit or substance as to be not fairly arguable'. The word "real" distinguishes fanciful prospects of success or ... they direct the court to the need to see whether there is a "realistic" as opposed to a "fanciful" prospect of success. 9 However s 31A(3) of the Federal Court Act makes it clear that the proceeding need not be hopeless or bound to fail for it to have no reasonable prospect of success. 10 Centrelink contends Mr Pickering has no reasonable prospects on the basis that there is no cause of action disclosed. Secondly, even if a cause of action could be identified, based on negligence or other breaches of the Social Security Act 1991 , the exercise of statutory power which is subject to a right of review does not confer private rights to claim damages. Thirdly, Centrelink submits that the Court has no jurisdiction to deal with this application. 12 Centrelink's submissions appear to proceed on the basis that the allegation is that unidentified officers or employees of Centrelink have acted towards Mr Pickering in a manner that is somehow unlawful, unreasonable, negligent or beyond power (or in a combination of more than one of these), so as to cause him to suffer mental illness, imprisonment and/or both. I have also approached his application on that basis. 13 The claim for compensation of $2,700,000 is unquantified and on Mr Pickering's own admission is arbitrary, being 'the number that jumps into my head'. 14 The application cannot, in my view, reveal any causal connection between the unspecified actions of Centrelink and the alleged mental illness and imprisonment said to have been sustained. In my view, no cause of action can be discerned on the application. 16 As established in Jones v Department of Employment [1989] QB 1 at pp 22 and 25, where an exercise of statutory power is subject to a right of review and the decision-maker exercises the power in good faith, the exercise of the power will not give rise to a common law duty of care. See also X v South Australia (No 3) [2007] SASC 125 at [189] , [196] and Gimson v Victorian WorkCover Authority [1995] 1 VR 209. The theory behind this principle is that even if some 'negligence' has been proven, it can be cured by an appeal process. The existence of the appeal process is sufficient to remove reliance on breach of any duty of care. 17 This Court has reached similar conclusions in Scott v Secretary, Department of Social Security [2000] FCA 1241 , Scott v Pedler [2004] FCAFC 67 and Wang v Secretary, Department of Employment and Workplace Relations [2006] FCA 898. So much has been exemplified by the High Court decisions in Crimmins, Sullivan, Graham Bailey Oysters and Shaddock , and by the majority judgment of the Full Federal Court in the earlier Scott litigation. The Court does not have jurisdiction to try criminal offences such as fraud and conspiracy. Breaches of the Social Security Act do not confer private rights for damages: Scott v Secretary Department of Social Security [2000] FCA 1241 ; (2000) 65 ALD 79 at [24] , Scott v Pedler [2004] FCAFC 67 at [1] , [53], [93], [102-103] and [106]. Nor is there any duty of care owed: Scott v Pedler . The Federal Court does not have a jurisdiction of general oversight of the administrative efficiency of federal government entities. Further and in addition, there may also be limitation issues arising in relation to any, as yet unidentified cause of action given that some of the problems are said to stem from as early as 1975. 21 In my view, the submissions of Centrelink are correct. 23 The Court only has such jurisdiction as is conferred on it by the Commonwealth Parliament together with any associated or accrued jurisdiction over non-Federal claims arising out of the transactions and facts which are common to the federal claims. This is fundamentally incorrect. Section 19(1) of the Federal Court of Australia Act 1976 (Cth) provides that the Court "has such original jurisdiction as is vested in it by laws made by the Parliament". The Federal Court only has such jurisdiction as is conferred on it by the Commonwealth Parliament, together with accrued jurisdiction over non-federal claims as arise out of transactions and facts common to the federal claims: Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570. 48 The claims of the applicants are not within the jurisdiction of the Federal Court. The Court does not have jurisdiction to try criminal offences such as fraud and conspiracy. Breaches of the Social Security Act do not confer private rights for damages: Scott v Secretary Department of Social Security [2000] FCA 1241 ; (2000) 65 ALD 79 at [24] , Scott v Pedler [2004] FCAFC 67 at [1] , [53], [93], [102-103] and [106]. Nor is there any duty of care owed: Scott v Pedler . The Federal Court does not have a jurisdiction of general oversight of the administrative efficiency of federal government entities. 49 Because there is no jurisdiction for this Court to deal with various claims made it is not appropriate to consider whether any reasonable causes of action are raised. Such an exercise would amount to exercising a jurisdiction which the Court does not have. There must, in each instance, be a 'matter' 'arising under' a Commonwealth enactment. That only occurs if the 'right or duty in question in the 'matter' owes its existence to federal law or depends upon Federal law for its enforcement'. This test is satisfied only if "the right or duty in question in the matter owes its existence to federal law or depends on federal law for its enforcement": R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50 ; (1945) 70 CLR 141 at 154; (Latham CJ); and Felton v Mulligan [1971] HCA 39 ; (1971) 124 CLR 367 at 388; (Windeyer J). It is not open, to the Court therefore to deal with the relief that Mr Pickering seeks. It argues that on its face, the application discloses no reasonable cause of action; no particulars are supplied and no supporting affidavit material is put forward to support Mr Pickering's claim; the claim for damages is unquantified and arbitrary and there is no causal connection established between the action of Centrelink and the losses Mr Pickering sustained. It is also submitted that the application is nonsensical and embarrassing and, given that this is at least the third set of proceedings Mr Pickering has sought to mount against Centrelink, or its Chief Executive Officer, that Centrelink should not be put to the unjustifiable trouble and expense of dealing with a case which on its face is frivolous, vexatious or an abuse of process ( Walton v Gardiner [1993] HCA 77 ; (1993) 177 CLR 378 at 393). 27 In NBGZ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 119 ; (2005) 143 FCR 434 , although the majority (Allsop and Conti JJ) reached a different ultimate conclusion, there is, with respect, a helpful collection of authorities by Gray J on 'frivolous' at [16]-[22] from which it may be concluded that if, despite whatever attempts are made to discern a cause of action in a case, it is still not arguable, it is frivolous. A matter is also frivolous when it is without substance or groundless or fanciful: Bullen & Leake Precedents of Pleadings (1975) 12th ed, p 145. However such matters will only be struck out when it is so obviously frivolous that to put it forward, would be an abuse of the process of the court: Young v Holloway [1895] P 87. The words 'frivolous' or 'vexatious' are used either separately or in conjunction, or interchangeably with the expression 'abuse of the process of the court': Young v Holloway [1895] P 87 at 90-91. 28 In my opinion, this ground is also made out in that, within the meaning of 'frivolous' discussed in these authorities, the claim is frivolous and should be struck out. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | summary dismissal no cause of action no private right to claim damages jurisdiction no 'matter' o 20 r 5 of the federal court rules practice and procedure |
Section 711(5)(c) of the Act requires that if the prospectus for an offer of security states that the securities will be able to be traded on a financial market, the prospectus must state that an application for admission of the securities for quotation on that financial market will be made to the operator of that market within 7 days after the date of the prospectus. 2 The prospectus in this matter was issued by the applicant company Geopacific Resources NL on 22 December 2006 and was lodged with the Australian Securities and Investment Commission ("ASIC") on that date. That prospectus, which was in short form (see s 712 of the Act), proposed, amongst other things, a placement of 4.6 million new shares at an offer price of 54 cents per share. These shares were to be quoted on the Australian Stock Exchange ("the ASX"). In light of s 723(3)(a) and s 724(1)(b)(i) of the Act, the company was under obligation to apply for quotation with the ASX within 7 days of the lodgement date, that is by 29 December 2006. 3 The quotation was in fact lodged on 5 January 2007, being 7 days after the end of the period for application prescribed by the two subsections to which I have referred. While the offer period in the prospectus has now closed, no securities have as yet been issued pursuant to the prospectus. Indeed the company has refrained from so doing pending the outcome of this application. 4 Geopacific Resources was incorporated in December 1986. It has an established and operating exploration business with respect to metals and minerals in Fiji and conducts business at a number of locations in that country. As the prospectus itself indicates, in addition to the 4.6 million shares offered under the prospectus, more than 25 million other shares which are on issue at the date of prospectus, are quoted on the ASX. The purpose of the offer of shares was to enable the company to expand its program of drilling and exploration in response to copper and gold targets that had been generated by work to date done in Fiji, as well as to enable to company to acquire advanced exploration property. 5 Turning to the reason for delay, it emerges from the affidavit of Mr Pringle, a director of Geopacific Resources, that while he was not personally involved in the preparation of the quotation application, he was aware of the need for it, but was unaware of the obligation to lodge it with the ASX within 7 days of lodgement of the prospectus. On 5 January he received an email transmission from an official at the ASX which pointed out that the company had not applied to the ASX for quotation of the securities to be issued under the prospectus within the 7 day window. 6 Following receipt of that email, Mr Pringle contacted the company secretary who prepared a quotation application and informed him of the ASX email. On the same date the quotation application was lodged. Mr Pringle in his affidavit states that the breach of the requirements of the Act in this regard was not deliberate or blatant. Rather the failure to lodge the quotation application within the prescribed time was due to inadvertence to the statutory timeframe provided by the Act. 7 The company secretary, Mr Clegg, in his affidavit states notwithstanding he prepared the quotation application, he was unaware that the company was obliged to lodge it within 7 days of issuing the prospectus on 22 December 2006. He indicates it was his understanding that a quotation application would need to be lodged at the ASX following the closure of the offer period in respect of the securities offered under the prospectus. He was in other words, unaware of the requirement to comply with s 723(3)(a) and s 724(1)(b)(i) of the Act. 8 Following a course, which has now become common in applications of this character, the legal advisers to Geopacific Resources made contact with, and served notice of, these proceedings, together with the affidavits and annexures, upon both ASIC and the ASX. 9 On 11 January 2007 ASIC indicated to Geopacific Resources legal advisers that it did not object to the proposed orders sought in these proceedings and did not intend to appear at the hearing of this matter. On 15 January an officer of ASX in turn communicated with the legal advisers that it was not aware of any reason why, if the Court granted the orders sought, ASX would not proceed in the usual way to grant quotation securities upon receipt of an application for their quotation, subject to the usual conditions. 10 The correspondence went on to indicate that the ASX was not aware of any reason why Geopacific Resources would not be able to satisfy the usual conditions imposed. Apparently no decision has yet been made on the application lodged on 5 January. 11 The statutory setting is as follows. ... Like the discretion to validate invalid share issues under s 254E, the power conferred by s 1322 must be exercised having regard to the requirements of the purposes of the Corporations Act and any other relevant statutes whose application may be in issue. It must also be exercised having regard to the interests of all parties affected and the public interest in ensuring compliance with statute law and company constitutions. Evidence of a blatant disregard of the provisions of the Act or the constitution of the company may lead to refusal of relief: Re Onslow Salt Pty Ltd (2003) 198 ALR 344; 45 ACSR 322 and cases there cited. The provision is, however, remedial in character and should be given a liberal construction: Re Insurance Australia Group Ltd [2003] FCA 581 ; (2003) 45 ACSR 702 at 707, [27] per Lindgren J citing Re Australian Koyo Ltd (1984) 8 ACLR 928 at 930 and Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157 at 160. 30. There is a constructional question whether the time limits for seeking quotations referred to in ss 723 and 724 are time limits which can be extended by the court under s 1322(4)(d). The power conferred by s 1322(4)(d) is to make an order 'extending the period for doing any act ... under the Act or in relation to a corporation'. Section 723(3) does not in terms impose an obligation to apply for quotation within 7 days after the date of the prospectus. Rather, it conditions the validity of the share issue or transfer in response to an application under the prospectus upon the application for quotation having been made within that time. I am satisfied, however, that the ordinary meaning of the words of s 1322(4)(d) can readily accommodate the extension of the period for making an application for quotation. The same is true in my opinion of the 7 day period referred to in s 724(1)(b). It is important to re-emphasise in this matter that as yet no shares have been issued pursuant to the prospectus. For that reason no question of invalidity as such arises at this stage, see s 254E(1) of the Act. Nonetheless, it is the case that extending time in a manner proposed in this application, that is up to and including 5 December 2007 (the date upon which the quotation application was in fact lodged with the ASX) will have the effect of depriving subscribers of a right that they would otherwise enjoy by virtue of the provisions of s 724(2) of the Act. 17 This notwithstanding, I am satisfied that in the circumstances of this matter it would be appropriate to make the order sought by the applicant. The subscriptions were made as a result of placement offers being made to clients of a designated firm of stockbrokers. Given that the non-compliance with the statute, though real, is not significant in its duration, to extend the time as sought does not, in my view, interfere in any significant way with what was contemplated by the underlying business arrangements entered into by the subscribers and the company. 18 What ultimately was being proposed was that the shares on offer would be marketable through the ASX. If this was not in fact the outcome secured within the 3-month period indicated in s 724(1)(b)(ii) then the consequences stipulated in s 724(2) would again come into play. I do not consider in the circumstances, particularly having regard to the attitude taken both by the ASIC and the ASX, that there is a likelihood of any substantial injustice being caused to any person. The principal consequence of refusal of the order would be to compel the company to undergo further expense to resolve its mistake. 19 Given that I am not satisfied that there is any likelihood of prejudice to third parties, i.e. to the subscribers, I do not think it appropriate to inflict unnecessary inconvenience and expense on the applicant by refusing its application. (3) Upon service of these orders on ASIC, ASIC will include such orders on its database. (4) The plaintiff make an announcement to the ASX disclosing the terms of these orders forthwith. (5) The plaintiff and all other interested parties including ASIC have liberty to apply to revoke or vary the orders above. | company's failure to lodge an application for admission to quotation for securities on the australian stock exchange ltd in accordance with ss 723(3)(a) and 724 (1)(b)(i) of the corporations act 2001 (cth) application under s 1322(4)(d) for an extension of time to lodge the application whether "substantial injustice" has been or is likely to be caused to any person in ordering an extension of time according to s 1322(6)(c). corporations |
These reasons support the replacement of the orders then made with the orders now made. The revision is necessary to correct an error as to the declaratory relief which was the subject of consent by all respondents and to the contraventions admitted by the Eighth Respondent. There is a consequential change to the pecuniary penalty imposed on the Eighth Respondent. None of the previous orders have yet been entered. 2 These proceedings were brought by the Australian Competition and Consumer Commission (the ACCC) against three companies, a business and their officers who were engaged in the provision of education consulting services in Perth to students of Korean origin. The ACCC alleged that the companies and the business, through their officers, entered into an agreement, at first oral and then written, not to offer discounted tuition fees to students for whom they acted as brokers in arranging their enrolment at schools, colleges and universities. 3 The facts of the case have been set out in an earlier judgment relating to the first four respondents given on 10 January 2008: Australian Competition & Consumer Commission v Kokos (No 2) [2008] FCA 5. Injunctive orders were made by consent and penalties imposed after argument in respect of those respondents. Declarations offered by consent were stood over pending the finalisation of the proceedings against all respondents. In a further judgment, delivered on 17 January 2008, I made injunctive orders against the fifth and sixth respondents and again imposed penalties. Declaration orders proposed by consent were stood over until the finalisation of the proceedings as a whole: Australian Competition & Consumer Commission v Kokos International Pty Ltd (No 3) [2008] FCA 20. The matter has come back before the Court for disposition as against the seventh and eighth respondents. Statements of agreed facts have been filed. 4 The seventh respondent, Study Overseas Now Pty Ltd (Study Overseas Now) was at all material times a trading corporation carrying on business in Western Australia as, among other things, a supplier of education consulting services to students and prospective students of Korean origin intending to study at secondary and tertiary institutions (Schools). 5 The company does not have exact figures for the annual turnover and profit for the 2004/2005 and 2005/2006 financial years. Mr Yeo has stated that no profits were made during those periods. That fact is not agreed but the ACCC did not dispute his statement. I will therefore proceed on the assumption that no profits were made. It is agreed that Study Overseas Now employed four full time staff. 6 Mr Yeo was at all material times a servant or agent of Study Overseas Now authorised by it to conduct business in its name and on its behalf and was responsible for its day to day management. The manner and payment and the amount of commission agreed to be paid by a School varied according to the particular terms and conditions agreed between Study Overseas Now and each school. Study Overseas Now did not directly charge fees to students for supplying education consulting services. 8 Before early to mid-July 2004 the market comprised Kokos, Nanuri, Jobbok, Study Overseas Now, the Schools and an unknown number of small service providers. The practice then, of offering or agreeing to accept a discount tuition fee, was commonly engaged in by competitors in the Perth market for education consulting services. In mid-July 2004 IAE entered the Perth market. There followed a meeting between Chad Kim on behalf of Kokos, Ace Pae on behalf of IAE, Rebekah Cabalt on behalf of Nanuri, Bernard Yeo on behalf of Study Overseas Now and Jacob Kim on behalf of Jobbok. Study Overseas Now had not at any time before entering into the written agreement offered or accepted discounted tuition fees from students. It did not accept discounted tuition fees thereafter. 9 Neither Study Overseas Now nor Mr Yeo have engaged in a contravention of the Trade Practices Act 1974 (Cth) (the Act) in the past. Study Overseas Now cooperated with the ACCC before and following the commencement of the proceedings. Before being joined in the proceedings Mr Yeo did not provide full cooperation, however since being joined he has offered full cooperation. 10 The declaratory and injunctive orders proposed against the seventh and eighth respondents and to which they consent are in accordance with those sought against the other respondents. I will therefore make the declaratory and injunctive orders. They are within power and appropriate. The outstanding question is that of penalty. 11 In penalty submissions filed by the ACCC it was submitted that Study Overseas Now did not at any time before or after entering into the written agreement, offer or accept discounted tuition fees from students. Therefore it was submitted there was no evidence of direct loss or damage caused to particular consumers by the company's conduct or by that of Mr Yeo. To the extent that they participated in creating the written agreement given effect to by the first to sixth respondents, their conduct contributed to loss and damage caused by those respondents. 12 The ACCC accepted that Mr Yeo was ignorant of the fact that the conduct was unlawful. It acknowledged that there was no evidence that he had concealed or attempted to conceal it. It was submitted that he engaged in the conduct deliberately in response to concerns about the commercial viability of the business but not with the intention to contravene the Act. It was, however, clear from the face of the written agreement that he would have been aware that the conduct would have a detrimental effect on competition in the market. It appears also to have been common ground that Study Overseas Now did not take any steps to give effect to the written agreement. 13 Mr Yeo was employed as the manager for the company. The company had no compliance program in place. The parties agreed that a principal object of a penalty under s 76 of the Act is deterrence. It was submitted that Study Overseas Now was arguably in a position of considerable responsibility and power relative to the students it serviced. 14 Study Overseas Now and Mr Yeo filed their own submissions as to penalty. 15 Study Overseas Now was deregistered on 18 March 2006 and was only reinstated for the purposes of these proceedings. During its period of registration it was a small scale company with only four employees. It was submitted that the offending conduct occurred during mid-2004 for a period of approximately five months and was never initiated nor implemented by the company. 16 The company also referred to its cooperation with the ACCC, the fact that its conduct was undertaken in ignorance of the relevant provisions of the Act and that it had an insignificant percentage of the relevant market. At the time of its conduct, Mr Yeo was the only person who represented Study Overseas Now. 17 In addition to those considerations Mr Yeo, for his part, pointed out that he has no assets and is currently not employed although he is actively looking for employment. When he was working for Study Overseas Now he rarely drew a personal wage. During his employment with the company he worked on two other jobs to sustain its debts and to pay associated business expenses. He submitted that given his financial circumstances either no pecuniary penalty or in the alternative, a small pecuniary penalty would achieve the current objectives of the Act. The factual aspects of his submissions were not disputed by the ACCC. 18 In my opinion there is no point in imposing a pecuniary penalty on the company which has been re-registered for the purposes of these proceedings. There is a point of distinction to be drawn between the involvement of Nanuri and Ms Cabalt with which I have already dealt, and the involvement of Study Overseas Now and Mr Yeo. In the case of Nanuri and Ms Cabalt there was evidence that the business did discontinue the practice of offering discounted tuition fees albeit, as it turned out, to its own detriment. Neither Study Overseas Now nor Mr Yeo changed their practice after entering into the agreement. Their practice before entering into the agreement had been not to offer discounted tuition fees. Another point of distinction is the asset position of both the company and Mr Yeo. 19 So far as Mr Yeo is concerned, I will, impose a penalty of $500 which reflects the limited scope of his involvement in the contravention, the absence of any implementing conduct, his ignorance of the law and his personal circumstances. The fact that he has cooperated in reaching a resolution without the need for any litigation is also a factor in his favour. 20 I will make orders for costs against the company and against Mr Yeo to be attached or agreed. Whether recovery against the company is possible is questionable. 21 I will also make the outstanding declarations which were agreed for the other respondents. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French . | price fixing consent orders pecuniary penalties deterrent factors no prior contraventions lack of awareness of law no implementation no assets deregistered company re-registered for proceedings natural person no assets. trade practices |
The extension of time is required because a notice of appeal was not filed and served within the time prescribed by Order 52 r 15 of the Federal Court Rules which provides that a notice of appeal shall be filed and served within 21 days after the relevant date, subject to Order 52 r 15(2) that the Court or a judge for special reasons may, at any time, give leave to file and serve a notice of appeal. In the written submissions on behalf of the respondent to the notice of motion, reference is made to the decision of Middleton J in Kuruwitage v Minister for Immigration and Citizenship [2007] FCA 795 at [9] . The guiding principles are set out at Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348 to 349, and include a requirement that there be some acceptable explanation for the delay, and require the merits of the substantial application to be taken into account. Furthermore, even where there are special reasons why the appeal should be permitted to proceed, the Court has the discretion to grant or refuse the extension time sought. This application for an extension of time was described by both parties as the second application. This description arises from the fact that there was an earlier decision of Moore J, being All Districts Coating Pty Ltd v Barhoum (2008) FCA 1757 (24 November 2008), in which his Honour dismissed an application for an extension of time. The parties agreed the relevant principles in relation to such a second application. Those principles are accurately summarised at [28] to [33] of the respondent's written submissions, referring to the decisions in Walton v Gardner (1992) 177 CLR 378 at 393, Clairs Keeley (a firm ) v Treacy [2004] WASCA 277 ; (2004) 29 WAR 479 at [7] to [14], Wentworth v Rogers (unreported, Sup Ct, NSW, Sperling J, SC 19228 of 1982, 28 April 1995), Nominal Defendant v Manning (2000) 50 NSWLR 139 at 156 and National Parks and Wildlife Service v Pierson (2002) 55 NSWLR 315. In essence, it is accepted by both parties that the making of this second application is not an abuse of process for that reason alone and this is so irrespective of the fact that there has been no change of circumstances (but for a further affidavit to which I will make reference shortly). Accordingly, I adopt the principle referred to by both parties that it is not the case that I cannot entertain this second application. The real evils to which Hayne J referred in D A Christie Pty Ltd v Baker (at 602 to 603) --- the risk of conflicting decisions, the unnecessary effects on the respondents, judge shopping and the diminution of certainty in the conduct by respondents of their affairs --- and others --- damaging public confidence in the integrity of judicial decisions, expending time and money on litigation unnecessarily --- are evils which each court, in its individual discretion, will rightly strain to avoid. In this regard, the applicants point to the following matters (which I address by reference to the reasons of Moore J). Moore J, in his decision, set out the background circumstances to the present application which I adopt. In short, the Federal Magistrates Court delivered a decision and made orders on 22 February 2008. The applicants filed an appeal against that decision without seeking leave to appeal. The respondent filed a motion to strike out that appeal on the ground that the appeal was incompetent because the decision of the Federal Magistrates Court was interlocutory, there still being outstanding issues in the proceedings before the Federal Magistrates Court. Moore J heard that motion on 3 June 2008 and reserved his decision. In the meantime, the Federal Magistrates Court made final orders, including orders for the payment of compensation to the respondent on 11 July 2008. The applicants however, did not file an appeal against these final orders but awaited the outcome of the strikeout application. Moore J delivered his decision in relation to the strikeout application on 14 October 2008 and struck out the appeal as incompetent. The applicants then filed the first application for an extension of time on 20 October 2008. Moore J heard that application on 10 November and dismissed it on 24 November 2008. This further application for an extension of time was filed on 17 December 2008 supported by two affidavits of the solicitor for the applicants, Mr Richard Mitry. Apart from setting out the background to the proceedings, Mr Mitry explains that he did not file an appeal against the orders of the Federal Magistrates Court of 22 July 2008 because he was uncertain of what to do in circumstances where there was an appeal already on foot but subject to challenge. Although he recognised that a possibility would have been to file a further appeal immediately, in circumstances where that may be unnecessary because the first appeal may not be struck out, it appeared to be a waste of money. Mr Mitry identifies in his affidavit the other steps which he took in relation to the appeal. The second affidavit of Mr Mitry annexes certain documents that were before the Federal Magistrates Court but which were not before Moore J when he determined, on 24 November 2008, to refuse the application for the extension of time. According to the applicants, Mr Mitry's explanation of the delay in filing the notice of appeal after the final orders of the Federal Magistrates Court of 22 July 2008, in short, were not as unsatisfactory as Moore J appears to have concluded. With respect to Moore J's observation at [18] that no attempt was made to demonstrate error on the part of the Federal Magistrate by reference to his reasons about the termination of the respondent's employment, the applicants submit that it was not contested that the second appellant had ceased trading in April 2006. The Magistrate had found that this decision predated the injury. It therefore followed that if the decision to cease trading was unrelated to injury to the respondent, the respondent cannot have been terminated for the prohibited reason identified in s 659(2)(a) of the Workplace Relations Act 1996 (Cth). The applicants also refer to Moore J's reasons at [18] to [22], in which his Honour described the fact that the Federal Magistrates Court made orders against all three of the applicants in circumstances where s 665 specifically refers to the making of orders against an employer. Putting it slightly differently, why should the applicant that is the employer be allowed to appeal, by the grant of an extension of time, when his or its case on this point is doomed to fail (because a finding will be made against him or it in the appeal that he or it is the employer). In the absence of the applicants pointing to findings or evidence that tended to demonstrate which of the applicants was the employer, I should proceed on the basis that it could be any of the three of them. Mr Mitry's affidavit says that these documents were before the Federal Magistrate but not before Moore J because Mr Mitry did not realise that they might be relevant to the consideration of the Court as to whether an extension of time ought to be granted. For this reason, the applicants say that at least two of the applicants have an unanswerable claim, namely, that they were not the relevant employer of the respondent. One applicant has an arguable claim, namely, that there was no termination of employment for a prohibited reason. In circumstances where none of the applicants sat on their hands because they did in fact appeal, indeed appealed too early against the decision of the Federal Magistrates Court, it would be a harsh exercise of discretion to now deny them the opportunity to appeal. That is, on the one hand the applicants' original appeal was dismissed as too early but now they are being refused an extension of time on the ground that they are too late. The difficulty with these submissions, however, is exposed by the competing submissions on behalf of the respondent. As the respondent rightly says, the prohibited reason in s 659(2) need not be an exclusive reason. The section specifically refers to termination for any one or more of the prohibited reasons or for reasons including any one or more of the prohibited reasons. Nothing has been said today which suggests or points to any particular error in the approach of the Federal Magistrate to that issue. Moore J, at [16], indicated that he accepted that there was some uncertainty attending the status of the original notice of appeal and that, if the facts went no further, he might have considered extending time even though he found the explanation of avoiding the costs of filing a new notice of appeal comparatively unsatisfactory. I share that view that the reason is comparatively unsatisfactory and nothing additional has been put to me today suggesting any new reason. His Honour then pointed to what he described as other factors pointing to a refusal of the exercise of discretion. The first of these was that he could not see, or he had not been taken to, any demonstrable error on the part of the Federal Magistrate with respect to the application of s 659(2)(a) of the Workplace Relations Act . For the reasons I have already given, that seems to me to remain the same position as at today's date. His Honour's second reason related to the submission that the Federal Magistrate had failed to identify the relevant employer and therefore had necessarily made orders against at least two parties where there was no power to make orders against those parties not being the relevant employer. Again, I agree with what Moore J said insofar as it seems to have been conceded that it is logically correct to say that two of the applicants could not have been the relevant employer. However, the reasons of the Federal Magistrate, consistent with the respondent's submission, show that all of the relevant documents were before the Federal Magistrate, including those annexed to Mr Mitry's affidavit as well as other documents. On the basis of the whole of that evidence, the Federal Magistrate reached a view that the third applicant used the first and second applicants interchangeably in the conduct of the business. Additionally, as the respondent submitted, the uncertainty surrounding the identity of the employer was a matter which could have been clarified by the applicants by their evidence if they had so chosen to do. It seems to me in these circumstances that the discretionary factor referred to in [21] of Moore J's decision does not involve any inappropriate reversal of the onus of proof, but is simply a discretionary reason that he rightly took into account to say that there should not be an exercise of discretion in the applicants' favour. Moore J also took into account, as set out in [23], the lack of a stay and a failure by the applicants to satisfy orders of the Federal Magistrates Court. I do not consider that these matters are entitled to material weight. It seems to me that when I weigh up the circumstances to which I have referred with the considerations referred to in Nominal Defendant v Manning , particularly the risk of conflicting decisions, the unnecessary vexing of the respondent, diminution of certainty in the conduct by the respondent of its affairs and damaging public confidence in the integrity of judicial decisions, they lead to the conclusion that the proper administration of justice in this case requires a refusal of an exercise of discretion in the applicants' favour. Accordingly, I make orders that the applicants' application for an extension of time for the filing of an appeal, filed on 17 December 2008 is dismissed. The respondent seeks an order for costs on the basis of the exception in s 824(1) of the Workplace Relations Act . That section effectively provides that there must not be a costs order in these proceedings unless, relevantly, the party against whom the order is sought instituted the proceedings vexatiously or without reasonable cause. The respondent accepts that the application was not made vexatiously but says it was made without reasonable cause because there was no fresh evidence or demonstrable error in Moore J's reasoning process and that is sufficient to say that the proceedings were brought without reasonable cause. The matter is not straightforward. There was an additional affidavit of Mr Mitry. I accept that the affidavit did not contain fresh evidence but it did contain material that, for the reason given by Mr Mitry, was not before Moore J. It seems to me to be too much to say that this application was brought without reasonable cause. Accordingly, I do not propose to make any order for costs and I will return the Workplace Relations Act . I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | second application for extension of time in which to file and serve notice of appeal whether special reasons exist justifying a grant of leave practice and procedure |
During the period 11 February 1999 to 10 July 2001, Mrs Vanderpluym received payments from the Secretary of the relevant department, now the Department of Employment and Workplace Relations ('the Secretary') through Centrelink in respect of that allowance. 2 The Secretary subsequently contended that because the relevant assets of Mrs Vanderpluym and her husband, Mr Peter Vanderpluym, exceeded the applicable statutory threshold informing the quantum of Mrs Vanderpluym's entitlement to receipt of particular payments, Mrs Vanderpluym had received $16,708.41 more than she was entitled to receive. 3 Accordingly, Centrelink made a decision on 2 September 2003 to recover from Mrs Vanderpluym the amount of that excess as a debt due to the Commonwealth under s 1223(1) of the Social Security Act . Mrs Vanderpluym sought review of that decision before the Social Security Appeals Tribunal ('the S S A T') and on 1 November 2004 (in accordance with reasons published on 10 November 2004), the S S A T set aside the decision and remitted the matter to Centrelink with directions that an overpayment in the period 14 November 1999 to 10 July 2001 be calculated on the footing that Mrs Vanderpluym's assets in that period exceeded the assets value limit set by the Social Security Act ; that any overpayment in that period is a debt due to the Commonwealth; and that as to the period 11 February 1999 to 13 November 1999, any overpayment be calculated on the basis of Mrs Vanderpluym's income in that period. As a result of those calculations, an overpayment of $12,258.55 was said to arise in the period 14 November 1999 to 10 July 2001 and no overpayment in the earlier period. 6 The references in paragraph 1(i) and (ii) of the AAT decision are directed to first, a 'right or interest' in particular property that has an affect upon assets thresholds under the Social Security Act for the purpose of the calculation of an entitlement to a parenting allowance and secondly, whether a particular right (that is, an entitlement to be paid a debt due to Mr Vanderpluym by the nominated company) is an asset of Mr Vanderpluym and thus an asset forming part of the 'assets value limit' of Mrs Vanderpluym on the footing that she is 'a member of a couple' made up of Mr and Mrs Vanderpluym: s 4 , Social Security Act ; s 500Q(3) , Social Security Act . 8 Section 500Q(1) provides that a parenting payment is not payable to a person if the value of the person's assets exceeds the person's 'assets value limit'. The assets value limit of a person who is a member of a couple is determined pursuant to s 500Q(3) of the Social Security Act having regard to a conjunction of two factors relevant here. First , whether Mr Peter Vanderpluym (as Mrs Vanderpluym's partner) is a person who neither receives a 'pension' nor a 'benefit' under the Social Security Act and secondly , whether either Mrs Vanderpluym or Mr Vanderpluym is a 'homeowner'. Since Mr Peter Vanderpluym neither received a benefit nor a pension under the Social Security Act at any relevant time, the 'assets value limit' at 1 July 1998 applicable to Mrs Vanderpluym was prescribed by s 500Q(3) of the Social Security Act as $178,500.00 if, 'either person or partner, a homeowner' ; and $268,500.00 if 'neither person nor partner, a homeowner' . The homeowner limits set at 1 July 1999, 1 July 2000 and 1 July 2001 were $181,500.00, $189,500.00 and $200,500.00 respectively; and the limits if neither Mrs Vanderpluym nor Mr Vanderpluym constituted a homeowner, were $273,000.00, $285,000.00 and $301,500.00 respectively in each of the above years. 9 Section 500Q(4) provides that for the purpose of determining the assets value limit of Mrs Vanderpluym, the value of her assets includes the value of Mr Vanderpluym's assets. 10 Part 2.10 of the Social Security Act establishes a regime for a person's qualification for an entitlement to 'parenting payments' in respect of the parenting of a child or children. Part 2.10 contemplates a wide range of circumstances in which either a parent alone or as a member of a couple is recognised as having responsibility for the care and support of one or more children; establishes regulatory and compliance arrangements in relation to the receipt of parenting payments and, among other things, establishes an assets test pursuant to s 500Q with the result that a parenting payment is not payable to a person if the value of the person's assets exceed the person's assets value limit. 11 The Social Security Act recognises that a person who is either a lone parent or alternatively a person who is a member of a couple, will either be a homeowner or not. If such a person is a homeowner, the value of any right or interest of that person in a residence that is the 'principal home of the person' is excluded by s 1118(1) of the Social Security Act from the calculation of the value of that person's assets for the purposes of the Act. In a case such as that of Mrs Vanderpluym, s 1118(1)(b) provides that not only is the value of any right or interest of Mrs Vanderpluym in such a residence to be disregarded but also that of 'the person's partner (Mr Vanderpluym) or of both of them' . The characterisation of that which is to be disregarded in such a calculation is the value of any 'right or interest' of the relevant person in a residence constituting the principal home, that is 'a right or interest that gives the person or the person's partner reasonable security of tenure in the home' . 12 The policy of the legislation in the setting of an assets value limit for determining the threshold at which a parenting payment, partnered or otherwise, might cease to be payable is to recognise that a person who is (or their partner is) a homeowner will have a lower assets value limit (recognising that the value of that right or interest is excluded) than a person (including that person's partner) who is not a homeowner. A non-homeowner, in part recognition that a homeowner has the benefit of the excluded value of their home, will be entitled to a higher limit on the value of his or her assets before being disqualified from access to a parenting payment whether a member of a couple or not, although, of course, the assets value limit differs for a person who is not a member of a couple as compared with one who is. First , does either Mrs Vanderpluym or Mr Vanderpluym have a 'right' or an 'interest' in a residence that is Mrs Vanderpluym's principal home or Mr Vanderpluym's principal home or the principal home of both of them? Secondly , is that right or interest of such a character that it gives Mrs Vanderpluym or Mr Vanderpluym 'reasonable security of tenure in the home'? There may be some artificiality in looking at each of these components entirely separately as the nature of the right or interest is informed by whether it is one that is capable of affording 'reasonable security of tenure in the home' in determining whether a relevant person is 'a homeowner'. Section 11(8) of the Social Security Act provides that if a person has a right or interest in the person's principal home, the person is to be taken to have a right or interest that gives the person reasonable security of tenure in the home unless the Secretary is satisfied that the right or interest does not give the person reasonable security of tenure in the home. 16 In early 1995, Dolores and Peter Vanderpluym sold their home in Sydney and moved to Magnetic Island in Queensland. In doing so, they received cleared funds of approximately $200,000.00 from the sale of their home in Sydney. Mr and Mrs Vanderpluym and their family initially moved into a rented house on Magnetic Island at an address described as 30 Compass Crescent [13(ii)]. Mr Peter Vanderpluym commenced an internet computing business on Magnetic Island and registered the business name 'Magnetic Magic' in July 1995. In late 1995 or early 1996, Dolores and Peter Vanderpluym bought a vacant block of land at 43 Compass Crescent, Nelly Bay, Magnetic Island for approximately $50,000.00. After the purchase of that land, Mr Peter Vanderpluym had a residual amount of approximately $150,000.00 remaining in his bank account. 17 On 28 August 1995, Mrs Vanderpluym was granted a parenting payment by the Secretary. On 3 February 1999, Mr Vanderpluym incorporated a company called Magnetic Magic Pty Ltd ('MMPL'). Mr Vanderpluym was the sole director and shareholder of that company and controlled the activities of that company. Shortly after the incorporation of MMPL, Mr and Mrs Vanderpluym transferred ownership of the land at 43 Compass Crescent to MMPL. Mr Vanderpluym then obtained registration as an owner/builder and supervised the building of a home on the land at 43 Compass Crescent. 18 During the course of construction of the home, Mr Vanderpluym transferred money from his bank account into the account of MMPL and payments were made to suppliers and contractors from that account. At 30 June 1999, the books of account of MMPL showed a loan from Mr Vanderpluym to the company of $204,056.00. The Vanderpluym family moved from a rented home in 39 Compass Crescent, Nelly Bay [13(xii)] to the new home taking up occupancy on 14 November 1999. Mr Vanderpluym paid rent in respect of that occupancy of the home to a real estate agent who then paid the money into the account of MMPL. 19 The home at 43 Compass Crescent became upon occupancy the principal residence of the Vanderpluym family. By 30 June 2000, there had been a transfer of furniture and a motor car to MMPL. The loan account of MMPL showed a debt due to Mr Vanderpluym by 30 June 2000 of $239,526.00. On 15 April 2001, the house and land at 43 Compass Crescent was transferred from MMPL to Peter and Dolores Vanderpluym [13(iv)] apparently in satisfaction of the debt owed to Mr Peter Vanderpluym. At 30 June 2001, the loan account as between MMPL and Mr Vanderpluym showed a debt due to Mr Vanderpluym of $6,000.00. Mr Vanderpluym initially transferred title to the land to MMPL without receiving payment and made further advances so as to provide MMPL with cash flow to obtain an overdraft facility for the benefit of the internet and computer business. The T documents (T2, p 6) reveal that rent from November 1999 was paid to MMPL for the occupation of the home but there was no written agreement for lease or tenancy of the home. Mr Vanderpluym appointed a real estate agent to collect the rent on behalf of MMPL and rent of $165.00 per week was paid by Mr Vanderpluym to MMPL's agent by personal cheque. Although the AAT found as a fact that the house and land at 43 Compass Crescent was transferred from MMPL to Dolores and Peter Vanderpluym on 15 April 2001, the decision of the S S A T suggests that the transfer was registered to Mr and Mrs Vanderpluym in July 2001 [22 --- S S A T decision]. 20 Having regard to these factual findings of the AAT, it can be seen that Mr Vanderpluym had no need of a written lease instrument (registered or unregistered) or tenancy agreement or any formal or written arrangement for occupation of the home at 43 Compass Crescent. The arrangement was simply an oral week to week tenancy at will. No greater formality or registered interest was necessary because the registered proprietor of the land was a company of which Mr Vanderpluym was the sole director and shareholder. Nor did Mr Vanderpluym require a registered mortgage or charge by MMPL or an equitable mortgage to secure advances made by him to MMPL to enable progress payments to be made to suppliers and contractors. There was no need for instruments of that kind nor a consent caveat or any other prudent mechanism designed to prevent an adverse interest arising in relation to the title to the property at 43 Compass Crescent because no inconsistent interest or dealing could be created by MMPL as Mr Vanderpluym controlled MMPL by force of his capacity as sole director and shareholder. The advances made by Mr Vanderpluym to MMPL were just that. They were unsecured loans to MMPL recorded in the balance sheet of the company as a liability to Mr Vanderpluym. 21 In reaching its decision arising out of a review of the S S A T's decision of 1 November 2004, the AAT made these conclusions. The term 'homeowner' would be regarded by most members of the Australian community as referring to a person who owns a home, that is, the registered owner [20]. A homeowner is to be contrasted with an occupier of a residence whose right or interest in the residence arises under a lease or rental agreement [21]. A renter would not be regarded as a homeowner, irrespective of their security of tenure in the home [21]. A person who has reasonable security of tenure in a home does not thereby automatically make that person the owner of a home [23]. The terms 'right or interest' in the definition of 'homeowner' must refer to a legal or equitable right or interest in the ownership or the title to the property [24]. Since the residence erected on the property at 43 Compass Crescent was owned by MMPL from the date of construction until 15 April 2001, neither Mrs Vanderpluym nor Mr Vanderpluym had a legal or equitable interest in the ownership of the property and thus neither of them was a homeowner at the relevant time [25]. Although Mr and Mrs Vanderpluym had a 'leasing arrangement' with MMPL which gave them 'security of tenure in the home' , neither Mrs Vanderpluym nor Mr Vanderpluym were homeowners by reason of that circumstance [30]. 22 As a result, the higher assets value limit applied to Mrs Vanderpluym for the purposes of s 500Q(3) in the period 14 November 1999 to 15 April 2001. 23 Section 1122 of the Social Security Act provides that the value of the assets of a person for the purposes of the Act includes so much of the amount of a loan made by that person that remains unpaid. Accordingly, a debt due to a person arising out of a loan transaction forms part of the value of the assets of that person. Having regard to that section, the AAT found that the debt due by MMPL to Mr Peter Vanderpluym ($204,056.00) during the relevant period was an asset of his for the purpose of assessing the assets value limit of Mrs Vanderpluym (s 500Q(4); s 500Q(3)) and thus ultimately the quantum of the parenting payment (partnered) payable to her from time to time. Whether a person who is a member of a couple and who resides, by way of a leasing arrangement, in a residence that is the couple's principal home, the title to which is held by a private company of which that person's partner is the sole director and shareholder, has a right or interest in the residence within the meaning of s 11(4)(b) of the Social Security Act 1991 ("the Act "). Whether the outstanding value of a loan made by a homeowner within the meaning of s 11(4)(b) of the Act to the registered owner of the principal home for the construction of that home, is an asset, the value of which is to be included in the value of the assets of the homeowner for the purposes of the Act . Having regard to the beneficial nature of the Act [Social Security Act 1991 (Cth)], the loan should, as a matter of law, have been disregarded either as a matter of statutory construction or by lifting the corporate veil in this case. 28 The Secretary concedes that the question of whether special circumstances subsisted so as to make it desirable to waive the right to recover all or part of the debt due to the Commonwealth was addressed by the S S A T and was thus a matter formally alive before the AAT. However, the Secretary resists the grant of leave to file a cross appeal on the ground that no error of law is properly raised and, in any event, the respondent has failed to file a notice of contention pursuant to Order 53 of the Federal Court Rules . 29 In the proceeding before the S S A T, Mrs Vanderpluym sought a waiver pursuant to s 1237AAD on the footing that she did not knowingly make a false statement or knowingly fail to comply with the provision of the Social Security Act ; that although financial hardship in the payment of the debt was not a consideration, the 'corporate veil' of MMPL should be lifted with the result that the debt owed to Mr Vanderpluym ought to be 'offset against the value of the home'. In the absence of that step, Mrs Vanderpluym contended she would be unfairly disadvantaged because a lower assets value limit would apply to her by reason of a finding that she was a homeowner, yet at the same time, the amount of the debt to Mr Vanderpluym considered an integral part of the arrangements giving rise to the conclusion that Mrs Vanderpluym was a homeowner, would also be taken into account in determining the assets value limit applicable to Mrs Vanderpluym for the purpose of calculating the amount of any benefit. 30 The S S A T was unpersuaded by that argument and concluded that no unusual, uncommon or exceptional circumstance had been made out giving rise to 'special circumstances'. The S S A T considered that it was not uncommon for persons to hold their principal home in a controlled company or as trustee of a trust and that where a person chooses to do so, unpaid loans from a relevant person to the relevant entity are to be treated as an asset for the purpose of determining the assets value limit of that person and, in consequence, 'a person', being a member of a couple with that person. 31 It seems to me that since the question of waiver was expressly raised and dealt with before the S S A T and was the subject of evidence from Mr Vanderpluym in the form of a facsimile to the S S A T dated 27 October 2004 which sought to explain the special circumstances applicable to Mrs Vanderpluym, the Secretary is not taken by surprise by the respondent raising the matter of waiver before this Court. All issues raised before the S S A T were the subject of the review proceedings before the AAT although it became unnecessary for the AAT to determine the matter of waiver as the AAT found that neither Mr Vanderpluym nor Mrs Vanderpluym were a homeowner for the purposes of the Social Security Act . 32 Accordingly, I propose to give leave to the respondent to file a cross appeal to determine whether the Tribunal erred in concluding that the debt payable by MMPL to Mr Vanderpluym was an asset for the purposes of the assets value limit applicable to Mrs Vanderpluym; whether the Tribunal erred by failing to conclude as a matter of law that the debt ought to have been disregarded by operation of the Social Security Act in the calculation of the assets value limit applicable to Mrs Vanderpluym; and whether, on the facts found by the AAT, special circumstances are made out for the purpose of s 1237AAD. Mrs Vanderpluym says that the real questions in the appeal are first, that in determining the assets value limit applicable to her, the debt due to Mr Vanderpluym by MMPL ought to have been disregarded as a matter of statutory construction of s 1118(1)(b) because the debt is supported by a 'vendor's lien' in favour of Mr Vanderpluym as unpaid transferor of the land to MMPL (and the lien extends to further advances for improvements); the lien is an 'interest' in the land and thus an interest in the residence being the principal home; and that interest as unpaid lien holder is an interest that 'gave' Mr Vanderpluym and Mrs Vanderpluym reasonable security of tenure in the home. As a result, the value of the interest must be disregarded in calculating the assets value limit of Mrs Vanderpluym. 34 Secondly, as a matter of purposive construction of the Social Security Act , the shell of MMPL should be disregarded and Mrs Vanderpluym should be treated as homeowner of the residence and the loan to Mr Vanderpluym simply reflects the real value of the home which is to be disregarded in calculating the assets value limit. 35 Thirdly, because Mr Vanderpluym, as a matter of law by operation of s 191 of the Land Title Act 1994 (Qld), may be unable to assert a vendor's unpaid lien, the value of the lien might not be 'disregarded' by operation of s 1118(1) since there is no qualifying 'interest' for the purposes of that section and thus the value of the lien may form an asset of his. If so, by s 500Q(4), the value of the asset is included in the value of Mrs Vanderpluym's assets and in that case, Mrs Vanderpluym suffers an unjust outcome as in all other States and the Australian Capital Territory, a vendor's lien can still be asserted as a source of an equitable interest which would enliven s 1118(1) and disqualify the value of the interest from inclusion in Mrs Vanderpluym's assets value limit. Accordingly, the 'special circumstance' is the consequential differential treatment between citizens under national legislation by force of where they might live. Accordingly, it is necessary to consider whether the decision reflects the error of law contended for by the Secretary and supported by the respondent subject to the respondent's other contentions. Of course, the joint view of the parties will inevitably be highly persuasive in the Court reaching its own determination of the question and in exercising the powers conferred upon the Court by s 44 of the AAT Act . However, the Court must form its own view. 37 The Secretary urges upon the Court a consideration of the proper construction of the relevant provisions not only as an element of the proper exercise of the jurisdiction but for two other reasons. First, the arguments of the respondent concerning the nature of the interest said to arise by reason of a vendor's lien and the proper construction of s 1118(1)(b) also go to the proper view to be taken of s 11(4)(b) in any event since there is a symmetry between the two sections. Secondly, the question of the proper approach to the construction of s 11(4)(b) and s 1118(1)(b) and thus the approach in substance to s 1118(1)(a) has been the subject of a number of decisions of the AAT where the approach to the sections has varied. Accordingly, the Federal Court ought to consider the proper construction of the provisions. 38 The prima facie impression of an orthodox application of the provisions to the facts as found by the AAT suggests that MMPL was at the relevant time the registered proprietor of the land upon which the residential house was built. Mr and Mrs Vanderpluym were tenants of the company under arrangements which were familial, oral and of no fixed duration. They were tenants at will of the company comforted no doubt by the fact that Mr Vanderpluym controlled in every sense of the word the conduct of the landlord. Because they were simply common law tenants at will (and in truth their own will) paying weekly rent neither Mr Vanderpluym nor Mrs Vanderpluym was a homeowner as that term might naturally be understood, of the residence. That right, title and interest fell to MMPL. In such a case, because neither of them was a homeowner, Mrs Vanderpluym was subject to an assets value limit determined by s 500Q(3) at the higher threshold. The assets of Mr Vanderpluym included a debt due by MMPL to him as recorded in the balance sheet of MMPL and the one issued share in MMPL held by him. The value of the only issued share would no doubt be the net asset backing value of the company which having regard to MMPL's liability to Mr Vanderpluym would presumably not be very significant. Nevertheless, such a prima facie view would accord with the notion that neither Mr Vanderpluym nor Mrs Vanderpluym was a homeowner and all relevant assets of Mr Vanderpluym would be brought to account in a recognised way as required by s 500Q(4) and s 1122 in determining the assets value limit of Mrs Vanderpluym for the purpose of determining the quantum of her benefit entitlement. 39 However, a view must ultimately be reached by application of the ordinary and natural meaning of the relevant provisions of the legislation in the context of the Social Security Act overall to the facts as found to determine whether either Mrs Vanderpluym or her partner was at the relevant time a homeowner for the purposes of the Social Security Act and whether the scope of the assets to be included within the assets value limit applicable to Mrs Vanderpluym included all or any part of the MMPL debt to Mr Vanderpluym. 40 Since the respondent relies upon the reasons outlined in the submissions of the Secretary as the basis for error on the issue of homeownership, those contentions require examination on the part of the AAT. 41 The Secretary contends that the Tribunal erred by concluding that although Mr and Mrs Vanderpluym had entered into a 'leasing arrangement' with MMPL which gave them a right of occupancy which in turn gave them security of tenure in the home, the leasing arrangement did not give rise to a 'right or interest' in a residence being the relevant principal home for the purpose of the first limb of s 11(4)(b). 42 The Secretary contends that the proper approach to the construction of s 11(4)(b) involves two steps. First, a view must be formed as to the proper meaning of the phrase 'right or interest' in the relevant property and once that right or interest has been characterised, a second and separate question arises as to whether the right or interest so found is one which gives the person (or relevantly the person's partner) 'reasonable security of tenure in the home' . 43 As to the first question, the Secretary, in effect, contends that the right or interest contemplated by s 11(4)(b) is not confined to legal ownership; the right or interest may be a legal or equitable right or interest as distinct from a mere contractual right to use the property; in identifying an equitable right or interest in the property, it may be necessary to identify the source of the bundle of rights exercisable by the relevant person and determine whether a court of equity would grant remedial relief arising out of those rights (for example, specific performance of an agreement or an injunction to restrain either breach of the agreement or, for example, a departure from an obligation of conscience) in connection with the land; the AAT in Re Delos Reyes and Secretary, Department of Social Security (1993) 32 ALD 287 in reliance upon the observations of Aitkin J in Stow v Mineral Holdings (Aust) Pty Ltd (1977) 14 ALR 397 at 411, concluded that the phrase 'right or interest' in the property was synonymous with a right or interest of a proprietary nature and not a mere personal right; that the observations in Stow as to the proprietary nature of the notion of an 'estate or interest in land' were relied upon in R v Toohey; Ex parte Meneling Station Pty Ltd [1982] HCA 69 ; (1982) 158 CLR 327 at p 342 by Mason J in observing that no one who has a mere personal right in relation to land can be said to have an estate or interest in that land; and that in identifying a proprietary right or interest it is necessary to consider both legal and equitable interests. 44 The Secretary further contends that in identifying equitable interests, it is well accepted that a tenant under a lease has an interest in the land. If the lease is registered, the interest is a legal interest. If not, an agreement for lease would nevertheless give rise to an equitable interest. If the interest is a tenancy at will, it might be necessary to determine whether there is a true tenancy or whether the occupant simply has a licence to occupy the premises. As to that distinction, the Secretary says that Taylor J in Radaich v Smith [1959] HCA 45 ; (1959) 101 CLR 209 at pp 217, 220 put the distinction in these terms: 'The instrument either makes a grant of an interest in land or it does not; if it does, a leasehold interest is created and if it does not then nothing more than a licence is given' . 45 The Secretary further contends that the subsistence in the relevant person or their partner of an equitable right or interest of a proprietary nature satisfies the first limb of s 11(4)(b) and that two examples of such a right are a vendor's lien as a form of equitable charge over property to secure unpaid purchase money and equitable remedial relief to protect an interest in land where the circumstances give rise to a resulting or constructive trust. 46 Applying these propositions to the facts as found by the AAT, the Secretary contends that an error of law arose when the AAT concluded that a right or interest arising under a lease arrangement or rental agreement is not a right or interest for the purpose of s 11(4)(b). The Secretary contends that on the facts found by the Tribunal Mrs Vanderpluym had a right or interest in the property by way of an informal lease under which a commercial rate of rent was paid to MMPL through the services of MMPL's real estate agent; and that Mr Vanderpluym had an equitable lien in respect of the unpaid purchase price for the property ($50,000.00). 47 The second consideration is whether the identified right or interest in the principal home gives the relevant person a 'reasonable security of tenure in the home' . The Secretary contends that the test of reasonable security of tenure is necessarily an objective one; it means a certainty or assurance of occupation; reasonable security of tenure need not be absolute; the interests of other parties such as a registered mortgagee or the specific character of particular classes of landlord such as a housing commission need to be considered in determining the nature of the security of tenure afforded to the person in all the circumstances; the substance of the arrangements between the person asserting a right to a benefit and the registered proprietor require consideration; the objective intention of the landowner must be ascertained by reference to the identified controlling mind of the company; where the land is held by a trustee of a discretionary trust, the question of intention will be resolved by identifying the intention of the person controlling the trust; and it is a question of fact as to whether in all the circumstances the intention of the parties in the relevant relationship, objectively ascertained, confers certainty or assurance of tenure so as to satisfy the statutory notion of 'reasonable security of tenure'. 48 The Secretary further contends first, that the AAT found, as a question of fact, that it was the leasing arrangement that gave Mr and Mrs Vanderpluym reasonable security of tenure and secondly, that a finding by this Court that Mr Vanderpluym held an equitable lien in relation to the unpaid purchase price for the transfer of the land to MMPL supports the finding of reasonable security of tenure. Inevitably, the facts of each case condition the determination of whether a sufficient right or interest is made out and whether such an interest confers reasonable security of tenure. However, some of the principles guiding administrative decision-making in the Tribunal on the issues are these. The expression 'right or interest' is not defined in the Social Security Act but a right or interest in the principal home is synonymous with a right or interest in real property ( Delos Reyes and Secretary, Department of Social Security (1993, supra p 290; Re Schultz and Secretary, Department of Family and Community Services [2003] AATA 770 ; 2003 76 ALD 247); an interest in property is a right of a proprietary nature not a mere personal right ( Delos, p 291); a person occupying a property even under a tenancy at will with no written agreement is to be regarded as having an interest in real property and not simply as having rights under a contract and such an interest is a 'right or interest in a residence' for the purpose of the section ( Re Johnston and Repatriation Commission (31 May 1994, AAT, Full Tribunal, unreported No. 9508); a tenancy at will is enforceable at equity and confers an interest in real property which represents a right or interest under the section ( Koch and Secretary, Department of Family and Community Services [2002] AATA 407 ; (2002) 68 ALD 651 at p 655 [18]); lessees under a written lease for three years with two 5 year options from a company controlled by the lessees enjoyed a right of interest under the Act ( Re Secretary of Social Security and Williams (1998) 52 ALD 418); established legal relationships put in place by an applicant should be given their real legal effect in determining whether an unpaid loan to a trustee of a discretionary trust should be brought to account as an asset of a claimant ( Re Schultz ). During that period, the tenancy was oral, entirely undocumented as to any terms but evidenced in relation to payment by the arrangement Mr Vanderpluym put in place for a real estate agent to receive payment of the rent by cheque. 51 The arrangement giving rise to occupation of the residence was familial in the sense that Mr Vanderpluym was the sole director and sole shareholder in MMPL with the result that both Mr and Mrs Vanderpluym knew that the weekly tenancy of the principal home would not be brought to an end unless Mr Vanderpluym presumably with the active engagement of Mrs Vanderpluym chose to do so. In fact, they resided in the home until transfer of title on 15 April 2001 and thereafter. Section 11(4)(b) defines a homeowner for the purposes of the Social Security Act and plainly enough a homeowner is not simply a person who has indefeasible title to land upon which a residential principal home stands. The section seeks to plot a point on a continuum of possible rights or interests that might be held by a relevant applicant person. 52 It is important to remember that the section speaks of a right or interest in a residence which is the person's (or partners) principal home in part at least for the statutory role of determining whether that principal home at which parenting occurs is to be excluded from consideration in calculating asset values for eligibility for a partnered parenting allowance. The Social Security Act recognises that a person's tenure (that is, the conditions under which the principal home is held or occupied) takes many forms with differential degrees of security or continuity of assured occupation. Accordingly, the critical matter is whether the right or interest whatever it may be, gives (that is, is the source of) reasonable security of tenure in the home being the principal place of parenting activity. 53 Accordingly, a consideration of the nature of, for example, an 'estate or interest in land' the subject of consideration in Stow v Mineral Holdings (Australia) Pty Ltd (1977) 14 ALR 397 at pp 404-411 for the purposes of the Mining Act 1929-1958 (Tas) may not usefully inform the scope or breadth of construction of the terms right or interest in a residence comprising a principal home for the purposes of the Social Security Act . 54 Analytically, the first step is to identify whether the applicant enjoys a right or interest (either directly or by reason of the right or interest of that person's partner) in a residence that is a principal home. In this case, Mr and Mrs Vanderpluym assumed exclusive occupancy of the residence as their principal home in the circumstances previously described. They were weekly tenants under an oral undocumented arrangement made with a landlord controlled by Mr Vanderpluym. 55 No assurance of land is valid to pass an interest at law unless made in writing signed by [MMPL] (s 10(1) , Property Law Act 1974 (Qld) ('PLA')) although s 10(1) , PLA, does not apply to a lease or tenancy not required by law to be made in writing (s 10(2)(c) , PLA). No interest in land can be created by parol except by writing signed by the person creating the interest, by will or by operation of law (s 11(1) , PLA). Any interest in land created by parol and not put in writing and signed by the person creating the interest takes effect as interests at will only (s 12(1) , PLA). Nothing in the PLA affects the creation by parol of a lease taking effect in possession for a term not exceeding three years (s 12(2) , PLA). In a lease of premises principally for the purpose of human habitation for a term of three years or any lesser period, the lessor shall provide and maintain the premises in a condition reasonably fit for human habitation (s 106(1)(a)). Although the terms lease, lessor and lessee are defined terms for the purposes of Division 3 of Part 8 of the PLA in dealing with relief from forfeiture, those terms are not generally defined in the PLA. Sections 130 , 131 , 132 and 133 of the PLA deal with the termination of tenancies. Section 133 of the PLA provides that one week's notice to terminate a weekly tenancy must be given by the landlord to the tenant. 56 Residential tenancies are also regulated by the Residential Tenancies Act 1994 (Qld). A lessor is a person who grants a right of occupancy of residential premises to another (a tenant --- s 9(1)) under a residential tenancy agreement (s 4(1)). Residential premises are premises used or intended to be used as a place of residence (s 6). A residential tenancy is a right to occupy residential premises under the tenancy agreement (s 7). A residential tenancy agreement is an agreement whether wholly oral, wholly written or wholly implied under which a person grants another a right to occupy residential premises as a residence whether or not the right is one of exclusive occupation (s 8(1) , (2) and (3)). The lessor must take reasonable steps to ensure that the tenant has quiet enjoyment of the premises (s 101(1)) and the lessor's agent must not interfere with the reasonable piece, comfort or privacy of the tenant in using the premises (s 101(2)). The lessor must ensure that the premises and inclusions are clean, fit for the tenant to live in and are in good repair (s 103(2)(a) , (b) and (c)). The lessor must ensure that the premises remain fit for the tenant to live in and that the premises and inclusions are maintained in good repair (s 103(3)(a) and (b)). The lessor must also ensure that any law dealing with issues concerning the health or safety of persons using or entering the premises is complied with (s 103(3)(c)). 57 Accordingly, s 106(1) of the PLA and ss 103(2) and (3) of the Residential Tenancies Act 1994 give rise to obligations upon the lessor which are enforceable by remedial action against the landlord. Leaving aside the symmetrical relationship between the landlord and tenant in this case which presumably would give rise to circumstances where no question of relief at the suit of the tenant would actually arise, it may be that in the relevant circumstances a court might grant equitable relief in the form of an injunction to restrain a contravention by a landlord of an obligation arising under the above provisions whether such obligations are characterised as implied terms of the relevant agreement or statutory obligations. 58 Section 11(4)(b) of the Social Security Act contemplates a point on a continuum of possible rights or interests. An applicant may be a registered proprietor; a beneficiary under a unit or discretionary trust; a party with the benefit of an agreement for lease for three years or more; a lessee under a registered lease pursuant to such an agreement; a lessee occupying premises pursuant to such arrangements where the lease has not been registered by the lessor; a lessee under an unregistered short term lease for a period of less than three years; a tenant under a written tenancy agreement for a fixed term; a weekly tenant under a written agreement or a weekly tenant under oral arrangements with no fixed term and no terms other than those implied by law. In the last case, the measure of the right or interest enjoyed by the applicant tenant might simply be a right to remedial relief in aid of occupation of the premises to restrain a breach of an obligation implied by law and in that sense the tenant might enjoy an equitable interest. Of course, vesting property (land and a residence) in a company or, for example, a corporate trustee of a discretionary trust coupled with a tenancy agreement conferring occupation in favour of a pension applicant related to the shareholders or directors of the entity has the apparent structural advantage of placing ownership of the home at arms-length yet retaining security of tenure in the home so as to enable a pension applicant to say that he or she is not, in orthodox terms, a homeowner and therefore entitled to a higher assets value limit for the calculation of the relevant pension entitlement. The social policy of the Social Security Act is to adopt a broad notion of 'homeowner' by s 11(4)(b) so as to ensure that those applicants (or their partners) who have a right or interest in a residence which gives reasonable security of tenure in the home are to be treated as homeowners for the purposes of calculating assets value limits and thus pension entitlements. 59 In this case, Mr and Mrs Vanderpluym enjoyed exclusive occupation or exclusive possession of the residence and in that sense occupied the premises under a lease ( Radaich v Smith [1959] HCA 45 ; (1959) 101 CLR 209; Street v Mountford [1985] UKHL 4 ; [1985] AC 809; Harris v Northern Sandblasting Pty Ltd [1995] Aust Torts Rep 81-365 per McPherson JA). The weekly tenancy arrangement coupled with occupation and payment of rent gave rise to an equitable interest in the sense that the tenant could secure an order for an equitable remedy in support of a tenancy at common law ( Chan & Anor v Cresdon Proprietary Limited [1989] HCA 63 ; (1989) 168 CLR 242). 60 Section 11(4)(b) of the Social Security Act contemplates an 'interest' which is either a legal or an equitable interest. However, the reference to the term 'right' also contemplates a class or species of 'right' which may not necessarily involve a legal or equitable interest in the residence. Although it might be difficult to identify a right of occupation of a residence which fails to give rise to a remedial entitlement in equity in respect of a breach of an obligation on the part of the landlord (either by injunction or a right to specific performance subject to discretionary factors), a contract which gives rise to bare 'rights' in a person in respect of a residence which is a principal home of a person who is an applicant for a parenting pension, creates rights (that is, personal rights) for the purposes of the section. Accordingly, having regard to the objectives of the Social Security Act and the disjunctive reference, the term 'right' is not to be read in a way which is simply a synonym for 'interest' which comprehends a legal or equitable interest in the residence. The balance the legislation seeks to strike in determining whether an applicant is a homeowner in respect of a principal home is achieved by the application of the second limb of s 11(4)(b) which asks the question whether such a right 'gives' to the person with that right, reasonable security of tenure in the home. The same question is asked in respect of a legal or equitable interest. The different character of the right or interest will inform the objective assessment of reasonable security of tenure in the home. 61 To the extent that the right enjoyed by the relevant applicant is an attenuated personal right in the sense that it is a right derived from a contract or licence and not necessarily a right measured in terms of a legal or equitable 'interest' in the residence attached to the land, it would be difficult to envisage circumstances in which such an attenuated right could give reasonable security or continuity of assured occupation. It is the conjunction of the character of the right or interest and the circumstances in which it arises that conveys an objective sense of whether the right or interest confers reasonable security of tenure in the home. However, in this case, Mr and Mrs Vanderpluym enjoyed an equitable interest in the residence in circumstances where they could hold no doubt as to the assured continuity of occupation of the home. The symmetrical relationship between the landlord and the tenant in the sense that either Mr Vanderpluym or Mrs and Mrs Vanderpluym by consensus controlled both the occupation of the premises and the conduct of the landlord makes it clear that Mrs Vanderpluym enjoyed a very high threshold of security of tenure in the residence as principal home. There can be no doubt that Mrs Vanderpluym was at all relevant times a homeowner for the purposes of s 11(4)(b) of the Social Security Act . 62 Accordingly, the value of that interest was properly excluded from consideration in determining the assets value limit applicable to Mrs Vanderpluym and by reason of her position as a homeowner, the assets value limit applicable to Mrs Vanderpluym was the lower assets value limit prescribed by s 500(Q)(3) of the Social Security Act . 63 Section 500Q(4) provides that if a person is partnered, the value of the person's assets includes the value of the partner's assets. Section 1122 provides relevantly that if a person lends an amount, the 'value of the assets' of the person includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan. Mrs Vanderpluym did not lend money which remained unpaid to her. However, Mr Vanderpluym lent money to MMPL which at the relevant date remained unpaid and which is an asset of his, as 'asset' means 'property' (s 11(1) , Social Security Act ) and thus the value of that asset is to be included in the value of Mrs Vanderpluym's assets. 64 However, Mrs Vanderpluym says that the debt due to Mr Vanderpluym ought not to be included in the value of her assets for the purposes of the assets value limit because the debt represents, in truth, the value of the residence and since a purposive construction ought to be adopted to the Social Security Act , the corporate veil or corporate identity of MMPL should be stripped away with the result that the value of the debt should be disregarded otherwise the very purpose of excluding the value of the right or interest of the applicant in the residence as principal home would be defeated by including the debt drawn down by MMPL from Mr Vanderpluym in order to build the home. Secondly, Mrs Vanderpluym says that the debt due to Mr Vanderpluym bears the character of a secured interest by way of an equitable lien and is thus an 'interest' in the residence held by Mr Vanderpluym that is, in turn, the source of Mrs Vanderpluym's (and also Mr Vanderpluym's) reasonable security of tenure in the home. Accordingly, by operation of s 1118(1)(b) , the value of that interest ought to be treated as an excluded asset. 65 In relation to the first matter, it seems to me that the proper approach is to give voice to the legal relationships established by the claimant and Mr Vanderpluym. In this case, Mr Vanderpluym chose to establish an independent entity, MMPL; Mr and Mrs Vanderpluym chose to vest title to the land in that company; Mr Vanderpluym elected to make advances (loans) to MMPL in connection with the construction of the residence and for other purposes of MMPL and upon completion Mr and Mrs Vanderpluym chose to become the weekly tenants of MMPL and pay rent to the company through a real estate agent. Although I have been referred to a range of cases in relation to the purposive construction adopted in relation to workers' compensation legislation as an analogue of a purposive approach appropriate to the construction of the provisions of the Social Security Act , there seems to be nothing inconsistent with the objects sought to be achieved by the Social Security Act in recognising that consistent with s 1118(1)(b) the right or interest of Mrs Vanderpluym (and her partner) in the residence as principal home ought to be disregarded in the calculation of the assets value limit on the one hand and the inclusion within the assets value limit of Mrs Vanderpluym of the value of the debt due to Mr Vanderpluym, on the other. That result is precisely the statutory result s 1122 of the Social Security Act seeks to achieve. 66 Accordingly, I see no basis for disregarding the corporate personality of MMPL or in treating the legal arrangements expressly put in place by Mr and Mrs Vanderpluym as something else or disregarding the unpaid due debt to Mr Vanderpluym reflected in the balance sheet of the company, as an asset of Mr Vanderpluym for the purposes of s 1122 of the Social Security Act , subject to [69] and [70]. 67 As to the second proposition, it is true that on the facts as found by the AAT, Mr Vanderpluym made advances to MMPL in connection with the construction of the residence and for some other purposes of MMPL. It seems to me that the symmetrical relationship as discussed previously between Mr and Mrs Vanderpluym and MMPL is the source of the high threshold of objective security or continuity of assured occupation of the residence. It is not the fact of the loan or sequence of advances to MMPL by Mr Vanderpluym resulting in the balance sheet debt to Mr Vanderpluym that is the source of Mrs Vanderpluym's reasonable security of tenure in the home. That objective degree of reasonable security is in part a result of the tenancy arrangement between the company and Mr and Mrs Vanderpluym. The assurance in the security and continuity of the arrangements derives from Mr Vanderpluym's control of the landlord with the result that all that was required to give reasonable security of tenure in the home was an oral weekly tenancy. The debt due to Mr Vanderpluym, the capacity to call up that debt and any rights derived by reason of the loan arrangement did not give the reasonable security of tenure contemplated by s 1118(1)(b). No doubt, Mr Vanderpluym would never have lent money to an entity he did not control especially in respect of the construction of a residence on land conveyed by Mr Vanderpluym and his wife to that entity. Although those events explain the willingness to make the loan it is not the source of the reasonable security of tenure contemplated by the section. 68 However, a more fundamental difficulty arises in relation to s 1118(1)(b) and it is this. There is little in the facts as found by the AAT which suggests an equitable lien in Mr Vanderpluym in respect of the loans made to MMPL. Mr Vanderpluym has no expressly identifiable right or interest in the residence other than by reason of the tenancy arrangement coupled with exclusive occupation. So far as the debt is concerned which is sought to be disregarded in the calculation of the assets value limit, the argument proceeds on the footing that the value of the interest ought to be disregarded because it represents a right or interest by way of a charge in the form of an equitable lien both as to the initial $50,000.00 being the value of the land transferred to MMPL and further advances made by Mr Vanderpluym to MMPL. By reason of that equitable lien, Mr Vanderpluym says that his interest as equitable chargee is within the scope of s 1118(1)(b). There is nothing in the facts found by the AAT which suggest that advances or loans made by Mr Vanderpluym to MMPL were to be a charge upon the company or any particular asset of the company such as the residence. In oral submissions the Secretary accepted that the facts found by the AAT give support, in part, to the contention of Mrs Vanderpluym to the extent that by reason of the transfer of the land to MMPL in circumstances where no payment or other value was received by the transferor, a resulting trust arose such that Mr and Mrs Vanderpluym remained the beneficial owners of the land held upon trust by MMPL. The Secretary says that the scope of any such resulting trust was the creation of a beneficial interest in the land to the extent of the unpaid purchase price ($50,000.00) described by the Secretary as a purchase price resulting trust. Mrs Vanderpluym goes further and says that each subsequent advance made by Mr Vanderpluym to MMPL to enable the residence to be constructed (approximately $195,000.00 of the total advances recorded at 30 June 2000, $239,526.00) is the subject of the equitable lien. 69 An equitable lien is a right against property, real or personal, arising by implication of an 'equitable doctrine' applicable to the circumstances of the case. The right, although called a lien, is a form of equitable charge over the particular property enforceable in the same way as any other equitable charge such as the appointment of a receiver for the sale of the asset pursuant to court order. The lien automatically arising by operation of law secures the discharge of an actual or potential indebtedness. Although the best known examples of an equitable lien arise in circumstances where parties are in a contractual or quasi-contractual relationship such as a lien in favour of a vendor to secure payment of the balance purchase price or a lien in favour of a purchaser to secure repayments of instalments of a purchase price repayable when the contract has failed, an equitable lien arises more broadly in support of an obligation recognised in equity ( Hewett & Ors v Court & Anor [1983] HCA 7 ; (1983) 149 CLR 639 per Deane J at p 663 and per Gibbs CJ at pp 645, 646). An equitable lien is properly understood as a positive right to obtain a remedial order for the sale of the subject property or for actual payment from a subject fund rather than a negative right of retention of a legal or equitable interest in the subject property ( Hewett v Court per Deane J at p 664). 70 In this case, I accept that the circumstances of the transaction for the transfer of the land by Mr and Mrs Vanderpluym to MMPL gave rise to a resulting trust and an equitable lien arises by implication of that equitable doctrine to secure the discharge of the obligation upon MMPL to account to the transferor for the value of the land at the date of transfer. However, having regard to the findings of fact by the AAT, Mr Vanderpluym chose to make advances to MMPL and entered into a debtor/creditor relationship. No doubt, as indicated previously, Mr Vanderpluym felt secure in the repayment of that debt either because he controlled MMPL or because upon completion of the construction he had in mind the transfer of the land and residence to him and his wife in discharge of the debt due to him and in discharge of the obligation upon MMPL to account for the purchase price being the value of the land at the date of earlier transfer ($50,000.00). There is nothing in the facts which suggest that the land was to be charged with the burden of the repayment of the debt to Mr Vanderpluym and nor does an equitable lien arise out of the circumstance that Mr Vanderpluym acted as a lender to MMPL. A debtor/creditor relationship does not give rise to an equitable lien and the circumstances of this transaction make it clear that Mr Vanderpluym was simply acting as an unsecured lender to MMPL. 71 The Secretary says that if the true character of the transaction between Mr and Mrs Vanderpluym and MMPL gave rise to a resulting purchase price trust enlivening a resulting beneficial interest in the land in the transferor, the transaction is not, to that extent, one of lender/borrower for the purposes of s 1122 and the obligation upon MMPL to pay the transfer purchase price does not amount to a remaining unpaid loan within the section. 72 As to the initial $50,000.00, I accept that submission. Accordingly, that sum ought to be excluded from the assets of Mr Vanderpluym and thus excluded from the assets value limit calculation applicable to Mrs Vanderpluym. As to the monies lent by Mr Vanderpluym to MMPL being the further advances, the remaining unpaid amount of those loans properly forms part of the assets of Mr Vanderpluym and is properly brought to account within the assets value limit calculation applicable to Mrs Vanderpluym. 73 The final matter involves the question of the waiver of all or part of the debt sought to be recovered by the Secretary upon the grounds said to enliven s 1237AAD of the Social Security Act . A part of that argument involves the notion that by reason of the abolition in Queensland of the concept of a vendor's lien by reason of s 191 of the Land Title Act 1994 (Qld), Mrs Vanderpluym is disadvantaged in treatment under the legislation as compared with citizens in other places because, but for abolition, a vendor's lien would have arisen in the circumstances and the entirety of the advance by Mr Vanderpluym to MMPL would have been an excluded asset pursuant to s 1118(1)(b). The abolition of a vendor's lien does not carry with it the abolition of an equitable lien as a charge in aid of an equitable obligation. I have found that no equitable lien arises on the facts found by the AAT other than in relation to an equitable lien in support of the beneficial interest of Mr and Mrs Vanderpluym arising under the resulting trust in respect of the value of the land at the date of initial transfer ($50,000.00). Accordingly, I am not satisfied that special circumstances have been made out for the purposes of s 1237AAD of the Social Security Act . 74 Accordingly, I propose to make the following orders pursuant to s 44(4) and (5) of the AAT Act . 75 First, the appeal is allowed. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | social welfare and services consideration of the construction to be adopted in relation to the term 'homeowner' for the purposes of the social security act 1991 (cth) and related provisions consideration of the extent to which particular 'rights' or 'interests' satisfies s 11(4)(b) and s 1118(1)(b) of the act. administrative law |
2 The background to the relevant legislation has already been dealt with by me in earlier proceedings involving the parties: see Toohey v Tax Agents' Board of Victoria (2007) 67 ATR 522. Therefore, the Board is required, in essence, to consider and determine whether the applicant is the prescribed fit and proper person. In determining the matter, the Board is directed by the legislature that a disqualifying factor for a person not being the prescribed fit and proper person is, relevantly, if the person is not of 'good fame, integrity and character': s 251BC(1)(d). This appeal does not require a consideration of the elements of whether or not a person is the prescribed fit and proper person, although the generality of the phrase 'good fame, integrity and character' is not to be limited by reference to whether the applicant has certain disqualifying convictions or is under sentence of imprisonment (see s 251BC(2) of the Act). The enquiry is whether the applicant is the prescribed fit and proper person, and the disqualifying factors set out in s 251BC(1) do not limit the generality of that enquiry (see s 251JC(1)) , although it may well inform that inquiry. The fact that a person is not of good fame, integrity and character means that that person cannot be regarded as the prescribed fit and proper person. However, even if this or other disqualifying factors do not apply, the applicant may still not satisfy the Board that he or she is the prescribed fit and proper person. If not satisfied, the Board 'shall refuse' to re-register the applicant: s 251JC(2). 10. The provisions of s 251BC(3) do not detract from this ultimate issue of whether the applicant is the prescribed fit and proper person, and should not be confused with it. Pursuant to s 251BC(3) , in the course of deciding the ultimate issue, certain matters may be disregarded because of special circumstances. Once disregarded, those matters are no longer considered in the enquiry, and then a decision as to whether the applicant is the prescribed fit and proper person is made by the Board. If a conviction, act or omission of the applicant is not disregarded, it will need to be assessed, along with other factors, in order to determine whether the applicant is a fit and proper person if that inquiry can still be made where the disqualifying factors do not apply. It may well be that a particular conviction (other than a disqualifying conviction) is to be taken into account and not 'disregarded', but that, for one reason or another, taking into account all the circumstances, the Board may still be satisfied that the applicant is the prescribed fit and proper person. Again, of course, it is clear that if there is a disqualifying factor, there cannot be a finding in favour of the applicant allowing re-registration. 12. The other matter to observe is that the relevant time for the assessment of whether a person is the prescribed fit and proper person, is at the time of the relevant determination. This is made clear by the Act itself, for it is in considering the application that the Board needs to be satisfied that the applicant is the prescribed fit and proper person. I note the Act specifically uses the present tense. There is no express or implied legislative indication which provides for the assessment of the facts at any other particular date. I refer also to A Solicitor v Council of the Law Society (NSW) [2004] HCA 1 ; (2004) 216 CLR 253 at 268. 13. In view of s 43(1) of the AAT Act, where the matter comes before the Tribunal, the Tribunal must be satisfied that the applicant is the prescribed fit and proper person at the time of the Tribunal's determination. In reaching its decision, the Tribunal should consider for itself, as though it was performing the function of the relevant decision-maker, whether the applicant has satisfied the Tribunal he or she was the prescribed fit and proper person. 4 The ultimate issue before the Tribunal was, again, whether the appellant was a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters. The real issue before me was whether the Tribunal properly, as a matter of law, applied the relevant provisions of the Act. 5 As I pronounced on 13 October 2008, after hearing oral submissions, in my view the Tribunal did not approach the matter correctly by properly applying the relevant provisions of the Act in considering the ultimate issue, and I propose to order that the appeal be allowed. 7 From the outset I acknowledge that the Tribunal did discuss the ultimate issue of whether the applicant was the prescribed fit and proper person. Further, the Tribunal did carefully consider the appropriate date at which it needed to consider the question before it, and the issue of 'special circumstances'. On the question of the appropriate date, the Tribunal dealt with the two possibilities separately (perhaps unnecessarily), and made findings for each accordingly. We now have the advantage of the decision in Shi v Migration Agents Registration Authority [2008] HCA 31 ; (2008) 248 ALR 390 , concerning the relevant time of assessment. As to the question of 'special circumstances', this was a matter of evaluation and factual analysis, upon which the Tribunal was entitled to make its 'factual classification' in the way it did: see Vetter v Lake Macquarie City Council [2001] HCA 12 ; (2001) 202 CLR 439 , 477-78 at [108] per Hayne J. I find no error of law in the way the Tribunal approached these matters. 8 However, when the Tribunal came to consider the ultimate issue, in my view, it failed to take into account all the material concerning the ultimate issue, did not place that material in the context of the matters relied upon by the appellant, and failed to make the evaluation necessary to determine whether the appellant was the prescribed fit and proper person. I have already summarised some of the cases that have considered what it means to be a 'fit and proper person'. I accept that Mr Toohey has always tried to do his best by his clients. Even though I accept his evidence that none of his clients has ever complained about him, I also find that his lodgement rate, at least in the 2002 year, was significantly below the national average. That finding is based on the ATO's records but is supported to some extent by a note of a comment made by Mr Toohey himself regarding the penalties imposed on his clients and his inability and their unwillingness to pay them. 157. I also accept that Mr Toohey has always tried to put his clients' interests above his own. That is so even when his health prevented him from devoting a great deal of attention to his practice. From one point of view, this is a very noble and proper thing to do. The difficulty that I have with his having done so is that he has done so at the expense of his duty to comply with his obligations to file returns for which he was personally responsible. Even more importantly, he has done so on the basis of his assessment of what his obligations to the Commissioner were. That is to say, he made the assessment that he would have little, if any, tax owing in most circumstances and used his assessment of his situation as a reason for failing or omitting to lodge the various returns. His decision to do that was to take from the Commissioner what was the Commissioner's to decide. Even with his self-assessment, it is for the Commissioner to decide what he will audit and what he will not and what tax he assesses as payable. He can only make his choice as to whether to audit or not to audit when a taxpayer has lodged a return. Mr Toohey's reasons showed a lack of understanding of the reason for lodgement. It also showed that he was not prepared to honour the relationship of trust that must necessarily exist between a tax agent and the Commissioner. Members of the public are entitled to expect that a tax agent will comply with his or her obligations in relation to his or her personal affairs. That is an important indication of whether they can have confidence that the person to whom they entrust their affairs will be careful to ensure that they meet their obligations. 158. Mr Toohey's putting his clients' interests above his own was not entirely altruistic as first appears. He acknowledged that he did so in order to generate income but, in doing so, he again showed that he did not understand his personal obligations or the relationship of trust that existed between him as a tax agent and the Commissioner. 159. Mr Toohey's dealings with the Board merely underline what I find to have been his attitude to the Commissioner. I have no doubt that his depression made it very difficult for him to function at times but even in the period in 2003 when he felt that he had recovered, he did not attend to addressing his outstanding obligations to either the Board or the Commissioner. Given the ongoing correspondence and telephone calls, I find his request to the Board on 7 July 2004 for particulars of its concern a little surprising. Not only should he have been aware of the nature of the Board's concern from their previous communications but, as a tax agent, they should have been patently apparent to him. 160. I look forward to events between the date of the Board's decision and my decision, I must have regard to Mr Toohey's failure to lodge returns for the 2006 year indicates that he has not learned to manage his professional affairs so that he can meet his obligations despite the difficulties that we all face. Certainly, Mr Toohey has had his share of difficulties but, whether I consider the matter at the date of the Board's decision or the date of my decision, I have decided that Mr Toohey is not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters. 10 In considering the approach of the Tribunal, the Tribunal's reasons must be read as a whole and fairly. I accept that I should not be concerned with looseness of language, nor review the Tribunal's reasons with an 'eye keenly attuned to the perception of error': Politis v Federal Commissioner of Taxation (1988) 20 ATR 108 , 111; Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322 ; (1993) 43 FCR 280 , 287. 11 Undoubtedly, the Tribunal set out the legislative framework, including s 251JC(1)(a)(i), which stated the ultimate issue. The Tribunal noted that s 251BC(1) does not limit the generality of the expression 'fit and proper person', but provides circumstances in which a person is not a fit and proper person. I will begin with that although I recognise that I must ultimately consider what is required of a "fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters" within the meaning of s 251JC(1)(a)(i). 13 The Tribunal then considered the meaning of 'fit and proper person' in a variety of contexts. 14 After considering whether any special circumstances existed, and whether by reason of any such special circumstances any act or omission of the applicant should be disregarded, the Tribunal then directed itself to the ultimate issue at [156]-[160] (as set out above). 15 I accept that the Tribunal set out the relevant conduct of the appellant (at [46]-[53] of its reasons), and that it summarised the evidence adduced by the appellant to explain that conduct (at [76]-[85] of its reasons). 16 However, in my view, the Tribunal did not approach the ultimate issue in the way I described the task in my earlier decision and in accordance with the approach necessary in evaluating whether the appellant was a fit and proper person. In determining whether a person is a fit and proper person the enquiry is directed not only to whether improper conduct has occurred, but whether it is likely to occur again, and whether the community will have confidence that it will not occur. This will involve an evaluation of character and reputation: see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 , 380 per Toohey and Gaudron JJ. The Tribunal should have considered and, more importantly, evaluated all the material which was raised as to 'special circumstances' in the context of a separate and ultimate enquiry of whether the appellant, at the time of the Tribunal's decision, was the prescribed fit and proper person. 17 In my view, the Tribunal did not undertake this task in the passages referred to above where it purported to consider the ultimate issue. To say, for example, as the Tribunal did, the appellant's explanations 'showed a lack of understanding of the reason for lodgement' of tax returns may be accepted, but this needs to be placed in the context of the evidence as to his health and general circumstances at the time, and in the context of the evaluation referred to in Australian Broadcasting Tribunal 170 CLR 321. While the Tribunal had previously accepted the appellant's medical condition proved debilitating over the years, the required evaluation necessarily involves looking at both past conduct and likelihood of future conduct, and this evaluation was simply missing from the Tribunal's analysis. The general references back to evidence and principles of law did not equate to an evaluation of the evidence in this context of the ultimate issue. 18 While the main criticism of the reasoning of the Tribunal is the lack of evaluation, there are references made in the reasoning that indicate a failure to focus on all the relevant circumstances up to the Tribunal hearing date. The Tribunal specifically referred to matters which occurred many years ago. There was a reference to the lodgement rate ('at least in the 2002 year' (at [156] of the Tribunal's decision)), correspondence on 7 July 2004 (at [159]), and conduct in 2003 (at [159]). No attempt was made to put these events in context, nor to consider them in the context of later events and circumstances. 20 I have considered further the position regarding the appropriate disposition of this proceeding on the basis that the appeal be allowed. The appellant has filed supplementary submissions dated 20 November 2008 in relation to this matter. 21 The appellant desired that I determine the ultimate issue myself. The appellant relied on the approach taken in Statham v Federal Commissioner of Taxation (1988) 20 ATR 228. The question for determination in Statham was strikingly different from the question whether a person is the prescribed fit and proper person. As I have said, the determination of this issue involves an evaluation of many factors. Such an evaluation is quite different from determining the application of s 25(1) or s 26(a) of the Act to undisputed facts as was the case in Statham . To proceed in the way now pressed by the appellant would require an assessment of the appellant, and I have not had the advantage of seeing him in the witness box, being able to ask questions of him, or to make a proper evaluation of the type the relevant provisions require. 22 The appellant pressed that I could receive further evidence from the appellant, and then determine the matter of whether he is the prescribed fit and proper person. It was submitted that it was convenient and appropriate that I make whatever further findings of fact necessary, and take into account any further evidence of the appellant. 23 The appellant further contended that he would not be able to afford legal representation should the matter be remitted, and there would be an unacceptable delay if the matter were remitted. 24 Whether heard in this Court or not, the question of the non-availability of legal representation and delay are inevitable matters to arise. The business of the Court will not permit an expedited hearing before me. Further, to make the necessary evaluation, the appellant would need to give evidence, as I do not regard the existing findings referred to in the appellant's supplementary submissions as necessarily leading to the appellant's desired result. At the very least, the evidence before the Court would need to include material relevant to the current position of the appellant. Whether the matter proceeds before me or the Tribunal, the hearing process is likely to be of a similar dimension. The purpose of that hearing would be for you to receive further submissions as to whether sufficient evidence already exists, and what if any further evidence particularly is required, for your Honour to make the Determination whether the Applicant is a fit and proper person for the purposes of section 251JC(1)(a)(i) of the 36Act, and if so, the consequential order that the Respondent re-register the Applicant as a tax agent. 26 I do not consider that a further hearing would be useful given my preferred approach as indicated above. As I have said, for a proper evaluation to be made of the appellant, an assessment would need to be made of him, which cannot be undertaken by me on the available material. 27 A compromise could be reached by the parties, and that would be to remit the matter to the same Tribunal (before Deputy President Forgie), for reconsideration of the question in accordance with these reasons. I would only do this if the parties agreed, but it could reduce the time and expense of any re-hearing and possibly achieve the process that the appellant desires. The Orders I make will allow for this eventuality. 28 Despite the history of this proceeding, in my view, it would not be convenient or appropriate for the Court to finally dispose of the matter in accordance with the power under ss 44(4) , 44 (5), (7) and (8) of the Administrative Appeals Tribunal Act 1975 (Cth) and the approach taken in Statham 20 ATR 228. I propose to make an order for remittal to the Tribunal. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | appeal from decision of administrative appeals tribunal where applicant's application for re-registration as a registered tax agent refused under s 251jc of the income tax assessment act 1936 (cth) where tribunal failed to correctly apply test under s 251jc where tribunal failed to correctly evaluate evidence when considering whether tax agent was a fit and proper person administrative law |
He brings this proceeding under s 49 for the imposition of penalties against the Construction, Forestry, Mining and Energy Union and Bob Mates for alleged breaches of ss 38 and 43 . Mr Mates was, at all times material to this proceeding, an employee and officer of the Union. The alleged breaches relate to conduct in 2006 at a building site at 90-100 Mount Street, Heidelberg, Victoria. The proceeding has had an eventful history. The trial began on 14 July 2008. Numerous rulings were called for and made. On 17 July 2008, the Union and Mr Mates applied for leave to make a no-case submission and contended that they should not be required to make an election as to the calling of evidence. On 18 July 2008, they were granted leave to make their no-case submission upon the basis that I deferred ruling on whether they should be put to their election until after I had heard further argument. The no-case submission made by the Union and Mr Mates related to only part of Mr Cahill's case --- being the contraventions that he alleged because of their conduct on 21 and 22 February 2006 and following. As discussed below, Mr Cahill also alleged contraventions based on the Union's and Mr Mates' alleged conduct on 15 and 17 February 2006. These alleged contraventions were not covered by the no-case submission. The no-case submission had two limbs. The first limb concerned the proper construction of the definition of "building industrial action" in s 36(1) of the Building and Construction Industry Improvement Act . The Union and Mr Mates argued that, in order to constitute "building industrial action" within paras (b) and (c) of the definition in s 36(1) , the action in question must be that of employees in respect of their work. It followed, so they said, that there was an evidentiary hiatus in Mr Cahill's case because Mr Cahill had not adduced any evidence that any "ban, limitation or restriction" had been imposed by employees in respect of the work to which the ban, limitation or restriction related: see below at [9]. For the reasons previously stated, however, the Union and Mr Mates failed to persuade me that their construction should be adopted. I accepted that, if there was a ban, limitation or restriction on the performance of building work imposed by a union , then the definition of "building industrial action" might be satisfied: see Cahill v Construction Forestry Mining and Energy Union (No 2) [2008] FCA 1292 (referred to below as "the No-case Ruling") at [59]. Also for the reasons previously given, I was satisfied that it was just and convenient for this ruling to be made without putting the Union and Mr Mates to their election. In the second limb of their no-case submission, the Union and Mr Mates contended that, taken at its highest from Mr Cahill's point of view, the evidence adduced by him did not make out the contraventions of ss 38 and 43 that he alleged in relation to the events of 21 and 22 February 2006 and following. For the reasons previously given, I declined to rule on this part of the no-case submission unless the Union and Mr Mates elected to call no further evidence: see the No-case Ruling at [30] and [60]. They were put to their election, and in respect of all causes of action. On 7 August 2008, the Union and Mr Mates elected not to call any evidence. At a directions hearing on 8 August 2008, I stated that I proposed to deliver my decision on the second part of the no-case submission at the same time as final judgment. It was common ground that the alleged "action" was not excluded action. The employer referred to in paragraphs (a) and (b) need not be the employer whose employees do the work to which the action relates. It was common ground that the Union was "an organisation" for present purposes: see s 4 of the Building and Construction Industry Improvement Act . The term "building employee" is defined in s 4 to mean "a person whose employment consists of, or includes, building work; or ... a person who accepts an offer of engagement as an employee for work that consists of, or includes, building work". A reference to employees includes a reference to future employees: see Schanka v Employment National (Administration) Pty Ltd [2000] FCA 202 ; (2000) 97 FCR 186 at 193 [23] - [24] per Ryan, Lee and Branson JJ. The maximum pecuniary penalty that may be imposed on a body corporate by reason of s 49(2)(a) of the Act is 1,000 penalty units, while the maximum pecuniary penalty that may be imposed on an individual is 200 penalty units. This equates to $110,000 in the case of a body corporate and $22,000 in the case of an individual: see Crimes Act 1914 (Cth), s 4AA. In particular, Mr Cahill alleged that, by their conduct on 15 and 17 February 2006, the Union and/or Mr Mates threatened to take action with the intent to coerce ACN 117 918 064 Pty Ltd trading as Hardcorp: (a) to employ at the Mount Street site the Union's former shop steward (Jason Deans), the former occupational health and safety officer (Roslyn Singleton), and the former FEDFA shop steward (Aengus O'Donnell); and (b) to allocate and/or designate to Ms Singleton the responsibilities or duties of the OH&S officer at the Mount Street site. Mr Cahill further alleged that, by their conduct on 21 and 22 February 2006 and following, the Union and/or Mr Mates organised and took action with intent to coerce Hardcorp at the Mount Street site to: (a) employ Ms Singleton, Mr Deans and Mr O'Donnell; and (b) allocate and/or designate to Ms Singleton the responsibilities or duties of the OH&S officer. The conduct alleged on 21 February 2006 was that Mr Mates: (1) demanded the crane crew attending the site that day to shut down the crane and leave; (2) telephoned the office of the crane company and said that its crew were not to work on the project at Mount Street; and (3) telephoned the Union's offices or a representative of the Union and instructed the person he contacted to instruct Maurie Hill (the Union organiser responsible for mobile cranes in Victoria (FEDFA division)) to ring Sergi Cranes and other crane operators to warn them off working at the Mount Street site. The conduct alleged on 22 February 2006 and following was that Mr Mates organised a picket line at the Mount Street site between 22 February 2006 and 3 March 2006. The balance of Mr Cahill's case was that the Union and/or Mr Mates had contravened s 38 of the Act. Mr Cahill alleged that Mr Mates' alleged conduct on 21 February 2006 and in organising a picket line at the Mount Street site between 22 February 2006 and 3 March 2006 constituted "building industrial action" within the meaning of paras (b) and (c) of the definition in s 36(1) of the Act. These companies were related. Transit Joint Venture was responsible for the construction of 96 residential units on the Mount Street site. The company began the project in December 2003. Transit Joint Venture subcontracted its construction activities through Melbourne Transit, which employed the construction workers for the project. The project at Mount Street was originally to be completed in October 2005. During construction, however, the design was altered, with the result that the completion date was extended to the end of February/ start of March 2006. On 22 December 2005, Melbourne Transit made numerous construction employees redundant, including the twenty-six who had been working at Mount Street. The Mount Street site was closed over part of December 2005 and January 2006. Hardcorp was incorporated on 17 January 2006. Melbourne Transit went into voluntary administration on 25 January 2006. In late January 2006, Transit Joint Venture contracted with Hardcorp regarding the construction work at the Mount Street site. Hardcorp was to supply the building employees for the project, in the place of Melbourne Transit. Hardcorp employees began work at the site in late January or early February 2006. Melbourne Transit went into liquidation on 23 February 2006. Following the events with which this proceeding is concerned, Hardcorp ceased operating sometime in March 2006. Emerald Glen went into liquidation on 23 January 2007. At this meeting, Mr Goss told Mr Mates that the project at the Mount Street site would be recommencing. The parties agreed that Mr Mates and Mr Goss went on to talk about various related matters, but they disagreed about the exact terms of the conversation that day. Mr Cahill alleged that, at the meeting on 15 February 2006, the Union and Mr Mates breached s 43(1)(a) , (c) and (d) of the Building and Construction Industry Improvement Act , because, at this meeting, Mr Mates threatened to take action with the intent to coerce Hardcorp: (1) to employ Mr Deans, Mr O'Donnell and Ms Singleton on the project at the site; and (2) allocate and/or designate to Ms Singleton the duties or responsibilities of an OH&S officer: see [17] of the Statement of Claim. By way of Defence, the Union and Mr Mates denied that Mr Mates made the demands and threats as Mr Cahill alleged: see [14] and [23] of the Defence. At the trial, Mr Goss and Emerald Glen's then office manager, Angela McDonald, gave evidence about this meeting. Their evidence was as follows. In a statement adopted at trial, Mr Goss said that, at this meeting, Mr Mates told him that he wanted the former employees of Melbourne Transit to be re-employed on the Mount Street project. Mr Goss responded that this would not be economically possible because the project was only recommencing and the size of the workforce at that stage was unknown. According to Mr Goss, Mr Mates then affirmed that he wanted Hardcorp to employ the Union's former shop steward (Mr Deans), the former OH&S officer (Ms Singleton), and the former FEDFA shop steward (Mr O'Donnell). Mr Mates added that he wanted the former shop stewards reappointed as shop stewards and Ms Singleton reappointed as the OH&S officer. According to Mr Goss, Mr Mates said that he would not accept anything less than this arrangement. Mr Goss said that he told Mr Mates that Hardcorp would not be employing a crane crew because Hardcorp was going to hire a crane, initially with staff, and then have a crane company use its manpower on a crane belonging to Transit Joint Venture. In this circumstance, there would, so Mr Goss said, be no need for Hardcorp to employ a FEDFA shop steward. According to Mr Goss, Mr Mates said that, if Hardcorp did not agree to employ Mr Deans, Ms Singleton and Mr O'Donnell, the project was "not going to happen". In cross-examination, Mr Goss affirmed that his recollection was that, at this meeting, Mr Mates singled out Mr Deans, Mr O'Donnell and Ms Singleton to be re-employed on the site, although he allowed that the position with respect to Mr O'Donnell might have altered after Mr Goss explained to Mr Mates what was happening with respect to a crane at the site. In cross-examination, Mr Goss also said that, as at 15 February 2006, no OH&S officer had been appointed, although management had taken the view that Robert Van Senten (also known as "Geeza") should have the position. He also said that, as at 15 February 2006, there was no shop steward. As stated above, although not a party to the conversation, Angela McDonald also gave evidence about this meeting. Ms McDonald's uncontested evidence was that she overheard the conversation since she was at the time seated about three metres away from Mr Goss and Mr Mates in Emerald Glen's open plan office. Her account substantially corroborated that of Mr Goss. Her evidence was that Mr Goss began by telling Mr Mates that the project at Mount Street was recommencing, but that only some of the people formerly employed by Melbourne Transit would be required at that stage because the project was just starting up again without there being any need for a full crew. According to her, when Mr Mates asked whether former shop stewards would be reinstated, Mr Goss replied that, since there were only a few men on the site at that stage, he did not believe that a shop steward was required but that he was not averse to the appointment of a shop steward as work progressed. According to Ms McDonald, Mr Mates stressed to Mr Goss that he wanted "my people" --- Mr Deans, Mr O'Donnell and Ms Singleton --- reinstated as a minimum. Ms McDonald stated that Mr Goss told Mr Mates, first, that an employee on site was an OH&S officer and there was no need for another OH&S person; and, secondly, that there would be no need for a FEDFA shop steward because he intended to hire a crane with its own crane crew. It was at this point, on Ms McDonald's account, that Mr Mates said that "he would not accept anything less than having ' my people' back on the site". Ms McDonald stated that Mr Goss would not commit to this, reiterating that he would not rule out having a union shop steward as the employees increased, but he could see no need for a union shop steward at that stage as only preparatory work was being undertaken. Mates then told Goss that 'the trouble you've had over the past 12 or so months, you can expect that to keep going for another 8 or 9 months. Don't think it's going to get better, it's not'. In cross-examination, Ms McDonald affirmed that she was able to recollect the conversation notwithstanding the time that had passed because she found parts of the conversation on 15 February 2006 "intimidating or threatening" and, in consequence, the conversation made an impression on her. Ms McDonald stated that she was "alarmed at what [she] overheard" and shortly thereafter had volunteered to make a statement. Her statement dated 9 March 2006, which she had volunteered to a representative of the Australian Building and Construction Commission in February 2006, was in evidence. This March 2006 statement was consistent with the statement filed in this proceeding. Counsel for the Union and Mr Mates submitted that the evidence of Mr Goss was unreliable. In particular, counsel submitted that Mr Goss's evidence as to the threat allegedly made by Mr Mates on 15 February 2006 was not consistent with the evidence of his behaviour on that and the following day, including that Mr Goss agreed to attend a subsequent meeting with Mr Mates. More generally, counsel for the Union and Mr Mates submitted that Mr Goss was prone to exaggerate in an effort to implicate the Union (for example, in relation to the estimated distance of the coffee shop from the site --- a matter mentioned later). Counsel also attributed a lack of candour to Mr Goss, especially in relation to the payment of subcontractors. Furthermore, counsel maintained that Ms McDonald's description of Mr Mates' behaviour should be discounted, since this was not the sort of conversation that she was used to hearing. Counsel for the Union and Mr Mates argued that the conduct of Mr Goss and Mr Mates was not consistent with the making of a threat. Amongst other things, counsel referred to their agreement on some matters, their conduct towards one another at the end of the meeting, Mr Goss's agreement to meet with Mr Mates again, and the absence of any complaint about Mr Mates' threats at the subsequent meeting. Counsel submitted that the Court should treat the discussion on 15 February 2006 as "no more than a forceful statement from Mates but not one that either Goss or Mates regarded as being an actual threat of action". The events that unfolded in February and March 2006 brought Mr Goss into conflict with the Union, Mr Mates and subcontractors. His business and financial interests were at stake. The failure of Melbourne Transit in early 2006 and the redundancies in December 2005 emphasised that the future of the project at Mount Street appeared uncertain at this time. The change in corporate vehicles in early 2006, from Melbourne Transit to Hardcorp, underscored the risks attached to Mr Goss's situation. Although not a party to the proceeding, it was clear that Mr Goss's interests had been directly and adversely affected by events occurring at the time. I accept that there were instances in Mr Goss's evidence where he appeared to exaggerate the evidence against the Union and Mr Mates. In the course of the trial, Mr Goss was shown to give evidence that was imprecise in some aspects. This imprecision was slanted towards Mr Cahill's case. Further, I accept that, at certain key points, Mr Goss gave evidence that was contrary to the Union and inconsistent with evidence given by other witnesses or not corroborated by them. In these circumstances, I have treated Mr Goss's evidence cautiously. Where, however, his evidence was independently corroborated by other witnesses or contemporaneous documents, it has been more readily accepted. Broadly speaking, I accept the account that Ms McDonald gave of the meeting of 15 February 2006, for the reasons that follow. Ms McDonald was a credible witness. Ms McDonald's recollection of the principal aspects of the conversation of 15 February 2006 was clear and convincing. I do not consider the fact that she was inexperienced in industrial issues to disqualify her from relating what she heard and remembered about the conversation. I accept that, as she said, the conversation between Mr Goss and Mr Mates made an impression on her, which assisted her recollection of it. Further, the notes that Ms McDonald made less than a month after the meeting accorded with her evidence. Counsel for the Union and Mr Mates did not cross-examine her on these notes. These notes contained Mr Mates' threats in quotation marks. For the most part, Mr Goss agreed with Ms McDonald's account. Some differences in their accounts were to be expected. Where, however, the evidence of Mr Goss was inconsistent with that of Ms McDonald, I have preferred the evidence of Ms McDonald to that of Mr Goss. Having regard to the evidence and s 140 of the Evidence Act 1995 (Cth), I find that, at the meeting of 15 February 2006, Mr Mates made demands on Mr Goss that Mr Deans, Mr O'Donnell and Ms Singleton be re-employed at the Mount Street site, and that Mr Deans and Mr O'Donnell be appointed as shop stewards and Ms Singleton be appointed as OH&S officer. All three individuals had previously been employed at the Mount Street site. Further, I find that Mr Mates threatened trouble at the site and that the project was "not going to happen" if his demands were not met. These threats constituted threatening to take action with intent to coerce Hardcorp to employ these three persons on the project at Mount Street and, amongst other things, to allocate to Ms Singleton the responsibilities or duties of OH&S officer on the project as it recommenced. Mr Mates' intent to coerce for a prohibited reason has been established in the manner outlined in the previous decisions of the Court: see Community and Public Sector Union v Telstra Corporation Ltd [2000] FCA 1610 ; (2000) 108 FCR 52 at 61-2 [24] per Ryan J and National Tertiary Education Industry Union v Commonwealth [2002] FCA 441 ; (2002) 117 FCR 114 at 142-143 [102] per Weinberg J. The Union is and was a "building association" within the meaning of s 4 of the Building and Construction Industry Improvement Act . Pursuant to s 69(1)(b) , "the following conduct in relation to a building association is taken to be conduct of the building association ... conduct of an officer or agent of the association acting in that capacity". Mr Mates was an officer of the association (s 69(3)) and acted in that capacity. At trial, counsel for the Union and Mr Mates made no argument to the contrary: see also Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 1188 ; (2000) 100 FCR 530 at [76] - [78] per Ryan, Moore and Goldberg JJ and Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 at [33] per Le Miere J. Mr Mates' conduct is therefore taken to be the conduct of the Union. Should Mr Mates' intent to coerce Hardcorp for a prohibited reason be imputed to the Union? There is a question as to whether Mr Mates engaged in the conduct "within the scope of his ... actual or apparent authority". There is no evidence of the scope of Mr Mates' actual authority. Having regard to the previous dealings between the Union and Mr Goss and his companies, however, and the admissions made by the Union (see [4] of the Defence), I am satisfied that Mr Mates acted within the scope of his apparent authority in respect of his conduct of 15 February 2006: see Hanley 100 FCR at [79]-[85]. In this regard, counsel for the Union and Mr Mates made no submission to the contrary. As already noted, the Union was an organisation for the purpose of s 43(2)(a) and therefore a person to whom the prohibition in s 43(1) might apply. Further, Hardcorp was a constitutional corporation for the purpose of s 43(2)(b) and, therefore, Mr Mates was a person to whom the prohibition in s 43(1) might apply. The latter would also be an alternative basis for supporting the application of the prohibition to the Union. Accordingly, I find that Mr Mates, in his own right, and the Union, through Mr Mates' conduct on 15 February 2006, breached s 43 of the Building and Construction Industry Improvement Act . This time the meeting was at the Union's Melbourne offices. The other people at the meeting were Alex Tadic, Bryan Palmer and Michael Malbourne. Mr Tadic was a CFMEU (FEDFA) organiser. Mr Palmer was a site manager at Mount Street, and Mr Malbourne was a financial executive concerned with the project. Mr Cahill alleged that Mr Mates' conduct on 17 February 2006 amounted to a contravention of s 43 because it involved the Union and Mr Mates again making threats to take action with the intent to coerce Hardcorp to employ Mr Deans, Mr O'Donnell and Ms Singleton; and/or (2) allocate and/or designate to Ms Singleton the duties or responsibilities of an OH&S officer: see [18] of the Statement of Claim. The Union and Mr Mates denied the allegation. The Union and Mr Mates contested Mr Goss's account of the conversation at the 17 February meeting. According to their Defence, in response to Mr Mates' question as to whether Mr Goss was going to re-employ some of the former Melbourne Transit employees, Mr Goss replied to the effect that he was not currently in a position to determine how many employees he needed and would not be able to decide at this point in time. Further, they said that, when Mr Mates raised the issue about the outstanding debts owed by Melbourne Transit to subcontractors, Mr Goss responded that this had nothing to do with him as the debts were owed by Melbourne Transit: see [16] and [24] of the Defence. Only Mr Goss, Mr Malbourne and Mr Palmer gave evidence about the meeting of 17 February 2006. During the meeting, according to Mr Goss's statement, Mr Mates said that, if Hardcorp did not agree to employ Mr Deans, Mr O'Donnell and Ms Singleton on the project and to re-appoint them as shop stewards and OH&S officer respectively, then Mr Mates and the Union would: (1) ensure the project never recommenced; and (2) cause trouble on the site. In cross-examination, Mr Goss rejected the suggestion that there was no discussion at this meeting about the employment of any particular individual. Mr Goss could not recall whether he told Mr Mates that there was already an OH&S representative and shop steward on site. In particular, in cross-examination, Mr Goss said that Mr Mates wanted "his men back on site, his shop steward and his OH&S". According to Mr Goss, Mr Mates also said that "there would be a picket line of subcontractors organised" at the site. Mr Goss also said that, when Mr Mates raised a question about the payment of the outstanding debts owed by Melbourne Transit to subcontractors, Mr Goss responded that this had nothing to do with him as the debts were owed by Melbourne Transit, not Hardcorp, although he would nonetheless attempt to have the debts paid sometime in the future. Mr Malbourne corroborated much of Mr Goss's account. In a statement adopted at trial, Mr Malbourne corroborated Mr Goss's claim that Mr Mates raised two issues at the meeting on 17 February 2006 --- first, concerning the re-employment of former employees and, secondly, concerning the payment of subcontractors. Also according to Mr Malbourne, Mr Goss had said that the payment of debts was not possible as they were owed by Melbourne Transit and not Hardcorp. Mr Malbourne corroborated Mr Goss's evidence that Mr Mates had said the "project would never recommence" if Hardcorp did not re-employ the former shop stewards and the former OH&S representative. So my recollection is very clear. Unless previous employees ... compensation [was] brought up to scratch and the shop steward, and health ... people from the [Union] were reinstated, the job would not recommence. Mr Malbourne made a contemporaneous note of the meeting on 17 February 2006, which was consistent with his evidence. The note referred to two issues --- "re-employment of CFMEU people" and "sub-contractor payments". This statement included that Mr Mates said, at the end of the meeting, that "if Hardcorp did not agree to re-employ as a minimum the shop steward and the health and safety representative, then the Mount Street project would never recommence". Mr Palmer's statement, adopted by him at trial, was to much the same effect. Mr Palmer stated that there was discussion about the debt that Melbourne Transit owed and the re-employment of workers previously employed at Mount Street. Mr Palmer also stated that "there was some further discussion about the position of Shop Steward and OH&S representative" but the issues were not resolved. Those persons were Roslyn Singleton ..., Jason Deans ... and Aengus O'Donnell ... and another ETU shop steward. Goss asked whether he wanted all of them re-employed. Mates replied that the CFMEU did not care about the ETU shop steward, but wanted all the others re-employed. Goss said that we could not afford to do that. I replied that I would have to think about it. While I was considering the pros and cons of re-employing O'Donnell, the meeting was being terminated. Mates made a comment implying that this would be the end of the involvement of [Transit Joint Venture] and Hardcorp on the project at the Mount Street site. I can't remember the words Mates used but it was to the effect the there would be action taken by the CFMEU to cause delays at the Mount Street site. Mr Palmer explained that he had included the reference later in response to questioning by the solicitors for Mr Cahill. The initial omission was perhaps unsurprising, because Mr Palmer could not recall the actual words Mr Mates had used. Further, as appears below, despite some inconsistencies in his evidence, Mr Palmer was a credible witness. There is little to support the allegation of concoction and I would reject it. Counsel for the Union and Mr Mates argued that Mr Goss's evidence about the meeting on 17 February 2006 was unreliable because it was not entirely consistent with the evidence of Mr Malbourne and Mr Palmer. In particular, Mr Palmer's evidence was that Mr Mates' threat could have related to the payment of money owed to the subcontractors. Further, only Mr Goss said that Mr Mates threatened a picket line of subcontractors at the Mount Street site. I deal with this second matter below. I do not consider that anything turns on the first matter. I would not regard Mr Palmer's equivocation as sufficient to undermine Mr Goss's evidence as to whether the threats related to the subcontractors or the re-employment of Mr Deans, Mr O'Donnell and Ms Singleton. Mr Palmer's equivocation showed merely that his recollection of the meeting of 17 February 2006 was incomplete. Mr Palmer gave his evidence in a measured way, with proper attention to what did and what did not lie within his recollection. As I have said, he was a credible witness. Counsel for the Union and Mr Mates also submitted that the Court should view Mr Malbourne's evidence as "highly partisan and tailored to assist Goss in the legal action and it should not be accepted". This is to overstate the deficiencies in Mr Malbourne's evidence. As counsel for the Union and Mr Mates noted, Mr Malbourne was liaising with Mr Goss about this proceeding at the time he prepared an initial witness statement on or about 10 March 2006 and this statement contained some material that was not in the statement he adopted at trial. None of this additional material affected the substance of his account, however, and this account is supported by the note that he made in his diary at the time. Furthermore, I observe that, at the time Mr Malbourne gave his evidence at trial, he was living in Cambodia and no longer working for Mr Goss. Mr Malbourne gave some of his evidence in a roundabout way, but I did not form the impression that he was untruthful. Counsel for the Union and Mr Mates have not pointed to any particular instance where Mr Malbourne was untruthful. Mr Malbourne, Mr Palmer and Mr Goss all gave evidence that, at the 17 February 2006 meeting, Mr Mates referred to the re-employment of former employees and the payment of subcontractors. I accept that these matters were discussed. They are also noted in Mr Malbourne's diary note. Further, I accept that Mr Goss had said that the payment of debts was not possible as they were owed by Melbourne Transit and not Hardcorp. Whilst there are differences in their evidence, the three witnesses agreed in substance that Mr Mates stated that he wanted the former shop steward or stewards (Mr Deans and Mr O'Donnell) and OH&S officer (Ms Singleton) re-employed and appointed to their former positions. Mr Malbourne corroborated Mr Goss's evidence that such re-employment was a condition that Mr Mates put on the project's recommencing. This evidence is also borne out by Mr Malbourne's contemporaneous diary note and his initial witness statement. Mr Palmer's evidence was broadly consistent. As counsel for Mr Cahill observed, the position that Mr Mates was apparently taking was consistent with his conduct at the meeting on 15 February 2006. I am not, however, satisfied that Mr Mates threatened to organise a picket if his demands were not met. Only Mr Goss gave evidence to this effect and, as previously indicated, I would not regard him as an objective witness on all accounts. Had a picket been mentioned by Mr Mates, I have little doubt that Mr Malbourne and Mr Palmer would have recalled as much, and Mr Malbourne would have noted it in his diary. Having regard to the fact that a picket was in fact formed shortly after this meeting and became the catalyst for this proceeding, I think it likely that Mr Goss has re-constructed his memory of the meeting of 17 February 2006 so as to include reference to a picket. I am not therefore satisfied that, on the balance of probabilities, Mr Mates threatened to organise the picket line, as Mr Cahill has alleged. Accordingly, having regard to the evidence of Mr Goss, Mr Malbourne and Mr Palmer and s 140 of the Evidence Act , I find that, at the meeting of 17 February 2006, Mr Mates made demands on Mr Goss that the former shop stewards and the former OH&S officer (Mr Deans, Mr O'Donnell and Ms Singleton) be re-employed at the Mount Street site, and be appointed as shop stewards and as OH&S officer. Further, I find that Mr Mates threatened that the project would never recommence if his demands were not met. The Union and Mr Mates maintained that this was an unlikely threat given that the project had commenced. It must, however, be borne in mind that the recommencement was in its infancy. The purport of Mr Mates' threat was clear: the project would not get going again in any real sense unless Hardcorp met his demands. These threats on Mr Mates' part constituted threatening to take action with intent to coerce Hardcorp to employ Mr Deans, Mr O'Donnell and Ms Singleton on the project at Mount Street and, amongst other things, to allocate to Ms Singleton the responsibilities or duties of OH&S officer on the recommencing project. For the reasons stated above, Mr Mates' conduct and intent are to be taken as those of the Union. Accordingly, I find that Mr Mates, in his own right, and the Union, through Mr Mates' conduct on 17 February 2006, breached s 43 of the Building and Construction Industry Improvement Act . As already noted, the contraventions alleged in respect of the events on site on 21 February 2006 and the picket line on 22 February 2006 and following were the subject of a no case submission. The question for the Court on a no case submission of the kind made is whether there is evidence upon which the Court could enter judgment for the applicant. Plainly enough, logically speaking, rejecting a no case submission does not necessarily entail the consequence that the claim succeeds. The difference between a ruling on a no case submission and final judgment is clear where a judge sits with a jury. Where a judge sits alone the distinction may be less easily seen. If the judge decides that there is a case to go to the jury, it is then for the jury to uphold or dismiss the claim. While there is no logical inconsistency in rejecting a no case submission and thereafter rejecting the claim, the distinction is a fine one when a judge sits without a jury, given that the standard of proof is on the balance of probabilities and that inferences may be drawn by reason of the respondent's failure to adduce evidence. ... If a defendant elects not to call evidence, the judge has before him all the evidence upon which he is called to make a decision. Any distinction between the role of the judge in ruling on a no case submission and the role of the judge as an arbiter of fact becomes largely illusory ... The inconvenience of not putting the defendant to an election is apparent. If the judge's decision on the no case submission is upset on appeal, there must inevitably be a retrial. This is so, as if they do not call any evidence, it would not be appropriate for the court then to embark on the artificial exercise of determining whether there was a case to answer. The orderly disposal of the proceedings in those circumstances would require the defendants to proceed with their final submissions: see Toohey J, James v ANZ Bank at 400. But those considerations cannot deflect me from ruling in favour of the defendants being put to their election, if it is otherwise proper to do so. Accordingly, I turn to the evidence as it now stands. On 17 February 2006, Transit Joint Venture booked and paid for a crane crew and a crane from IC Hire Pty Ltd, trading as Independent Cranes, to attend the site on Tuesday, 21 February 2006. Monday, 20 February 2006, was a rostered day off for workers at the site. On 21 February 2006, Mr Mates attended Mount Street shortly after the crane and crane crew had come onto the site and begun to set up. The Union and Mr Mates did not dispute that Mr Mates told the crane crew to shut down the crane and leave. The crane crew spoke with Mr Mitchell at the office of Independent Cranes and left the site. Mr Cahill alleged that, by this conduct, the Union and Mr Mates contravened s 43 by taking action with the intent to coerce Hardcorp to employ Mr Deans, Ms Singleton and Mr O'Donnell; and/or (2) allocate and/or designate to Ms Singleton the duties or responsibilities of an OH&S officer: see [13] and [19] of the Statement of Claim. There was a further related allegation concerning s 38 , which is discussed below. In their Defence, the Union and Mr Mates denied the case made against them under s 43 (and s 38): see [17] and [25] of the Defence. Mates was informed by the crane operator that he had been instructed by his employer to leave the site. Mr Moresi said that he arrived at the site at about 6:00 am and that the crane came on site just after 7:00 am. About 8:00 am, Mr Palmer told him that Mr Mates had stopped the crane. Mr Moresi said that he, Mr Palmer and Mr McMahon went to find Mr Mates to ask him what was going on. They found Mr Mates quite close to the crane. When asked why he had shut the crane down, Mr Mates replied that this was because there was no OH&S officer, no shop steward and also no first aid. Mr Moresi reiterated this evidence in cross-examination. Mr Moresi said that he told Mr Mates that this was wrong and that "Geeza" (Mr Van Senten) was the shop steward and OH&S representative on site. In a diary note around the same time, Mr Moresi recorded that Mr Mates "then told the crane to pack up and leave the site". According to Mr Moresi, as the crane crew were packing up, Mr Mates said "make sure you write it all down and I will swear by it in Court". Further, Mr Moresi said that he was standing about 4 to 5 metres away from Mr Mates, when Mr Moresi overheard Mr Mates say in a mobile phone conversation "tell Maurie Hill to ring Sergi and all the others to make sure". Mr Moresi wrote this down in his diary the same day. Sergi Cranes Pty Ltd was a well-known crane company from which Transit Joint Venture sometimes hired cranes and Mr Hill was the Union's (FEDFA Division) crane organiser. According to Mr Moresi's diary note, Mr Mates left the Mount Street site around 9:00 am that day. Mr Moresi said that he telephoned Mr Goss shortly afterwards to let him know what had happened. Mr Palmer said that, at about 7:50 am, he and Mr Van Senten set out the location for the crane to commence work and the crane was driven into position and set up on outriggers. Mr Palmer said that the crane was ready for the first lift at about 8:15 am, when Mr Mates arrived at the site. Mr Palmer said that he then went to find Mr Moresi and Mr McMahon. According to Mr Palmer, when the three men found Mr Mates, they asked him why he had shut down the crane and Mr Mates replied that he had done this because there was no shop steward or OH&S representative on the site. When corrected, Mr Mates replied "No you don't and I have shut down your crane. You can write that down in your diary. " Mr Palmer and Mr McMahon repeated that the site had a shop steward and OH&S officer. In response to Mr Mates' question "who is that? ", they said it was "Geeza" (Mr Van Senten). According to Mr Palmer, Mr Mates then said "the crane is not working. I have sent them (the crew) away". A diary note that Mr Palmer made that morning was to the same effect. Mr Palmer's evidence was that he and Mr McMahon went to meet with the crane crew and that he asked the crew to check with the office of Independent Cranes. Mr Palmer saw one of the crew finish a phone call and then motion to the other to continue packing. In a statement adopted at the trial, Mr McMahon stated that he arrived at the site at about 6:50 am on 21 February 2006. The crane and crane crew from Independent Cranes came on site just after 7:15 am. Mr McMahon said that he inducted the driver and dogman and then told the crane crew to set up the crane. Mr McMahon's evidence was that, at about 8:20 am, one of the carpenters told him that Mr Mates had entered the site. Mr McMahon went to inform Mr Moresi, and they were joined by Mr Palmer. The three men decided to find Mr Mates to ask him what was happening. According to Mr McMahon, they found Mr Mates reasonably close to the crane and asked him what he was doing on site. Mr Mates said that he was shutting down the crane, because there were no OH&S representative and shop steward on site. Mr McMahon said that Mr Moresi told Mr Mates that "Geeza" (Mr Van Senten) had been voted shop steward and OH&S representative. Mr Mates replied that he "didn't fucken care" and that he was shutting down the crane. Mr McMahon said that Mr Mates walked off from the crane crew followed by Mr Palmer and Mr Moresi, whilst he (Mr McMahon) went to receive a telephone call elsewhere. According to Mr McMahon, Mr Mates drove off in his car shortly afterwards and the crane crew told Mr Palmer (in Mr McMahon's presence) that Mr Mitchell from Independent Cranes had instructed them to pack up. In a statement in reply, Mr McMahon added that he subsequently called Mr Mitchell from Independent Cranes. Once it became aware he was on site management, Greg, Bryan, Ryan sought him out. He told us there was no shop steward or [OH&S] on site. We replied that yes there was. Geeza was shop steward & cert II qualified. He told us that he didn't fucken care and then he's shutting us down. I rang Steve [Mitchell] and he said that he had not instructed his boys to pack up but called 5 min later to say that now he had been instructed by the union also to remove the crane from site. He said he was sorry but he was just the meat in the sandwich and that if he didn't follow instructions they wouldn't be able to work on any other sites. Crane left at 9:30 am. We'll talk to him and call straight back. " Shortly afterwards, Mr Mitchell received another phone call in which the crew member said: "The union has knocked the job on the head". Mr Mitchell's evidence was that he told the crew to pack up the crane and come back to the yard at Independent Cranes. Mr Goss was not on site when Mr Mates arrived there on 21 February 2006. Mr McMahon and Mr Moresi kept him informed by telephone. When Mr Goss learned that the crane and crane crew had left the site, he instructed Mr McMahon to ask other crane companies about the availability of a crane and crane crew, upon the basis that Transit Joint Venture would pre-pay any booking. Mr McMahon's evidence was that later on 21 February 2006 he unsuccessfully called about eight crane companies. Counsel for the Union and Mr Mates submitted that Mr Moresi's account of the events of 21 February 2006 showed that he was not being frank in his evidence. Counsel referred to one occasion. Mr Moresi's evidence fell to be considered in its entirety, however, and, so considered, he was a credible witness, who gave his evidence carefully and conscientiously. Counsel for the Union and Mr Mates argued that Mr McMahon's evidence was unreliable because he exaggerated his evidence in order to implicate the Union. Mr McMahon was the least experienced person to give evidence, although he begun at Mount Street in early 2004. There were occasions when he corrected his evidence, when he was shown to be in error, and other occasions when he became confused. Allowing for these deficiencies, however, he endeavoured to give his evidence as best he could. I would not regard his evidence as unreliable to the extent that the Union and Mr Mates argued. What happened on site between 8 and 9 am on the 21 February 2006 was tolerably clear. By this time, the crane and crane crew had arrived, been inducted by Mr McMahon, and set up the crane. Shortly before the first lift, Mr Mates arrived on site, found the crane and crane crew and shut the crane down by telling the crew to pack up and leave. When Mr Moresi, Mr Palmer and Mr McMahon found Mr Mates close by the crane and asked for an explanation, Mr Mates admitted that he had shut the crane down, saying this was because there was no OH&S representative or shop steward on site. In the presence of Mr Palmer and Mr McMahon, Mr Moresi told him that this was incorrect because Mr Van Senten was shop steward and OH&S representative. Mr Mates responded that he did not care about this and was in any event shutting the crane down. Meanwhile the crew, who had already spoken to Mr Mitchell at Independent Cranes once, phoned him again and received Mr Mitchell's instruction to return to Independent Cranes. Did Mr Mates' action in stopping the crane amount to action taken with the intent to coerce Hardcorp to employ Mr Deans, Mr O'Donnell and Ms Singleton and, in Ms Singleton's case, to allocate OH&S responsibilities to her? Over the history of the proceeding, the Union and Mr Mates put forward various explanations for Mr Mates' conduct on 21 February 2006, some of which were not pursued at trial and others were not pressed in final submissions, whether because of the Union's and Mr Mates' election not to call evidence or otherwise. Thus, [17A] of an amended defence dated 17 August 2007 pleaded that the crane was removed because of a malfunction and/or because of concerns about payment. Neither explanation was pursued at trial. I reject counsel for Mr Cahill's submission that I should treat this conduct on the Union's and Mr Mates' part as evidence of consciousness of guilt. I would not regard the relevant principle as applicable in the circumstances shown: compare Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2004] FCA 1678 ; (2004) 141 FCR 183 at 215-6 [244] - [248] . It is undeniable, however, that there is no evidence that might explain Mr Mates' conduct other than that to which I have already referred. For the reasons that appear below, I would not regard the evidence concerning the events of 22 February 2006 and thereafter as having much, if any, bearing on this incident. There was no evidence to support a suggestion that safety concerns motivated Mr Mates' conduct: compare [17] of amended defence and further amended defence dated 14 July 2008. In cross-examination, Mr Moresi, who had 10-15 years experience in the construction industry and with cranes, said that he had not heard Mr Mates or anyone else raise any safety issue when Mr Mates was on site on 21 February 2006. Mr Moresi said that responsibility for any safety issue affecting the crane lay with the crane crew and the site safety officer, managers and engineer. Mr Palmer's evidence was to the same effect, including that no safety issues touching the crane were raised with him on 21 February 2006. Mr McMahon's evidence was that, if there had been a safety issue with the crane, then, as a matter of practice, the crane crew would have immediately notified him as one of the site management personnel. Mr McMahon added that no-one from Independent Cranes and none of the crane crew had raised any safety, location, or other problem concerning the crane on 21 February 2006. The evidence established that Mr Mates told Mr Moresi, Mr Palmer and Mr McMahon that he had shut down the crane because there was no shop steward or OH&S representative on site. When Mr Moresi informed him that Mr Van Senten was shop steward and OH&S representative, Mr Mates persisted, saying he did not care. There is no reasonable explanation for Mr Mates' conduct once he was given this explanation. The only tenable explanation is that Mr Mates was carrying out his threats of 15 and 17 February 2006 that the project at Mount Street would not recommence unless Mr Deans, Mr O'Donnell and Ms Singleton were re-employed and took on their former responsibilities, including that Ms Singleton assumed OH&S responsibilities. It was telling that Mr Mates gave as his reason for his action that there was no shop steward or OH&S representative, because this reflected the demands that he had made to Mr Goss at his earlier meetings with him on 15 and 17 February 2006. The nature of Mr Mates' demands was reflected in that fact that, when he was told that Mr Van Senten was shop steward and OH&S representative, he said he did not care. In effect, Mr Mates signalled that he was only interested in his people being appointed to these positions. This too was consistent with his demands of 15 and 17 February 2006. Counsel for the Union and Mr Mates contended that the evidence of Mr Mitchell as to what he was told by the crane crew that Mr Mates had said to them showed that Mr Mates' reason for shutting down the crane was not to coerce Hardcorp to employ Mr Deans, Mr O'Donnell or Ms Singleton. Rather, the shut down was because sub-contractor payments and employee entitlements had not been met. Even if admissible on this point, I would not regard this evidence as probative of Mr Mates' intent and, even if probative, it would not outweigh the considerations addressed in the preceding paragraph. Accordingly, having regard to the evidence of Mr Moresi, Mr Palmer, Mr McMahon and Mr Mitchell and s 140 of the Evidence Act , I find that, on the morning of 21 February 2006, Mr Mates demanded that the crane crew from Independent Cranes shut down the crane and leave the site, which they ultimately did after speaking to their own office. In so doing, Mr Mates was carrying out his threats of 15 and 17 February 2006. Having regard to this fact and to Mr Mates' statements to Mr Moresi, Mr Palmer and Mr McMahon on the morning of 21 February 2006, I find that his intention in shutting down the crane was to coerce Hardcorp to re-employ Mr Deans, Mr O'Donnell and Ms Singleton at the Mount Street site, and, amongst other things, to have Ms Singleton appointed as OH&S officer on site: compare Telstra Corporation Ltd (2000) 108 FCR at 61 [24] and National Tertiary Education Industry Union (2002) 117 FCR at 142-143 [102]. For the reasons stated above, Mr Mates' conduct and intent are to be taken as that of the Union. Accordingly, I find that Mr Mates, in his own right, and the Union, through Mr Mates' conduct on 21 February 2006, breached s 43 of the Building and Construction Industry Improvement Act . Mr Cahill also alleged that, on 21 February 2006, Mr Mates telephoned the office of Independent Cranes and said that its crew were not to work on the Mount Street project. At trial, this allegation became an allegation that Mr Mates arranged for Mr Tadic and/or Mr Hill to contact Independent Cranes to ensure that the crane left the Mount Street site and did not return. Mr Cahill further alleged that, around the same time as Mr Mates shut down the crane, Mr Mates telephoned the Union's offices or a representative of the Union (whose identity is unknown) to instruct Mr Hill (the Union organiser responsible for crane services in Victoria (FEDFA Division)) that he should ring Sergi Cranes and other crane operators to warn them off working at the Mount Street site. Mr Cahill's allegation about Mr Mates' telephone call concerning Mr Hill depended on Mr Moresi's evidence that he overheard Mr Mates say "tell Maurie Hill to ring Sergi and all the others to make sure". I accept that Mr Moresi honestly believed that he heard Mr Mates say these words. Assuming Mr Mates said them, the evidence does not disclose the identity of the person to whom he was speaking at the time (if in fact he was speaking to anyone). There was no evidence that Mr Hill or anyone else on the Union side called Sergi Cranes in the relevant period. Moreover, the statement attributed to Mr Mates does not disclose what was to be made "sure". There is no evidence, or at least no direct evidence, about this matter. I reject the proposition that I should infer from this statement alone (assuming it were made) that Mr Mates telephoned the Union's offices or a representative of the Union to instruct Mr Hill that he should ring Sergi Cranes and other crane operators to warn them off working at the Mount Street site. Moreover, having regard to the lack of corroborative evidence, I have some real doubts about whether the statement attributed to Mr Mates was in fact said by him. Ultimately, I am not satisfied on the balance of probabilities that Mr Mates in fact spoke the words alleged. Mr Cahill relied on mobile telephone records to support both the warning off allegations. Mobile phone records also showed that, on 24 February 2006, Mr Hill called National Crane Hire (at 8:40 am), Rebel Cranes (at 4:01 pm and 5:22 pm) and, on 27 February 2006, he called Independent Cranes (at 1:20 pm). Mr Mates' mobile phone records did not show that he made any call to the Union's offices when he was on the Mount Street site. These records indicated that Mr Mates did not call the Union until around 12:08 pm. Further, the records did not record any call on Mr Mates mobile phone to the offices of Independent Cranes. Mr Mates' mobile phone records showed that, whilst at Mount Street, Mr Mates made some brief calls from his mobile phone to Mr Tadic and a call to Mr O'Donnell. The records did not show that Mr Tadic called Mr Hill until about 10:17 am, although the records indicated that Mr Tadic called Independent Cranes shortly after Mr Mates first called him. There was also evidence that Mr Hill called Independent Cranes very briefly about three-quarters of an hour after Mr Mates had left the site. Furthermore, as indicated above, there was no evidence that, on 21 February 2006, Mr Hill called Sergi Cranes. There was little, if anything, to connect Tutt Bryant and Jatco Engineering with the matters at issue in this proceeding and, in consequence, little turned on the evidence that Mr Mates might have called them. There was no evidence that Mr McMahon rang these companies to inquire about the availability of a crane. There was no evidence as to what was said in any of these mobile phone calls, many of which were very brief indeed and therefore indicated that very little (if anything) was said. There was no evidence from any person from any crane company that the Union had warned the company off working at the Mount Street site. Mr Mitchell was called by Mr Cahill to give evidence, but he gave no evidence that he had received a call from Mr Mates or any other Union representative that day or on any subsequent day. Indeed, Mr Mitchell was not asked whether Mr Mates or anyone else from the Union had telephoned him at Independent Cranes on 21 February 2006 or any other date. As counsel for the Union and Mr Mates said, it has to be borne in mind that, at this time, Mr Mitchell was in charge of bookings at Independent Cranes. If there had been a warning off as alleged, he might reasonably have been expected to know about it. Counsel for the Union and Mr Mates relied on the rule in Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298. Counsel argued that the inference that there was no warning off might, in the absence of testimony from Mr Mitchell, be more comfortably drawn. I accept this submission in part: see Braverus Maritime Inc v Port Kembla Coal Terminal Ltd [2005] FCAFC 256 ; (2005) 148 FCR 68 at 112 [159] - [160] and Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (2007) 241 ALR 705 at 758 [384] per Jacobson J. I accept that, in the absence of any testimony from Mr Mitchell on the subject, it may be more comfortably inferred that, leaving aside what had happened earlier on 21 February 2006, no-one from the Union directly or expressly warned off Independent Cranes. The mobile phone records established that Mr Mates, Mr Tadic and, to a lesser extent, Mr Hill and Mr O'Donnell were in communication with one or the other on 21 February 2006. Mr Tadic and Mr Hill were in limited communication with Independent Cranes. It was, perhaps, to be expected that the Union would be in contact with the crane company and crane organisers and others interested in the site, given what had occurred. I would not regard this evidence as probative of anything more. These records established that Mr Hill was in contact with some other crane companies, but this was not shown to be unusual and might be explained by reference to the nature of his responsibilities. Mr Cahill relied on the fact that that day and subsequently Hardcorp was unable to get a crane to attend the Mount Street site. Mr Goss gave evidence that, on the basis of his thirty years' experience in the construction industry, it was very unusual to be unable to hire a crane of the kind he was seeking for work the following working day. However, Hardcorp's inability to obtain a crane and Mr Goss's evidence must be evaluated in light of the attendant circumstances. Mr McMahon gave evidence that, once the picket formed (see below), he told all the crane companies that he called that there was a picket in place. Thus, Hardcorp's own representative provided a reason for crane companies not to want to supply a crane to the Mount Street site. As counsel for Mr Cahill noted, this did not explain Mr McMahon's inability to hire a crane when he called the eight crane companies on 21 February 2006, before the picket formed. However, Mr McMahon's summary of 1 March 2006, which was faxed to Mr Goss on that date, disclosed some reasonable explanations for his failure to obtain a crane. The contents of this summary do not entirely bear out the allegation that Mr Cahill made that the Union and Mr Mates took steps to ensure that any crane companies were warned off the Mount Street site. Furthermore, as counsel for the Union and Mr Mates noted, when Mr McMahon asked Sergi about a crane and crew on 2 March 2006, Sergi agreed to send them for the morning of the next day. In summary, having regard to s 140 of the Evidence Act and the evidence before me, I reject as unproven Mr Cahill's further allegations that: (1) Mr Mates telephoned the Union's offices or a representative of the Union to instruct Mr Hill to ring Sergi Cranes and other crane operators to warn them off working at the Mount Street site; and (2) Mr Mates arranged for Mr Tadic and/or Mr Hill to contact Independent Cranes to ensure that the crane left the Mount Street site and did not return. See generally Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 ; (1992) 110 ALR 449 and Granada Tavern v Smith (2008) 173 IR 328, [2008] FCA 646 at [85] and following. Further, I am not persuaded that anything that occurred subsequently at the site should lead me to a different conclusion. At this meeting, the unsecured creditors of Melbourne Transit were offered 2.4 cents in the dollar. Doubtless, many (if not all) of these creditors were dissatisfied with this offer and unhappy about the history of the Goss companies: see [17]-[20] above. From 22 February 2006 until 3 March 2006, there was a picket line outside the Mount Street site. As already noted, in unsuccessfully seeking to obtain a crane, Mr McMahon advised crane companies of the picket line, but, on 2 March 2006, a representative of Sergi Cranes told him that Sergi Cranes would have a crane at the site in the middle of the following morning, 3 March 2006. Notwithstanding this, on 3 March 2006, Mr Goss instructed Mr McMahon to cancel the booking, amongst other reasons because Mr Goss did not consider his companies "could actually get the job done at that stage". It may be recalled that his companies were under considerable financial pressure from late 2005. Mr Cahill claimed that Mr Mates organised the picket line. This was to be inferred, so Mr Cahill said, from Mr Mates' conduct on 15, 17 and 21 February 2006; the fact that, from time to time, Mr Mates was in attendance in the vicinity of the picket line; and from the fact that, after Mr Palmer complained to Mr Mates on 23 February 2006 about the picketers' conduct in front of kindergarten children, the conduct stopped: see [14] of the Statement of Claim. Mr Cahill alleged that, by Mr Mates' conduct, the Union and Mr Mates contravened s 43 by taking action with the intent to coerce Hardcorp to employ Mr Deans, Ms Singleton and Mr O'Donnell; and/or allocate and designate to Ms Singleton the duties or responsibilities of an OH&S officer: see [20] of the Statement of Claim. Mr Cahill relied on the fact that the picket followed the events of 15, 17 and 21 February 2006. It will be recalled that subcontractors' payments had been an issue at the meeting on 17 February 2006. The temporal link was, so counsel for Mr Cahill said, "extremely important" in assessing the significance of the events of 22 February 2006 and following. As I explain, I do not consider that the so-called temporal link can make up for a want of evidence. The Union and Mr Mates denied the allegations. Amongst other things, they said that the creditors of Mr Goss and his companies had organized the picket. In an amended pleading filed, with leave, at the close of trial, they also said that the picket line did not constitute conduct in contravention of ss 43 or 38 because it was a lawful picket. Mr Goss, Mr McMahon and Mr Palmer first saw the picket line in front of the site around 7:00 am on 22 February 2006. Estimates of its size varied. Mr Goss said he saw about 30 men. Mr McMahon said he saw between 25 and 30 people, although this reduced to 6 to 8 men between 9:15-9:30 am. Mr Palmer said he saw 10 men early in the morning in front of the site, but the number increased to around 20 by 9:00 am. The witnesses agreed that the picket dispersed by 11:00 am. They also agreed that this pattern of attendance at the picket was the same for all the days of the picket. Mr Goss said that he saw about 40 men on the picket at around 7:00 am the following morning. Mr McMahon said that he saw 30 to 35 men on the picket at about 6:45 am. Their evidence was not borne out by Mr Palmer, however, who said that, at about 7:00 am on 23 February 2006, he saw only about 7 to 8 picketers, although there were about 10 on the picket later that morning. I accept that the numbers of picketers varied between 7:00 am and 11:00 am each day. Both Mr Goss and Mr McMahon were shown to be inexact in aspects of their evidence, however, whilst Mr Palmer was a careful and conscientious witness. In cross-examination, Mr Goss conceded that he did not make any count of the individuals who made up the picket and accepted that his figure might be wrong. I prefer Mr Palmer's evidence to that of Mr Goss and Mr McMahon on the issue of the size of the picket. A video produced on discovery by Mr Cahill and tendered by counsel for the Union and Mr Mates showed that, at the time the video was taken on 24 February 2006, the picket was no more than 2 to 3 people --- all of whom were making demands for the payment of money. Passers-by were able to walk along the footpath comfortably and a commercial vehicle was apparently entering the site. When asked about this in cross-examination, Mr McMahon said that, when the picketing died down during the day, they felt that they could open the gates and allow some vehicles to enter. On 22 and 23 February 2006, Mr Goss saw Mr O'Donnell and workers from creditor companies, including five or six workers from MC Labour, amongst those on the picket line. On 23 February 2006, Mr Palmer saw Mr O'Donnell on the picket line. Also on 23 February 2006, Mr Palmer observed that the picketers had handwritten signs referred to "Goss needing to pay his debts". Mr McMahon also recognised Mr O'Donnell on the picket line "at one point" within two or three days of the picket commencing. Mr McMahon also gave evidence that, on 23 February 2006, he saw Mr Mates sitting with four other people outside a shop about 100 metres from the site. (In their statements, Mr McMahon and Mr Goss estimated that the shop was about 50 metres from the site, but they agreed in cross-examination that the distance was twice this estimate. ) On 24 February 2006, Mr McMahon again saw Mr Mates, this time with Mr O'Donnell and Mr Tadic, at the corner café. On 3 March 2006, Mr Goss saw Mr Mates, Mr O'Donnell and Mr Tadic sitting together in the café. Mr Cahill relied on the fact that Mr Mates was seen in the vicinity of the picket but not at the picket to support a contention that Mr Mates was adopting a deliberate strategy to attempt to distance himself from his involvement in the organisation of the picket. There is no probative evidence of this. I would infer from Mr Mates' presence at the café that he was interested in the picket. This is emphasised by Mr Mates being seen there with Mr Tadic and Mr O'Donnell. I would not infer from this circumstance alone, however, that Mr Mates had organised the picket, or was involved in its organisation. The suggested clandestine behaviour is not in keeping with Mr Mates' conduct on the previous days. There was evidence from Mr Goss that he telephoned Mark Lunedei of MC Labour to ask him why his people were there. Mr Lunedei did not give evidence at trial. Counsel for Mr Cahill argued that Mr Goss's evidence as to what Mr Lunedei said to him was admissible pursuant to s 87(1)(c) of the Evidence Act . I doubt that this was so: see Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321 at 339-340 [53]-[54] and Orica Investments Pty Ltd v William McCartney [2007] NSWSC 645 at [53] . Even if it were admissible, however, I would not accord the evidence any weight, having regard to the fact that I considered Mr Goss exaggerated his evidence from time to time to implicate the Union and Mr Mates. On 23 February 2006, an episode happened, which Mr Cahill claimed was indicative of Mr Mates' involvement in the picket. Mr Palmer telephoned Mr Goss to say that a group from the picket line had moved to the rear of the site, which was in the vicinity of a kindergarten, and that the group was abusing Hardcorp's workers in the presence of kindergarten children. Mr Goss told Mr Palmer he would telephone Mr Mates and Mr Palmer said that he would telephone the police. Both said that they made the calls as agreed. According to Mr Palmer (whose evidence I accept) shortly thereafter, and before the police arrived, the picketers moved back to the front of the site and "then settled down a bit". Mr Palmer said that not long afterwards he saw the police. Counsel for Mr Cahill argued that I should infer from this that Mr Mates had arranged for the picketers' conduct outside the kindergarten to stop and that Mr Mates had significant control of the conduct of the picket line. I do not consider that Mr Palmer's evidence permitted this inference to be drawn safely. There is no evidence about Mr Mates' conduct that would support this inference. Mr Palmer's evidence is consistent with the proposition that the picketers at the back of the site determined of their own accord to return to the front of the site and that, when they rejoined the others, they also "settled down" of their own accord. In support of his case against Mr Mates, Mr Cahill also relied on mobile telephone records. (2) On 23 February 2006, Mr Mates called Mr Tadic at 11:25 am (4 minutes), Mr Hill at 11:40 am and 3:50 pm, and Mr O'Donnell at 3:58 pm and 4:00 pm. (3) On 24 February 2006, Mr Mates called Mr Tadic at 7:01 am (3 minutes 30 seconds) and Mr O'Donnell at 11:23 am (3 minutes). (4) On 27 February 2006, Mr Mates called Mr O'Donnell at 8:11 am (2 minutes 30 seconds); Mr Tadic called Mr Mates at 9:01 am (30 seconds); and Mr Mates called Mr Tadic at 3:01 pm (5 minutes 30 seconds). (5) On 28 February 2006, Mr O'Donnell called Mr Tadic at 11:23 am (16 seconds). (6) On 1 March 2006, Mr Mates called Mr Tadic at 6:36 am (4 minutes) and Mr O'Donnell at 3:05 pm (6 minutes and 30 seconds). (7) On 2 March 2006, Mr Mates called Mr Tadic at 7:58 am (1 minute), 9:02 am (30 seconds), 9:08 am (1 minutes and 30 seconds), 10:06 am (30 seconds) and 5:26 pm (6 minutes and 30 seconds). Mr Tadic called Mr Mates at 9:06 am (15 seconds), 9:32 am (24 seconds), 11:43 am (56 seconds), 11:48 am (14 seconds) and 12:30 pm (30 seconds). Mr Mates called Mr O'Donnell at 11:06 am (1 minute 30 seconds). (8) On 3 March 2006, Mr Tadic called Mr Mates at 9:34 am (34 seconds) and Mr Mates called Mr Tadic at 12:05 pm (8 minutes 30 seconds). Mr O'Donnell called Mr Tadic at 3:44 pm. Mr Cahill contended that the mobile telephone records demonstrated a high level of contact between Mr Mates, Mr O'Donnell and Mr Tadic, who were seen in, or in the vicinity of, the picket, from time to time. Mr Cahill contended that the early morning calls were consistent with arrangements being put in place for the picket that day. I accept that Mr Mates, Mr Tadic and Mr O'Donnell (in one instance, Mr Hill) were in communication with one another from 22 February until 3 March 2006. There is no evidence to show that these communications were out of the ordinary. Presumably, on account of their responsibilities, Mr Mates, Mr Tadic and Mr Hill had occasion to speak with one another about various work-related matters. Furthermore, each of Mr Mates, Mr Tadic and Mr O'Donnell had reason to be interested in the events at Mount Street. Mr O'Donnell's presence on the picket line on one occasion established as much, but I do not consider that it established much more than this. The mobile phone record evidence did not establish that Mr Mates organised the picket line. Further, since there is no evidence as to the contents of their communications, it does not seem to me that the inferences that Mr Cahill invites me to draw can be safely drawn. Mr Cahill's case that Mr Mates organised the picket line depended on inferences drawn from a number of circumstances, particularly from his conduct on 15, 17 and 21 February 2006. It will be apparent that I regard his case at this point as insufficiently persuasive. As counsel for the Union and Mr Mates noted, Mr Mates was not seen at the picket. There was no evidence that the picket displayed Union flags, signs or other Union paraphernalia. There was no evidence that the Union endorsed or otherwise approved the picket in any way. If the picket was directed to the re-employment of Mr Deans, Mr O'Donnell and Ms Singleton, it did not convey that message. There was ample evidence that the picket was directed to recovering payments for sub-contractors and others to whom the Goss companies owed money. The picket followed immediately after the second creditors' meeting of Melbourne Transit (at which 2.4 cents in the dollar was offered to unsecured creditors). As noted above, on 23 February 2006, Mr Palmer observed that the picketers had handwritten signs that referred to "Goss needing to pay his debts". The picket line included creditors of Melbourne Transit. For reasons already indicated, I would accord little weight to Mr McMahon's uncorroborated evidence that he recognized only a "small percentage" on the picket line as subcontractors. The video evidence of the picket on 24 February 2006 showed that the then picketers were concerned with the repayment of debts. The evidence establishes that, on the balance of probabilities, the reason for the picket line was to pressure Mr Goss to make a better offer for the payment of debts than that made at the creditor's meeting on 21 February 2006. Apart from the fact that Mr Mates had stopped the crane the day before, there would have been very little reason for supposing that the picket was being organised so as to coerce Hardcorp to re-employ anyone or to allocate OH&S responsibilities to any particular individual. I do not consider that the reason for stopping the crane can, without more, be treated as the reason for the picket, especially when the creditors' meeting had intervened and there was evidence to the contrary. Mr Cahill has therefore failed to establish that the reason proscribed in s 43 was a substantial or operative reason (or a substantial and operative reason) for the organising of the picket: see Hanley 100 FCR at 541 [44]-[45] and National Tertiary Education Union 117 FCR at 139 [98]; and compare General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 616 per Mason J. Further, the evidence failed to establish that, on the balance of probabilities, Mr Mates organised the picket. There was no direct evidence that this was his role. Mr Cahill's case depended, as noted already, on inferences. Having regard to the evidence as a whole and s 140 of the Evidence Act , I am not satisfied that these inferences can be safely drawn. There was evidence of connection at an earlier time between the Union and one creditor (Wellington Carpets) but this is not determinative. The evidence also showed that the Union had an interest in the payment of moneys owed by Melbourne Transit, besides that evident at the meeting on 17 February 2006. For example, in cross-examination, Mr Goss acknowledged Melbourne Transit's creditors included a previous employee and shop steward (to whom an amount of $13,806.75 was owed in respect of a WorkCover claim), C+BUS Superannuation (in an amount of $120,370.30 by way of compulsory superannuation contributions) and Incolink (in an amount of $35,867.55 in respect of redundancy insurance payments and the like). This might perhaps explain the presence of Mr Mates, Mr Tadic and Mr O'Donnell at the café and Mr O'Donnell's presence at the picket. The evidence fails to establish that, on the balance of probabilities, Mr Mates was responsible for organising it, or was relevantly involved in its organisation. In his Statement of Claim, Mr Cahill alleged that the Union and Mr Mates breached s 38 by Mr Mates: (1) demanding the shut down of the crane; (2) telephoning the office of Independent Cranes and saying the crane crew were not to work on site; (3) telephoning the offices of the Union or a representative of the Union and instructing that Mr Hill be told to warn off Sergi Cranes and other crane companies from the Mount Street site; and (4) organising a picket line at the Mount Street site. Mr Cahill alleged that this conduct constituted "building industrial action" within the meaning of that term in s 36 because this conduct constituted: (b) a ban, limitation or restriction on the performance of building work ... in accordance with the terms and conditions prescribed by the industrial instruments (see s 36(1)(b)) ; or (c) a ban, limitation or restriction on the performance of building work ... that is adopted in connection with an industrial dispute (see s 36(1)(c)). The Statement of Claim defined the building work to be "[t]he building and construction work performed or to be performed in connection with the project at the Mount Street site": see [8]. The [Union] and Mates have also engaged in unlawful industrial action in contravention of s 38 of the [Building and Construction Industry Improvement] Act by reason of the matters set out below. 109. Mates and the [Union's] conduct constituted "building industrial action" as that term is defined in s 36 of the [Building and Construction Industry Improvement] Act. This is because he failed to establish that Mr Mates: (1) (whether directly or through Mr Tadic and/or Mr Hill) telephoned the office of Independent Cranes and said the crane crew were not to work on site; (2) telephoned the offices of the Union or a representative of the Union and instructed that Mr Hill be told to warn off Sergi Cranes and other crane companies from the Mount Street site; and (3) organised a picket line at the Mount Street site. That is, whilst he established that Mr Mates had stopped the crane on 21 February 2006, he failed to establish the whole of the conduct, which, as pleaded and argued, was said to be "building industrial action" for the purpose of ss 37 and 38. Mr Cahill did not plead that stopping the crane on 21 February 2006 was in and of itself "building industrial action": contrast Duffy v Construction, Forestry, Mining & Energy Union [2008] FCA 1804 at [23] . Nor did he argue to this effect in final submissions, although, for forensic reasons, counsel for the Union and Mr Mates sought to dissect each element of the s 38 case pleaded against them in this way and, in [126] of his closing submissions, Mr Cahill sought declarations in terms that, on one view and contrary to the case as pleaded and argued by him, assumed that a finding about each alleged event (stopping the crane, discouraging crane operators and organising a picket line) had been sought and was therefore open to be made. Had Mr Cahill established the case he pleaded and argued --- that not only had Mr Mates stopped the crane from Independent Cranes on 21 February, he had also discouraged other crane operators from coming on site and had organised a picket discouraging or hindering work on the project --- Mr Cahill would have been in a position to say that the Union and Mr Mates had engaged in conduct in order to prevent any crane coming on site, construction work associated with the crane, and work at the site from progressing, as he alleged. If this were accepted, Mr Cahill would have had a basis for saying that the conduct of which he complained constituted a "ban, limitation or restriction on the performance of the building work" at the site. Mr Goss's evidence --- that most of the work to be done on the site at the stage the project had reached required a crane --- would have been pertinent. Since he did not prove the case as alleged, Mr Cahill failed to establish the case that he sought to make against Mr Mates and the Union under s 38, including the basis for his pleading that Mr Mates' and the Union's alleged conduct amounted to a "ban, limitation or restriction on the performance of building work" at the site. Mr Cahill failed to establish that there was the "building industrial action", as alleged in his pleading and advanced in his final submissions. Accordingly, Mr Cahill's case under s 38 fails. Had he proven his case as alleged, further questions would arise as to whether par (b) or (c) of the definition of "building industrial action" was satisfied. In the circumstances, it is, however, unnecessary to decide these questions. With respect to penalties, costs and any other remaining issue, there should be a directions hearing later this month. I certify that the preceding one hundred and twenty-six (126) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | meetings between union officer and construction company in relation to a construction project union officer told crane crew to shut down crane and leave the construction site whether union officer contravened s 43 of the building and construction industry improvement act 2005 (cth) by making threats or taking action with intent to coerce the construction company for a proscribed reason contraventions made out union contravened s 43 by virtue of union officer's actions whether union officer discouraged other crane companies from attending the construction site whether union officer threatened to organise, or organised, a picket line alleged contraventions of ss 38 and 43 of the building and construction industry improvement act not made out industrial law industrial law |
The application as originally framed did not seek any substantive relief in the form of an election inquiry. Such orders were framed only as claims for interlocutory relief. The interlocutory aspect of the relief sought was directed at halting the election process, which was then in prospect. No such interlocutory relief was granted and the election proceeded in accordance with the rules of the Construction, Forestry and Mining and Energy Union (CFMEU) in November 2008. Proceedings then ensued in the Industrial Relations Commission of Western Australia concerning the results of the election. Those proceedings related to an election inquiry instituted under s 66 of the Industrial Relations Act 1979 (WA) (WAIR Act). The applicant unsuccessfully applied to intervene in those proceedings: see Thompson v Reynolds [2009] WAIRComm 24 (23 January 2009) at [17]. On 23 February 2009, the applicant then filed a "substituted application" pursuant to s 200(1) of Sch 1 of the WR Act for an inquiry by the Federal Court into alleged irregularities in relation to an election for an office in an organisation or a branch of an organisation, the organisation being the Construction, Forestry, Mining and Energy Union, Western Australian Branch (CFMEU). The irregularities are said to arise under s 190 of Sch 1 of the WR Act. At a hearing before Heenan J in the Supreme Court of Western Australia, evidence was received by the Court through affidavits. The applicant now proposes that this Court should grant the applicant leave to issue a subpoena to have the evidence adduced before Heenan J in the Supreme Court of Western Australia produced to this Court so that it can be taken into account on the applicant's substituted application. The applicant initially proposed that the CFMEU, Mr Reynolds and Mr Kavanagh --- the interested persons who have been given leave to make submissions --- give discovery of material documents, but later abandoned that proposal when he accepted through counsel that discovery could only be required of "parties" and the interested persons were not parties. As a consequence, the applicant converted his proposal into one for leave to issue a subpoena to produce the documents adduced as evidence in the Supreme Court proceedings. The applicant, on the other hand, contends that there is no reason why the application currently before the Court should not be considered a relevant proceeding for the purposes of O 27 and that the Court is fully empowered to grant leave to issue a subpoena in a case like this and should proceed to do so. These are the detailed reasons for that decision. However, O 27A generally provides for leave to issue a subpoena and by r 1 applies to a subpoena that is to be issued under O 27. It will be noticed that under O 27, r 2(1) and O 27A, r 2(3), it is contemplated that a subpoena may be issued, with leave of the Court, in a "proceeding". Order 1, r 4 of the FCR that deals with interpretation does not ascribe any meaning to the word "proceeding". Any cursory examination of usual legal dictionary sources (such as Stroud's Judicial Dictionary of Words and Phrases (7 th ed, Greenberg D, Sweet & Mawell, 2006) and Black's Law Dictionary (9 th ed, Garner BA, West Group, 2009)) discloses that there are numerous judicial definitions of the terms "proceeding" or "any proceeding" and the like. What is important to notice is that the relevant terms are always interpreted having regard to a particular statutory context, and that not every step or action taken in a court has been held to fit within the relevant term. To mention this is simply to emphasise the fact that the word "proceeding" and the phrase "proceeding in a court" used in s 4 of the FCA Act appear in a particular statutory context and are not amenable to some simple, generic interpretation. Nonetheless, one would have thought that the word "proceeding" and the expression "proceeding in a court" as used in s 4 of the FCA Act are probably intended to have very wide meanings, and the authorities in this Court bear this out. In Fiorentino v Irons (1997) 79 FCR 327 ( Fiorentino ), Foster J held that a summons to a person to attend for examination under s 596B(1) of the then Corporations Law could be regarded as an originating process for the purposes of O 8, r 1 FCR. In so concluding his Honour noted that the FCR were different from the rules of other courts where different conclusions had been reached in relation to the nature of an examination order. I am satisfied that for present purposes one can regard the original application for the issue of the summonses in this matter as a proceeding in the Court and one can regard the current application by notice of motion for leave for the service of that summons outside Australia as a proceeding incidental to the original application or one relevantly in connection with it. However, in National Australia Bank Ltd v Stern [2000] FCA 588 , Einfeld J at [7] doubted, without having to decide the point, that an application for examination of a party following judgment against them in respect of their financial situation, following their failure to pay the amount in question, could be considered a "proceeding" in respect of which subpoenas could be issued for the production of documents under O 27, r 2 FCR. There is even a difference, I think, between this type of examination and the type which resulted in the decision in Fiorentino . I should also mention that the Federal Court Rules contain a definition of 'examination' but it does not include an examination of the kind referred to here. In Carnegie Corporation Ltd v Pursuit Dynamics Plc [2007] FCA 1010 ; (2007) 162 FCR 375 (4 July 2007) ( Carnegie ), the applicant sought to serve process out of the jurisdiction pursuant to O 8 FCR. The question arose whether the application to the Court under O 15A, for an order that the prospective respondent give preliminary discovery to the applicant, was included within the expression "originating process" in O 8, r 3. French J noted that O 8, r 1 defined originating process as "an application commencing a proceeding...". His Honour referred to the definition of "proceeding" in s 4 of the FCA Act and noted that it provided a wide definition. An application for preliminary discovery is therefore 'an application commencing a proceeding' and is within the new definition of 'originating process' in O 8 r 1. In yet another context closer to the circumstances of the present, in Re Amalgamated Metals Foundry and Shipwrights Union; Ex parte Adamson (1984) 4 FCR 319 an application was made to set aside a subpoena directed to a person to appear at an inquiry instituted under the Conciliation and Arbitration Act 1904 (Cth) --- the predecessor legislation to the WR Act. Order 27, r 2 of the Federal Court Rules gives the court express power 'in any proceeding' to issue a subpoena. Order 27, r 9 provides for the setting aside of a subpoena on motion by the person named in it, after notice of motion. Despite these provisions, there is some support for the view that the issue of a subpoena, and hence any motion to set it aside, is a separate 'proceeding', within the definition of that word given by s 4 of the Federal Court of Australia Act 1976 . By that definition, 'proceeding' includes an incidental proceeding in the course of, or in connection with, a proceeding. The issue of a subpoena, particularly against a person who is not a party to any proceeding before the court, might be said to be incidental to or in connection with the proceeding before the court. ... In view of the forms now prescribed in the schedule to the Federal Court Rules for subpoenas, it may be inappropriate to describe a subpoena issued out of this Court as a writ. Nevertheless, it is easy to see that the issue of a subpoena, especially against a stranger to the proceeding in connection with which it is issued, and any motion to set it aside, is a separate proceeding from that to which it is incidental or connected. In the absence of submissions on the question, I express no concluded view on whether the issuing of a subpoena itself amounts to a 'proceeding'. However, I am prepared to assume that 'proceeding' is sufficiently broad to encompass the issue of the subpoena to ASIC and the formulation, before the Court, of a confidentiality regime for access to documents produced in compliance with the subpoena. It could reasonably be characterised as an 'incidental proceeding' in the course of, or in connection with, the principal representative proceeding. But an application for leave or special leave to appeal is not in the ordinary course of litigation. The practice of this Court in granting or refusing leave or special leave makes this clear. First, until the grant of leave or special leave, there are no proceedings inter partes before the Court. This is so even in a case in which the application for leave or special leave is opposed. In this general context, it is appropriate to turn to the proper construction of s 200 of Sch 1 of the WR Act. As noted above, it permits a person who is or has been within a 12 month period, a member of an organisation who claims there has been an irregularity in relation to an election for an office in the organisation or a branch of it to "make an application for an inquiry by the Federal Court into the matter". Section 201 of Sch 1 of the WR Act then deals with the "Instituting of inquiry". While set out in full earlier, it is worth setting out the full text of s 201 of Sch 1 again. Rather, it requires the Court to "fix a time and place for conducting the inquiry" if the pre-conditions in (a) and (b) are satisfied, and when it does the inquiry "is taken to have been instituted". Accordingly, in a case such as the present, there being an application for an inquiry, all the Court must thereafter do is be "satisfied there are reasonable grounds for the application". As soon as the Court has or expresses this satisfaction then it "must" fix the time and place for conducting the inquiry. At that point the inquiry is taken to have been initiated. To put that another way, the inquiry is instituted automatically under the terms of s 201 of Sch 1 upon satisfaction of the pre-conditions set out in (a) and (b) and the fixing of the time and place for the inquiry. The Court does not actually "order" an inquiry. It occurs by operation of s 201. Section 200(1) simply provides for the relevant person to make an application for an inquiry by the Federal Court into the matter, but does not say anything about what the content of that application should be. Nor does any other provision of the WR Act. It will also be noticed at this point that, under s 200(1) of Sch 1, the relevant person may "make an application" and that, under reg 143(2), that application in the appropriate form must be "lodged" in this Court with any required document. A question arises, and is considered further below, whether the use of the verb "lodged" instead of the verb "filed" is a term of art. Order 48 of the FCR at all material times dealt with workplace relations proceedings. Division 4 of O 48 deals with inquiries and ballots in relation to registered organisations. Rule 10(a) makes Div 4 applicable to an application under s 200 of Sch 1. Rule 10A(1) requires such an application to be in accordance with Form 50A and "be accompanied by an affidavit stating the nature of the applicant's claim and the material facts on which the claim is based". On the face of it r 10A of O 48 has been complied with by the applicant in this case. On the face of Pt 3 of Sch 1 of the WR Act, the Court is simply required to consider the application and the material disclosed by the accompanying affidavits in order to consider whether it is "satisfied that there are reasonable grounds for the application". If the Court is so satisfied, then as noted, under s 201 the Court is simply required to fix the time and place for conducting the inquiry and give such directions as it considers necessary to ensure that all persons who are or may be justly entitled to appear at the inquiry are notified of the time and place. This inquiry scheme suggests that the Court is not to engage in any wider preliminary inquiry as to whether or not there are material facts that might support the attainment of the satisfaction to which s 201(b) refers. Rather, if there are material facts put before it which enable that satisfaction to be expressed, then an inquiry is to be fixed so that the matter can be fully inquired into, with all relevant persons being entitled to participate. It follows that, at the time the inquiry is actually instituted, consideration is given to the persons who will be justly entitled to appear at the inquiry to call evidence and the like. In this regard the scheme of the Act is fleshed out by the subsequent provisions of Pt 3 of the WR Act. Section 202(1) of Sch 1 of the WR Act permits the Court to authorise the Industrial Registrar to arrange for, for the purposes of the inquiry, for a designated Registry official to take any action referred to in subs (2). That includes inspecting election documents, giving a written notice to a person requiring a person to deliver to him or her any election documents, taking possession of any election documents and retaining any election documents. Such an order can be made under s 202(1) "where an application for an inquiry has been lodged with the Federal Court under s 200". (Again the verb "lodged" is used. ) But nothing in s 202 suggests that the Court, for the purpose of exercising its function under s 201, should enter upon an initial inquiry. All that s 202 does, is ensure the security and integrity of the election documents in the event that an inquiry is instituted. However, s 202(3) does anticipate that the Court might give a person an opportunity to object to the proposed action. That person obviously is not a "party" to any proceeding, but simply a person who may be affected by an order made under s 202. However, that does not require the Court to enter into some preliminary inquiry as to whether or not there are material facts supporting the instituting of an inquiry. It is limited simply to the security and integrity issue. Then under s 204(1), where an inquiry into an election has been instituted, the Court may make a number of orders to the effect that: Section 205 then sets out the procedure to be followed at the inquiry. Section 205(1) provides that the Court must allow to appear at an inquiry all persons who apply to the Court for leave to appear and who appear to the Court to have "an interest in the inquiry" and the Court may order any other person to appear. By s 206(1), at an inquiry the Federal Court must inquire into and determine the question whether an irregularity has happened in relation to the election, and such further questions concerning the conduct and results of the election as the Court considers necessary. Under s 206(2), the balance of probabilities is the appropriate test for determining whether any irregularity has occurred. Once an inquiry has been commenced, the Court, at all material times, had express power to issue a subpoena under O 48, r 14 FCR. Order 48 at all material times dealt with workplace relations proceedings. The first stage is the application under s 200 (to which there are no relevant parties). If, on the materials before the Court, the Court achieves the requisite satisfaction under s 201(b) of Sch 1 of the WR Act, then, as noted above the inquiry is fixed and taken to have been instituted. The Court need do nothing more. In my view, given the array of powers that the Court then has upon the instituting of the inquiry, the scheme of the WR Act is such that the Court does not have the power to enter upon what might be considered a preliminary inquiry before the inquiry that is actually instituted under s 201 by way of itself calling for or facilitating the production of further evidence, otherwise than by means of production by the applicant. In my view, if the Court had the power under O 27 or O27A to give leave to issue a subpoena for the production of documents in order to assist it in deciding whether it has the requisite satisfaction under s 201(b), then the statutory scheme would be subverted. This two stage process has been in place for some years. The predecessor to s 201(b) of Sch 1 of the WR Act can be found in s 219(b) of the Industrial Relations Act 1988 (Cth). It is clear that the Court will not lightly be "satisfied". In Re Becker [2004] FCA 1534 , it was held that the requisite satisfaction would not be achieved if the grounds relied upon could not, even if made out, constitute "an irregularity in relation to an election for an office in the organisation". Further, if the allegations of fact relied on do not go beyond accusations of a "speculative nature based upon the applicant's opinion that there has been an irregularity unless that opinion rests upon some substantial factual foundation", then the satisfaction required will not be achieved: see Re Becker at [9]; Re Post (1992) 40 IR 162 at 166 --- 167. These authorities on their own suggest that it is not the function of the Court to set off an inquiry in order to determine or consider whether it holds the requisite "satisfaction" for the purpose of s 201(b). But the Act has provided ample powers to the court to make orders, as appropriate and necessary, including at short notice, to meet irregularities appearing in the course of an inquiry into an election. To invoke the jurisdiction of the Industrial Relations Court and to conduct an inquiry into an election is a serious matter . This explains the procedure established by s 219(b) by which, before an inquiry is conducted, the court must be satisfied that 'there is reasonable ground for the application'. I say that this step is a serious one because it affects confidence in the integrity of the conduct of the organisation; introduces an element of uncertainty in the tenure of the office-holders affected; distracts the attention of those office-holders, to some extent, from the pursuit of their industrial functions; consumes a great deal of time of the organisation and of public office-holders; and involves much public and private cost. In such circumstances the proper inference is that the parliament intended that electoral inquiries should not be likely embarked upon nor extended unnecessarily beyond the subject matter of the particular application. If he makes such a claim the court has jurisdiction to inquire; if he does not, the court lacks jurisdiction to inquire. If, on the face of the application, what the applicant claims to have occurred does not amount to an irregularity ... a defect in jurisdiction appears. A defect in jurisdiction appearing on the face of the application does not require evidence to establish it ... nor can evidence cure it. Again, in my view, the scheme of the WR Act, authority explaining the nature of the inquiry process, and the Rules of the Federal Court all make plain that the Court has a very limited function when it comes to the process of instituting an inquiry on an application made by a relevant person under s 200 of Sch 1 of the WR Act. In my view, this limited function is confirmed by the relevant regulations and rules that speak of an applicant lodging, not filing, materials. Order 1, r 5A pointedly deals with the topic of "Filing and lodging documents". Rule 5A(1) deals with a document that is required or permitted by the FCR "to be filed or lodged". The FCR recognise that there can be a distinction between those means by which the Court receives a document. The first matter to notice is that s 478 [of the Migration Act 1958 (Cth)] is concerned with an act of a party and not with an act of the Court or an officer of the Court. This distinction is an important one. By the Federal Court Rules 1979 (Cth) a proceeding in the original jurisdiction of the Court is commenced by the 'filing' of an application (see O 4 r 1(1)) and an appeal is instituted by the 'filing' of a notice of appeal (see O 52 r 12). 'Filing' is the word used to describe the process of placing a document in the records of a court or its registry: see Purden Pty Ltd v Registrar in Bankruptcy (1982) 64 FLR 306 at 309 --- 310; 43 ALR 512 at 515. Because s 478 is concerned with an act of a party it cannot be supposed that the word 'lodge' is synonymous with the word 'file'. A party who is required to 'lodge' a document does not have the power or ability to 'file' that document among the records of the Court or its registry. Also as noted above, s 202(1) of Sch 1 of the WR Act authorises certain security and integrity steps to be taken where an application for an inquiry "has been lodged" with the Federal Court under s 200. The fact that an application is "lodged", not filed, is considered of significance in the present context because it suggests the "application" so lodged is something less than an originating proceeding and, in deed, is not a "proceeding" at all. In all of these circumstances, there is the distinction, in my view, drawn by the various legislative provisions and regulations and rules that govern the making of an application under s 200 that strongly suggest it is not in the nature of an originating "proceeding" or a "proceeding in the Court" but rather that the application is more in the nature of an application for leave or special leave to appeal to the High Court of Australia, which, if allowed, then commences a relevant "proceeding", being the inquiry that is instituted by operation of s 201 where the Court is satisfied to the requisite degree as required by s 201(b) and fixes the date for the inquiry. Therefore, as a matter of construction, I do not consider that an application made by a relevant person pursuant to s 200(1) of Sch 1 of the WR Act is of itself a "proceeding" for the purposes of O 27 and O 27A of the FCR. For these reasons I do not consider it is open to the Court to give leave to issue a subpoena at the instance of the applicant for an inquiry, to produce the documents that may be relevant to such an inquiry. If there be any documents that ought to be produced to any inquiry that is subsequently instituted by operation of s 201(b) of Sch 1 of the WR Act, and it is necessary for subpoenas to go to require their production, then the Court has full power to order the subpoenas be issued if and when that inquiry is instituted. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | application for leave to issue a subpoena to produce documents o 27 and o 27a of the federal court rules (fcr) whether application under s 200(1) of workplace relations act 1996 (cth) for an election inquiry is a "proceeding" for the purposes of o 27 and o 27a of fcr application dismissed. industrial law |
Directions were given on 11 August 2006 for the filing of affidavits in opposition to the application by 18 August. The application was set down for hearing on 31 August 2006 on the basis that if leave to proceed were then granted to ASIC, consideration would be given to whether to proceed immediately with the substantive application. On 31 August 2006, I gave liberty to Mr Carey, a director of Forestview, to defend the application in the name of the company. 2 Directions were made for the production of a list of documents by ASIC for a process by which a list of relevant documents might be agreed in a conference before a Registrar and for directions to be given by a Registrar. Affidavits in opposition were to be filed by 21 September 2006. On 27 September 2006 the solicitors then on the record for Forestview, withdrew from the record. On 29 September 2006 further directions were given, listing the matter for hearing on 23 October 2006. On 23 October 2006 the application was further adjourned to 25 October 2006. 3 Forestview was directed to file any affidavits in support of an adjournment application it wished to make, which was related to an application for funding. By the term "application for funding" in this context I refer to what was ultimately treated as an appeal against the refusal of the receivers to make available to Forestview funds, from company assets, for the purpose of defending the winding up application. 4 The matter was adjourned to 30 October 2006 and Ms Colson, on behalf of Forestview, then made submissions on the substantive question of the receiver's decision refusing funding. Judgment was reserved to 8 November 2006. Because of the way in which the matter had arisen in the context of like arguments concerning Lanepoint Enterprises Pty Ltd and Bowesco Pty Ltd (Receivers and Managers Appointed), the receivers for Forestview had not been represented and were given the opportunity to make submissions and file any affidavits in opposition to the funding submission. 5 On 30 October 2006 the application to wind up the company was adjourned to today. Following a request by Forestview's new solicitors to file further evidence in answer to affidavit evidence filed by the Forestview receivers, the judgment on the question of their decision to refuse funding was further reserved to 15 November 2006. On 15 November 2006 judgment was given refusing Forestview's appeal against the receiver's decision to decline funding: Australian Securities & Investments Commission v Forestview Nominees Pty Ltd (Receivers and Managers Appointed) [2006] FCA 1530. 6 The winding up application has come on as previously fixed for hearing today. Forestview applies to adjourn the proceeding. That the hearing of the Application and the Applicant's application to amend the Originating Process, as set out in the Applicant's Notice of Motion dated 11 October 2006 and filed 12 October 2006 (" the Application to Amend ") be adjourned to a directions hearing on a date to be fixed following the Respondent being granted access to documents referred to in the Affidavit of John Hammond sworn 17 November 2006, filed herewith. He says in that affidavit that he has been engaged to act and advise in relation to the vacation of the application to wind up and the application to amend the originating process. He refers to an exchange of correspondence relating to requests for documents, including letters dated 18 September 2006 from ASIC to Clavey Legal; a letter of 25 October 2006 from Mr Carey; and a letter of 16 November 2006 from Mr Carey, both to ASIC. He says that he is informed by Mr Carey and verily believes that despite the request for documents, only a limited number are available, which he is waiting to inspect. 9 In relation to the funding application Mr Hammond says that on 23 and 25 October 2006 Forestview applied to adjourn the application on grounds including the need for funding. The adjournment application was dealt with as a funding application. The funding was expected to cover legal costs of instructing solicitors and counsel. He says that in anticipation of the receipt of funding pursuant to the funding application and pending its outcome, Forestview was unable to seek appropriate legal advice. The funding application was dismissed on 15 November 2006. He says that since that date Forestview has arranged alternate sources of funding within a limited period of time. I note in that context, of course, that there is a time limit, subject to extension by the Court, for dealing with winding up applications, such as the present, brought on the ground of insolvency where a receiver has been appointed. 11 There are really two issues raised in the adjournment application. The first is as to access to documents and the second is as to funding. So far as the access to documents is concerned, I set up a mechanism by orders that I made some months ago under which a consensual process was provided for and absent agreement a facility for the Registrar to make directions. An order was also made for liberty to apply. If there had been a dispute or some alleged obstruction or failure to be forthcoming on the part of ASIC in producing necessary documents, then that was a matter which could have been the subject of an application for directions by the Registrar and, alternatively, to a Judge. 12 So far as funding is concerned, Mr Hammond's instructions do not indicate that in fact there is any source of funding available beyond that available for his instructions for the purpose of seeking the adjournment. If such funding were available then, of course, there would have been no justification for putting everything on hold pending the uncertain outcome of the appeal against the receiver's decision. In my view, no proper justification has been shown for the adjournment and the adjournment application will be refused. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | acn 009 349 053 (no 2) [2006] fca 1628 |
Macquarie is an Australian resident corporation and SVB is an overseas resident corporation, presumably of the United Kingdom. The existing first respondent ARMA Pty Limited ('ARMA') carried on business at the material times as a real estate valuer under the business name 'Cairns Regional Valuers'. The second respondent Neil Teves ('Mr Teves') was asserted by PCL to be a director and shareholder of ARMA, an assertion which I do not understand to have been put in issue by the Insurers. 2 Macquarie entered into professional indemnity insurance arrangements in Australia in favour of ARMA, and did so purportedly on behalf of so-called 'Security' , which was defined in the insurance policy schedule to mean 'certain Underwriters at Lloyds...' . Those insurance arrangements the subject of the proceedings related to two successive years of cover, being from 26 July 2003 to 26 July 2004 and from 26 July 2004 to 26 July 2005; each insurance policy itself was headed 'MACQUARIE UNDERWRITING' and 'PROFESSIONAL INDEMNITY'. In the proceedings as initially constituted, PCL sued ARMA and Mr Teves for damages under the Trade Practices Act 1975 (Cth) ('TP Act') in relation to valuations of two parcels of real estate located at Trinity Beach in Queensland, on the alleged basis whereof PCL advanced substantial funds to the real estate owner Mr Brett Robinson, said to have subsequently encountered financial difficulty. He was not a party to the proceedings. 3 The grant of leave would enable PCL to pursue direct recourse for indemnity by Macquarie and/or SVB under section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ('the LR Act') in relation to the conduct of ARMA and Mr Teves, the apparent author of the valuations, by way of the provision of those realty valuations each bearing date 22 May 2003, being conduct said to have contravened sections 52 and 53A of the TP Act. Section 52 relates to misleading and deceptive conduct in trade or commerce and s 53A relates to false representations and misleading conduct in connection with the promotion of the sale of land. The nature and extent of indemnity the subject of that underwriting by Macquarie and SVB is particularised in the insurance documentation placed in evidence, and also the circumstances excluded from cover. The insured risk falls within the description of professional indemnity, being a description which appears in the heading to each so-called policy schedule, and is geared to the respective definitions of 'Responsible Valuer' and 'Valuation(s)' appearing on the concluding page thereof. The present interlocutory application does not of course require the final or concluded determination of the insurance issues arising, but does require the resolution of the nature and prospective extent of any liability of the Insurers, or either one of them, to indemnify the existing respondents ARMA and Mr Teves in relation to the consequences of any determination which might be made in favour of PCL at any ultimate hearing of the proceedings, by reason of what is contended by PCL to have been valuations made in contravention of the foregoing statutory provisions. As will later be seen, the policies extended to any ' principal... director or employee' of ARMA, and hence the apparent basis for Mr Teves' joinder as a respondent to the proceedings along with ARMA. Leave shall not be granted in any case where the court is satisfied that the insurer is entitled under the terms of the contract of insurance to disclaim liability, and that any proceedings, including arbitration proceedings, necessary to establish that the insurer is so entitled to disclaim, have been taken. If the claim is reasonably arguable in the sense that it 'could be seriously put' ( Andjelkovic v AFG Insurances Ltd (1980) 47 FLR 348 at 356 per Blackburn CJ, the context whereof involved an issue as to statutory or alternatively contractual interpretation), then leave should be granted to join the Insurers, or at least that Insurer resident in Australia being of course Macquarie, notwithstanding its purported agency status, so that the issue as to availability of the statutory remedy referrable to the prevailing circumstances may be subsequently resolved at a final hearing of the proceedings. I do not accept the appellant's submission that the judge was bound to grant leave if there was an arguable case on the non-disclosure issue. I can readily accept that leave may be given where the Court is satisfied that there is an arguable point on the insurer's indemnity issue. It is now established that the grant of leave to proceed against an insurer does not foreclose the insurer's right to litigate issues going to its liability to indemnify the insured in the substantive proceedings.... But it does not follow, in my view, that a court that is positively satisfied of the insurer's entitlement to disclaim, after issue has been joined on that matter as between the plaintiff and the insurer, must exercise the discretion in favour of the grant of leave. The court is "seized of the discretion to grant leave" (National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1996) 9 ANZ Insurance Cases 61-335 at 76,711; (1996) 138 ALR 409 at 418 per Lindgren J), but it is not driven to exercise the discretion in a particular way. In the present case Delaney DCJ was satisfied on the balance of probabilities that the insurer was entitled to disclaim. He was in my view entitled to reach this conclusion. It is the case of the Insurers on the present application of PCL for joinder of Macquarie and also SVB as additional respondents to the proceedings that I should find on the balance of probabilities that the Insurers are entitled to disclaim liability, and therefore that leave to join the Insurers should be refused. On 22 May 2003, ARMA provided valuations for mortgage lending purposes to PCL as prospective mortgagee in respect of two adjacent freehold properties comprising Lots 15 and 20 at Nos 22-24 Oyster Court Trinity Beach in the State of Queensland. The valuations were apparently signed by Mr Teves on behalf of ARMA, though the valuations were not tendered into evidence, the view understandably taken by the parties being that the same were not material to the resolution of the present interlocutory proceedings. 8 It is PCL's case that in reliance on those valuations, it lent to the freehold owner Brett Robinson the sum of $598,000 secured by way of registered first mortgage over the properties, and that when the freehold owner defaulted under the mortgage, PCL exercised its power of sale as mortgagee and sold the properties, thereby sustaining a shortfall in the available proceeds of sale in relation to the moneys by then secured by PCL's mortgage. PCL's case was further that the valuations were provided to PCL by the respondents ARMA and Mr Teves in breach of sections 52 and 53A of the TP Act, for the reason that the valuations substantially overstated the market values of the properties and those existing respondents did not have reasonable grounds for their assessments of market value. PCL has claimed damages in the first instance against ARMA as the provider of the valuations and Mr Teves as the author of the valuations, he being allegedly also a director of ARMA, but it is apparent that recovery from ARMA and Mr Teves individually is at least dubious. 9 As I have earlier foreshadowed, ARMA held professional indemnity policies of insurance in its favour as the insured for the respective yearly periods 26 July 2003 to 26 July 2004 ('the first policy') and 26 July 2004 to 26 July 2005 ('the second policy'). Each policy commenced with a so-called Schedule , the first pages whereof containing reference to such basic details as the name of the insured and the insured's business, the insurance period, the sum insured, the excess, the premium and certain special conditions. The third page of the Schedule was headed 'Valuers-Australia' , and set out certain threshold circumstances excluded from cover, including understandably valuations made otherwise than by a registered or licensed valuer. The term 'You' picked up reference to the 'Name' on the front page, being ARMA trading as Cairns Regional Valuers. 'Security' was defined in the definitions segment of the policies to mean 'certain Underwriters at Lloyds, each of whom (including their executors and administrators) is only liable for their share of any Claim, loss, liability or expense payable by this policy. Details of each syndicate and its share can be obtained from Macquarie Underwriting Pty Limited'. Such 'certain Underwriters' were not identified in the policies by name, nor appear to be as yet identified at least to PCL. Each policy stipulated 26 July 2001 as the 'Retroactive Date' , which readily accommodated of course the time of compilation of the valuations of ARMA complained of, which as above indicated, were apparently furnished by ARMA in or about May 2003. 11 PCL asserted, by a communication of 23 April 2004 written on the letterhead of its apparent trade name 'Bluestone Mortgages' and addressed to 'Mr Neil V Teves' of 'Cairns Regional Valuers', that the valuations (of course made by ARMA) had 'significantly overvalued the properties, such that it appears likely that there will be a shortfall incurred following exercise of [PCL's] power of sale. ' PCL through its solicitors subsequently wrote to 'Mr Neil Teves Cairns Regional Valuers' on 13 May 2004 and gave further notice of likely claim referrable to ARMA's said valuations, and repeated the allegation of excessive values having been ascribed by ARMA. The full text of both letters will be shortly extracted. It appears that Macquarie may have first received notification of PCL's claim on 7 October 2004, by means of a letter from the previous solicitors for the existing respondents to the proceedings, ARMA and Mr Teves. In response, Macquarie sent a facsimile transmission to those solicitors on 25 October 2004 which denied any such liability to indemnify ARMA and Mr Teves. An auction of the properties is scheduled for 27 May 2004. It was asserted further by PCL that neither ARMA nor Mr Teves appeared to have the financial means to meet any judgment for the likely shortfall in PCL's mortgage debt recoupment from the proceeds of PCL's proposed sales as mortgagee, including the costs and expenses of exercise of PCL's power of sale and otherwise relating to ARMA's allegedly misleading and deceptive valuations. Hence PCL has sought to join Macquarie, and subsequently SVB as well, as respondents to the proceedings commenced initially against ARMA and Mr Teves. In the case of the joinder of SVB, that occurred apparently as a result of information obtained by Macquarie concerning the corporate identity of so-called 'Security', being a corporate identity not apparent from the words of the successive first and second yearly policies. Macquarie and SVB contended however that PCL should not have leave to join Macquarie or SVB to the present proceedings, at least on the basis that PCL must plead that either Macquarie or SVB is the insurer, since it could not be claimed to be both. Macquarie and SVB seemingly asserted moreover that PCL had been already informed that SVB is the insurer in relation to each policy sought to be relied upon by PCL, upon the footing apparently that Macquarie was merely the agent for SVB. Macquarie and SVB therefore contended that leave ought to be refused in any event for the joinder of Macquarie as a respondent in the proceedings, irrespective of whether the circumstances alleged by PCL attracted the operation of either or both of Macquarie's so-called 'PROFESSIONAL INDEMNITY' policies (to which I have been referring of course as the first and second policies). PCL instituted the present interlocutory proceedings by notice of motion filed on 18 November 2005, whereby leave was sought to add Macquarie as third respondent to its existing proceedings commenced on 29 November 2004 against ARMA and Mr Teves, and subsequently on 15 December 2005, PCL filed an amended notice of motion for the addition of SVB as fourth respondent. A proposed amended statement of claim, which pleaded relief against Macquarie as third respondent and SVB as fourth respondent, was tendered to the Court by PCL. For that reason, where I hereafter refer generally to 'respondents' in these reasons, the same may be taken to include reference to both Macquarie and SVB, as well as ARMA and Mr Teves, unless inconsistent with the context. 17 Both the first and second policies were of course issued by Macquarie. Each policy bore Macquarie's seal through which was placed an indecipherable signature, which appears beneath the words 'Signed for and on behalf of Macquarie Underwriting Pty Ltd' . Details of each syndicate and its share can be obtained from Macquarie Underwriting Pty Limited. . In any event, Macquarie disclosed at least implicitly by those terms of each policy that it acted on behalf of those unidentified 'certain Underwriters at Lloyds' . Accordingly Macquarie should be joined as a third respondent to the proceedings, as PCL presently seeks, irrespective of any joinder of SVB as fourth respondent. As to the joinder or otherwise of SVB, there is no specific indication in either policy, as I have foreshadowed, that the 'Security' is a legal entity; so much has however been apparently indicated by Macquarie to be the case, and hence PCL's present application that both entities be added as respondents for the purpose of the claims to be advanced pursuant to s 6 of the LR Act. There is no compelling reason, that I can identify, for Macquarie to add as further respondents the unidentified and otherwise undisclosed 'certain Underwriters at Lloyds' . 19 Each of the policies contains in clause 1 thereof, which appears under the heading 'STANDARD PI ENDORSEMENT' , reference to the circumstances whereby '[w]e will not cover you for any Claim...' . Clause 1.2.1 stipulated that valuations the subject of cover must have been undertaken by a 'registered or licensed valuer', and thereafter set out minimum requirements for valuations to attract cover. One of those requirements was that the valuations the subject of cover should not have been 'undertaken or signed by Brian Smith' ; another stipulated that cover was not to be available in relation to '... [v]aluations undertaken or signed by any person not named in the SPECIAL CONDITIONS of the Schedule' . 20 The only material difference between that second policy and the first policy, apart of course from the latter relating to the earlier insurance year 26 July 2003 to 26 July 2004, and the former to the following insurance year 26 July 2004 to 26 July 2005, was that only one 'Named Valuer' was identified in the 'SPECIAL CONDITIONS' of the 'SCHEDULE' to the extent appearing on the front page of the earlier or first policy, being Terrence Stewart, whereas there were three 'Named Valuers' appearing in the 'SPECIAL CONDITIONS' of the 'SCHEDULE' on the front page of the later policy (ie that relating to the subsequent insurance year 26 July 2004 to 26 July 2005), being Neil Teves, Paul Lowis and John Wake , and additionally 'Terrence Stewart, but only in relation to valuations done prior to the Insurance Period '. Mr Teves is of course the existing second respondent to the proceedings. It is common ground that it was during the term of the later or second policy, that a claim was made by PCL upon the existing respondents ARMA and Mr Teves, being a claim which was adequate in scope in relation to the risk pleaded by PCL, and further that such claim was notified to Macquarie during that later or second term. PCL's case accordingly was that there was what may be described as a prima facie indemnity response in operation pursuant to the terms of the second policy. PCL's case was primarily put on the basis of the second policy. 21 However it was put against PCL that each of Macquarie and SVB is not liable under the second policy by reason of the operation of exclusion clause 4.1 thereof, the second policy relating of course to the year of indemnity 26 July 2004 to 26 July 2005, and which, as appears from the text of what I have earlier reproduced, excludes cover for any claim 'first made, threatened or intimated against or to [ARMA] prior to the Insurance Period; or arising from any matter disclosed or notified to Us... prior to the Insurance Period as being either a Claim, or claim, or else arising from circumstances of which [ARMA was] aware prior to the Insurance Period and which [ARMA]... ought reasonably to have realised to be circumstances which might result in a Claim or claim' . The distinction between Claim and claim thus appearing in that segment of each policy is that the former refers to an originating legal process, whereas the latter is what appears as a non-exclusive definition in the second segment of exclusion clause 4.1, and thereby includes an 'allegation or complaint of a breach of professional duty' , and generally 'a demand for compensation or damages' . That critical exclusion clause 4.1 is in identical in terms in relation to the first and second policies for the successive years of cover of course from 26 July 2003 to 26 July 2004 and from 26 July 2004 to 26 July 2005. 22 The parties agreed that prior to the commencement of the insurance year of the second or later policy, ARMA had received the two letters of significance I have already extracted, the first from Bluestone Mortgages written on behalf of PCL on 23 April 2004, and the second written from PCL's solicitors written on behalf of PCL on 13 May 2004, the latter whereof repeating the substance of the allegation made in the former as to overvaluation, and consequentially of a likely or possible shortfall on the prospective realisation by PCL of the subject properties in its capacity as mortgagee exercising power of sale. More precisely, the earlier letter used the expression 'it appears likely there will be a shortfall' , whereas the latter or subsequent letter used the perhaps more conservative expression '... our client may suffer a shortfall upon sale...' . Each letter was written of course some time prior to the expiration of the term of insurance the subject of the first policy, and therefore of course prior to commencement of the term of insurance the subject of the second policy. However it would seem from Macquarie's fax of 25 October 2004 that neither letter was passed on by ARMA to Macquarie until October 2004 (see Macquarie's fax to 'Greg Parr' of 25 October 2004). 23 A threshold debate arose as to the construction to be given to the operation of each of those two letters of 23 April and 13 May 2004. One contention of PCL was that those letters did not evince ' circumstances which might result in a claim ' within policy exclusion 4.1, with emphasis being placed upon the word might , as both letters had been written at a time prior to crystallisation of any loss to PCL, that is to say, at a time prior to any sale of the properties by PCL (in exercise of its power of sale as mortgagee) involving any actual shortfall being sustained in respect of the mortgage indebtedness of Brett Robinson to PCL, and that the letters were therefore merely 'speculative' in operation for that reason. Attention was drawn by PCL in particular to the words ' it appears ' and ' may suffer ' in the later letter of PCL's solicitors of 13 May 2004 extracted above. PCL asserted in that regard that '[t]his is not a claim nor an assertion of the breach of duty, it merely raises the possibility of overvaluation, foreshadowing future action in the event of a shortfall', and that consequently, any so-called 'known circumstances' the subject of exclusion clause 4.1 did not apply. PCL also contended that to foreshadow the possibility of a claim pursuant to either policy did not constitute a 'known circumstance', because otherwise 'every event, no matter how remote and contingent, would trigger the exclusion'. Put another way, PCL submitted that 'at the relevant time', there was no claim as such then pending, because it was implicitly acknowledged in those letters of 23 April 2004 and 13 May 2004, written on behalf of PCL (during of course the terms of the first policy being 26 July 2003 to 26 July 2004), that there was no basis for any claim to indemnity unless certain further events transpired or crystallised by way of sale by PCL as mortgagee exercising power of sale. In my opinion, that submission of PCL cannot be dismissed as not reasonably arguable or not open to argument. 24 The Insurers rejoined that the words 'circumstances which might result in a claim' the subject of exclusion clause 4.1 of each policy included circumstances where a claim is possible in the sense, for instance, of being contingent upon crystallisation of some event, and that if such was not the case, there could never be any circumstances, short of the making of a claim per se , which could constitute circumstances which might result in a claim. The respondents drew attention to FAI General Insurance Co Limited v McSweeney ((1999) 10 ANZ Ins Cas 61-443 at 75,033-4), where this Court (Lindgren J) gave consideration to a policy condition containing a similar expression ' may give rise to a claim', and expressed the opinion that although it was not desirable to attempt to define precisely the shade of meaning to be signified by that expression in particular contexts, circumstances may be said to give rise to a claim if ' they would... immediately suggest to a reasonable person in the... insured's position who reflected upon those known circumstances, that the bringing of a claim against the insured in respect of them was a "definite risk" or a "real possibility" or "on the cards". It was therefore contended by the Insurers the second policy 'does not respond' to the claim of ARMA as valuer and hence also to that of PCL as mortgagee . Moreover this letter warned '... that circumstances have arisen that may give rise, to a claim', being words reflected in the fourth indented paragraph of exclusion clause 4.1 of each of the first and second policies. The letter dated 23 April 2004 is to similar effect. 26 PCL drew attention to the well known principle of insurance law that an exclusion clause in an insurance policy should be construed narrowly and otherwise against the interests of the insurer, citing in that regard Derrington and Ashton, The Law of Liability Insurance (2 nd edition Lexis Nexis, 2005) at 10-2. PCL referred further to the principle enunciated in the unanimous reasons for judgment of the High Court in Darlington Futures Limited v Delco Australia Proprietary Limited [1986] HCA 82 ; (1986) 161 CLR 500 at 510 to the effect that in the event of ambiguity, an exclusion clause is to be construed contra proferentem . I have already extracted the material provisions of exclusion clause 4.1 of potential relevance. Given the content of the letters of PCL to Mr Teves, apparently a director and shareholder of ARMA during the term of the first policy (as well as the second policy), yet the absence of any sale of the properties the subject of ARMA's valuations prior to commencement of the second policy, being letters apparently not provided to Macquarie prior to the commencement of the term of the second policy, the Insurers contended that if the second policy was otherwise the subject of relevant cover, that absence of disclosure by ARMA to Macquarie of those notifications of apparent likely claim communicated by PCL to ARMA was fatal to invocation of any liability of the Insurers under the second policy. 27 It was PCL's further contention however that s 33 (of Division 3 of Part IV) of the Insurance Contracts Act 1984 (Cth) ('IC Act') so operates as to preclude, in the present circumstances, the Insurers from any effective reliance upon exclusion clause 4.1. PCL cited in that regard Permanent Trustee Australia Limited v FAI General Insurance Company Limited (1988) 153 ALR 529, where Hodgson CJ in Eq considered a policy condition, extracted at 536 under the heading ' Retroactive Liability ', which was claimed to have granted unlimited retroactive liability, qualified only by the words ' omitting claims or circumstances which may give rise to a claim which are known to the insured prior to the inception of this insurance' . PCL contended that such exclusion condition addressed in FAI was 'on all fours' with exclusion clause 4.1 of each of the present policies, and that what was addressed by his Honour was indeed the substance rather than the form of the exclusion clause there in issue. His Honour determined (at 568) that '... the retroactive clause should be interpreted as applying only if the insured knows the circumstances as circumstances which might give rise to a claim (being his Honour's emphasis), because otherwise the clause would have the unreasonable effect of excluding many or even most circumstances that were purportedly insured against'. Subsequently (at 589), his Honour added that '[i]f the retroactive clause had the effect of excluding liability for something which was in substance a non-disclosure, then I think s 33 would in any event, prevent the retroactive clause excluding liability'. PCL's submissions was that '... the only way that [Macquarie and SVB] can escape the making of the orders sought is... to persuade [the Federal Court] that Hodgson J... was wrong' in his approach to the resolution of Permanent Trustee . 29 Counsel for the Insurers Macquarie and SVB drew attention to the reasons for subsequent decision of Dunford J in the Supreme Court of New South Wales in Pech v Tilgals (1994) 94 ATC 4206, where the circumstances involved a claim against an accountant for professional negligence, and a cross-claim by that accountant for indemnity against his professional indemnity insurer. The professional indemnity insurance policy excluded from cover claims '[a]rising from any circumstance or circumstances of which [the insured] shall became aware, prior to the commencement of insurance cover under this Policy... and which a reasonable Accountant in [the] position [of the insured] would at any time prior to the commencement of cover have considered may give rise to Claim' . His Honour first observed that the words '"at any time" (prior to the commencement of cover)' did not embrace circumstances which may have existed some time previously but which had been overtaken by subsequent events, as such a construction could at times lead to absurd results; rather in his Honour's view, those words referred to what a reasonable accountant should consider right down to the commencement of cover. 30 Assuming that policy language addressed in Pech to have relevantly similar effect as that of exclusion clause 4.1, two observations may be made. The first is that his Honour's observation cited above would have no application in relation to the operation of the first policy, but only the operation of the second policy, since the letters of 23 April 2004 and 13 May 2004 were written by PCL to Mr Teves during the currency of the first policy. The second is that the critical issue remains here as to the import of what was said in those letters concerning the implications as to what appear to have then constituted merely pending or proposed sales, rather than the implications of sales effected during that subsequent year of indemnity commencing 26 July 2004. It does not seem to me that Pech provides sufficient bearing upon the circumstances thus far in evidence in the present case. 31 PCL submitted next that s 14 of the IC Act, headed 'Parties not to rely on provisions except in the utmost good faith' , was also applicable to the present circumstances of claim, it providing by subsection (1) that '[i]f reliance by a party to a contract of insurance on a provision of the contract would be to fail to act with the utmost good faith, the party may not rely on the provision' . PCL's submission was that 'the effect of what the insurer seeks to do by relying on the exclusion is to penalise the insured for failing to notify the insurer of circumstances that might give rise to a claim during the previous policy year'. PCL asserted that the previous policy year of indemnity did not contain any provision that required the insured to notify any such circumstances. Accordingly PCL contended that '... where an insured is covered under successive policies of insurance, it is arguably a breach of duty of utmost good faith to rely on [an] exclusion which relates to the failure of the insured to perform an act during the prior policy of insurance when in fact there was no obligation of the insured pursuant to the prior policy to perform that act, namely to notify those circumstances'. The Insurers asserted on the other hand that PCL did not demonstrate 'how reliance upon a well known limitation in a claims made cover could amount to a lack of good faith', though no explicit evidence has yet been tendered as to the existence of the limitation being 'well known'. 32 PCL advanced an alternative claim for indemnity based on the first policy, that being of course issued by Macquarie to ARMA for the period of cover 26 July 2003 to 26 July 2004. It appears to have been common ground that the valuations the subject of the present proceedings were undertaken and signed by Mr Teves, who was not a named valuer in the so-called special conditions appearing on page 1 of the Schedule to the first policy, the only valuer named therein being Terrence Stewart (as I have earlier recorded). Upon that basis, the Insurers' case was that the first policy did not provide insurance in relation to the circumstances of PCL's claim, the first policy not extending to valuations undertaken and signed by persons other than 'Terrence Stewart' , and hence not extending to valuations undertaken and signed by 'Neil Teves' . The Insurers submitted that there was no averment or evidence at all about Mr Teves' role or association with ARMA at the time of the commencement of operation of the first policy, or about 'any negotiations between the insured and the insurer relating to the decision to name Mr Stewart (and not Mr Teves) in the policy', and that there was therefore no basis, pleaded or otherwise, for the proposition that the first policy was intended to include valuations undertaken or signed by Mr Teves. Upon that apparent footing of Mr Teves' involvement in ARMA to the extent of being a director and shareholder, PCL contended that 'given Mr Teves' position at ARMA, it is improbable in the extreme that his name was omitted from the schedule otherwise than by mistake or oversight'. However the Insurers drew attention to the circumstance that there had been no evidence tendered as to Mr Teves' role or association with ARMA at the time of commencement of the first policy. It would be inappropriate nevertheless to permit the present proceedings to be by interlocutory strike-out by reason largely of an apparent oversight on the part of PCL to have attended to such an evidentiary formality. One difficulty for PCL, so the Insurers contended in any event, was that no evidence had been provided to enable the Court to determine whether s 14 of the IC Act operates to preclude the proposed respondents from relying on such a mistake or oversight, being evidence for the purpose of proceedings for rectification of the first policy. Nevertheless it would be an unsatisfactory approach on my part to the resolution of the present interlocutory application to uphold the same in circumstances where there had emerged an apparency of a potentially viable basis for rectification of the first policy, albeit that such an evidently available course had not yet been formally commenced. 35 PCL's concluding principal contention in relation to the operation of the first policy was that 'a simple point of construction allows [PCL] to overcome the respondents' argument that Mr Teves was not named in the Special Conditions of the Schedule to the first policy'. The 'clearest indication' of that interpretation advanced by PCL was said to be the circumstance that only valuations of Mr Brian Smith were specifically excluded from the first policy by paragraph 1.7 thereof ( supra ), and further that Terrence Stewart was (as I have earlier indicated) the only valuer named in the first policy. PCL submitted that '[i]f the clause was not intended to take effect conjunctively there would be no reason to include subparagraph 1.7 [and] [v]aluations by Mr Smith would go out by operation of subparagraph 1.8', an observation which is literally correct but obviously highly controversial. Given that paragraphs 1.1 to 1.8 are to be read conjunctively, PCL contended further that since there was no suggestion made by the Insurers that all of the requirements of the subparagraphs of paragraph 1.0 of the first policy had been fulfilled, the exclusions the subject of paragraph 1.0 had no present application, and PCL had the benefit of insurance cover for the claim, even though Mr Teves was not specifically named in the schedule to the first policy. As I have already indicated, the professional indemnity arrangements in that regard are uncertain, the Insurers not having identified individually those 'SVB Syndicate' members, doubtless referring thereby to the so-called 'certain Underwriters at Lloyds' . It is however reasonably arguable, based on the wording of the subject policies such as it is, that Macquarie is the insurer albeit as agent for undisclosed principals, and that in the light of what I have further recorded from apparent communications between the parties, the principal was ultimately identified as SVB. Those so-called 'certain Underwriters at Lloyds' have not been identified as yet to PCL, notwithstanding that the subject proceedings were commenced on 29 November 2004. I should add nevertheless that I have not thought the Insurers to have intentionally withheld from identification of the principals standing behind SVB as the relevant insurers in order to delay the resolution of the issues of existence and scope of indemnity which seemingly arise. 38 As already explained, the case of PCL is advanced on the basis of contravention of ss 52 and 53A of the TP Act attributable to ARMA and of its corporator Mr Neil Teves. The PCL letters as to the possibility or likelihood (however the same may be construed on a final hearing) of commencement or proceedings were sent on behalf of PCL on 23 April 2004 and 13 May 2004 to Mr Teves personally, and hence were sent during the currency of the Macquarie insurance policy for the year of indemnity 26 July 2003 to 26 July 2004 (ie that which I have been referring to as the first policy). As I have earlier recorded, Mr Teves was apparently a director and shareholder of ARMA, although that circumstance appears not yet to have been formally established. 39 It appears however that PCL's loss by way of shortfall in recoupment of its mortgage indebtedness the subject of the intended claims against ARMA and Mr Teves did not crystallise until sometime during the following year of indemnity from 26 July 2004 to 26 July 2005, that is to say, during the currency of the second policy. I use the word 'crystallised' to convey for instance the import of the expression '... reported... during the insurance period' appearing in paragraph 1.00 of each policy ( ante ), apparently referring to the report of loss or damage sustained. It is therefore reasonably arguable, from the material presently in evidence, that the applicable insurance cover comprised that relating to the later of the two years of purported insurance cover. Such subsequent policy from 26 July 2004 to 26 July 2005 specifically listed Mr Teves as one of the Named Valuers in the special conditions appearing at the foot of the first page thereof. I use the description reasonably arguable at least because of the lack of sufficient clarity apparent from the text of the above letters as to whether any loss or damage would crystallise by way of an actual sale of the properties in question and as such, it is open to argument that exclusion clause 4.1 may have no operation in the present circumstances. The subject insurance policies are in the nature of a claims made cover rather than a claimed events cover, and it was conceded by Macquarie and SVB that a claim was subsequently in fact lodged with Macquarie, which was apparently adequate in scope, during the term of the second policy. I think that there has been established a reasonably arguable case on the issue of liability of Macquarie in favour of PCL at the present interlocutory stage of the proceedings, subject to Macquarie establishing by documentary evidence, within fourteen days of delivery of these reasons, that Mr Teves was in fact recorded or listed as a director and shareholder of ARMA at all material times during the operation of the second policy. 40 Subject to fulfilment of what presumably would be that foregoing evidentiary formality, leave to join Macquarie should be granted in principle, irrespective of its purported status as agent for presently undisclosed 'certain Underwriters at Lloyds', by reference at least to the indemnity the subject of the second policy. The Insurers have asserted incidentally that each of those unidentified underwriters would be 'only liable for their share of any Claim, loss, liability or expense payable...'. Whether that be so as between themselves and Macquarie has no necessary bearing upon Macquarie's potential exposure to liability as between itself and ARMA, and as a consequence to PCL pursuant to he LR Act. Neither policy purported to explicitly stipulate that Macquarie was not susceptible to personal liability as issuer thereof, albeit it would seem as agent for undisclosed principals, for any claim made by an insured otherwise apparently falling within the scope of cover, and nor may any such stipulation in my opinion be reasonably inferred. In any event, despite the apparent absence of explicit reference to SVB as a corporate entity appearing of course in the text of the policies, no objection in principle has been subsequently taken to SVB being added as an additional respondent with Macquarie to the proceedings, which of course reflects if I may say so a sensible approach for the Insurers to have apparently adopted. 41 The more difficult and complex issue arising is whether it is further reasonably arguable that upon the true construction of the first policy, Macquarie would be alternatively liable to indemnify PCL, in the light of the absence of reference to Mr Teves as a valuer identified in the special condition appearing on the front page of that first policy. It is difficult to rationalise why reference to Mr Teves appeared in the second policy as a '[n]amed [v]aluer', but not so in the first policy relating of course to the immediately preceding year of indemnity, particularly given what has been asserted in the submissions of PCL that Mr Teves was in effect the corporator of ARMA, as well of course as a director per se , and that the only person specifically identified in the first policy for exclusion from the operation of cover thereunder was 'Brian Smith' , who was also the only person specifically named as excluded from cover in relation to the second policy. There is no evident or apparent rationale in support of any implicit exclusion of Mr Teves as a disclosed valuer from the operation of the first policy, particularly in the light of his inclusion explicitly in the immediately following second policy. Perhaps the reason might have been that since ARMA was to be the insured entity, it was thought to go without saying that the policy extended to the person who appears to have been its corporator and apparent decision-maker. Be all that as it may, senior counsel for PCL contended in any event for a reasonably arguable interpretation of the Schedule to the first policy on the footing of a conjunctive as distinct from a disjunctive operation of each of its clauses or paragraphs, being a matter said to be sufficiently arguable for the purpose of the operation of s 6 of the LR Act. 42 I have reached the conclusion, subject to provision of evidence formally as to Mr Teves' status as a director and shareholder of PCL at the material times, being a circumstance of course asserted by PCL, that PCL has demonstrated satisfaction of the test exemplified in Andjelkovic, and subsequently as articulated more expansively in Fishwives , in relation to both successive insurance policies, and that it would be erroneous on my part to shut out PCL from pursing its presently framed causes of action at this interlocutory stage upon the demurrable basis advanced on behalf of the Insurers. I think that I should exercise my discretion in favour of the grant of the leave sought in relation to the operation of both policies, and thus in relation to the successive years of indemnity from 26 July 2003 to 26 July 2004 and from 26 July 2004 to 2005. The addition of SVB as a respondent is more problematical, but I gained the ultimate understanding that no objection would be raised in principle to the inclusion of SVB as an additional respondent, apparently as a representative of the individual Lloyds underwriters involved. 43 I would incline to the view that I should reserve the issue of costs for further debate at the time of consideration of the final orders to be made in relation to the present joinder application. My present inclination but not final view is that each party should bear their respective costs of the joinder application. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | lender advanced moneys secured by mortgage of realty lender asserted reliance in so doing on valuation of real estate valuer borrower defaulted under mortgage likely shortfall in loan moneys outstanding inclusive of interest after exercise of power of sale by lender lender sought recovery of shortfall from valuer on basis of misleading and deceptive conduct valuer held professional indemnity insurance from australian underwriting agent for unnamed non-resident representative or nominee for individual unnamed underwriters lender sought leave to add australian underwriting agent and non-resident liability to indemnity rejected upon the basis of controversial interpretation and operation of policies of indemnity in favour of valuer in relation to each of two successive years of cover issue as to applicable annual insurance cover for two successive years difference in wording of cover for each year whether notice to litigate applicable to one year of indemnity or the next following year of indemnity issues arising as to construction of successive yearly policies reasonably arguable leave granted to lender to join in proceedings as respondents additional to valuer the australian insurance agent and the overseas representative for the unidentified underwriters insurance |
2 On 13 November 2006, Kiefel J heard an interlocutory application to suspend the operation of the decision pending the hearing of the substantive application. On 15 November 2006, pursuant to s 15 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act '), her Honour granted a stay of the decision until the determination of the substantive proceedings, or earlier: Anthony Martincevic v Commonwealth of Australia [2006] FCA 1514. 3 On 13 November 2006 an Amended Application for an Order of Review was filed. Application to review the decision of the First, Second, and/or Third Respondent that the Applicant's service with the Australian Defence Force be terminated on 17 th November, 2006. Further or alternatively, application to review the conduct of the First, Second, and/or Third Respondent which it has engaged in namely purporting to terminate the Applicant's service with the Australian Defence Force without investigating his Application for Redress of Grievance with respect to the Notice of Termination. Further or alternatively, application to review the conduct in which the First Respondent, Second Respondent and/or Third Respondent proposes to engage in, namely to terminate the Applicant's service with the Australian Defence Force on 17 th November, 2006. Alternatively, application to review the failure of the First Respondent, Second Respondent and/or Third Respondent to investigate the Applicant's Redress of Grievance with respect to the issue of the Notice of Termination. Alternatively, application to review the failure of the First Respondent, Second Respondent, Third Respondent in failing to take into account a medical report of Profession Whiteford, consultant psychiatrist, dated 10 August 2006 in proposing to terminate the Applicant's service with the Australian Defence Force on 17 November 2006 . The Applicant is aggrieved by the decision, conduct, proposed conduct or failure because he is a member of the Defence Force, the subject of the proposed termination and in those circumstances is "an aggrieved person" within the meaning of that term contained in Section 3(4) of the Administrative Decisions (Judicial Review) Act 1977 . Contrary to s 7(1) of the Act, a decision with respect to the Applicant's Application for Redress of Grievance has not been made. In the Alternative the Applicant seeks the orders set out in paragraph 9 herein pursuant to section 39B of the Judiciary Act 1903 . 5 The applicant joined the Australian Defence Force in 1994, and at the time of the decision of 9 August 2006 to terminate the applicant's service, held the rank of Private. He is currently being paid but is not working. 6 On 19 January 2004, the applicant was posted to the 7th Combat Services Support Battalion ('7 CSSB') at the Gallipoli Barracks in Enoggera, Brisbane. 7 In his affidavit filed on 3 November 2006, the applicant alleges that he was "poorly treated at work" following an incident on 2 March 2004. He asserts from April until July 2004 three attempts were made to discharge him on psychological grounds. 8 During his service at Enoggera, there were a number of disciplinary charges found against the applicant and punishments imposed on him in respect of those charged. There were also a number of complaints by the applicant that he was bullied, and subjected to bastardisation. 9 Prior to the decision the subject of this application, there had been previous attempts to discharge the applicant on medical grounds. On the 10 April 2006 I made a complaint to the Chief of the Defence Force about the Unit's treatment of me. My complaints have been the subject of an investigation by Lieutenant Colonel Thomae. I have never been told the results of the investigation. On 16 March 2005, Dr John Newton Chalk, a specialist psychiatrist, said at par 7 of his affidavit that there were then no grounds for termination based upon his mental health. 11 On 13 March 2006, the applicant was again admitted to 2HSB for depression. Dr Chalk says that as from 16 March 2005 under Defence Department referral auspices, he consulted with the applicant on a regular basis approximately every two weeks. 12 Dr Chalk says that on or around 6 April 2006, he was asked to provide an opinion to the army/respondents regarding the applicant's fitness for duty and medical class. Dr Chalk says that at this time he orally advised the Defence Department's Dr L. Van Ingen Schenau, that the applicant was suffering from a situation crisis with avoidance personality traits, and advised that he considered the applicant to be MEC 403. 13 The classification MEC 403 refers to personnel who ' are not employable or deployable in Army' . Any member that is determined to be MEC 401 or MEC 403 by the MECRB may not be upgraded at unit level. The only means to upgrade a member in these circumstances is through the MECRB appeal or MECRB termination process. In such cases, particularly for Critical Skills Wavier (CSW) reviews, health staff may recommend upgrade through a CMECR, but they are not to issue a Form PM 532 or amend HealthKeyS to reflect this recommendation. 18 On 10 April 2006 the applicant made a complaint, via an email eleven pages in length, to the Chief of the Defence Force about his treatment in the Battalion, alleging bullying and bastardisation, which had had an adverse psychological effect on him. On 7 May 2006 Lieutenant Colonel Thomae was appointed to investigate these complaints. The applicant asserts that he has never been told the results of the investigation. 19 On 11 April 2006, the applicant was advised that he had been downgraded to a classification MEC 403, and would be medically reviewed for discharge. 20 A document, headed ' Workplace Disability Report ', dated 19 April 2006, and signed by Lieutenant Colonel Whitting, as the applicant's commanding officer, discusses the applicant's deployability. Over the past 15 months however, as a result of his consistently below average work performance requiring intensive supervision and numerous personal difficulties, he has been employed in all three companies within the battalion in an effort to ensure his poor performances were not related to just one workplace environment. PTE Martincevic has recently been placed under the close supervision of a Warrant Officer in the battalion training cell as his constantly poor performance was impacting on his peers and supervisors in all three prior workplaces. It also raises the issue of the member's financial difficulties (approx $19,000-00 in various debts) and the need for him to appear in court with regards to outstanding debts. A record of conversation dated 19 Apr 05 and complied by a different supervisor shows minor improvement in PTE Martincevic's performance but again highlights the distraction caused by personal administration and the need for an improved effort in relation to his conduct and attitude. A subsequent report dated 3 May 05 indicates regression in the member's performance, particularly in relation to personal organisation, teamwork, interpersonal relationships, reliability , conduct and attitude. In addition, PTE Martincevic made five separate threats of self harm over a 20 day period in Mar/Apr 06 and was admitted to Mental Health Establishments on each occasion. This observation is supported by Psychological reports conducted in 2004 and again in Apr 06. His continual threats of self-harm and very poor work performance render this member as unsuitable for continued service as a result of an inability to deploy him on operations for fear of his reactions under stress and his continual predilection for making threats of self-harm. You may not be aware but I have complained to CDF as to my treatment in 7 CSSB. This complaint is now the subject of an investigation. One of the matters of complaint is that I have not been posted out of 7 CSSB where the harassment against me has occurred. I am confident that if I was posted out of the unit, my MEC classification would not be MEC 403. I have written today to SCMA ['Soldier Career Management Agent'] to be posted out of the unit. I have also applied today for funding for an independent psychiatric assessment. Dr Chalk's evidence is that since this date he has consulted with the applicant on ' several occasions' and has prepared three reports, dated 18 August 2004, 20 March 2005, and 17 July 2006. 31 The first two of Dr Chalk's report were commissioned by the first respondent. Following my examination of the Applicant at this time, I advised the First Respondent that the Applicant displayed no clinical signs such as to support a diagnosis of depression and therefore was not suffering from any psychiatric illness requiring treatment with medication. At this time, I orally advised the Defence Department's Dr L Van Ingen Schenau that the Applicant was suffering from a situation crisis with avoidance personality traits and advised that I considered the Applicant to be MEC 403. 33 The MECRB considers deployability and employability of a member based on medical information, trade requirements and personnel management requirements: see Defence Instructions (Army) PERS 124-29 Medical Employment Classification System in the Australian Army at cl 1. Where a member is found to be MEC 401, MEC 403, their CSW [Critical Skills Wavier] expires, or the member does not accept trade transfer when MEC 402, they will be discharged under DI(A0 PERS 116-5 --- Separation of Regular Army soldiers, Army Reserve soldiers on full-time service --- policy and procedures or DI(G) PERS 03-4 --- Management Initiated Early Retirement and termination of service in the Australian Defence Force. For soldiers, MECRB will determine the MEC of the member and if there is sufficient grounds to issue a TN under DPR 87(1)(d) 'Soldier does not comply with the medical standard for the trade or employment in which the enlisted member is engaged'. Such a TN will invite a soldier to provide a Statement of Reasons (SOR). A termination date will not be issued until the discharge authority considers the TN and decides whether the services of the member should be terminated. He has been observed to have poor work performance and a history of failing his BFAs. He has been under close performance scrutiny and his command has concluded he is permanently undeployable. His numerous threats of self-harm reinforced this belief. He has had multiple psychiatric assessments dating to early 2005 and no psychiatric diagnosis was forthcoming. There were features of personality vulnerabilities. He has had psychological treatment to try to address these. The possibility of posting to alternative locations was raised. Despite not being categorised as having an illness, he was working reduced hours and presenting in distress frequently. He alleged he was being harassed in the workplace. He has significant family stressors including children with special needs, marital, and financial difficulties. He alleged that his unit discouraged him from attending medical appointments with his son. On 06/04/2006, his psychiatrist declared he was not coping and had suicidal ideation and was MEC 403. This soldier and his family have a high requirement for support, which unfortunately is demonstrably incompatible with his military life. The member's personality and behaviour have exacerbated his situation and have deteriorated in response to the stress. He continually presents with claims of self-harm and thoughts of suicidal ideation. He is high maintenance and has demonstrated a personality that is incompatible with service employment and he is definitely not deployable . I determine P8S8 MEC 403 . I find there is sufficient evidence that the member is non-deployable in the long term and therefore I am bound to issue the member with a TN pursuant to DPR 87 (1)(c) "Medically Unfit". The reason for the PROPOSED termination is that pursuant to regulation 87(1)(c) of the Defence (Personnel) Regulations 2002 , you are "medically unfit". On 20 Apr 06 you were downgraded to 403, as indicated on the PM 64/532 of 20 Apr 06. On 16 May 06 your case was presented to a MECRB where your medical condition as per your JHSA MECRBR Summary of 11 May 06 at Enclosure 3 was discussed. Pursuant to regulation 87(2)(d) of the Defence (Personnel) Regulations 2002 , you are invited to give the delegate of the Chief of Army for discharge at the Soldier Career Management Agency (hereafter referred to as 'the delegate'), a written statement of reasons why your service in the Defence Force should not be terminated. You have 28 days from the receipt of this Termination Notice within which to provide your written statement of reasons. You may consult a legal officer and/or medical staff if available, or you may have another person assist you in preparing your statement of reasons. If you do not give the delegate a statement of reasons within the specified period and the delegate is of the opinion that the reason for terminating your service has been established and has not been affected by a change in circumstances since this Termination Notice was given to you, the delegate must terminate your service in the Defence Force. If you give a statement of reasons within the specified period, the delegate will consider that statement and any other relevant material that you choose to submit with it. If the delegate is then of the opinion that the reason for terminating your service has been established and has not been affected by a change in circumstances since this Termination Notice was given to you, the delegate must terminate your service in the Defence Force. While considering your statement of reasons, if it is found that new or previously omitted medical evidence is presented, the delegate may seek Director General Health Services review and recommendation for consideration pursuant to regulation 87(4) of the Defence (Personnel) Regulations 2002 . Any such recommendation will be provided to you as new evidence and you will be invited, pursuant to regulation 87(2)(d) of the Defence (Personnel) Regulations 2002 , to give the delegate an additional written statement of reasons. Where, after reviewing all the material provided, the delegate is of the opinion that you may be retained in the Defence Force, the delegate may direct that your retention is to be subject to any other medical and employment restrictions, including but not limited to medical waivers, trade transfer or permanent medical restrictions. In making a decision the delegate will consider all the material provided to them in the Termination Notice, including your statement of reasons and additional material submitted by you in response to this Termination Notice. If PTE Martincevic disagrees with the MECRB determination, he may in the first instance, pursuant to DPR 87(2)(d), submit a Statement of Reasons to the delegate within 28 days of acknowledging the TN. Any soldier who submits a Statement of Reasons, is to continue with discharge administration. On this form the words ' I do not wish to provide a statement of reasons why my termination of service should not proceed' have been crossed out. The sentence, ' I intend to provide a statement of reasons why my termination of service should not proceed' has been circled. The third respondent says that he received notification of the applicant's acknowledgement on or around 6 June 2006. 45 The applicant lodged an ' Application for Redress of Grievance ' on 15 June 2006, seeking to have the Termination Notice set aside or delayed until the investigation being conducted by Lieutenant Colonel Thomae into his treatment in 7 CSSB was completed. Receipt of this application was acknowledged on 16 June 2006. Nature of grievance: The decision made by MECRB to issue a Termination Notice dated 24 May 06. Redress sought: That the decision be overturned or at the least delayed until an investigation by LTCOL Thomae is complete. I request the matter be investigated outside 7 CSSB as members of that unit are being investigated presently at the moment. I request LTCOL Thomae investigate this Redress of Grievance. In summary I have been the subject of unlawful harassment and behaviour by members of the ADF. This has lead to my being psychologically harmed. Once the harassment ceases and I am posted away from 7CSSB I will be fit to perform my duties and there will be no need to terminate my services from the ADF. I also say that I requested action with respect to the MECRB determination be suspended pending my obtaining an independent psychiatric report. This request was ignored. I also submit that the MEC process is being improperly used by 7CSSB as a continuation of the harassment in respect of which I have made complaint to the CDF. I request that any MECRB decision be put on hold. I have submitted a ROG on my MECRB decision which is being investigated. That is why I am requesting that any action be put on hold until investigations are conducted. I have also submitted a complaint to the CDF. This is also involving the events to the MECRB decision. The complaint to the CDF is currently still under investigation. I require a answer on this by 1200hrs on the 20 June 2006. This is so that any further action can be taken. I can be contacted on 0415701936 to discuss the matter further. It should be noted that the MECRB is an exhaustive, independent assessment of a member's overall medical condition and is overseen by psychological, psychiatric and general medical specialists. As such, its determinations are confined to medical diagnoses. Most of the claims alleged by PTE Martincevic in his ROG are of an administrative nature and have been dealt with through external QAs and Routine Inquiries. There has been no medical evidence submitted in [the applicant's Redress of Grievance] to suggest any reason why the MECRB determination should be overturned. Given that a psychiatrist has determined that PTE Martincevic is considered MEC403 and that this has been confirmed at several subsequent levels by objective medical assessment through the MECRB process, I see no medical grounds as to why the MEC decision should be reversed. If a member disagrees with a MECRB determination they may, in the first instance, appeal the MECRB decision in accordance with DI(G) PERS 16-15. In the event that a Termination Notice is issued by the MECRB, the member may provide a SOR as their appeal documentation. Appeals are to be addressed to the relevant MECRB Secretary. Once all relevant CMECR documentation is received at a CMA, the CMA is to have the member's case presented to a MECRB within 28 days wherever possible. I also request an extension on this till I receive other reports form [sic] health professionals. There is also a statement in here by the MECRB President which states "PTE Martincevic has a condition that has not improved upon posting to BNE. " I did not have any condition upon posting to Brisbane. That statement of reasons came to my attention at SCMA prior to my making my decision to discharge the Applicant from the Army. 53 On 26 June 2006, SCMA was informed by Major Paul Smith, an Army legal officer acting on the applicant's behalf, of the applicant had an upcoming appointment with a psychiatrist on 28 June 2006. Email correspondence between Major Smith and Major Andrew Adamson, of the SCMA, shows acknowledgement of this appointment. The affidavit of the third respondent, sworn on 5 December 2006, describes this as ' a major medical unit based at Gallipoli Barracks' , which ' has responsibility for the provision of medical treatment for the Applicant or for the arranging of the same by other medical practitioners, as required '. 55 On 24 June 2006 Major Smith wrote to Dr Chalk, posing supplementary questions for advice in respect of the applicant. I am instructed that he is to see you on 28 th June 2006 for the purposes of your providing a report to the Australian Army. Does he in fact have a diagnosable psychiatric condition in accordance with DSM IV. If he does have a diagnosable psychiatric condition what has caused this. Has his treatment in 7 CSSB contributed to his present condition. Would his condition improve once posted away from 7 CSSB. 57 The agreed facts indicate some confusion between Major Smith and Dr Chalk as to the provision of a report by Dr Chalk. At that time, the last advice that had been sought and obtained from Dr Chalk by the Commonwealth was prior to the giving of the Termination Notice to the Applicant. The agreed facts state, ' The appointment on 28 June 2006 was arranged by the applicant in consultation with Dr Chalk following previous appointments as part of the applicant's ongoing treatment by Dr Chalk '. 60 On 3 July 2006, Dr Chalk generated an account of $825.00 for the 28 June consultation. Major Smith received this account, who, on 4 July 2006, wrote to Dr Chalk by facsimile, requesting this account be forwarded to the ADF. I merely wrote to you to ask you to consider the material I referred to in my letter. Given that I have not received a written request from the ADF for a report on this gentleman, I will discard the one I have prepared. I submit that it is a serious error of process if the CO of the unit against whom I made the complaints (he being CO at the relevant time) is the one to investigate my complaints. Over and beyond this it is a serious error of process if the CO would himself investigate the matter at the same time I have a current complaint with HREOC against his unit with respect to the unit's harassment of me. All the CO appears to have done is read the documents and put his view of things in the minute. It is as if he is the respondent to the complaint (which is the true position) as compared to being an independent investigating officer. As a sequel to the briefings by Major Adamson as to his dealings with Major Smith, on or around the end of June 2006, I instructed Captain Walter, a subordinate officer within SCMA, to advise the Applicant that he would be granted an extension until 21 July 2006 in which to provide a supplementary statement of reasons along with any further medical evidence supporting his contentions. Captain Walter advised me and I believe that he advised the Applicant that he had been granted an extension until 21 July 2006 in which to provide a supplementary statement of reasons along with any further medical evidence supporting his contentions. The Applicant failed to provide any further medical evidence or a supplementary statement of reasons within the time granted under the extension. " PTE Martincevic replied yes. The ADJT advised that 21 Jul was last Friday and that he had missed his due date. PTE Martincevic said that he had an appointment with the doctor on 9 Aug 06 so he couldn't get anything in until after that. The ADJT asked if this was the same doctor that he referenced in his extension and PTE Martincevic answered yes but he was overseas and the next time he could see him was 9 Aug 06. The ADJT advised that he should have told SCMA before the due date. PTE Martincevic said that "I better write something up then and fax it off to CAPT Walter", the ADJT advised him that he should telephone CAPT Walter and speak to him in person to explain the circumstances but she didn't like his chances because he didn't contact SCMA before the deadline elapsed and they had already. The ADJT reiterated that PTE Martincevic should contact SCMA straight away to explain his circumstances. He continues to recommend that the member is MEC 403 and supports discharge. I also spoke to the GP at 2HSB, Dr Lee. She is unaware of any other pending specialist referrals/reports. The email of Major Adamson of SCMA to Major Smith of 26 June granted an extension to the applicant for this appointment. I request an extension as I have an appointment with Professor Harvey Whiteford on the 9 th of August 2006. This is so that Professor H. Whiteford can examine me correctly. Dr J. Chalk now states that there is nothing wrong with me. But will not let myself return to work until I provide him with a copy of the investigation report. This is the report that LTCOL Thomae has prepared for the CDF. I have been seeing Dr J. Chalk about every two weeks and he is only concerned about this report that LTCOL Thomae has prepared. This is all that is discussed in my meetings with Dr J. Chalk and nothing is said about medical issues that might be outstanding. There is no reference to Professor Whiteford being a psychiatrist. 74 The applicant did not receive a response to this minute prior to the making of the decision. No response was made to that minute prior to the making of the discharge decision. I was aware of the contents of that minute and of the absence of a response to it prior to the making of the discharge decision. A four page document, styled ' STATEMENT OF REASONS FOR THE TERMINATION OF SERVICE DECISION 8233008 PTE A. MARTINCEVIC' , is signed by the third respondent. In reaching the decision to order your discharge very high weight was afforded to the contents of the TN. The TN proposed that your service should be terminated. Very high weight was afforded to the MECRB determination, reference E, which confirmed your medical classification of MEC 403 and that you are not expected to regain fitness for deployment in the long term. Very high weight was afforded to the contents of the JHSA Summary, reference F, which determined that your prognonis is that you are likely to continue to struggle with your current circumstances. Very high weight was afforded to the Workplace Disability Report, which stated that you have poor trade skills and an inability to cope with stress. You have little motivation for work and an unwillingness to follow procedure and have difficulty in adjusting to change. You have a history of failing your BFA, require close supervision and considerable financial difficulties. As a result of continual threats of self-harm, your unit has considered you permanently undeployable and in the interests of your safety and the safety of others you are not to carry weapons or attend range practice. The recommendation from your CO that you should be discharged was weighted very high. Your CO reviewed your response and could not find justification to support your retention. Very high weight was afforded to the medical employment policies at references, C, D, I and J, which describe the medical employment profile to sustain a deployable profile. Very high weight was afforded to the psychological and psychiatric reports. Your CO initially referred you for assessment after demonstrating difficulty coping with stress and poor interpersonal relations during Exercise Crocodile 1999. On 17 Mar 06 Dr Detering confirmed your diagnosis that you suffered from a mental illness. Initially Dr Chalk noted that there was no clinical diagnosis, however, you have a long history of not coping, integrity issues and marginal work ethics. Dr Chalk did diagnose that you suffer from situational crisis with avoidance personality traits. You have been presenting to Dr Chalk every two weeks and therefore Dr Chalk knows you well to confirm your medical classification of MEC 403. High weight was afforded to your health statement. You state that there are no restrictions that prohibit you from conducting your normal duties and ask to be posted from 7 CSSB where you feel harassed. Low weight was afforded to your response to the TN. In your response you argue that the MECRB process was being improperly used as a continuing harassment by 7 CSSB. I noted that your response was very similar to your ROG. Your response did not contain any new medical evidence and therefore carried little weight. You requested and was granted an extension to submit new medical evidence but failed to provide any new evidence. Dr Chalk has stated that you asked him to provide additional assessment for which he did and the diagnosis remained the same, that is, MEC 403. I am satisfied on the available evidence that you are unfit for further military service, I am legally bound to terminate your service. I therefore determine you are to be discharged IAW DPR 87(1)(c) 'Medically Unfit' IAW policy provisions and the principles of natural justice. This document included the direction that the applicant be discharged from the Army under the terms of the Personnel Regulations reg 87(1)(c), as being ' Medically Unfit '. A copy of the determination was enclosed. This document also said, ' It is requested that PTE Martincevic be informed of my decision and that he be given a copy of my determination'. His signature appears under the typed statement, ' I acknowledge the contents within the above statement of reasons that details the decision for my termination of service' . 78 For completeness, I note that on 25 October 2006, the applicant signed a document, ' Offer to Defer Separation Date ', in which he elected to defer his discharge date from 7 November 2006 until 17 November 2006, in order to be eligible for the pay increase from an Australian Defence Force workplace remuneration arrangement. 79 On 9 August 2006, the applicant was examined by Professor Whiteford. Yet Professor Whiteford's report was not communicated to anybody in the Army until 2 October 2006. The report is dated 10 August 2006. 80 On 17 August 2006, the applicant had a conversation with Captain Loskill, a member of 7 CSSB, who, the applicant alleges, told him that the Army would not consider the report provided by Professor Whiteford, and that, in any case, it was too late to help him because the decision had already been made. It seems clear that the report had not yet been obtained, and the applicant was thus unaware of the report. My solicitor at that time, Mr James Patterson, told me that the report would cost $1,045.00. I could not afford the report at that stage as I was paying child support and had many outstanding accounts as well as the cost of day to day living. At the time I examined Mr Martincevic he did not meet ... diagnostic criteria for any mental disorder. I would tend to agree with Dr Chalk that Mr Martincevic does have some dysfunctional ways of dealing with stress. It also appears that he has been in significant conflict in his workplace for the last two and a half years and this, combined with the stress of a relationship breakdown, resulted in his developing some anxiety and depressive symptoms. These symptoms are now resolved. There is no psychiatric reason why Mr Martincevic could not return to his work in the Military. Sir I have been handed a letter which purports to terminate my service on 7 November 2006. I respectively consider their termination to be invalid and invite you to withdraw it. At all times SCMA was aware I was in the process of obtaining an independent psychiatric report. This report clearly shows that the MEC determination is incorrect. I enclose herewith a copy of the report of Dr. Whiteford. SCMA did not wait for or ask me where the report was. At all times SCMA was aware that I had informed MECRB in May that before it made a final determination I wished to have an independent psychiatric assessment. Despite this MECRB went ahead with its determination. I enclose herewith a copy of this minute. I enclose herewith a copy of the Referral of the ROG to Chief of Army. I expect this investigation will vindicate my claims of harassment. It was this harassment that has lead to this termination process. In the circumstances I respectfully ask that you withdraw the purported letter of termination. I look forward to your early reply. Also I wish to start parading again. Can you please post me to a unit other than 7 CSSB as soon as possible. 85 As to paragraphs (a) and (b), the applicant had received an extension of time until 21 July 2006, because through Major Smith he had told SCMA that he had an appointment with a psychiatrist on 28 June 2006. The applicant in fact saw Dr Chalk on 28 June 2006. 86 In the telephone inquiry by Captain Loskill on 24 July 2006, the applicant informed her that he had an appointment on 9 August 2006 with "the same doctor that he referenced in his extension. I can find no reference in any document in July to the applicant "awaiting the report of Dr Whiteford before forwarding a final response. " It appears that what was enclosed in the applicant's letter to Lieutenant Colonel Egan of 11 October 2006 was a copy of Professor Whiteford's report. 89 As to paragraph (d), the applicant says that ' at all times SCMA ought to have been aware ' that he had forwarded a Redress of Grievance to the Chief of Army. No basis for this state of knowledge is given, and the bald allegation is inconsistent with what the applicant asserted in (c). 90 It is submitted by the applicant in written submissions that ' the delay in forwarding the report was principally caused by the fact that the Applicant had to raise the funds to pay the doctor before the report was released to him'. Walter from the Medical Board in Canberra. He told me that Lt. Col. Egan would not make a decision concerning the matter until Tuesday 24 October, 2006 as he was presently overseas. He told me to call on Thursday 26 October. Walter. He told me he was not able to speak about the decision. That minute is dated 26 October 2006, although the applicant claims not to have received it until the 2 November 2006. I refer to your minute of 11 Oct 06 in which you request me, in my capacity as the delegate for CA to withdraw the decision to terminate your service. On 09 Aug 06 I made the decision to terminate your service under the provisions of Defence (Personnel) Regulations 2002 ( DPR) 87(1)(c) 'Medically Unfit' to take effect now on 17 Nov 06. DPR 87(4) allows me to terminate your service irrespective that you have submitted a ROG. I am not aware of any change in circumstances that require me to alter my decision. Currently your ROG is lodged with the Directorate of Complaints Resolutions (CR) and therefore the decision regarding whether your termination is valid or not lies with CR and the relevant delegate of the Service Chief. I do not intend to hold in abeyance (HIA) your termination and you should continue to work towards a termination date of 17 Nov 06. Your minute of 11 Oct 06 has been forwarded to CR of 7 CSSB for their records. On 20 November 2006 the applicant was informed by Captain Loskill that the investigation into his bullying complaints was continuing, and, on 23 November 2006, the applicant received a minute about the investigation into bullying, entitled ' UPDATE ON INVESTIGATION '. The relation to the Crown of members of the armed forces is no new subject; the rules of the common law define it. The regulations are not to be read in disregard of those rules and of the long tradition to which they have contributed. At common law neither commission nor enlistment in the services does or can amount to a contract with the Crown and neither officer nor man obtains any legal right against the Crown to pay, deferred pay, half pay, pension or emolument. 'All engagements between those in the military service of the Crown and the Crown are voluntary only on the part of the Crown, and give no occasion for an action in respect of any alleged contract. ' Per Lord Esher M.R. in Dunn v. The Queen; see Macdonald v. Steele; Gibson v. East India Co.; R. v. Secretary of State for War, Leaman v. The King: Lucas v. Lucas. 98 The Defence (Personnel) Regulations 2002 do modify the common law, for the provision they make for termination of the service of an enlisted member of the Defence Force exhausts, rather than supplements, the common law. 99 Regulation 87 of those regulations, and, in particular, subregulations 87(4) and 87(5) make that plain. 100 In my judgment, a decision to terminate the service in the Defence Force of an enlisted member on the ground specified in reg 87(1)(c) of those regulations, namely, that the enlisted member is medically unfit, is a decision amenable to review under the ADJR Act , on any of the grounds set out in s 5 of that Act, and conduct for the purpose of making such a decision is reviewable under s 6 of that Act. 101 On such a review, the Court may exercise any of the powers conferred by s 16 of the ADJR Act . 103 The applicant lodged an ' Application for Redress of Grievance ' on 15 June 2006, seeking to have the Termination Notice set aside or delayed until the investigation being conducted by Lieutenant Colonel Thomae into his treatment in 7 CSSB was completed. Receipt of this application was provided on 16 June 2006. 104 On 20 June 2006, a response to this Redress of Grievance, headed, ' Outcome of CO Investigation of Redress of Grievance' , of some six pages considered in detail the applicant's complaints against his battalion, in effect dismissed the applicant's complaints and stated that that no new medical evidence undermined the original determination to terminate the applicant's service. The applicant then made a fresh complaint on 8 July 2006 that the related investigation was undertaken by his Commanding Officer, Lieutenant Colonel Whitting, the same Commanding Officer about whom various complaints were made. 105 On 28 July 2006, the applicant requested his Redress of Grievance be referred to the Chief of Army. 106 In oral submissions the applicant argued that the Statement of Reasons for the decision to terminate the applicant's service, which provided different weight attributed to different considerations by the decision-maker, shows that no regard was taken of the Redress of Grievance and the redress grievance process. Neither the applicant's engagement of that process nor even his asserted contributing factors altered the fact that there existed medical evidence upon which a conclusion of medical unfitness might reasonably be made. Medical discharge TNs are very similar to normal TNs outlined above; however, the determinations and actions on new or unconsidered medical information does produce some areas of concern. If a soldier is not satisfied with a discharge decision by a discharge authority, they may submit a redress of grievance (ROG) in accordance with DI(G) PERS 34-1 --- Redress of Grievance --- Tri-Service Procedures . ROGs that are lodged against a CMA's decision with respect to separations are to be investigated by the member's Commanding Officer (CO). All discharge administration, except inter unit movement, is to be completed. When an investigation is completed and the application for redress is not upheld by a Redress Action Authority (normally CO SCMA or Director Army Personnel Agency) the prescribed discharge authority will specify the date on which the separation order is to have effect in accordance with paragraph 16. Should the soldier elect to have the ROG reviewed further by the Chief of Army, or Chief of the Defence Force in the case of Warrant Officers, the ROG including the Investigating Officer's Report and CO's recommendations are to be forwarded to the Complaints Resolution Agency without delay. The Defence Force has legislative exemptions under the Administrative Decisions (Judicial Review) Act 1977 from providing Statements of Reasons (SOR) in connection with personal management decision making (including promotion, recruitment and ROG). In cases where a member has elected to redress a termination of service decision, the discharge authority will not normally provide a SOR until after a ROG has been lodged. The Redress of Grievance process, it is said for the applicant, recognises the fact that other actions may need to be suspended or delayed pending a resolution of those matters. 113 A Redress of Grievance is an administrative procedure, and there is provision for the suspension of executive action pending a determination of the Redress of Grievance. When a complaint relates to a proposed action, that action is not normally to be taken until the complaint has been resolved. The underlying principle is that approving authorities should not take irrevocable, or pre-emptive, action that would prejudice an appropriate remedy, if a member's complaint were subsequently upheld. Notwithstanding the foregoing, Service requirements may override the suspension of executive action, ie when considerations of safety, security, discipline or effective operation of the unit reasonably dictate that the proposed action should be taken regardless of the submission of a complaint. Such circumstances are expected to be exceptional. Where necessary, COs are to formally request the relevant approving authority to suspend executive action. that such executive action would not normally be taken until his or her ROG complaint had been finalised. The exception that the DI(G) could engender could only ever be an incident that of a procedural fairness obligation arising in the circumstances of a particular case [Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1] . In this case, the applicant had notice that such action would be taken before finalisation. I reject it. In my ROG I requested that LTCOL Thomae investigate my ROG. This was because in my ROG I complained that 7 CSSB (the CO) was misusing the MEC system in a further attempt to harass me and terminate my services from the ADF. Notwithstanding this request the CO himself purported to "investigate" my ROG deciding the matter against me. This as I will later submit is a serious administrative law defect. The CO states that he has "investigated" my redress. As I will subsequently state there was no proper investigation. 118 However, the issue for consideration in a termination decision based on a medical classification of MEC 403, and as a result "medical unfitness" pursuant to reg 87(1)(c) of the Personnel Regulations, is whether or not the applicant is fit to be a solider. 119 In my opinion, the issue of the Referral of the Redress of Grievance here is separate from the question of the validity of the applicant's termination. The applicant's Request for Referral was lodged on 7 July 2006, prior to the termination decision. The Request makes no reference to the ground of the termination decision, and in no way seeks to controvert the finding of MEC CLASS 403, or the medical evidence supporting it. Proceeding with the termination of the applicant's service, on the ground of medical unfitness, is not "action that would prejudice an appropriate remedy if (the) member's complaint was subsequently upheld, 'the underlying principle' in par 13 of the ' Redress of Grievance-Tri-Service procedures' set out above. 120 Further, the Redress of Grievance did not include any complaint that the applicant had been given an assurance that a Termination Notice would not be given effect to before he had had the opportunity of submitting further psychiatric evidence. 121 During the course of oral submissions I put it to counsel for the applicant that if, in fact, the applicant is mentally unfit because of bastardisation or bullying during his service, does that mean that the Army cannot act to terminate his service? Why should there be a requirement that the decision maker must wait to find out whether the applicant's complaints about bullying are justified or not? In response to this, Mr Campbell said that a failure to do so leaves out of the equation the fact that the alleged act of bastardisation and bullying is subject to an investigation. 122 There has been no report made available to the Court as to the investigations by Lieutenant Colonel Thomae into the applicant's complaints, and there is contradictory evidence as to whether an investigation has been completed. 124 In my judgment, the third respondent was not under a legal obligation to defer the decision until the conclusion of various and sequential Redress of Grievance applications had been concluded, and his decision to determine the applicant's service on 9 August 2006 involved no reviewable error on this account. 126 The independent medical report was not received by the third respondent prior to his making the discharge decision on 8 August 2006. It was received on 11 October 2006. This was known to the Respondent (as was the time when the independent medical assessment was to take place) and the Applicant was not told that such additional medical report would not be considered unless it was received by a certain date or otherwise. If you give a statement of reasons within the specified period, the delegate will consider that statement and any other relevant material that you choose to submit with it . If the delegate is then of the opinion that the reason for terminating your service has been established and has not been affected by a change in circumstances since this Termination Notice was given to you, the delegate must terminate your service in the Defence Force. ... In making a decision the delegate will consider all the material provided to them in the Termination Notice, including your statement of reasons and additional material submitted by you in response to this Termination Notice. Where, as here, the decision-maker chose to give a termination notice, these regulations specified the minimum content of that requirement --- not less than 28 days notice to respond. The applicant was given much more than this period . Further, when an extension was given within which to supply medical evidence as part of his response it was made clear to the applicant's military legal adviser that he should not expect any further extension. The applicant had no expectation therefore that a decision would be held in abeyance for however long it took him to get around to submitting medical evidence . It was for this purpose that an extension for the applicant's statement of reasons was granted. The report of Dr Chalk as to that appointment is not before the Court, but having regard to Dr Chalk's view on 24 July 2006, communicated through Dr Doherty to the third respondent, one might infer that it was not favourable to the applicant. 134 The agreed facts establish that it was only on 18 July 2006 that the solicitor for the applicant made the appointment for the applicant to see Professor Whiteford, that appointment being for 9 August 2006. The request for further extension on 26 July 2006 is the first reference by the applicant to anybody in the Army of Professor Harvey Whiteford. That request is inconsistent with the content of the telephone conversation between Captain Loskill and the applicant on 24 July 2006 which lead to the enquiries on that day of the present status of Dr Chalk's assessment of the applicant's medical condition. 135 In my opinion, there was no denial of natural justice, in the circumstances of this case, in refusing to give a further extension to the applicant to see if he could obtain medical evidence to assist his case. In my opinion, Lieutenant Colonel Egan, in making the enquiries of Dr Chalk through Dr Doherty on 24 July 2006, was seeking the fullest and up-to-date information about the applicant's medical fitness. No reviewable error has been shown to taint that assessment. What caused or contributed to that condition is not relevant to its existence. 139 The decision to terminate the applicant's service was then a matter of obligation under the Defence (Personnel) Regulations 2002 . 140 For the above reasons, the application is dismissed. 141 I will hear the parties on costs. I certify that the preceding one hundred and forty-one (141) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | judicial review where applicant discharged from australian army where decision reviewable under administrative decisions (judicial review) act, but no ground of review made out administrative law |
They have brought separate applications against the Secretary of the Department of Employment and Workplace Relations complaining of wrongful conduct by Centrelink in connection with their claims for social security benefits following the termination of their employment with Demos Property Services (Australia) Pty Ltd (Demos). 2 The Secretary has brought motions seeking that the respective applications be dismissed. The Secretary submits that the Federal Court has no jurisdiction to hear and determine the matters raised in the applications or to grant the relief sought. 3 In the alternative, the Secretary contends that each application discloses no reasonable cause of action. Demos terminated their employment in December 2003. 5 The applicants sought relief in the Australian Industrial Relations Commission (the Commission) claiming that their termination was harsh, unjust or unreasonable. They succeeded before a single Commissioner who awarded each ten weeks pay and, in the case of Mrs Xiao, ordered reinstatement. They successfully appealed to a Full Bench of the Commission. On the remitter back to the single Commissioner essentially the same orders were made. 6 The applicants then sought an order to show cause in the High Court. On remitter to this Court a Full Court consisting of North, Madgwick and Siopis JJ dismissed the application: Wang v Australian Industrial Relations Commission [2006] FCAFC 31. 7 On 10 April 2006 the applicants filed an application for special leave to appeal to the High Court from the decision of the Full Court. A copy of the special leave application was produced to me. I am satisfied that it is confined to issues concerning the termination of their employment by Demos and the conduct of the matters in the Commission. The respondents are the Full Bench of the Commission, Commissioner Lewin and Demos. The Secretary is not a party. Of course if the application for special leave covered matters in the present proceedings it would not be appropriate for me to proceed with the Secretary's applications. However I am satisfied that is not the case. The present proceedings are confined to the complaints concerning Centrelink, the Secretary being the only respondent. Taking Mr Wang's application, it commences by alleging that it is made "as a result of several breaches of law by Centrelink ... against the applicant". Breaches of the Social Security Act 1991 (Cth) and the Social Security (Administration) Act 1999 (Cth), and Racial Discrimination Act 1975 (Cth). 10 Paragraph 5 alleges that Demos provided false and misleading information to Centrelink. 11 In par 6 it is said that the matter "mostly involved legislations of the Commonwealth, so we believe this matter is best dealt with in the Federal Court". The acts committed by officers of Centrelink are deeply concerning, and seriously affected our lives, as well as destroying the reputation of the Commonwealth of Australia. The applicant's wife (Ms Qian Xiao) had applied for places at Victoria University for the course Certificate III in ESL Employment, and was offered places with no costs to the applicants. However on 28 February 2005 the Mrs Xiao was told by VU that she was no longer qualified to participate in the course, because she did not complete her Work for the Dole program, and only additional payments can ensure that she can remain in the Course. It is intriguing how VU knew that Ms Xiao did not complete her Work for the Dole program. Centrelink may have used their powers outside of their duty, and into places where their `customers' are working or studying. This is alarming, and Centrelink should be restricted to ensure they do not abuse their powers like in this incident. The applicant understands that the Federal Court may not be able to deal with all the unlawful acts committed. He hopes that the Federal Court will refer some of the matters to an appropriate court to deal with, to ensure that no crime should be unpunished. All social security payments lost by the applicant. Compensation to the applicant for the mental pain and suffering totalling $100,000. Costs associated with legal proceedings, totalling $9,000. In effect these submissions are to be treated as particulars. To some extent they fill out the gaps in the initiating applications, although detailed particulars cannot overcome a fundamental problem of lack of jurisdiction which, for reasons discussed hereafter, I am satisfied exists in the present case. 15 I should also mention that in addition to the submissions Mr Wang addressed the Court through an interpreter. Also the applicants' son, who is apparently only 16, gave a polished and articulate address and demonstrated a natural talent for advocacy. 16 After their dismissal by Demos on 2 December 2003 the applicants on 22 December contacted Centrelink via telephone and made claims for Newstart Allowance. The significance of first contact is that, generally speaking, a Newstart Allowance when granted will be calculated from the date of first contact. However, there is an exception where payment has been received on termination, for example for accumulated leave. In such a case the start date is calculated by taking into account an "income maintenance period" which assumes the person has the support of the amount received. The allowance does not commence until that period has expired. The income maintenance period can be shortened in cases of "extreme financial difficulty". 17 On 22 December 2003 Centrelink wrote (to Mr Wang only) enclosing an application form. On 31 December Mr Wang contacted Centrelink by telephone to rectify this error. 18 On 5 January 2004 Centrelink wrote to Mr Wang mistakenly stating the initial contact date as 31 December 2003. Again Mrs Xiao was not mentioned and the application form was not enclosed. 19 On 6 January the applicants' son contacted Centrelink on his parents' behalf. An arrangement was made for an interview with the applicants in early February. Also on 6 January Centrelink wrote to Mrs Xiao wrongly confirming her initial contact date as the same date. The letter also failed to enclose a claim form for Newstart Allowance. 20 On 5 February the applicants attended at Centrelink and were interviewed separately. The Centrelink officer told Mr Wang to produce an "Employment Separation Certificate" (ESC), a document which provides various details about a termination, and also proof of bank account balances. Mr Wang immediately produced proof of his bank account balance, thus the only outstanding requirement was the ESC. 21 Mrs Xiao was separately interviewed by another Centrelink officer, Ms Ely Hanson, who asked the interpreter to leave. Mrs Xiao had to fill in forms she could barely understand. She signed documents without understanding their contents and left in confusion. She was given a letter by the Centrelink officer requiring her to produce certain documents, including bank balances and an ESC. 22 The applicants on 9 and 11 February supplied all the documents required to Centrelink, including loan statements and council rate notice. Still they did not receive social security. 23 Between 5 February and 5 March Mr Wang contacted Centrelink regularly to try and collect the social security benefits. However Centrelink officers told him that the records showed that his former employer had not completed the ESC. 24 On 5 March the applicants visited Centrelink. A lady named Cindy said that Centrelink had still not received the ESC. When asked to state that in writing, Cindy altered her response and told them that Centrelink had indeed already received the ESC. She said the applicants could obtain a copy if an application were made in writing. 25 The applicants, according to their submissions, "were immediately sent into outrage". They asked to see the manager but were referred to Mr Michael Harper, a supervisor. He said that two other documents were still required by Centrelink, a land valuation notice and a home loan statement. He said as soon as the two documents were produced the applicants' claims would be granted and the social security benefits paid. The applicants sent the documents to Centrelink and Ms Hanson provided them with copies of the ESCs. 26 On the same day, that is 5 March 2004, Mr Kevin Donnellan, an officer of the Commission, supplied the applicants with copies of their ESCs. In the case of Mr Wang the copy of the ESC obtained from the Commission was different from that supplied by Centrelink. The Centrelink copy listed the reason for termination as "threatening to kill superiors & poor work performance". In the copy obtained from the Commission that answer read "threatening", then there was a space, then the words "behaviour superiors & poor work performance". The words "to kill" appear to have been deleted and the word "behaviour" added. The fax date of transmission in the latter case is 4 March, in the earlier case 5 February 2004. 27 On 10 March, benefits still not having been received, the applicants again visited Centrelink and met Mr Harper. He said that he had not received the fax sent by the applicants on 5 March. 28 The applicants' son's social security was inexplicably cancelled, delayed unreasonably and was paid in wrong amounts. 29 The applicants complained to a number of authorities including the Commonwealth Ombudsman, Centrelink Customer Relations and Ms Julia Gillard MP. 30 On 18 March the applicants contacted Centrelink to ask for a review of its decision. Centrelink responded on the same day. Its letter referred to an enclosed form but did not in fact provide one. 31 The applicants and their son lodged forms on 2 April 2004 seeking review of their respective decisions by an Authorised Review Officer. A decision was not made until March 2005. The Ombudsman is seeking a reason for this delay. 32 On 22 September 2004 Mrs Xiao attended an interview with Ms Raelene Harrip, an Employment Consultant. Ms Harrip misled Mrs Xiao into signing a Job Seeker Statement and attached Job Seeker Plan. Ms Harrip gave her a letter from Centrelink advising her to attend an interview for the Work for the Dole Program. Ms Harrip threatened her that failure to attend the interview would result in automatic cancellation of her social security benefits. Mrs Xiao started her Work for the Dole Program on 2 October. 33 Mr Wang had signed his Preparing for Work Agreement on 5 February 2004 which required him to start a language, literacy and numeracy program by 22 June but he was not admitted into that program until 15 December 2004. 34 On 3 November 2004 the applicants attended another interview with Centrelink. Mrs Xiao was "further misled" to sign her second Preparing for Work Agreement "without comprehension of the outcome or consequence of committing to such agreements". This agreement was to "cover up" the fact that Mrs Xiao was forced into the Work for the Dole Program and imposed an incorrect starting date of 15 December 2004. This later resulted in her exclusion from the English language lessons, instead she was confined by this agreement to participation in Work for the Dole Program only. 35 Both applicants were offered places in Vocational Education, Certificate III in ESL Employment (Aged Care) at Victoria University, St Albans Campus. The applicants' tuition costs should have been fully funded by Centrelink. Soon after the applicants started this course Mrs Xiao was informed by the Head of Department at the University that she was no longer eligible for the course because she had not finished her Work for the Dole Program. Her teacher showed her a handwritten note to Centrelink. 36 The applicants having obtained the intervention of the Ombudsman, a Centrelink officer at Werribee, arranged a meeting with Mr Wang on 23 March 2005. Mr Wang asked for permission to use a voice recorder. Mr Harper of Centrelink immediately asked the applicants to leave or the police would be called. On the same day the manager wrote a letter to Mr Wang alleging verbally threatening behaviour by him. 37 The applicants appealed to the SSAT. On 30 May 2005 the SSAT handed down a decision dismissing their appeals. The applicants say that the SSAT failed to consider the evidence and arguments presented by way of submissions and erred in law. 38 The applicants sought review in the AAT. On 20 October 2005 their appeals were dismissed after the applicants filed notices of discontinuance. 39 The present proceedings were instituted in the Federal Court on 20 October 2005. 40 The applicants allege "serious criminal offences" by officials of Demos during the course of the Commission proceedings, including perjury and making false corrections to Mr Wang's ESC. It is also alleged that Mr Demos provided false information to Centrelink in regard to the applicants, including particulars as to their last working day, average daily working hours and reasons for termination of employment. 41 Under the heading "Serious Criminal Offences of Centrelink" it is said that Centrelink "conspired to defraud the applicants as defined under common and criminal law". Centrelink conspired with the applicants' former employer and used its authority, power and trust to take advantage of the applicants "appalling English skills and their severe hardship". Centrelink deceived the applicants in relation to their ESCs and assisted Mr Demos "to commit criminal acts to Mr Wang's ESC". 42 Centrelink disregarded and ignored evidence given by the applicants as to their last working day and average daily working hours and "instead based their decision using false and misleading information". Although the applicants have made it clear to the SSAT and the AAT that most information Demos had given to Centrelink was false and misleading, the SSAT and AAT "simply ignored this, and still naively accepted the false information without taking any further action". 43 Centrelink had current and comprehensive information in regard to the applicants and their family because they had claimed family tax benefits but nevertheless the applicants were sent an application form "for another unqualified payment, despite the disqualification was obvious to the officer". 44 Centrelink officers deceived Mrs Xiao into signing an agreement she could not understand and failed to act in her best interests. They forced her into a program which was not in her interests. Centrelink conspired and passed on private information to Victoria University. This was in breach of the Privacy Act 1998 (Cth). 45 Under the heading "Breaches of SSA 1991, SSAA 1999 and Respondent's Policies", it is said that Centrelink officers conspired with Demos to use false evidence in regard to the applicants' average daily working hours. 46 Centrelink failed to apply the relevant law to whether the applicants qualified as under "severe financial hardship". Centrelink noted that they had a total of $700.21 in cash at bank and liquid assets exceeding $694.60. Centrelink irresponsibly assumed that the applicants had more funds available to them on the day of termination of employment than on 5 February 2004, but that was not so because they had to pay mortgage instalments of $850 per fortnight. Thus the $700.21 was not available. This is fundamentally incorrect. Section 19(1) of the Federal Court of Australia Act 1976 (Cth) provides that the Court "has such original jurisdiction as is vested in it by laws made by the Parliament". The Federal Court only has such jurisdiction as is conferred on it by the Commonwealth Parliament, together with accrued jurisdiction over non-federal claims as arise out of transactions and facts common to the federal claims: Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570. 48 The claims of the applicants are not within the jurisdiction of the Federal Court. The Court does not have jurisdiction to try criminal offences such as fraud and conspiracy. Breaches of the Social Security Act do not confer private rights for damages: Scott v Secretary Department of Social Security (2000) 65 ALD 79 at [24], Scott v Pedler [2004] FCAFC 67 at [1] , [53], [93], [102-103] and [106]. Nor is there any duty of care owed: Scott v Pedler . The Federal Court does not have a jurisdiction of general oversight of the administrative efficiency of federal government entities. 49 Because there is no jurisdiction for this Court to deal with various claims made it is not appropriate to consider whether any reasonable causes of action are raised. Such an exercise would amount to exercising a jurisdiction which the Court does not have. However, I should take this opportunity to correct an error I made in Duncan v Lipscombe Child Care Services Inc [2006] FCA 458 in relation to the new s 31A of the Federal Court of Australia Act which introduces for strikeout applications the lower threshold of "reasonable prospects of success" as against the test laid down in such cases as General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 150. I was not referred in Duncan to item 44 of Pt 2 of Sch 1 to the misleadingly titled Migration Litigation Reform Act 2005 (Cth) (misleading because it applies to all litigation) which makes it clear that s 31A does not apply to proceedings commenced before that Act came into force. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | claims against secretary of department of employment and workplace relations alleging criminal offences and civil liability to pay social security benefits practice |
Each is concerned with the question whether a decision of the Refugee Review Tribunal ("the Tribunal") is vitiated by jurisdictional error. The first issue concerns the refusal by the Tribunal to adjourn its hearing, when it was notified in advance by a solicitor and migration agent acting on behalf of the appellant that the appellant's case was not ready to proceed at the hearing. The second issue concerns the Tribunal's refusal to give any weight at all to a statement submitted to it containing information supplied by the appellant's mother in Albania, because the statement was not signed. 2 The proceeding before this Court is an appeal from a judgment of the Federal Magistrates Court, published as SBLF v Minister for Immigration and Citizenship & Anor [2007] FMCA 1477. The learned federal magistrate dismissed an application by the appellant for judicial review of the decision of the Tribunal, signed on 7 August 2006 and handed down on 29 August 2006. The Tribunal affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs (now the Minister for Immigration and Citizenship, the first respondent to this appeal) (in both cases "the Minister"), refusing to grant to the appellant a protection visa. 3 It is accepted that the appellant is a citizen of Albania, who arrived in Australia on 2 November 2005, having obtained a visa to travel to Australia by using a false Italian passport. On 29 November 2005, the appellant applied for a protection visa. On 2 February 2006, the Minister's delegate made a decision to refuse to grant the visa. The appellant then applied to the Tribunal for review of that decision. Having been unsuccessful in that application, the appellant filed an application in the Federal Magistrates Court, for relief of the kind available under s 39B of the Judiciary Act 1903 (Cth), on 22 September 2006. He filed an amended application on 5 April 2007. The federal magistrate heard the application on 11 April 2007 and gave judgment on 31 August 2007. 4 By s 36 of the Migration Act 1958 (Cth) ("the Migration Act "), there is a class of visas to be known as protection visas. A criterion for a protection visa is that the person applying for it be a non-citizen in Australia to whom the Minister is satisfied that Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol. The terms "Refugees Convention" and "Refugees Protocol" are defined in s 5(1) of the Migration Act to mean respectively the Convention relating to the Status of Refugees done at Geneva on 28 July 1951 and the Protocol relating to the Status of Refugees done at New York on 31 January 1967. It is convenient to call those two instruments, taken together, the "Convention". He claimed that he professed the Catholic religion, in a country dominated by Muslims, and was consequently in danger of persecution by reason of his religion. He also claimed that he had expressed publicly his opposition to an extremist Muslim political party and so was in danger of persecution on the ground of political opinion. He claimed to have been assaulted and beaten severely. He claimed that shots had been fired at him. He claimed that his parents had been forced to sell their house for less than its value and to move their place of residence because of threats. He claimed that his persecutors were still making inquiries of his parents in Albania as to the appellant's whereabouts, and still making threats. He claimed to have been dismissed from employment. He said that he feared that, if he returned to Albania, the Muslims would make an example of him and would beat him and shoot him. " By s 415(1) , the Tribunal may, for the purposes of the review, exercise all the powers and discretions conferred by the Migration Act on the person who made the decision. It is well accepted that the Tribunal is required to perform its function by considering the subject matter of a decision of a delegate of the Minister afresh, on the material before the Tribunal, and not to decide whether that decision was correct on the material before the Minister's delegate. (2) The Tribunal, in reviewing a decision: (a) is not bound by technicalities, legal forms or rules of evidence; and (b) must act according to substantial justice and the merits of the case. 7 Division 4 of Pt 7 of the Migration Act contains provisions concerning the conduct by the Tribunal of a review. 8 Section 425(2) contains exceptions to this obligation, none of which is applicable to the present case. The substance of his claim to have a well-founded fear of persecution for reasons of religion and political opinion was contained in a typewritten and signed statement 14 short paragraphs in length. The appellant's account of his experiences recorded in that statement was very brief. Before the Minister's delegate considered the matter, two invitations were sent to the appellant's migration agent, addressed to the appellant, offering opportunities to provide additional information to support the claims. The migration agent responded to the first invitation, without providing any substantive information. There was no response on behalf of the appellant to the second invitation. The Minister's delegate found that the appellant had "provided little or no evidence to support his claims". Consequently, the Minister's delegate was not satisfied that the appellant had a well-founded fear of persecution for a Convention reason. 11 The same migration agent lodged the application for review by the Tribunal. By notice posted on 7 March 2006, sent to the migration agent, the Tribunal invited the appellant to a hearing on 19 April 2006. By facsimile transmission dated 28 March 2006 but apparently sent on 4 April 2006, the migration agent advised the Tribunal that he had a commitment to appear before the Full Court of this Court on the date of the appellant's hearing, and requested a hearing at a later date. The Tribunal replied on 11 April 2006, agreeing to this request, and rescheduling the hearing for 24 April 2006. On that day, the migration agent again sent a facsimile to the Tribunal, which included a certificate of a medical practitioner, advising that the appellant was not able to keep the appointment because he was suffering from acute gastroenteritis. The Tribunal again rescheduled the hearing, this time for 8 May 2006. [The appellant] has provided us with a copy of an 18 paragraph statement, which, on our instructions, constitutes the only evidence before the Department and the RRT regarding his claims, apart from some articles and information obtained by his former migration agent through the internet. In our view, there are a number of deficiencies in the manner in which this case has been prepared and submitted. [The appellant] claims that he will suffer persecution in Albania because of his political opinion. In an incident on 3 July 2005 he publicly expressed his opposition to the Islamic Muslim Party ("Partia Shquiptare Atgheu"). On our instructions there were a number of witnesses to the incident. The witnesses are friends and cousins of [the appellant] and he is in a position to provide us with their details so that we can obtain detailed statements from them. [The appellant] informs us that since his departure from Albania members of the Partia Shquiptare Atgheu have attended at his parent's [sic] address looking for him. We need to obtain statements from his parents in relation to the ongoing efforts of the representatives of the Partia Shquiptare Atgheu to locate [the appellant]. [The appellant] must demonstrate that the state of Albania is unable or unwilling to provide him with the protection he requires. On our instructions, no evidence appears to have been submitted to the Tribunal or the Department in relation to this aspect of the claim. In fact, [the appellant] is quite clear that the Albanian State and its agencies are unable to provide him with the protection he requires. I have informed [the appellant] that we require evidence of the failure of State protection. We are not in a position to proceed in this matter on Monday 8 May 2006. In our view, we will require at least two months to obtain the necessary statements and prepare a submission for the Tribunal. We seek an adjournment of this application for a period of at least two months. We are most concerned that if an adjournment of the hearing is not granted, the Tribunal will effectively be depriving [the appellant] of his right to a hearing. We would be grateful if you could urgently respond to this request. 13 The Tribunal proceeded with the hearing, as scheduled, on Monday, 8 May 2006. The appellant attended with his solicitor, who was also a registered migration agent. As recorded in its reasons for decision, the Tribunal did not grant the request to postpone the hearing "after due consideration" and advised the appellant's representative of this decision at the hearing. Given the need for s.424A correspondence arising from the evidence at the hearing, the representative agreed with the Tribunal that this would give her ample time to make any further submission. 15 On 10 May 2006, the Tribunal sent a letter to the appellant pursuant to s 424A of the Migration Act , requesting that he provide written comments on information referred to in that letter. The appellant's solicitor provided a response dated 23 May 2006, attaching a statement signed by the appellant, and requesting an extension of time to provide corroborating evidence in support of the appellant's claims. No such extension was granted formally, but further information was submitted on 24 May, 14 June, 26 June and 12 July 2006. The information provided on 14 June 2006 consisted of certified translations of a contract of sale of the appellant's parents' house and a statement of an Albanian medical practitioner concerning injuries with which the appellant presented on 25 June 2005 and subsequently on 3 July 2005. The information submitted on 26 June 2006 was in the form of a statement prepared for signature by the appellant's mother. Please note that the Statement has not as yet been checked or signed by her. Arrangements are in place for the Statement to be translated, checked and signed by [the appellant's mother] and returned to us in the near future. The Statement was obtained by the writer by contacting [the appellant's mother] by telephone and using the services of Mr Entel Demaji, a NAATI level 3 accredited interpreter. We would be grateful if the Tribunal would take this information into account in assessing [the appellant's] application. I do not accept this as a satisfactory explanation for this conflicting and contradictory evidence as the evidence presented over time is not lacking in detail but is directly contradictory. The applicant has made no submission to indicate that the previous representative had in any way misrepresented his claims to the Department or the Tribunal or had made any errors in the information provided on behalf of the applicant. Based on the highly conflicting and contradictory evidence before me in relation to the applicant's problems with members of Partia Shjiptar Atdheu I find that the applicant was not a witness of truth in this regard and that his evidence in relation to his problems with Partia Shjiptar Atdheu lacks credibility. Based on this finding in relation to the lack of credibility of the applicant's evidence, and based on the evidence before me, I am not satisfied that the applicant ever suffered any of the alleged problems he claims to have suffered with members of Partia Shjiptar Atdheu. I therefore find that the applicant was never beaten by members of this party and hospitalised as a result of injuries received in these beatings either on 25 July 2005 or 3 July 2005 or on both occasions; he was never forced to vote for Partia Shjiptar Atdheu against his will at the elections on 3 July 2005; he was never shot at by members of this party whilst driving his car; members of this party have never gone to look for him at his parents' house both before and after he left Albania; he was never sacked by his employer in August 2005 because of pressure from members of this political party; that his parents were not forced to sell their house at a price well below market value to assist the applicant to leave Albania; and that members of Partia Shjiptar Atdheu do not have any ongoing interest in the applicant whatsoever. In making these findings I have considered the letter of the doctor indicating that the applicant was hospitalised on 25 July 2005 and again on 3 July 2006. The letter does not indicate the reason why the alleged injuries requiring hospitalisation were caused and makes no indication whatsoever that they were caused as a result of alleged altercation with members of Partia Shjiptar Atdheu, as claimed by the applicant. I have therefore not placed any weight on this letter when making this decision. I have also considered the contract of sale for the applicant's parents' house as submitted by the applicant. The contract, as translated gives no indication as to the reason for the sale of the property and gives no indication as to whether the vendors had sold the property at any price other than its true market value. I have therefore placed no weight on this contract when making this decision. I have not placed any weight when making this decision on the unsigned statement purporting to be a statement from the applicant's mother as at the time of making this decision this statement has not been signed by the applicant's mother and cannot be taken to be a true indication of her views or opinions. 17 Accordingly, the Tribunal was not satisfied that the appellant was a person to whom Australia had protection obligations under the Convention and found that he did not satisfy the criterion for a protection visa. So far as it is potentially relevant to this appeal, the amended application raised two issues. The first was that, by rejecting and failing to consider the appellant's mother's statement on the basis that it was not signed, the Tribunal misunderstood its powers and functions in relation to evidentiary material and therefore failed to exercise its jurisdiction and to perform its function of reviewing the decision of the Minister's delegate, as required by s 414 of the Migration Act . The second issue was that, in refusing the request for an adjournment of the hearing on 8 May 2006, the Tribunal denied the appellant procedural fairness or failed to comply with s 425 of the Migration Act , because the hearing to which it invited the appellant was not a hearing that had the necessary elements of a hearing required by that section. 19 The federal magistrate found against the appellant on all grounds in the amended application. It is conceded that the statement has not been signed by the mother nor even checked by her. It is apparent that it is yet to be translated to her. I take the applicant's agent's letter to be indicating that the Tribunal had been asked to receive the letter conditionally upon those matters being attended to subject to those implicit conditions, the Tribunal is asked to accept the statement. As matters transpired, the Tribunal did not deliver its decision until the 29 August 2006. No explanation for the failure to attend to the translating, checking and signing of the statement by the mother was provided to the Tribunal or to this Court. In these circumstances the Tribunal was entitled to take the view which it did that there was nothing to establish that the document was a reflection of the mother's actual views or opinions. 20 At [50]-[51], his Honour also rejected the argument that the Tribunal denied the appellant procedural fairness by not giving him notice of its intention to reject the mother's statement. As well as relying on the proposition that the appellant's solicitors themselves recognised that the statement was provided provisionally, his Honour took the view that s 422B of the Migration Act prevented the appellant from relying on any argument of procedural fairness, as there was no suggestion that the denial of procedural fairness constituted a failure to comply with any relevant provision of the Migration Act . Apart from the obstacle to the acceptance of this argument presented by s.422B of the Act, it cannot be overlooked that a period of some three months elapsed between the denial of the adjournment and the delivery of the Tribunal's decision. In that time the Tribunal received further representations and documents and a further statement of the applicant all of which were given consideration (although not all were given weight). There is nothing to indicate that by the time the Tribunal delivered its decision the applicant had not been given ample opportunity to present his case. The difficulties for the applicant arising from the Tribunal's view that the oral testimony was inconsistent with the first statement were not a function of an adjournment not being granted or at least there is nothing to indicate that such was the case. The ground that was pursued in the appellant's written submissions was that the federal magistrate erred in not holding that the Tribunal had committed jurisdictional error by the manner in which it rejected the unsworn statement of the appellant's mother. 23 In reserving judgment, I indicated that I proposed to consider the question whether leave to amend the notice of appeal should be granted. 24 The two issues argued on the appeal, therefore, were those related to the Tribunal's refusal to give any weight to the statement of the appellant's mother, and the Tribunal's refusal to accede to the request for an adjournment of the hearing of 8 May 2006. It is convenient to deal with these two issues in their chronological order. These included a number of statements of fact. The appellant had only consulted the solicitors recently. He was concerned that his earlier migration agent had not prepared his case properly. There were deficiencies in the manner in which the case had been prepared and submitted. Most importantly, there were particular persons capable of supplying information that might assist in corroborating the appellant's account of what had happened to him and of the continuing attempts by those he claimed would persecute him to ascertain his whereabouts. In addition, there was a major issue, namely the availability of state protection for the appellant from those he claimed would persecute him, as to which the solicitors needed to obtain and submit information. The letter asserted that, if an adjournment were not granted, effectively the Tribunal would be depriving the appellant of his right to a hearing. The Tribunal did not deal expressly with any of these matters, other than to state that a postponement of the hearing was sought to enable the new representative "to further prepare" the appellant's case. There is no indication as to what constituted the "due consideration" that the Tribunal said it gave to the request for a postponement. The only reason given for such a refusal was that the hearing had been postponed twice previously. 26 It is clear that the Tribunal did not grapple with the substance of the letter of 5 May 2006. That letter referred to issues arising in relation to the decision under review, the decision of the Minister's delegate to refuse to grant the appellant a protection visa. It indicated that the appellant was not ready to give evidence and present arguments in relation to those issues, because he did not have available to him immediately evidence that would corroborate his claims. The letter gave reasons for the unavailability of this evidence. The Tribunal member did not take issue with the assertion of the unavailability of evidence at that time. He did not assert that the evidence was in fact available, should have been available, or would be unnecessary. The letter also gave a reason for the appellant's lack of readiness, namely the inadequacy of the earlier preparation of the case. The state of the earlier preparation of the case would have been apparent to the Tribunal member both from the reasons for decision of the Minister's delegate and from documents that were already on the Tribunal's file, having been forwarded to the Tribunal in compliance with the duty imposed on the Secretary of the relevant department by s 418(3) of the Migration Act . The Tribunal member did not take issue with the reason advanced. He did not find that the case was, or should have been, prepared sufficiently to enable the hearing to proceed. 27 The only reason given by the Tribunal member for refusing to postpone the hearing was the fact that there had been two earlier postponements. The Tribunal member did not find that the reason advanced for either of the two earlier postponements had not been a genuine reason. Indeed, the Tribunal member appeared to have accepted that the different reasons advanced on those two occasions (a conflicting engagement of the appellant's migration agent and the appellant's illness respectively) were genuine. Nor did the Tribunal member assert any absence of genuineness about the reasons advanced in the letter of 5 May 2006. There was no reference made to any rule or practice to the effect that no more than two postponements of a hearing would be permitted. It is hard to see how any such rule or practice could be applied, if a person had a genuine reason for a third postponement. The fact that there had been two previous postponements was nothing more than one matter to consider, and to weigh against the basis on which a third postponement was sought. The Tribunal member did not undertake such a weighing process. If it had done so, a powerful factor in the appellant's favour was the Tribunal's obligation to provide him with a proper opportunity to take advantage of the invitation to a hearing, by giving evidence and presenting arguments about the issues arising in relation to the review of the decision of the Minister's delegate to refuse the appellant a protection visa. 28 Unless it concluded that the considerations advanced by the appellant's solicitors were outweighed by other legitimate considerations, the Tribunal ought to have granted the appellant an adjournment. This was not a situation, as might arise when an adjournment of a court proceeding is requested and, having regard to previous adjournments, a further adjournment would cause prejudice to an opposing party. In the Tribunal, there is no adversary of an applicant for a protection visa. Prejudice to that applicant is the only relevant prejudice. Of course, the Tribunal might conclude that a particular applicant is applying for multiple adjournments, without any proper basis for any of them, so as to delay consideration of the application for review. No such conclusion was reached in the present case. In the light of the matters raised by the appellant's solicitor's letter, and the apparent acceptance of the validity of the reasons for the previous adjournments, such a conclusion would have been unlikely. The requirement of s 420(1) of the Migration Act that the Tribunal pursue the objective of providing a mechanism of review that is quick cannot be relied on in disregard of the requirements (of at least equal weight) that the Tribunal pursue the objective of providing a mechanism of review that is fair and just. 29 It is now well-established that the invitation that the Tribunal is required by s 425(1) of the Migration Act to give to an applicant is not a matter of form. The duty to give the invitation will not be performed if what the Tribunal then affords to an invited applicant is not a hearing that conforms with the requirements of s 425(1). This was made clear in Minister for Immigration & Multicultural & Indigenous Affairs v SCAR [2003] FCAFC 126 (2003) 128 FCR 553 at [33] - [39] . Section 425(1) requires that the invitation be to a hearing at which the applicant is "to give evidence and present arguments relating to the issues arising in relation to the decision under review. " As SCAR itself makes clear, even if the Tribunal is unaware of the inability of the applicant to give evidence and present arguments about those issues, the hearing will have fallen short of the requirements of s 425(1) , so that the duty to invite the applicant to a hearing of the required kind will not have been fulfilled. In that case, the Tribunal was unaware that the applicant was undergoing medical treatment as a result of being affected badly by news of his father's recent death. In [39] of its reasons for judgment in SCAR , the Full Court relied on Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (2002) 209 CLR 597 , in which it was held that the Tribunal had denied the applicant procedural fairness through inadvertence, because it was unaware of a letter seeking an adjournment of the hearing. 30 The question in the present case, therefore, is not whether the Tribunal's decision to refuse to adjourn the hearing was correct. If that were the question, there would be little doubt that the Tribunal's discretion miscarried, because it failed to take into account relevant material before it, namely the substance of the reason why the adjournment was sought. The question in the present case is whether the decision had the effect of denying to the appellant the sort of hearing that the Tribunal was required to invite him to, namely a hearing in which he could both give evidence and present arguments in relation to the issues. Because he had relied on a migration agent who had not done all that a conscientious migration agent would do, the appellant was not in a position to give evidence or present arguments about those issues. This was not a case of a failure by the appellant to give due attention to his application for a protection visa, or his application for review of a decision refusing him such a visa. He had done what could reasonably be expected of him, namely to engage a migration agent. The realisation that his migration agent may not have done all that a competent migration agent ought to have done apparently led the appellant to seek other advice. As a consequence of this chain of events, and as the Tribunal well knew, he was not in a position to present his case fully. 31 The fact that the appellant had opportunities after the hearing on 8 May 2006 to provide documentary evidence is not sufficient in the present case to overcome the deficiencies of the hearing. Because of the unavailability of the information at the hearing, the appellant did not have an opportunity to present arguments in relation to the issues at that hearing. 32 In its reasons for decision, the Tribunal recorded that the appellant's solicitor agreed that the time it would take for the Tribunal to comply with its obligations under s 424A of the Migration Act would provide ample time to make any further submission. In no way could this be taken to have amounted to a waiver of a right to an invitation to a hearing that complied with s 425(1). It is unnecessary to consider whether, other than in the ways contemplated by s 425(2) , it would be possible for an applicant to waive the performance of the Tribunal's statutory duty under s 425(1). 33 For these reasons, I am of the view that the Tribunal failed to perform its statutory duty under s 425(1) of the Migration Act . Because the duty under s 425(1) is an essential prerequisite to the making of a valid decision by the Tribunal, the failure to perform that duty amounts to jurisdictional error. The federal magistrate was in error in failing to find that the Tribunal's decision was the result of jurisdictional error. The federal magistrate did not discuss the question whether there had been a failure to comply with s 425 , but treated the issue as being one of denial of procedural fairness in a general sense, and seems to have thought that s 422B of the Migration Act was an obstacle to accepting that argument. It is unnecessary for me to consider whether s 422B would have operated to exclude the ordinary implied obligation of the Tribunal to afford procedural fairness to the appellant, because I take the view that there was a failure to comply with the duty imposed on the Tribunal by s 425(1) in any event. For the reasons that I have given, the federal magistrate was also in error in holding that the subsequent opportunities the appellant had to provide information were capable of curing the error. As I have said, a failure to perform the Tribunal's statutory duty under s 425(1) cannot be cured by the subsequent provision of information in writing. 34 Having reached these conclusions, in the interests of justice, I should grant to the appellant leave to amend the notice of appeal by adding the ground proposed, which I have set out in [22] above. That ground of appeal is made out. The first is that the Tribunal member gave no weight at all to the appellant's mother's statement. The second is that the sole reason given by the Tribunal for taking this course was that the statement had not been signed by the appellant's mother. The Tribunal member described the statement as one "purporting to be a statement" from the appellant's mother, and concluded that it could not be taken to be a true indication of her views or opinions. 36 The letter from the appellant's solicitors to the Tribunal, accompanying the statement, contained specific information about the way in which the evidence contained in the statement had been obtained. According to that letter, the statement was obtained by contacting the appellant's mother by telephone, using the services of an interpreter accredited to the level required to act as a court interpreter. The Tribunal did not make any finding that this information was untrue. It simply ignored the information. If accepted, the information would have led to the view that the mother's statement had probative value in relation to a number of elements of the appellant's claims. It was not the case that the appellant and his solicitors, or one or other of them, had written out what they thought the appellant's mother might say, or ought to say, with a view to submitting the draft to her to see if she was prepared to say it. The letter informed the Tribunal that the statement was made on the mother's instructions, obtained through a qualified interpreter. Far from indicating that the statement was provisional, as the federal magistrate found, the letter specifically invited the Tribunal to take the information into account in assessing the appellant's case. It is true that the letter also drew attention to the fact that the statement had not yet been checked or signed by the appellant's mother. This could have been a reason why the weight to be attached to the statement might have been less than would have been the case if the statement had been translated to the appellant's mother, checked by her and then signed as true and correct. It did not follow, however, that the unsigned statement was necessarily to be treated as of no weight because it was not signed. If the solicitor's statement as to the way in which the information contained in the statement was obtained was to be accepted, then subject to any appropriate reservations about whether the statement was accurate in every single respect, it had probative value even in its unsigned form. 37 By s 420(2)(a) of the Migration Act , the Tribunal was not bound by the rules of evidence. The evidence that the Tribunal acts on does not have to be sworn. In circumstances in which the Tribunal is required to deal with applications by people who seek protection visas, it is almost inevitable that the Tribunal will receive some of the evidence it considers in the form of documents in which people who are not called to give evidence before it in person provide information. There is no ground for the Tribunal to reject evidence in this form out of hand. It must consider such evidence as it receives and give to it such weight as it believes that the evidence merits. It cannot reject information arbitrarily, whether because of the form in which the information comes, or otherwise. What the Tribunal did in the present case was to reject the appellant's mother's statement arbitrarily. In the circumstances, because it did not find that the account in the solicitor's letter of how the statement had been obtained was false, but simply failed to refer to that account, the Tribunal's conclusion that the statement had no weight at all was perverse. 38 The Tribunal's overall statutory function, pursuant to s 414(1) of the Migration Act was to review the decision of the Minister's delegate. As I have said, that function is to be exercised by means of what is called a hearing de novo, in which the Tribunal must receive information and submissions and make its own decision on the material before it. The Tribunal has a fact-finding function, which it must exercise for this purpose. Fact-finding is a process that involves consideration of all probative material placed before the fact-finder. It is not open to the fact-finder to choose not to rely on probative material properly before him or her. There is a clear distinction between making a finding of fact inconsistent with some of the material of a probative nature, after consideration of the whole of the material, and choosing not to rely on some of the material at all. In many, if not most, cases, it will be inevitable that the fact-finder will make findings inconsistent with some of the probative material before him or her. That is the natural result of the process, which involves determining what to accept and what to reject. That process is altogether different from arbitrary rejection of probative material by labelling it as without probative value, or weight, altogether, when it has probative value. That is what the Tribunal did in this case. 39 The approach of the Tribunal member in the present case to the fact-finding process, demonstrated by the rejection of the mother's statement, raises the question whether the Tribunal member understood the nature of the fact-finding process as a central element in the exercise of the review function. In my view, he did not. I am fortified in this view by the reasons the Tribunal member gave for the attribution of no weight to the letter of the doctor and the contract of sale of the appellant's parents' house. One of the appellant's claims was that on a particular date, he had been severely beaten because of his expression of political opinion based on his religious affiliation. The doctor's letter, if its provenance were to be accepted, corroborated this claim to the extent of describing injuries for which the appellant was treated on that occasion. The Tribunal member did not question the provenance of the letter. The letter was therefore probative of the appellant's claim. It was not probative of every element of that claim, and the Tribunal member was correct to point out that it did not cast light on the claim as to the reason for the infliction of the injuries. It is unlikely that the doctor could have cast any light on that. The fact that the letter did not conclude the question of the cause of the injuries did not deprive it altogether of corroborative weight. The attribution of no weight to it showed that the Tribunal member lacked understanding of the fact-finding function, and therefore of his function of reviewing the Minister's delegate's decision. 40 I take the same view in relation to the contract of sale of the house. The appellant's claim was that, because of the attention of those who sought to persecute him, his parents had sold their house and the family had moved to another place. The contract of sale corroborated this claim to the extent of supporting the proposition that the house had been sold. Again, the Tribunal member did not express a doubt as to the genuineness of the contract. He attributed no weight to it because it did not corroborate all elements of the appellant's particular claim. Not surprisingly, the contract gave no reason for the sale, nor any indication as to what price the vendors might have sought if they had held out for the true market value. The absence of this information from the contract itself did not mean that the contract lacked probative weight altogether. It meant that the contract only corroborated the appellant's claim to a limited extent. The rejection of this item of evidence on this basis was again arbitrary. 41 My conclusion that the Tribunal's rejection of the appellant's mother's statement showed its lack of understanding of the fact-finding function is therefore strengthened by the similar arbitrary rejection of the doctor's letter and the contract of sale of the home. As a result of the Tribunal's arbitrary rejection of the appellant's mother's statement, by attributing to it no weight in circumstances when no ground existed for saying that it had no weight, it is necessary to conclude that the Tribunal failed to perform its function of reviewing the decision of the Minister's delegate. It failed to comply with its statutory duty under s 414(1) of the Migration Act . It did not carry out the task of finding the facts on the information before it, which was necessary to the exercise of that function. The federal magistrate was in error in rejecting this ground of challenge to the Tribunal's decision. The federal magistrate did not advert to the information in the solicitor's letter about how the statement had been obtained. His Honour wrongly construed that letter as being an indication that the Tribunal was not being asked to receive the statement in evidence until such time as it had been translated, checked and signed. His Honour was wrong to say that the Tribunal was entitled to take the view that there was nothing to establish that the document was a reflection of the mother's actual views or opinions. The appeal must be allowed and the order of the Federal Magistrates Court, made on 31 August 2007, dismissing the appellant's amended application and ordering him to pay the Minister's costs, must be set aside. In lieu of those orders, there should be orders that a writ of certiorari issue to remove into this Court the decision of the Tribunal, for the purpose of quashing it. The Tribunal's decision must be quashed. A writ of mandamus must issue, directed to the Tribunal, requiring it to hear and determine the appellant's application for review according to law. 43 No reason was advanced, and none appears, why the first respondent should not pay the appellant's costs of the proceeding below, or of the appeal. Costs should follow the event in each case, and orders should be made accordingly. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | visa protection visa tribunal hearing adjournment appellant sought adjournment on the ground that his case was not ready to proceed to hearing, after consulting new solicitor/migration agent tribunal refused adjournment on ground that hearing already adjourned twice no finding that reasons for previous adjournments not legitimate no finding that reason now advanced for adjournment not legitimate whether tribunal denied appellant opportunity to give evidence and present arguments visa protection visa review of decision to refuse visa tribunal member gave no weight to unsigned statement of appellant's mother failed to take into account solicitor's account of how statement had been obtained if solicitor's account accepted, statement manifestly had some weight fact-finding function of tribunal whether tribunal failed to perform its statutory function to review decision to refuse visa migration migration |
Following a review of his practice profile the Commission referred Dr Selim's conduct to the fourth respondent, the Director of Professional Services Review. As a consequence of this referral Dr Selim's practice was investigated by the first respondent, the Professional Services Review Committee 309, which found that Dr Selim's conduct, in particular his high volume of services and lack of clinical input, in connection with the rendering of some of his services during the referral period constituted inappropriate practice under s 82 of the Health Insurance Act 1973 (Cth) (' HIA '). 2 Dr Selim sought review of the decisions made by the first and fourth respondents under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth). In his amended application for review, the applicant also sought a declaration, on constitutional grounds, that Part VAA of the HIA is invalid . In the alternative he sought declarations that Part VAA is invalid in so far as it relates to the applicant or, in the further alternative, that ss 82 , 86 and 106U are invalid. On 29 October 2004 Jacobsen J made an order severing the constitutional questions and providing for the hearing of the claims for judicial review, which his Honour dismissed on 7 February 2005. These reasons concern only the constitutional questions. 3 The applicant challenges the constitutional validity of the Professional Services Review Scheme ('PSR Scheme') contained in Part VAA of the HIA on the grounds that it is beyond the legislative power of the Commonwealth and because it infringes the prohibition against civil conscription in s 51 (xxiiiA) of the Commonwealth Constitution . In the alternative the applicant contends that ss 82 , 86 and 106U are invalid for the same reasons. The fundamental elements of the Medicare Scheme were summarised in the written submissions of the respondent to which the applicant made no objection. The Act was one of the pieces of legislation enacted as a result of the historic joint sitting of the houses of the Federal Parliament in 1974. Its long title is 'An Act providing for Payments by way of Medical Benefits and Payments for Hospital Services and for other purposes. Section 10 provides for the payment of benefits for 'medical expenses ... incurred in respect of a professional service' rendered to an eligible person. A 'professional service' is, relevantly, a service to which an item in the general medical services table prescribed by the regulations relates, rendered by a medical practitioner, that is generally accepted in the medical profession as being necessary for the appropriate treatment of the patient to whom it is rendered. At the relevant time the amount of the benefit for each service was 85% of the Schedule fee. However, a patient may enter into an agreement with the practitioner under which the patient assigns to the practitioner the right to payment of the Medicare benefit. If such an agreement is entered into, the practitioner must accept the assignment in full payment of the medical expenses incurred in respect of the service. Assignments provide the means by which the practitioner 'bulk-bills' the Commission in respect of services which attracted Medicare benefits. He stressed that the practitioner's decision to accept an assignment of the benefit is entirely voluntary; there is no compulsion for any doctor to 'bulk-bill'. It is the 1999 version that is relevant to this proceeding; that is the HIA as amended by the Health Insurance Amendment (Professional Services Review) Act 1999 (Cth) and the Health Legislation Amendment Act (No 3) 1999 (Cth), (together the Amending Acts) . The scheme establishes a process for examining the conduct of a practitioner, in connection with the supply of services which attract a payment under Medicare, in order to determine if the practitioner has engaged in 'inappropriate practice'. It also provides for action that can be taken in response to inappropriate practice. The Director may make written guidelines about the content and form of adjudicative referrals. The Committee may only make findings about the services that are the subject of the adjudicative referral; s 106H(1). Before that the concept of 'excessive services' or over-servicing, was the criterion by which practitioners' conduct was judged. It encompasses the existing concepts of excessive rendering and excessive initiating but also introduces the concept of excessive prescribing. In addition, it will allow a Committee to examine, where relevant, aspects of a practitioner's practice broader than purely the excessive servicing of patients. A Committee will have the capacity to consider the conduct of the person under review in his or her practice and determine whether that conduct is acceptable to the general body of his or her profession or specialty. Whereas excessive servicing is currently defined as the rendering or initiation of services not reasonably necessary for the adequate care of the patient, the concept of inappropriate practice goes further. It covers a practitioner engaging in conduct in connection with the rendering or initiation of services that is unacceptable to his or her professional colleagues generally. 20 The applicant sought to put certain evidence before the Court including affidavits of Dr Selim and various other extrinsic materials such as explanatory memoranda to relevant legislation. The respondents did not object to the applicant relying on the extrinsic material although they made the point, correctly in my view, that such material is not evidence. They did object to evidence concerning Dr Selim's personal circumstances on the grounds that this evidence is not relevant to the debate as to the constitutional validity of the PSR Scheme. They submit that whether Part VAA is valid does not depend on its impact on the applicant as an individual; it cannot be the case that Part VAA is invalid with respect to the applicant and valid for everyone else. For this reason the factual propositions relevant to the constitutional challenge must be put at a general and not an individual level. It is for this reason, it is submitted, that the leading cases on s 51(xxiiiA) have not had an individual's personal circumstances as their factual base but have proceeded by way of a demurrer to a fully pleaded statement of claim or on a case stated. I agree with these submissions. 21 There is no challenge to Dr Selim's standing to bring the present proceeding. The respondents have accepted that should the applicant be disqualified from participating in the Medicare Scheme, then for the period of the disqualification the applicant's patients would not receive benefits in respect of the applicant's professional services. The respondents accept that, depending on the length of any disqualification the applicant 'may lose a number of his patients'. The pervasiveness of the Medicare Scheme and its role in covering an individual's medical expenses or, at least, in subsidising those expenses, is sufficiently well known generally as to allow me to take judicial notice of this and of its impact on medical practitioners who are unable to participate in the scheme; Holland v Jones [1917] HCA 26 ; (1917) 23 CLR 149 ; Evidence Act 1995 (Cth) s 144. It is not difficult to conclude that the consequences for a medical practitioner who is excluded from the scheme would be sufficiently serious. The disadvantages of operating outside the Medicare Scheme are such as, in my view, to impose practical, if not legal compulsion, to participate in the Scheme. 22 The written submissions made on behalf of the applicant went into considerable detail about the repercussions for the applicant should he be disqualified from the Medicare Benefits Scheme for up to three years. These included the virtual devastation of his practice and loss of his livelihood. As I have explained above these submissions are not relevant to the issue I have to decide. The applicant sought judicial review of the decisions of the Director and the Committee. Jacobson J dismissed that application. I understand that, pending the outcome of the present constitutional challenge to the legislation, no penalties have been imposed on the applicant. Whether or not hardship submissions will be relevant to the assessment of any penalty is not for me to say. The issue of whether the PSR exceeds the powers of the Commonwealth however, cannot depend on issues of hardship particular to an individual practitioner. Nevertheless, the applicant contends that the realities underlying the medical benefits scheme are such that 'realistically, economically and practically' it requires medical practitioners to become approved medical providers in order for them to practise as general practitioners. The applicant submits that the HIA requires general practitioners to provide medical services in a manner designated as 'appropriate' but which is 'unstated and undefined'. According to the applicant, this dictates the 'kinds of and manner in which medical services are actually provided' and attaches significant sanctions to a failure to conform including disqualification from participation in the scheme for up to three years, public reprimand and/or the imposition of substantial repayments of Medicare benefits paid to them or assigned to them by their patients. By so doing, the applicant submits, the HIA 'impermissibly' constitutes civil conscription. 24 Elaborating on this submission the applicant contends that the financial consequences of not participating in the Medicare Scheme create a formidable and real compulsion for general practitioners to do whatever is necessary to enable them to participate. What is required, it is submitted, goes to the actual medical services to be delivered as well as to the mode or manner of their delivery. The Commonwealth is now empowered to intervene in the actual professional delivery of medical services. Rather, it is submitted, the broader view of what constitutes 'civil conscription' taken by Latham CJ, Rich, Williams and Webb JJ in Federal Council of the British Medical Association in Australia v Commonwealth [1949] HCA 44 ; (1949) 79 CLR 201 ('BMA case') should be accepted. It is not open to this Court to say that a decision of the High Court of Australia is incorrect. If, contrary to my view, the General Practitioners case and the BMA case are not reconcilable then the General Practitioners case, being the later decision, must prevail. In the present proceeding, unless it is relevantly distinguishable from the circumstances under consideration here, the General Practitioners case must be applied. The proposed amendment had been approved by the necessary majorities of electors and was assented to on 19 December 1946. In explaining the background to this amendment in BMA at 285 , Williams J referred to the different views as to the proper scope of s 81 of the Constitution (Commonwealth power of appropriation) expressed in Attorney-General for Victoria v Commonwealth [1945] HCA 30 ; (1945) 71 CLR 237 (' Pharmaceutical Benefits Case') and to the likelihood, if the point arose for decision, that a majority of the Court would hold that the Commonwealth could only expend its money on those forms of social services expressly authorised by the Constitution , namely invalid and old age pensions authorised by s 51(xxiii). The extension of Commonwealth power to the provision of the benefits enumerated in s 51(xxiiiA) had been put beyond doubt by the amendment and concerns that the extension of power might lead to the nationalisation of medical and dental professions were met by the prohibition of civil conscription; see also D Mendelson, "Devaluation of a Constitutional Guarantee: The History of Section 51(xxiiiA) of the Commonwealth Constitution " (1999) 23 MULR 308 . At issue was the validity of s 7A of the Pharmaceutical Benefits Act 1947 (Cth) which required medical practitioners to use a prescribed form and adhere to a prescribed list of pharmaceuticals in writing a prescription if their patients were to be entitled to free pharmaceutical benefits. It was an offence, carrying a penalty of [sterling]50, for a medical practitioner to write a prescription other than in the statutory form unless asked to do so by the person for whom or at whose request the prescription was written. The majority of the High Court (Latham CJ, Rich, Williams and Webb JJ, Dixon and McTiernan JJ dissenting) held that the section imposed a form of civil conscription contrary to the prohibition in s 51(xxiiiA). 29 Latham CJ emphasised, at 243, that the power given to the Commonwealth under s 51(xxiiiA) is not a power to make laws with respect to pharmaceutical benefits and medical services but for the provision of such benefits and service. The Chief Justice accepted that in providing such benefits and services, the Commonwealth was entitled to rely upon the existing 'position in the community', that is, a system whereby private doctors prescribe medicine. His Honour found that the incidental power derived from s 51(xxxix) of the Constitution entitled the Commonwealth, when providing benefits out of public moneys, to take precautions so as to prevent injury to the public and the useless or dishonest expenditure of public moneys. 30 The Chief Justice also said (at 249) that the term 'civil conscription' is wider than 'industrial conscription' and is applicable to "any compulsion of law requiring that men should engage in a particular occupation, perform particular work, or perform work in a particular way. " The Chief Justice emphasised that the words 'any form of' in s 51(xxiiiA) evinced an intention on the part of the Parliament to ensure that any service to which the limitation applied should be 'completely voluntary'. Considering s 7A, his Honour accepted that a doctor might escape the penalty by not writing a prescription but noted that if a doctor could not carry on practice without writing many prescriptions included in the prescribed list, the doctor is not given any live option. Given that the doctor had no power or right to procure or control a request that he not use the Commonwealth forms then he either had to use them or go out of practice. 31 Williams J was also not prepared to confine the operation of the constitutional prohibition to direct legal compulsion; at 287. In his Honour's view, however, the fact that s 7A carried a penalty for non-compliance implied legal compulsion and by compelling medical practitioners, in the absence of a relevant request to the contrary, to write prescriptions on forms supplied by the Commonwealth, the section compelled the provision of a medical service to the Commonwealth. He is in effect certifying to the Commonwealth that the patient requires a pharmaceutical benefit within the meaning of the Act. ... He is compelled to render that service in the course of rendering a contractual service to his patient. But it is a service which forms no part of the implied contract for services created by a patient seeking the advice and treatment of a medical practitioner and the medical practitioner examining the patient with a view to giving him advice and treatment. It is a compulsory service to the Commonwealth for the purposes of the Act which is super-imposed upon the contract of the parties. It is a compulsory service whether the obligation is absolute or absolute unless performance is excused by the person in respect of whom or at whose request the prescription is written. But when this service is made compulsory by a fine, or loss of practice to avoid the fine ...then, having regard not only to the extent of the professional work involved but to the almost unlimited number of persons entitled to insist on the service at any time, it becomes, I think, not merely a compulsory service but a form of civil conscription within any meaning that can be given to that expression which, if not quite clear, was certainly intended to be comprehensive. It is civil conscription of doctors as doctors. Certain provisions of the HIA (ss 16A, 16B and 16C) and regulations made under the Act imposed conditions to be met before Commonwealth medical benefits were payable in respect of pathology services (other than prescribed pathology services) and also imposed obligations on some, at least, of the persons providing those services. It was necessary for those services to be provided by or on behalf of an 'approved pathology practitioner'. The conditions and obligations were designed to prevent the supply of unnecessary or excessive pathology services. 34 The legislative provisions operated in conjunction with an undertaking to be provided by approved pathology practitioners and a code of conduct. They had no application to a medical practitioner who was prepared to render pathology services for which no medical benefit would be payable and there was no legal compulsion on any medical practitioner to become an approved pathology practitioner. Secondly, it was said, the laws, by prohibiting practitioners from carrying on practice in what was formerly the normal way, compel them to carry on practice in a different way. ... it was argued for the plaintiffs that few practitioners would be able to attract patients, or to make a living from their profession, if medical benefits were not payable in respect of their services, and that therefore, if ss 16A, 16B and 16C are valid, a practitioner who intends to render pathology services (whether as a specialist or as a general practitioner) is compelled by practical considerations to apply to become an approved pathology practitioner. It would be necessary for them to become approved pathology practitioners, and for that purpose they would have to submit to the obligations imposed by the statute, the undertaking and the regulations. His Honour noted first, at 554, that mere compulsion for a medical practitioner to seek to become an approved pathology practitioner could not in itself 'amount to the imposition of any form of civil conscription'. Accordingly, his Honour focussed in particular upon those provisions which had the effect of compelling medical practitioners to observe certain positive requirements. Those provisions involved the requirement to make (or confirm) requests in writing, to give details of the relevant service in the handwriting of the person making the request and to record other particulars as required by the regulation. The approved pathology practitioner was also required to retain certain records for 18 months, to ensure that his employees acted in accordance with the legislation and to furnish information as required by the Minister from time to time. Most of the duties imposed relate only to things done incidentally in the course of practice, rather than to a medical service itself. (xxiiiA) requires, to medical and dental services, refers to any sort of compulsion to engage in practice as a doctor or a dentist or to perform particular medical or dental services. However, in its natural meaning it does not refer to compulsion to do, in a particular way, some act in the course of carrying on practice or performing a service, when there is no compulsion to carry on the practice or perform the service. ... it could not properly be said that it would be a form of civil conscription to require a person who had voluntarily engaged in civilian employment to perform the duties of that employment in accordance with the instructions given to him by his employers. ... There is nothing in the Constitution that would indicate that the expression "any form of civil conscription" where it appears s 51(xxiiiA) should be given an enlarged meaning which its words do not naturally bear. The words "any form of" do not, in my opinion, extend the meaning of "conscription", and that word connotes compulsion to serve rather than regulation of the manner in which a service is performed. Of course no express power is conferred on the Parliament to make laws to regulate the manner of performance of medical or dental services, but it appears clearly necessary to the effective exercise of the power conferred by s 51(xxiiiA) that the Parliament should be able to make laws as to the way in which medical and dental services provided by the Commonwealth under the authority of that paragraph are performed, and laws annexing conditions to the entitlement to any of the benefits provided under that authority even if those conditions may have the result that a medical or dental service must be rendered in a particular way if the benefit is to be obtained. I find it impossible to discern in the words in parenthesis in par. (xxiiiA) any intention to prevent the Parliament from making laws of that kind, provided that no compulsion to serve is imposed. 39 Despite the disagreement outlined in the passage quoted above, Gibbs J did not regard the BMA case as wrongly decided as it could be supported on narrower grounds. This requirement had no necessary relationship with any pharmaceutical benefit or medical services provided by the Commonwealth; and 2. in the light of its history and context, s 7A could be seen to intend to compel medical practitioners to join the Commonwealth scheme for the provision of free pharmaceutical benefits and to provide 'against their will' a medical service for the Commonwealth. The only medical service that the provisions in question compelled was, possibly, that required by s 16A(1) of the HIA , namely that a request by medical practitioner to an approved pathology practitioner to render an approved pathology service should be made or confirmed in writing. Although Gibbs J thought that such a request might be regarded as a medical service he held that the section did not compel any medical practitioner to make such a request. Rather it required that the request, if made , be in writing. 41 Subject to the points made below in [42]-[43], and to some additional observations that are not relevant here, the other members of the High Court agreed with Gibbs J that the provisions under consideration did not impose compulsion amounting to 'civil conscription'. 42 Although it is clear that Gibbs J was of the opinion that practical compulsion, as distinct from legal compulsion, is sufficient to satisfy the concept of 'civil conscription', given the High Court's interpretation of the legislation under consideration in the General Practitioners case it was not necessary to decide this point. Indeed, Barwick CJ, Mason J and Wilson J all left this question open. The General Practitioners case clearly shows, however, that careful examination of the specific requirements of challenged legislation is crucial to the determination of whether the constitutional prohibition has been breached. 46 The salient features of the Medicare Scheme and the PSR Scheme are outlined in [5] --- [13] above. As can be seen, there is no legal compulsion for a medical practitioner to participate in the Medicare Scheme any more than there was for medical practitioners to become approved pathology providers under the legislation considered in the General Practitioners case. I accept that here, as there in the General Practitioners case, there is a form of compulsion in that it may be severely detrimental, if not fatal, to the viability of a medical practice if the practitioner were excluded from the Medicare Scheme. The General Practitioners case clearly establishes, however, that such compulsion is neither a legal nor a practical compulsion to provide a medical service and is not affected by the constitutional prohibition; see [36] above. It is not clear exactly what the High Court meant by 'practical compulsion' but the acceptance ('with equanimity' as Mr Robertson observed) in the General Practitioners case of the fact that a pathologist who did not participate in the statutory scheme under consideration might not have a viable practice shows that such compulsion as is here involved, does not fall within the constitutional prohibition; see the General Practitioners Case at 549-50 per Gibbs J. It may be that 'practical compulsion' is a term that follows from an examination of the substance of a statute rather than mere form and is really a conclusion about that which offends the constitutional prohibition. In any event I do not need to decide that here. 47 For the applicant to succeed he would have to show that important aspects of rendering medical services are compulsory under the Medicare Scheme, enforced by the PSR Scheme. In making this point Mr Robertson referred to the provision for assignment of benefits under the Medicare Scheme to the medical practitioner who provides the service; see [5]-[6] above. In support of his submission that a medical practitioner was entirely free to accept payment by way of assignment of the benefit he referred to the comments to this effect in Health Insurance Commission v Peverill [1994] HCA 8 ; (1994) 179 CLR 226 at 235 per Mason CJ, Deane and Gaudron JJ. As Mr Robertson explained, a doctor can charge whatever fee he likes for his services; it is only where he voluntarily accepts assignment as full payment that his fee is limited to the amount that the Commonwealth is prepared to pay. The fact that the practitioner may be financially advantaged in deciding to accept an assignment does not make the provision compulsory. 48 As explained at [7] --- [18] above, the PSR Scheme provides for a practitioner's conduct to be examined to determine if he or she has engaged in 'inappropriate practice'. The consequences attached to a finding of inappropriate practice show that, as the name suggests, the purpose of the provisions is to prevent inappropriate practice rather than to compel the provision of medical services. Such a simple analysis is, of course, not sufficient to resolve the issues raised by the applicant but it does make clear that the thrust of the provisions is to regulate the conduct of medical practitioners, including the way in which they provide medical services. 49 The applicant accepts that regulating the incidents of medical practice does not offend the constitutional prohibition but contends that the PSR Scheme does more than regulate the incidents of medical practice. It does not merely regulate the number of services provided or the administrative incidents of medical practice but, it is submitted, the Scheme trespasses into the actual medical services provided not just the manner in which they are provided; it affects the practitioner's clinical decision whether or not to provide a particular service. This feature alone, the applicant contends, distinguishes the present-day system from that considered by the High Court in the General Practitioners case. 50 In my view this submission does not take sufficient account of Gibbs J's express statement in the General Practitioner's case (see [37] above) that Parliament has the power to make laws as to the manner in which medical services are performed where such laws are 'clearly necessary' to the effective exercise of the Commonwealth's power to provide medical and dental services. It is incidental to the exercise of the power to provide medical services to be able to make such regulatory laws and to be able to annex conditions to the entitlement to any of the benefits provided, even if this means that medical or dental services have to be rendered in a particular way if the benefit is to be obtained. The making of such laws is not civil conscription provided that 'no compulsion to serve is imposed'. Therefore the issue here is whether regulation with reference to the criterion of 'inappropriate practice' is 'clearly necessary' to the effective exercise of the power conferred by s 51(xxiiiA). 51 The High Court has cautioned that when considering the ambit of the incidental power, whether arising by implication or expressly under s 51(xxxix) of the Constitution , it is important not to allow the incidental power to dominate the main power or, as Rich J said, not to put the cart before the horse; Attorney-General for Victoria v The Commonwealth [1935] HCA 31 ; (1935) 52 CLR 533 at 563. The point was well illustrated by Dixon J in the Pharmaceutical Benefits case. The legislation under consideration there rested on the power of the Commonwealth to appropriate money under s 81 of the Constitution . Dixon J concluded that even if one accepted that s 81 authorised the expenditure of money on any purpose that the Parliament might think fit without restriction, the scheme established under the legislation would still be invalid. However, as the General Practitioners case shows, the incidental power is still relevant in an assessment of the constitutional standing of the PSR. 53 The applicant accepts that matters 'merely incidental to the core of clinical practice of medicine' do not fall within the constitutional prohibition because they might constitute a necessary part of the Commonwealth's administration of its benefits scheme. In the applicant's written submissions such incidental matters are said to include requirements about completing forms or with respect to accounts and receipts or financial and administrative matters. The applicant does not accept that it is incidental to the Commonwealth's provision of medical services either that it has the power to impose a standard which the services provided have to meet or the power to discipline medical practitioners whose services fail to meet that standard. 54 The applicant is correct that the regulation implicit in the concept of inappropriate practice is capable of going to the heart of medical services rather than merely to ancillary aspects. Whether that is different from merely regulating the incidents of medical services I do not need to decide, although I suspect that it is not. Ultimately however, I do not accept that a constitutional provision that empowers the Commonwealth to provide medical services, including through the existing network of medical practitioners, at the same time prohibits it from imposing standards on the medical services provided. Such standards are integral to the responsible provision of medical services and, as Latham CJ recognised in the BMA case, the Commonwealth's incidental power entitles it to provide for such matters as well as to take the necessary precautions to ensure that public money is properly used; see [29] above. A disciplinary system that is directed to support such precautions (as opposed to a free-standing disciplinary system) would also fall within the incidental power of the Commonwealth even if it could otherwise be viewed as exceeding the power of the Commonwealth because it can be characterised as, for example, a law with respect to the regulation of medical practice. This submission cannot be sustained. Section 80(1) shows that 'inappropriate practice' is a subset of a person's conduct; it refers to examining a person's conduct to ascertain if there has been 'inappropriate practice'. Inappropriate practice is defined in s 82 (see [8] above). The definition restricts the concept to conduct 'in connection with rendering or initiating [medical] services' and provides that it must be such that the Committee could 'reasonably conclude' that the conduct would be unacceptable to the general body of general practitioners. The context indicates that the grounds on which the conduct is to be judged must relate to the services that are rendered or initiated. Moreover, the Explanatory Memorandum quoted above at [15] indicates that the relevant conduct is conduct in the course of the practice of medicine. Were a Committee to attempt to label as 'inappropriate practice' conduct of a medical practitioner that is unrelated to the provision of medical services the appropriate challenge would be, not to the constitutional validity of the PSR, but to the accuracy of the committee's interpretation of the concept. Therefore, under Pt VAA, the power to discipline in relation to "inappropriate practice" must be understood as a power to discipline in relation to conduct which is related to the payments which are made by the Commonwealth under the Act by way of medical benefits and the like. Accordingly, the reference to "inappropriate practice" in s 82 refers to conduct in relation to which Commonwealth benefits were paid or payable and in respect of which the medical practitioner failed in some way to meet the standards of the general body of the members of the profession in which the services were rendered. The Commonwealth's interest is to see that the services which are provided by a medical practitioner and for which a Commonwealth benefit is or may be claimed are services in respect of which the medical practitioner provides due care and skill, that a claim if made is brought under the correct item and that overservicing does not occur. This is clearly correct. 58 The applicant puts forward the General Practitioners case as authority for the blanket proposition that it is constitutionally impermissible to regulate any performance by medical practitioner of his medical duties and functions; that such regulation was equated with compulsion and therefore with conscription. This however is not what is held in the General Practitioners case. What was crucial for Gibbs J in the General Practitioners case was that no medical service was compelled. Most of the duties imposed relate only to things done incidentally in the course of practice, rather than to a medical service itself. The only possible exception is s 16A (1), which requires that a request by a medical practitioner to an approved pathology practitioner to render a pathology service shall be made or confirmed in writing as prescribed. A request of that kind may be regarded as a medical service. However, s 16A(1) does not compel any medical practitioner to make such a request. What it requires is that the request, if made, be made or confirmed by written instrument which satisfies reg. 5. There is nothing in that regulation which affects in the slightest the performance by a medical practitioner of his medical duties and functions. The statutory requirements may impose on him more administrative work. In particular he is required to specify, in his own handwriting, the services to which the instrument relates, and cannot simply mark a form on which is printed a list of possible services. The reason why a condition of this kind is attached to the entitlement to medical benefits is no doubt that the use of the printed form might reasonably be regarded as likely to contribute to laxity and to facilitate fraud. However that may be, to require a practitioner to write out particulars of the service which he has decided to request another practitioner to perform is not to compel the practitioner making the request to perform a medical service. Even more clearly, the requirements of s 16A(2) with regard to accounts and receipts, and those of s 16A(3) with regard to the retention and production of any written request or confirmation, do not compel any medical practitioner to perform any medical service. His Honour found that the provisions in question did not breach the constitutional prohibition because, put simply, that which was compelled was not a medical service in itself; although it may have been incidental to a medical service; and where a medical service was regulated, as by requiring a request to be made in writing, the medical service itself was not compelled. These comments do not support the proposition that any regulation of the way in which a medical service is provided is unconstitutional. 60 In my view the General Practitioners case is directly applicable to the present situation. For the reasons I have given I do not find that the Medicare Scheme or the PSR Scheme impose any compulsion to provide medical services. The decision to provide medical services is a voluntary decision. The regulation of the manner in which such services are provided is properly incidental to the Commonwealth's power under s 51(xxiiiA) to provide medical services and does not offend the constitutional prohibition against civil conscription. In my view a proper application of the term 'inappropriate practice' would sufficiently confine the concept to matters which are within the incidental power of the Commonwealth. 61 For the above reasons the applicant's challenge to the constitutional validity of PSR Scheme must fail. The appeal must be dismissed with costs. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. | powers of commonwealth parliament power to make laws with respect to the provision of medical and dental services (but not so as to authorise any form of civil conscription) power to make laws with respect to matters incidental to the provision of medical and dental services meaning of 'civil conscription', 'inappropriate practice' constitution s 51 (xxiiia), (xxxix) health insurance act 1973 (cth) part vaa ss 82 , 86 and 106u constitutional validity law imposing standards on provision of medical services incidental to commonwealth power to provide medical services law imposing standards upon provision of medical services not civil conscription 'civil conscription', 'inappropriate practice' constitutional law words and phrases |
These reasons for judgment are to be read together with the reasons for judgment in Bell , delivered this day. 2 Ms Mackay also claimed that her employer breached cl 26 of the Health and Disability Services --- Support Workers - Western Australian Government - Award 2001 in respect of her. Those days only changed when management altered her work location in mid 2002 and again in May 2004. All employees in those locations who were not relieving knew when they were to work. It requires the display of a roster for full time employees which sets out their start and finishing times and their rostered days off. If a person is told, whilst employed at a particular location that her or his start and finishing times and rostered days off are fixed there is no need for a formal written roster. The requirement to display rosters which contain the abvovementioned information is only operative when employees work in accordance with a roster which does not contain fixed working hours. Any other construction of cl 26.7 of the award would be unworkable impose an unnecessary administrative burden on an employer. 5 For the above reasons and the reasons set out in Bell as to the proper construction of cl 26 of the award, the application is dismissed. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | application under s 178 of the workplace relations act 1996 (cth) for imposition of penalty for award breaches award interpretation whether award rostering requirements applicable no question of principle industrial law |
That the 6 November 2009 hearing of my appeal against the judgment of Federal Magistrate Smith given in the Federal Magistrates Court in Sydney on 17 November 2008 in SYG 642 of 2008 be adjourned to ... 2010 or, in the alternative, a date to be set by the Court. The appeal listed to be heard before his Honour is from a sequestration order made by the learned Federal Magistrate on the petition of the respondent American Express Australia Ltd ("American Express"). The notice of appeal, filed 9 December 2008, contains 13 grounds of appeal. In Court this morning Ms Kerr did not appear. Instead there was an appearance by her husband, Mr Ian Kerr. Mr Kerr, who appears to hold a power of attorney from Ms Kerr, applied for leave to represent her in Court this morning. It is clear that a power of attorney as held by Mr Kerr from Ms Kerr does not provide a lawful basis for a non-lawyer to act for a party in litigation in a Federal Court (cf Slack v Bottoms English Solicitors [2003] FCA 1337). However the Court has discretion to grant leave to a person who is not a qualified legal practitioner to represent a litigant. Such a person is commonly known as a "Mackenzie friend". I note that I consider it inappropriate that an application should be made by Mr Kerr to represent Ms Kerr without Ms Kerr being present. However I understand that in previous proceedings in this Court Mr Kerr has represented Ms Kerr in her absence. For the purposes of today's hearing, which is procedural only, I am prepared to entertain Mr Kerr's application to represent Ms Kerr. As pointed out by Ipp AJA in Teese v State Bank of New South Wales [2002] NSWCA 219 at [15] , the usual ground for granting leave to a person, not properly qualified, to represent a litigant is impecuniosity, namely where the litigant cannot afford to pay a properly qualified lawyer. In this case Ms Kerr's impecuniosity was the reason for seeking that Mr Kerr should speak for her in Court. In the circumstances I was prepared to grant leave to Mr Kerr to represent Ms Kerr for the purposes of today's proceedings. There was no appearance in Court by either American Express or the Insolvency Trustee Service Australia (ITSA) which is Ms Kerr's trustee in bankruptcy. I understand that American Express has informed Deputy District Registrar Baldwin of the Queensland Registry of this Court that it would not appear either in respect of this notice of motion or in the appeal more generally having regard to the substantial costs already incurred by the company to date, and in light of the fact that Ms Kerr's estate has no funds. At my request Deputy District Registrar Belcher informed the appellant prior to today's hearing that I currently hold an American Express credit card, and inquired whether, from the appellant's perspective, this gave rise to any concerns as to perceived bias on my part. I understand that my possession of this card has not caused the appellant any concern in relation to me hearing this notice of motion. Ms Kerr's notice of motion was supported by an affidavit filed by Mr Kerr on 23 October 2009. Attached to this affidavit is a letter from Mr Kerr to Deputy District Registrar Baldwin dated 16 October 2009 in which Mr Kerr sets out recent developments which he states have caused "major issues with the current timetable". These developments, which appear to be the grounds upon which Ms Kerr seeks an adjournment can be summarised as follows: Ms Kerr has a counterclaim for $900,000 in the District Court of Queensland against a plaintiff who was recently successful in obtaining an order for payment of $50,000 by Ms Kerr in that Court. Ms Kerr is appealing the decision of the District Court to the Court of Appeal of Queensland, although in his affidavit Mr Kerr deposed that the other party had applied for Ms Kerr's appeal to be summarily dismissed. The learned Federal Magistrate below did not recognise that Ms Kerr's counterclaim was an asset in her bankruptcy. Ms Kerr is dissatisfied with decisions taken by ITSA in the course of her bankruptcy, but understands that she would need to file an application in the Federal Magistrates Court to contest any decision of ITSA. Ms Kerr proposes to commence proceedings in the Federal Magistrates Court in the near future. Mr Kerr has appearances in the Brisbane Magistrates Court in October for directions in relation to a number of matters concerning personal debts arising from the financial stress experienced by the family. Material which Mr Kerr claims was produced in response to subpoenas before the Federal Magistrate in NSW has, for unknown reasons, been omitted from the Appeal Index in this Court. The decision of a judge to adjourn a hearing is not only an interlocutory decision, it is a discretionary decision ( Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 ; (2009) 258 ALR 14 , Goldberg v Morrow [2004] FCA 1490 at [36] ). There is authority that the discretion in respect of ordering or refusing an adjournment miscarries where the refusal of an adjournment results in one of the parties being unable adequately to present his case ( Thornberry v R (1995) 69 ALJR 777). Where there is a proper basis for an application for an adjournment, and refusal would seriously prejudice the party seeking the adjournment and not prejudice the other party, there is authority that adjournment should ordinarily be granted: Jordan v Smart [1961] NSWR 735. In this case the grounds upon which Ms Kerr seeks adjournment of the hearing of her notice of appeal are, with one exception, slim: Despite the paucity of compelling reasons advanced by Ms Kerr to adjourn the hearing of the appeal, in view of the absence of submissions by either American Express or the trustee it is difficult to identify how an adjournment of the hearing of the appeal would in any way prejudice either of those parties. On the other hand, it appears that an adjournment would permit Ms Kerr extra time to prepare her case and would allow resolution of the issue concerning the Appeal Index. In a situation where exercise of the Court's discretion appears of indifference to the respondent and the trustee, but an adjournment is of importance to the applicant for the notice of motion, I consider it reasonable that I should exercise my discretion in favour of that applicant. Notwithstanding that I propose to adopt this approach in favour of Ms Kerr, in my view it is also reasonable that the appeal be heard within a reasonable time frame. For reasons I have already given, I do not consider it appropriate that the appeal should be adjourned until such time as either the outcome of Ms Kerr's appeal in the Queensland Court of Appeal is determined or until proceedings which may or may not be filed by Ms Kerr in the Federal Magistrates Court are heard. Accordingly, while I am prepared to adjourn the hearing, it is only with a view to permitting Ms Kerr extra time to prepare her case before his Honour, and in circumstances where a hearing date is set in early 2010. By this date the issue of whether material produced in response to subpoenas is included in the appeal index will have been resolved. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application for leave to adjourn trial mackenzie friend practice and procedure |
This decision concerns only the fifth respondent, Joseph O'Connor, and the sixth and seventh respondents being (respectively) the national body and New South Wales branch of the Australian Workers' Union. I refer to the fifth respondent as Mr O'Connor and the sixth and seventh respondents collectively as the AWU except where it is necessary to distinguish between the two. 2 Mr O'Connor has not entered an appearance in the proceedings and did not appear at the hearing. An affidavit of Jeremy Hanrahan, solicitor, establishes service of the Court documents on Mr O'Connor (through various orders for substituted service). On the basis of Mr Hanrahan's affidavit I ordered that the matter proceed against Mr O'Connor in his absence (Order 32 r 2(1)(d) of the Federal Court Rules ). 3 The applicant is an ABC Inspector appointed under the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act). The applicant claims that Mr O'Connor and, through the actions of Mr O'Connor, the AWU contravened s 38 of the BCII Act. The applicant also claims that the same conduct means that Mr O'Connor and the sixth respondent (the national body of the AWU) contravened s 170MN of the Workplace Relations Act 1996 (Cth) and cll 10(d) and 13 of a certified agreement under that Act. 4 There was no dispute between the applicant and the AWU that employees of John Holland (including Mr O'Connor) took unlawful industrial action within the meaning of s 38 of the BCII Act between 6.30 am on 15 October 2005 and 6.30 am on 18 October 2005 and between about 11.00 am on 10 November 2005 and 6.30 am on 11 November 2005. Further, that the same circumstances constituted a breach of s 170MN of the Workplace Relations Act and the certified agreement (cll 10(d) and 13). 5 Rather, the proceedings concerned the capacity of the AWU to attract liability by reason of Mr O'Connor's conduct. This involved three issues. First, what action did Mr O'Connor take with respect to the industrial action? Secondly, in what capacity did Mr O'Connor take that action? Thirdly, were Mr O'Connor's actions within the scope of his authority as a job representative or delegate of the AWU? However, the Workplace Relations Act has been materially amended since that time. All references below are to the statutory provisions as in force in October 2005. 7 Section 38 of the BCII Act provides that a person must not engage in unlawful industrial action. Section 38 is a civil penalty provision. Unlawful industrial action is defined in s 37. (2) Paragraphs (1)(c) and (d) do not apply if: (a) a committee of management of the building association; or (b) a person authorised by the committee; or (c) an officer of the industrial association; has taken reasonable steps to prevent the action. (3) In this section: "officer", in relation to a building association, includes: (a) a delegate or other representative of the association; and (b) an employee of the association. 8 The applicant relies on s 69(1)(b) and (d) in support of its claim that the conduct of Mr O'Connor with respect to the industrial action is taken to be the conduct of the AWU. (2) For the purposes of subsection (1), the following are covered by this subsection: (a) any employee whose employment is subject to the agreement or award; (b) an organisation of employees that is bound by the agreement or award; (c) an officer or employee of such an organisation acting in that capacity. (3) If the employee, organisation or officer contravenes subsection (1), the action concerned is not protected action. 11 Under s 178 of the Workplace Relations Act a person who breaches the terms of a certified agreement is subject to a penalty. The AWU is an organisation of employees registered under Sch 1B of the Workplace Relations Act and a building association within the meaning of s 4 of the BCII Act. John Holland is a construction company. Barrick Australia Limited is the owner of the gold mine near Lake Cowal. Barrick engaged John Holland to carry out a construction project at the mine comprising civil, structural, mechanical and piping works. This was building work within the meaning of the BCII Act (s 5). John Holland, the AWU and John Holland's employees (including Mr O'Connor) were building industry participants within the meaning of that Act (s 4). 15 Mr O'Connor was an employee of John Holland at the Lake Cowal Gold Mine. Mr O'Connor was also a member, delegate and officer within the meaning of s 69(3) of the BCII Act of the AWU (the national body and the New South Wales branch). 16 John Holland, the AWU, the Construction, Forestry, Mining and Energy Union (the CFMEU) and Australian Manufacturing Workers Union (AMWU) were each parties to a certified agreement (John Holland Engineering Pty Ltd New South Wales --- SMP Certified Agreement 2005) made under Div 2 of Pt VIB of the Workplace Relations Act . The certified agreement had a nominal expiry date of 31 March 3006. (ii) If the matter is not settled at this level, the employees may seek the assistance of the duly appointed employee's representative, who shall: (iia) again raise the matter with the employee's immediate supervisor/foreperson. If the matter is still not settled at this level, the employee's representative shall then; (iib) raise the matter with the Company's Project manager or representative. If agreement is not reached at this level, the employee's representative shall then; (iic) be provided with telephone facilities to speak to an official of the relevant Union and request representation for a further conference to be held at a date and time mutually acceptable. (iv) While emphasis shall be placed on a negotiated settlement, the matter is not resolved, the parties shall jointly or individually refer this matter to the Australian Industrial Relations Commission for assistance in resolving the dispute. For the purposes of this clause the status quo means the circumstances that existed prior to the introduction of the change that caused the dispute. The following references are to the rules of the national body. 19 The rules of the AWU provide for the functions of elected officers including organisers (rule 61). They also provide for "job representatives" (commonly known as a delegate or site delegate). In the absence of an Organiser, members will elect a Representative at a meeting called for that purpose. Each Representative must supply the Secretary with a permanent address immediately after appointment. Provided that any person so dismissed has the right of appeal to the Branch Executive or National Executive. (4) Representatives are to act for the persons on the job and have the power to call meetings of members on such jobs to discuss Union affairs. They must on all matters keep in communication with the relevant Branch or Sub-Branch or District Secretary. (5) All appointments or elections of Representatives are subject to the approval of the Secretary or other official authorised by the Branch Executive. Upon the issue to him of such receipt book and pay-in book, the Representative is deemed, whilst he remains a Representative, to be a duly appointed representative of the Branch on whose register the Representative is enrolled for the purpose of collecting such moneys on behalf of the Union. (7) All money collected by Representatives on behalf of the Union must be forwarded to the Secretary as soon as conveniently possible. (10) Each Representative must immediately report the fact of work starting to the Secretary, and is to be guided by the instructions sent by the Secretary. (11) Where work is carried out under agreement or award, Representatives must post any such agreement or award in a conspicuous place on the works. (13) Where the word "Secretary" is used in this Rule, it is deemed to mean the West Australian Branch Mining Division Secretary, District Secretaries or Branch Secretaries as the case may be, whose duty it is under these Rules to attend to the particular matter. (14) Any member on being given reasonable notice must produce their ticket to the Representative, Organiser, or other authorised person. (2) Subject to any directions concerning the dispute given by the Branch Executive or National Conference or National Executive, the members involved shall comply with all directions of the Officer of the Branch or of the Union who has been notified of or who is handling the dispute. (4) In the event of a serious dispute arising, or being threatened, the Secretary of the Branch concerned shall communicate with the National Secretary, who shall in conjunction with the relevant Branch Secretary thereupon take such steps for the settlement of the dispute as they deem expedient. (5) For the purpose of this Rule any dispute or threatened dispute which exposes the Union to a pecuniary penalty or to an action for damages or which is likely to involve members of another Branch shall be deemed to be a serious dispute. (6) Members ceasing work in respect to any industrial grievance without the sanction of the Branch Executive or National Executive shall be liable to bear the responsibility of such action. Members ceasing work under the direction of the Branch Executive or National Executive shall not return to work without the sanction of the Branch Executive or the National Executive. 22 Under the AWU rules members must observe, abide by and carry out each of the rules (rule 17). Mr O'Connor, in applying to be a member of the AWU, agreed to abide by the rules of the AWU. 23 The primary facts in dispute were within a narrow compass. They involve: - (i) a dispute in the evidence of Paul Rosenblatt and John Tocchet about Mr O'Connor's conduct at a meeting on 10 November 2005, and (ii) a dispute with respect to the evidence of Harold Goring about a conversation with Lawrence O'Reilly on 18 October 2005. I deal with the disputed factual matters as part of the factual findings below. 24 Mr Goring is an elected official of the AWU and has worked as an organiser since 1998. As an AWU organiser he was responsible for the AWU members employed at the Lake Cowal gold mine. His involvement started with the negotiation of the certified agreement. At that time the AWU did not have a job representative (or delegate) on site. Once the certified agreement had been negotiated Mr Goring informed workers on the site that they could not take industrial action without protection and that they had to ensure that they did not "go outside the rules and limitations" set by the "Building Commission" which had "unheard of powers". Mr Goring told the employees that if they took matters into their own hands they would be exposed to fines or even imprisonment. He stressed that it was important to have officials involved at every level of discussion that might end in dispute. He concluded with the words "Remember, call the union, let us work within the laws no matter how strongly you feel about your local site". 25 Mr Goring returned to the site in July 2005. At that time he was aware of constant complaints about conditions relating to the accommodation and mess area for the employees at West Wyalong. On 18 July 2005 Mr O'Connor called Mr Goring and introduced himself as the safety officer at the Lake Cowal gold mine. Mr Goring understood that Mr O'Connor was a member of the AWU calling on behalf of AWU members as the call was about safety issues affecting those members. Mr Goring took the issues up with management and they were resolved. Mr O'Connor contacted Mr Goring again on 28 July 2005 about an incident at an airport involving some employees including Mr O'Connor. Mr Goring discussed the matter with John Holland management and this issue was also resolved. Mr Goring agreed that Mr O'Connor, at this time, was acting as a conduit between the members and their union and the union and its members. 26 On 9 August 2005 Mr Goring heard that the CFMEU was planning a stop work meeting at the site. He went to the site on 11 August 2005. When he arrived at the site John Holland management (Mr Nelson) directed Mr Goring to contact Mr O'Connor, the AWU delegate on site and offered to introduce Mr Goring to Mr O'Connor (an offer which Mr Goring declined). Mr Goring found Mr O'Connor and they had a discussion. Mr O'Connor told Mr Goring that there was going to be a meeting after lunch. Mr Goring said that they could not just call a meeting but had to go through procedures and get permission as the "Building and Construction Commission can come down on everybody. The result could be fines or imprisonment". Mr Goring asked who was calling the meeting. Mr O'Connor said it was the other delegates and everyone was expecting the meeting to go ahead. Mr Goring said that Mr O'Connor needed to step back and would not be calling any meeting as the AWU could not be involved in any unauthorised meetings from which members could be exposed to action. Mr Goring said he would take the issues up through the necessary channels. 27 Mr Goring contacted Mr Nelson about the meeting who refused permission for the meeting to be held. Mr Goring then advised Mr O'Connor about management's refusal. Mr O'Connor said "The boys are expecting to meet. You can tell them that they can't. I am going to resign as a Delegate. I don't need this". Mr Goring replied "That is why I have no intention of forcing a meeting. If anything specific comes out of the lunch meeting I intend to find a way to address those issues through proper channels". 28 Mr Goring attended a meeting of workers during the lunch break. He told them that workers could not call stop work meetings as in the past because "there are now drastic new laws and a Building Commission with powers to have workers fined and imprisoned". I have today told Joe O'Connor that without management's permission, a meeting after lunch is out of the question. You have to go through certain procedures to get authorisation. I have spoken to management today and they have refused to authorise a meeting. Let me propose to management that the Delegates continue with the discussions. At least that way the issues can be considered, and the union officials will be able to follow up through the proper channels. 29 The workers approved this proposal. Mr Goring met Mr Nelson who approved a meeting of the union delegates on the site after lunch. Mr Goring attended that meeting but Mr O'Connor decided to return to work. 30 On 12 August 2005 Mr Goring wrote to Mr Collison, the AWU branch secretary. Mr Goring's letter said that he had attended the site "as arranged with the site elected AWU delegate Joe O'Connor". He spat the dummy --- threatening to quit. I explained the new laws and ensured him if there were specific issues that required action we would find a way --- as there were no major issues and as much as I would like a show of cards and a recruiting opportunity --- the possible fines would not allow me to force the issue. 31 Mr Goring's letter concluded with the observation that the "site has any number of agendas be it union factions, pub factions, former site factions and an increasing number of local (country) workers who the regular construction workers have issues with. There have been a number of sackings relating to off site incidences that have a few simmering as well". 32 Mr Goring did not provide Mr O'Connor or any person from John Holland with a copy of the AWU rules or follow up with Mr O'Connor, any other employees or John Holland about procedures that needed to be followed or, more specifically, any limits on Mr O'Connor's authority as the AWU's job representative or delegate. Mr Goring understood Mr O'Connor had not resigned and remained as the AWU's job representative or delegate on site. He also knew that John Holland understood Mr O'Connor to be performing this function. 33 Ronald Smits was the construction manager for John Holland reporting to Jim Bryce, the project manager. Mr Smits organised and chaired weekly meetings with the union delegates on site. Mr O'Connor was the delegate of the AWU and Mr Wakelin the delegate of the CFMEU. Mr O'Connor and Mr Wakelin attended these weekly meetings as delegates. Mr Smits said that because of the different unions on site the delegates always reminded management that they (the delegates) were acting as the conduits for their unions. Mr Smits recalled Mr O'Connor in particular saying he was a conduit for the AWU. He said this before and after the first work stoppage in October 2005 (see below). Mr Bryce had also been told that Mr Wakelin was the CFMEU delegate for the site and Mr O'Connor the AWU delegate. Delegates would appoint a co-delegate while they were away. Mr Bryce recalled Mr O'Connor telling him from time to time that he had appointed someone as a co-delegate. 34 On 14 October 2005 there was an incident relating to alleged drug use by an employee. The employee was dismissed and left the site. Within a few hours of these events Mr Wakelin, Mr O'Connor and others said they wanted to meet Mr Smits. Mr Wakelin told Mr Smits that the same employee had found a maggot in his food. Mr Smits inspected the food and could not see a maggot. The delegates raised other hygiene issues relating to the mess hall and Mr Smits called in Mr White, the construction manager for the company responsible for accommodation and food (which was not John Holland). Mr Bryce was also called into this meeting. Mr Wakelin, Mr O'Connor and the others repeated their concerns. Mr White, Mr Wakelin and Mr Smits went to the accommodation site. They inspected the mess hall and found some issues which required rectification. Employees including union delegates dined in the mess hall as usual that evening. 35 Mr Smits had breakfast in the mess hall early the next morning (15 October 2005). He noticed that the issues of concern from the day before had not been rectified. He went to the site and saw that employees had convened a meeting that went from about 6.30 am to 7.15 am. After the meeting Mr Wakelin, Mr O'Connor and another employee met Mr Smits. Mr Wakelin said that that nothing had been done about the hygiene issues in the mess and some workers had not packed their lunch for the day. Mr Smits said he could organise a barbeque for the workers' smoko and lunch (and had already taken steps to do so as he knew some workers had not packed their lunches). Mr Wakelin said they were not interested and the workers were getting on the buses and going home. Mr Smits responded that they were not and he wanted his say. They went to the buses and Mr Smits saw the workers getting on. He asked them to come back and let him have a say. The employees got off the buses and Mr Smits told them he understood their grievances but that going out was inappropriate. He asked them to wait for Mr Bryce and Mr White to see what they had to say. Mr Smits was asked to leave while the employees took a vote. Mr Bryce confirmed that a barbeque would be provided. Mr Bryce then left to return to the accommodation site. 36 Mr Rosenblatt is employed by John Holland as a supervisor. He worked for John Holland at the Lake Cowal gold mine as a leading hand supervisor, rigger, dogger and crane driver. He was a member of the Queensland Builders Labourers Federation (the BLF) between 2004 and 2006 (and has been both a delegate and shop steward). He knew Mr Wakelin as the CFMEU delegate on the site and was told by Mr Wakelin that the CFMEU would represent him as a member of the BLF. When he arrived for work on 15 October 2005 all employees were directed to an area for a meeting. Union delegates were at this meeting including Mr O'Connor. Mr Wakelin told the meeting about the maggot. The meeting became heated. Mr Wakelin took a vote and the employees agreed to go on strike until the food was fixed. Mr Best (the delegate of the AMWU) opposed the strike but (amongst others) Mr O'Connor was in favour. Mr Rosenblatt saw Mr O'Connor walk over to Mr Best, say something to him and walk away shaking his head. Mr O'Connor voted to go on strike. Mr Rosenblatt then saw the union delegates (including Mr O'Connor) leave the meeting. 37 Mr O'Reilly is a member of the AWU. He worked at the Lake Cowal gold mine. He heard Mr Goring speak to the employees in August 2005. He met Mr O'Connor at the site and knew him to be on the safety committee and the AWU's delegate. Mr O'Reilly did not think Mr O'Connor should be the AWU's delegate as in Mr O'Reilly's view Mr O'Connor easily lost his temper and had the nickname "Joe Bananas". Mr O'Reilly attended the meeting on 15 October 2005. Mr O'Reilly saw Mr Wakelin at the centre of this meeting. He first saw Mr O'Connor when he left the meeting with Mr Wakelin once it was over. Mr O'Reilly thought this unusual as he considered Mr O'Connor was "prone to enjoying the limelight and to performing for a crowd". When he saw Mr O'Connor later Mr O'Reilly asked him if he had called Mr Goring to let him know what was going on and Mr O'Connor said yes. Mr Goring said he did not receive any such call from Mr O'Connor at this time (which I accept). 38 After the vote, Mr Wakelin, Mr O'Connor and others walked over to Mr Smits and told him that the vote stood and the employees were going out until Monday but there would be a meeting at 6.30 am the next day to review their course of action. Mr Smits contacted Mr Bryce and told him about the vote to strike until Monday. Mr Bryce said to tell the delegates to get the employees back to work. Mr Smits said the employees had gone. Mr Bryce said they would not be paid as this was industrial action. Mr Smits told Mr Wakelin and Mr O'Connor this and Mr Wakelin said it was too late as they had gone on strike until Monday and would be having the meeting at 6.30 am on Monday. 39 When the employees returned to the accommodation site Mr Bryce approached Mr Wakelin. Mr Bryce said he wanted to meet the delegates. Mr Wakelin, Mr O'Connor and the other delegates as well as members of the safety committee then met Mr Bryce but the meeting was suspended due to an incident in the mess hall. Once the meeting resumed Mr Bryce documented the issues of concern and a time for their rectification. 40 No employees attended for work on 15 October 2005 or 16 October 2005. 41 On Monday 17 October 2005 Mr Smits and Mr Bryce were at the site awaiting the outcome of the meeting of employees at 6.30 am. Mr Rosenblatt attended this meeting. Mr Wakelin took a vote on the strike continuing until an independent health report had been received. This motion was carried. The employees returned to the accommodation site. Mr Wakelin told Mr Bryce and Mr Smits the outcome of the meeting. Mr O'Connor and another person (Mr Grady) were with Mr Wakelin at this time. Arrangements were made for a health inspector from the local council to inspect the mess hall, as well as an inspection by a consultant. No work was done on Monday, 17 October 2005. Mr O'Reilly (who observed the meeting from about 20 metres away) recalled Mr Wakelin being at the centre of this meeting but not seeing Mr O'Connor there. 42 Jamie Loader, an environmental health and building surveyor employed by the local council, inspected the mess hall on 17 October 2005. Mr Loader considered the standard of hygiene and cleanliness generally adequate but noted some non-compliances. A few hours later he re-inspected the premises and was satisfied the defects had been rectified. Diane Buettel is a food safety auditor. Ms Buettel audited the food program at the accommodation site, the kitchen, food storage and dining areas. Ms Buettel found some minor issues but assessed the standard of hygiene and cleanliness as good. She returned to the accommodation site to observe breakfast production on 18 October 2005. 43 Mr O'Reilly was frustrated by what he thought was stupid conduct by the workers (by striking over the weekend when higher rates were paid). He resigned (giving a week's notice) on 17 October 2005. He also called Mr Goring on the same day who did not answer. Mr O'Reilly left a message saying that the employees at Lake Cowal had been on strike since Saturday about the food and he had resigned. He contacted the AWU office at Griffith and left a similar message with Mr Goring's secretary. Mr Goring was not at work on 17 October 2005. When he got to work on 18 October 2005 Mr Goring received Mr O'Reilly's messages and a message from 17 October 2005 to call Mr O'Connor. Mr Goring returned Mr O'Reilly's call. Mr O'Reilly told him that there had been a strike and that the "CFMEU delo caused a blue about the food at the camp". Mr Goring did not return Mr O'Connor's call. He said he did nothing further because the stoppage had ended and he did not consider the AWU to have been involved. He agreed that his affidavit did not refer to the AWU not being involved. 44 On Tuesday, 18 October 2005 the employees held another meeting. A CFMEU organiser attended the meeting. Mr Grady told them that the results of the audit established nothing wrong with the food arrangements at the accommodation site. Ms Buettel was introduced to the meeting and told the employees that it was OK to eat in the mess hall but the tests on the alleged contaminated chicken would take two days. Ms Buettel spoke for about 15 minutes. The employees at the meeting then voted to return to work. They returned to work before 8.30am on 18 October 2005. 45 On 9 November 2005 Mr Bryce drafted a memorandum about a proposed national protest day against Federal government industrial legislation scheduled for 15 November 2005. The memorandum said that 15 November 2005 was a normal work day and John Holland did not consent to employees other than union delegates being absent. John Holland agreed to allow union delegates to attend the proposed broadcast and report back to employees. This memorandum was posted on notice boards. 46 At about 7.00am on 10 November 2005 Mr Bryce asked Mr Wakelin to find out if the employees would accept a recommendation from the Australian Industrial Relations Commission (the AIRC) about the dispute relating to the payment for meals during the strike in October (this issue having been referred to the AIRC). Mr Wakelin said he would have to put it to a meeting. Mr Bryce authorised a 15 minute meeting. Mr Smits joined him. The meeting started at 10.30 am. At 10.45 am the meeting was still going and Mr Smits said something about the meeting running over time. After a while Mr Bryce made his way to the clear area in the middle of the employees and told them the "time authorised for the meeting has passed. Please return to work immediately". Mr Bryce left the meeting area but continued to observe the meeting. 47 Mr Rosenblatt and Mr Tocchet were at this meeting. Mr Rosenblatt said the union delegates, including Mr Wakelin and Mr O'Connor, stood at the front of the meeting. After about 20 minutes the issue of the memorandum relating to the protest day was raised. Following Mr Bryce's intervention Mr Rosenblatt said he saw delegates, including Mr Wakelin and Mr O'Connor, become very agitated and volatile by shouting, yelling and kicking dirt around. This included Mr Jones saying "let's walk for 48 hours to send a message that they just can't walk in on us like that", Mr Wakelin saying "what are we going to do about this, men? ", Mr Batzloff saying "they are always going to do this if we don't stand up now" and Mr O'Connor shouting "fuck this, what are we going to do about this? Get the buses and let's go". Mr Wakelin called for a vote. A majority voted to go on strike and the employees returned to the buses. According to Mr Rosenblatt's affidavit he saw Mr O'Connor walk amongst and speak to employees during this meeting although he did not hear what he was saying. In oral evidence Mr Rosenblatt said that Mr O'Connor went up to individuals and groups, to one part and then another part, saying things about the food and the like. In cross-examination Mr Rosenblatt agreed that he had not mentioned Mr O'Connor kicking dirt in his second affidavit (but his attention was not drawn to his first affidavit when he had said he saw Mr O'Connor kicking dirt). He denied that his oral evidence about hearing Mr O'Connor speak to individuals and groups of employees was inconsistent with his second affidavit (in which he said that he could not hear what Mr O'Connor was saying to the employees). Mr Rosenblatt said he had heard Mr O'Connor speak to individuals and groups of employees but not the whole group of employees. 48 Mr Tocchet worked as a scaffolder/rigger for John Holland at the Lake Cowal gold mine. He is a member of the AWU. He heard Mr Goring speak to the employees in August 2005. He was on leave during the events of October 2005. Mr Tocchett described the meeting on 10 November 2005 as one where the CFMEU reported back on the AIRC proceedings about the stoppage in October 2005. This did not concern him as he had been on leave at the time. Mr Tocchet recalled seeing Mr O'Connor standing next to the CFMEU representative in the centre of the circle but that he played no part. He recalled Mr Smits saying the meeting had run over time and then Mr Bryce going to the centre of the circle saying that the meeting had run over time and if they did not return to work their pay would be docked. Mr Tocchet said this antagonised the workers and led to "heated discussion". Mr Tocchet recalled someone saying that if their pay was going to be docked they might as well not work for the rest of the day. Somebody else shouted "let's walk". A motion to that effect was put and carried. Mr Tocchet was certain that Mr O'Connor did not put the motion or say anything that recommended the employees stop work or leave the site. 49 In cross-examination Mr Tocchet said that there were nearly a couple of hundred employees at the meeting on 10 November 2005. He knew that Mr O'Connor's nickname was "Joe Bananas". Mr Tocchet knew him to be the AWU delegate. At the meeting Mr O'Connor stood with the other delegates at the front. Mr Tocchet agreed people became angry after Mr Bryce's intervention. He agreed it was possible that someone had said words to the effect "let's walk for 48 hours to send a message that they just can't walk in on us like that" and another person said "what are we going to do about this, men? " He agreed that it was possible that someone said "they are always going to do this if we don't stand up now". He agreed that someone had said "fuck this, what are we going to do about this? Get the buses and let's go". However, Mr Tocchet said that Mr O'Connor played no part in any of the shouting or agitation leading to the employees stopping work. According to Mr Tocchet Mr O'Connor stood at the front and said nothing at any time. He did not think this uncharacteristic as he described Mr O'Connor as a quiet person. 50 After the meeting Mr Wakelin, Mr O'Connor and others approached Mr Smits and Mr Bryce. Mr Smits and Mr Bryce were informed that the employees had voted to go out for the rest of the day due to Mr Bryce interrupting a union meeting and intimidation by management. The employees left the site between 11.30 am and 12.00 pm. No further work was carried out on 10 November 2005. The employees returned to work at 6.30 am on 11 November 2005. 51 Mr Bryce and Mr Smits were both asked about the role of Mr Goring. Neither was aware of any person notifying Mr Goring of the work stoppages. They did not accept that the reason they had not done so was because Mr O'Connor had not played a part different from any other employee. Rather, it was not their responsibility to deal with unions on behalf of John Holland. Mr Wyatt had that responsibility. Mr Bryce disagreed with the suggestion that Mr O'Connor had not played a part different from any other employee. Mr O'Connor was a union delegate on the site and all the delegates took a leading role. After initially agreeing that he had not contacted any union about the stoppages because Mr O'Connor had not played a part different from any other employee Mr Smits gave evidence inconsistent with that proposition. It is clear that Mr Smits did not understand the question when originally put (as disclosed by his position that he did not understand when the question was put in a slightly different form a second time). Mr Smits' evidence, considered as a whole, should be understood as consistent with that of Mr Bryce, namely, that: - (i) it was not Mr Smits' job to raise issues with the unions (but the job of Mr Wyatt), (ii) Mr O'Connor was a union delegate on the site, and (iii) all the delegates acted and made decisions as a group repeatedly saying they were conduits for their unions (including Mr O'Connor). According to Mr Smits "Mr O'Connor was continuously involved in the issues. Right from the very first time I knew Mr O'Connor being a delegate he was always very heavily involved in union issues". 52 This summary of the evidence discloses the narrow compass of the factual dispute. In resolving the factual issues I have taken into account the nature of the proceedings (by which the respondents are exposed to penalties) and the seriousness of the allegations against them. 53 With respect to Mr Goring, I accept that Mr O'Reilly's reference to the "CFMEU delo caused a blue..." led Mr Goring to believe that there was not an issue involving the AWU with which he needed to deal. 54 With respect to Mr Rosenblatt and Mr Tocchet it is apparent that: - (i) Mr Rosenblatt had a much more detailed recollection of the meeting on 10 November 2005 than Mr Tocchet, (ii) Mr Tocchet had no particular reason to recall the meeting on 10 November 2005 as it initially concerned the stoppage in October 2005 (when Mr Tocchet was on leave), (iii) Mr Tocchet recalled many additional aspects of the meeting (precisely as Mr Rosenblatt said they occurred) when those aspects were specifically put to him, and (iv) Mr Tocchet's version of Mr O'Connor's conduct during the meeting is not only inconsistent with that of Mr Rosenblatt but inconsistent with many other parts of the evidence (specifically, Mr Goring and Mr O'Reilly's view of Mr O'Connor's character, Mr O'Connor's involvement in the October meetings, Mr O'Connor standing at the front of the meeting on 10 November with the other delegates, the meeting becoming heated and people shouting, and Mr O'Connor being one of the delegates who approached Mr Smits and Mr Bryce after the meeting to inform them of the decision to stop work). For these reasons I prefer the evidence of Mr Rosenblatt to that of Mr Tocchet. I do not accept the submissions that Mr Rosenbaltt's credibility was adversely affected by his cross-examination. Mr Rosenblatt was a credible witness who had a good recollection of the events in issue. I accept his explanation about the alleged inconsistency between his second affidavit and his oral evidence (namely, that he did not hear what Mr O'Connor said to the employees as a group but heard him speak to individual and small groups of employees). (2) John Holland understood Mr O'Connor to be the AWU delegate on site. This understanding was based not only on representations by Mr O'Connor and other employees but also by the AWU through Mr Goring's conduct. Mr Goring accepted that Mr O'Connor was the AWU delegate when he attended the site in August 2005 and dealt with Mr O'Connor, the employees and John Holland management on the basis that Mr O'Connor was the AWU delegate. (3) Mr Goring had been involved in negotiating the certified agreement. He knew that the Lake Cowal gold mine project was large. He thus knew that hundreds of employees, being members of different unions, were present on site and living at the accommodation site. From these circumstances he must have been aware that the union delegates (including Mr O'Connor as the AWU job representative or delegate on site) would have been involved on behalf of the AWU in dealing with issues as between AWU members on site and John Holland management on a routine basis. (4) Mr Goring was aware that Mr O'Connor was unhappy with Mr Goring's direction that he could not call a stop work meeting of employees and had threatened to resign as the AWU delegate. He was also aware that Mr O'Connor had not resigned and continued in the role of AWU delegate on the site. He knew too that there were many potential issues and difficulties with respect to the site. (5) Mr Goring did not provide Mr O'Connor, John Holland management or any other person with a copy of the AWU rules. Although Mr Goring told the workers at the meeting in August 2005 that they could not hold a stop work meeting without management's permission he did not inform any of them about limitations on the powers of Mr O'Connor as the AWU job representative or delegate or that, rather than going through their delegate, the employees should contact the AWU directly. Insofar as John Holland was concerned Mr Goring said nothing about Mr O'Connor's role but conducted himself on the basis that that Mr O'Connor was the AWU's delegate. He said nothing knowing that Mr O'Connor had been acting as a conduit between members and the union about issues with John Holland since at least July 2005. (6) Contrary to the submissions on behalf of the AWU I am satisfied that Mr O'Connor took a leading role in the industrial actions on the site during October and November 2005. The conduct of other leaders (such as Mr Wakelin) who may have been even more active does not undermine the importance or Mr O'Connor's role. He was and acted as the AWU's delegate and encouraged and incited the members of his union to take industrial action by stopping work between 6.30 am on 15 October and 6.30 am on 18 October 2005 and between about 11.00 am on 10 November and 6.30 am on 11 November 2005 and they did so (including Mr O'Connor himself). In the lead up to the stoppage in October 2005 Mr O'Connor attended all of the critical meetings with management (along with other delegates) and took an active role in encouraging others to vote in favour of the stoppage (as his conduct with respect to Mr Best, the AMWU delegate who opposed the strike, shows). Mr O'Connor also informed John Holland management of the decision (along with the other delegates). He attended the meetings with management during the stoppage. He called Mr Goring (no doubt about the stoppage) but Mr Goring did not return his call. As to the stoppage on 10 November 2005, Mr O'Connor stood at the front of the meeting with other delegates. He was shouting and yelling (along with other delegates) and kicking dirt around after Mr Bryce's intervention. He called for the employees to get back on the buses. He thereby encouraged and incited other employees to stop work. On both occasions he, as AWU delegate and on his own behalf, voted in favour of the strikes. 57 As noted, an "officer" of a building association within the meaning of the BCII Act includes a delegate or other representative of the association (s 69(3)). Conduct of an officer of an association "acting in that capacity" is taken to be conduct of the association as is conduct of a member of the association who performs the function of dealing with an employer on behalf of the member and other members of the association acting in that capacity. Further, a body corporate (such as the AWU) can become liable for a breach of s 170MN of the Workplace Relations Act through the conduct of an agent acting on behalf of the body corporate within the scope of the agent's actual or apparent authority (s 349(2)). 58 As certain observations in other decisions disclose, the main difficulty with the AWU's submissions is that they focused on Mr O'Connor's actual authority under the AWU rules and the certified agreement rather than dealing with the facts of the case in the context of the extended liability provisions of the legislation in issue. (2) "To establish apparent authority, it is not sufficient to show merely that an "officer, director, employee or agent" held himself or herself out as having authority: see J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers --- Western Australian Branch (1992) 111 ALR 502 at 533---4 per French J. Rather, there must at least be circumstances which would justify a belief on the part of a person dealing with the "officer, director, employee or agent" that that "officer, director, employee or agent" is acting with authority" ( Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 100 FCR 530 ; [2000] FCA 1188 at [79] ). By so doing the principal represents to anyone who becomes aware that the agent is so acting that the agent has authority to enter on behalf of the principal into contracts with other persons of the kind which an agent so acting in the conduct of his principal's business has usually 'actual' authority to enter into. ( Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 502---3 cited in Essington Investments Pty Ltd v Regency Property Pty Ltd [2004] NSWCA 375 at [3] and [39]). Whether the representation is general, or related specifically to the particular transaction, it must come from the principal, the company. That does not mean that the conduct of the officer is irrelevant to the representation, but the company's conduct must be the source of the representation. In many cases the representational conduct commonly takes the form of the setting up of an organisational structure consistent with the company's constitution. That structure presents to outsiders a complex of appearances as to authority. The assurance with which outsiders deal with a company is more often than not based, not upon inquiry, or positive statement, but upon an assumption that company officers have the authority that people in their respective positions would ordinarily be expected to have. In the ordinary case, however, it is necessary, in order to decide whether there has been a holding out by a principal, to consider the principal's conduct as a whole. ( Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451 at [36] also cited in Essington Investments [2004] NSWCA 375 at [5] ). (5) It cannot be the case that action in breach of the law can never be attributed to a union despite the fact that union rules are most unlikely to permit such action ( The Employment Advocate v National Union of Workers (2000) 100 FCR 454 ; [2000] FCA 710 at [121] . See also Hanley (2000) 100 FCR 530 ; [2000] FCA 1188 at [83] --- [84]). And that will have consequences between employer and employee. Yet unlawful conduct has not been held inevitably to be outside the scope of employment. On the contrary, if a servant or agent has authority to enter into transactions of the sort in question, it is no answer for a principal to say that in the particular circumstances the servant or agent acted wrongfully: Australasian Brokerage Ltd v Australia and New Zealand Banking Corporation Ltd [1934] HCA 34 ; (1934) 52 CLR 430 at 451---2. In the present case, all the relevant representations were made by the agent, so that the real question is whether they were themselves authorised by the principal and so made by the principal, or were relevantly "permitted" to be made by the principal. [45] In my opinion, one circumstance in which it may be said that representations are permitted to be made is where a principal knows that an agent engaged on the principal's behalf is making representations as to the agent's authority, is able to prevent such representations being made or countermand them, but does not do so. There is arguably, in these circumstances, something like a representation by silence: the circumstances call for some action by the principal to ensure that persons are not misled by the agent, and the principal does not take that action. 61 First, the AWU rules. Rule 45(1) directs that there "should be" an AWU job representative on sites where members are working. Organisers (such as Mr Goring) have the power to appoint or dismiss job representatives (rule 45(2)). The role of a representative under the rules is to "act for the persons on the job" including a power to call meetings on such jobs to discuss union affairs. In so doing the job representative is to keep the relevant branch informed (rule 45(3)). Job representatives are also empowered under the rules to collect moneys for the union (rule 45(6)). Duties include (but, as rule 45(3) discloses, are not limited to) investigating and conferring with an employer on complaints made by union members and reporting the results to officials. Rule 67 deals with disputes. I accept the AWU's submission that a job representative is not an "Officer" within the meaning of rule 67 given the definition in rule 78(24). Accordingly, while Mr O'Connor had actual authority to "act for the persons on the job" and to call meetings of members on the site to discuss AWU affairs (albeit not stop work meetings) he was also obliged by rule 67 to notify a full-time officer of the AWU (such as Mr Goring) before taking the action he did with respect to the work stoppages in October and November 2005. 62 Secondly, the certified agreement. The AWU members on site appointed Mr O'Connor as their job representative. From this I infer that Mr O'Connor was also the "duly appointed employee's representative" under cl 10(d) (ii) of the certified agreement. The work stoppages in October and November 2005 were in breach of the agreement. Clause 10 required work to continue as per the status quo while any dispute was resolved. Clause 13 provided no justification for the stoppages. 63 Thirdly, it is important to recognise that, for many months (since at least mid July 2005), Mr O'Connor exercised many aspects of the actual authority that he enjoyed by reason of the AWU rules and the certified agreement. He did so, for example, at the weekly meetings he attended with Mr Smits as the AWU's delegate. John Holland, its employees and the other union delegates thus routinely dealt with Mr O'Connor as a person acting in a particular capacity (namely, for and on behalf of the AWU as its delegate). As noted, Mr Goring must have known that a site as large as the Lake Cowal gold mine would involve Mr O'Connor, as the AWU's job representative or delegate, in regular dealings with John Holland, AWU members, and other union delegates in this capacity. 64 The facts of the present case are thus different from those in Clarke (2007) 164 IR 299; [2007] FCAFC 87 (relied upon by the AWU to support its submissions against liability in this case). The certified agreement in Clarke was a greenfields agreement under s 170LL of the Workplace Relations Act . The union representatives spoke against industrial action. It was conceded that the "site steward" was not an agent for the union. In the present case the AWU rules required a member to act as a job representative. They empowered the job representative to act for AWU members on the job and to call meetings of members on site to discuss union affairs. They also empowered a person in Mr Goring's position to appoint or dismiss a job representative. Further, the AWU entered into a certified agreement which vested specific responsibilities in the "duly appointed employee's representative" (cl 10(d)(ii)). These roles, given the organisational structure of the AWU (in accordance with its rules) and the terms of the certified agreement, constituted Mr O'Connor as the AWU's agent on site and gave him both actual and apparent authority to deal with employees and John Holland on the AWU's behalf. The real issue in this case is the scope of Mr O'Connor's authority, particularly his apparent authority (addressed further below). 65 Even before his appointment as job representative Mr Goring knew that Mr O'Connor was acting as a conduit between members and the AWU about various issues relating to their employment by John Holland (such as those raised in July 2005). In so doing Mr O'Connor was acting on behalf of the AWU. John Holland must be inferred to have known Mr O'Connor was so acting on the AWU's behalf. When Mr Goring attended the site in August 2005 John Holland management referred to Mr O'Connor as the AWU delegate on site. Mr Goring thereafter dealt with Mr O'Connor as the AWU's delegate, to the knowledge of both the employees and John Holland (and, indeed, other parts of the AWU as his letter of 12 August 2005 discloses). 66 The AWU thus constituted and held out Mr O'Connor as its job representative or delegate on this site. It did so by its organisational structure (reflected in the rules), the terms of the certified agreement into which the AWU had entered, through Mr Goring's conduct and through Mr O'Connor's own conduct. Mr O'Connor had actual authority (and, indeed, responsibilities) as the AWU's delegate to represent AWU members on site in dealings with John Holland and to call meetings of members to discuss AWU affairs. While he did not have actual authority to take industrial action or to encourage or incite others to do so, employees (including AWU members for whom Mr O'Connor acted under rule 45(4) of the AWU rules) took the industrial action at meetings that Mr O'Connor, amongst others, effectively convened and ran on site on behalf of the AWU. The fact that other union delegates also convened these meetings on behalf of their own members is not the point. Mr O'Connor may have taken a lesser role than Mr Wakelin (the CFMEU delegate) in a particular meeting or overall; but he still acted as the AWU job representative at the meetings of employees. The evidence of Mr Smits, Mr Bryce and Mr Rosenblatt confirms that, on this site with its many factions and issues (apparent even to Mr Goring who only visited the site on a few occasions), the union delegates acted as a group in calling meetings of their members and in taking the industrial action. I accept that evidence. It was also conduct by him as a member of the AWU performing the function of dealing with an employer on his own behalf and on behalf of AWU members acting in that capacity within the meaning of s 69(1)(d) of the BCII Act. The AWU's submissions to the contrary are not persuasive. 68 First, I do not accept that the sub-sections of s 69(1) should be read as mutually exclusive. The sub-sections are capable of overlap. In this case Mr O'Connor's conduct fell within both ss 69(1)(b) and (d). 69 Secondly, I do not accept that Mr O'Connor's conduct could not be in the relevant capacity because he was also acting in a personal capacity. The same conduct may be carried out in more than one capacity. 70 Thirdly, I do not accept that Mr O'Connor could not be acting in the relevant capacity (that is, as an officer of the AWU as defined in s 69(3) and as a member of the AWU performing the function referred to in s 69(1)(d)) merely because the AWU did not actually know that Mr O'Connor was encouraging and inciting other employees to take unlawful industrial action and such conduct was not authorised by the AWU rules and was in contravention of the certified agreement. In the circumstances described above Mr O'Connor was acting in the relevant capacity at all material times. As noted, he had actual authority to "act for the persons on the job" and to call meetings of AWU members to discuss union affairs (rule 45(4)). Adopting an unauthorised (and unlawful) method of acting for persons on the job did not mean that Mr O'Connor was acting in some capacity other than as an officer of the AWU (within the extended definition in s 69(3)). Mr O'Connor, in taking the steps he did in October and November 2005 (as recorded above), acted in his capacity as the AWU's delegate or job representative on site on his own behalf and on behalf of AWU members. That is sufficient to attract liability to the AWU under s 69 of the BCII Act. 71 Fourthly, it also follows from these considerations that I do not accept that the AWU could not be liable by reason of Mr O'Connor's conduct because the conduct was not of benefit to the AWU (a submission the AWU made relying on Bowstead FMB, Bowstead and Reynolds on Agency (18 th ed, Sweet & Maxwell, 2006) Article 23). Mr O'Connor was acting for AWU members on the job in purported accordance with rule 45 of the AWU rules. This was for the AWU's benefit. I do not accept the submission that Mr O'Connor's statement to Mr O'Reilly about contacting Mr Goring and his resignation from the AWU support a contrary conclusion. As to the first, Mr O'Connor did attempt to contact Mr Goring on 17 October 2005 (perhaps prompted by Mr O'Reilly's question). As to the second, the evidence does not support a finding that Mr O'Connor resigned from the AWU (although he appears to have ceased to be a financial member since 30 November 2005). In any event, nothing reasonably suggested to John Holland that Mr O'Connor was acting otherwise than for the AWU's benefit. The fact that, in the events that have happened, the AWU no longer considers Mr O'Connor's conduct beneficial cannot undermine the apparent authority he enjoyed as the AWU's agent on the site at the time. 72 Nor, in my view, does s 69(2) assist the AWU (noting that it is relevant only to s 69(1)(d) in this case). The AWU did not take reasonable steps to prevent the actions. In the context of the AWU knowing that: - (i) Mr O'Connor was empowered to "act for the persons on the job" and to call meetings of AWU members to discuss union affairs (rule 45(4)), (ii) the certified agreement vested certain responsibilities in Mr O'Connor, (iii) John Holland understood Mr O'Connor to be the AWU delegate on site, and (iv) the site had many factions and simmering issues, more was required to satisfy s 69(2) than the advice Mr Goring gave employees and Mr O'Connor on the occasions he visited the site. 73 Mr Goring's advice about not being able to call stop work meetings and getting the union involved did not identify any clear distinction between the AWU's job representative or delegate and the AWU. Mr Goring, for example, did not inform AWU members employed on the site that the job representative or delegate did not represent the AWU on the site or that any attempt the job representative or delegate made to encourage or incite them to take industrial action had to be disregarded as that person would be acting outside of the AWU's rules. Mr Goring also said nothing to John Holland to this effect. He did not provide Mr O'Connor, AWU members on site or John Holland with a copy of the AWU's rules. He did not do so in circumstances where, before the first stoppage in October 2005, he knew that Mr O'Connor in his capacity as AWU delegate had been involved in encouraging or inciting employees to take industrial action (by holding an unauthorised stop work meeting) and had threatened to resign when Mr Goring prevented the meeting. Accordingly, before the first stoppage in October 2005 the AWU had not taken reasonable steps to prevent the action. 74 The situation is compounded by the events after the first stoppage. Mr Goring took no steps after Mr O'Reilly had contacted him on 17 and 18 October 2005. Mr O'Connor's call remained unanswered. Ordinary prudence would have dictated Mr Goring at least satisfy himself about events in which the whole workforce (including AWU members) had stopped work by contacting Mr O'Connor (which he did not). Relying on Mr O'Reilly's reference to the CFMEU delegate having "caused a blue" fell far short of taking reasonable steps to prevent the action on 10 November 2005. 75 Mr Goring also retained at all times but never exercised (or even threatened to exercise) his power to dismiss Mr O'Connor from his role as the AWU's job representative on site despite knowing of these matters. 76 In these circumstances the exception to liability in s 69(2) of the BCII Act is not applicable. Mr O'Connor was an agent of the AWU by operation of rule 45 of the AWU rules (and cl 10(d) of the certified agreement). As is common with many principal-agent relationships the AWU's control over Mr O'Connor effectively lay in Mr Goring's power of dismissal under rule 45(2) of the AWU's rules (Bowstead at [1-017]). 78 Mr O'Connor, as the AWU's agent, had actual authority to act for AWU members on the job and to call meetings of AWU members to discuss union affairs and to collect money owing to the AWU. He thus had actual authority to represent AWU members in dealings with John Holland. He also had responsibility (and thereby actual authority) under the certified agreement to contact the AWU if a dispute could not be resolved and John Holland was obliged to provide facilities to that end. Contrary to the AWU's submissions, Mr O'Connor's responsibilities under the certified agreement contribute to, rather than undermine, the reasonable belief on John Holland's behalf (and, indeed, by the members of the AWU on site) that Mr O'Connor at all times was acting within the scope of his apparent authority from the AWU. 79 Mr O'Connor encouraged and incited employees to take industrial action in his role as the AWU delegate. All of his conduct at the meetings and with John Holland was undertaken in that role on the AWU's behalf and relying on the authority with which he was imbued by reason of his status as AWU delegate. The fact that Mr Goring (and other AWU officials) did not actually know of the industrial action at the time does not mean that the AWU is immune from liability. Apparent authority may exist independently of actual knowledge. As the applicant submitted, the AWU effectively armed Mr O'Connor to deal with the employees and John Holland on the AWU's behalf. The fact that he acted on the AWU's behalf in an unauthorised manner during October and November 2005 does not take his actions outside the scope of his apparent authority. 80 I do not consider it necessary to rely on s 4(8) of the Workplace Relations Act . Section 4(8) is an aid to interpretation. This section operates so that where the words "engaging in conduct" (or their equivalent) appear elsewhere in the Act the meaning to be given to those words is extended to include being directly or indirectly a party to or concerned in the conduct. In this case Mr O'Connor engaged in conduct on his own behalf (by taking unlawful industrial action) and in directly encouraging and inciting other employees to take the same industrial action in his capacity as the AWU's delegate. Section 349(2)(a) operates because Mr O'Connor's conduct in so doing was as an agent and on behalf of the AWU and within the scope of his apparent authority. By the same conduct Mr O'Connor and the AWU (the national body) also contravened s 170MN of the Workplace Relations Act and the certified agreement. I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | whether conduct of union delegate made union liable capacity in which delegate was acting with respect to unlawful industrial action whether delegate was acting as agent on behalf of the union delegate's apparent authority whether conduct within the scope of delegate's apparent authority. held : declarations made. industrial law |
The Tribunal had affirmed a decision of a delegate of the Minster for Immigration and Multicultural Affairs to refuse to grant a protection visa to the appellant. On 16 June 2005 he lodged an application for a protection (Class XA) visa with the Department of Immigration and Multicultural and Indigenous Affairs under the Migration Act 1958 (Cth) ('the Act'). On 8 September 2005, a delegate of the Minster for Immigration and Multicultural Affairs refused to grant the appellant a protection visa and on 10 October 2005 the appellant applied for review of that decision by the Tribunal. 3 On 20 December 2005 the Tribunal decided to affirm the delegate's decision not to grant the appellant a protection visa. The appellant filed an application for judicial review of the Tribunal's decision in the Federal Magistrates Court on 8 February 2006. His application for judicial review was dismissed by McInnis FM on 14 August 2006. 4 The claim made by the appellant before the Tribunal was that he had a well-founded fear of persecution due to his religious beliefs. The appellant claimed to be a Christian who attended secret meetings and was involved in illegal church activities. The appellant claimed to have attended these meetings since a child and that in 1984 his parents were arrested and imprisoned for a year. The appellant claimed that in 2004 he was arrested and interrogated at a meeting at his neighbour's house because the authorities thought he was contacting overseas churches. 5 The Tribunal did not accept the appellant's parents were Christian because the appellant was unable to name the church and nature of religious practice, information the Tribunal expected the appellant would have known if he had practised Christianity as a child. The Tribunal did not accept that the appellant was a Christian or attended Christian groups in China or Australia as he demonstrated almost no knowledge of Christian belief. In relation to the appellant's claims of detention, the Tribunal did not accept these either. The Tribunal noted that the evidence as to his detention was lacking in detail. Furthermore, the Tribunal found the appellant's evidence regarding the three years prior to his departure from China was inconsistent. The Tribunal found the appellant's claims to be fabricated and that there was no evidence the appellant would be at risk of harm for the claimed reasons. The appellant provided particulars in support of this ground which raised various claims, including: a breach of s 424A of the Act; that the Tribunal did not consider the appellant's claim of membership of an underground church; and that the Tribunal was biased. The Federal Magistrate considered s 424A(1) of the Act had no application to the information impugned by the appellant --- information in the appellant's passport --- as it was information provided by the appellant. The Federal Magistrate found no jurisdictional error and dismissed the application. " My parents are Christians. The Tribunal concluded that I am not a Christian without evidence or materials to support it. The Tribunal did not consider my application for a protection visa according to S91R of the Migration Act . The Tribunal failed to consider the chance of my persecution on my return to China because of my underground religious activities. The Tribunal failed to consider my claims. The Tribunal failed to carry out its statutory duty. The Tribunal was required to notify the applicant the reason or part of the reason for affirming the decision, and must explain why the information is relevant and should give the applicant an opportunity to comment upon it. The Tribunal failed to do so when considered my application. I believe that the Tribunal fell into jurisdictional error. My case should be reconsidered at RRT. The Tribunal is entitled to form adverse conclusions as to the appellant's credibility on the evidence that the appellant presented. The finding of the appellant's credibility is a finding of fact, and it is well established that the Court cannot review the merits of the Tribunal's decision: Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272. In any event, 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] HCA 14 ; (1999) 197 CLR 510 at 560, [137] . 10 Further, I reject the claim that the Tribunal's findings were not based on a logical and rational foundation. The appellant's complaints do not rise above criticisms of the Tribunal's fact finding process. As such, these complaints cannot succeed: see NAMM of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 32 at [46] . 11 The affidavit in support of the notice of appeal seeks to make unparticularised complaints about the Tribunal's decision. It appears that the appellant is alleging, consistent with the only ground advanced before the Federal Magistrate, that the Tribunal breached s 424A of the Act when deciding his application. 12 It is clear that the Tribunal considered and rejected the appellant's claims. It was satisfied that the appellant was not a Christian. The Tribunal specifically found that the appellant did not face any chance of persecution for reasons of his religion. 13 Similarly, the appellant has not identified the 'information' that is said to be subject to mandatory disclosure under s 424A of the Act. There is no error in the Federal Magistrate's conclusion that the appellant's passport information (being information provided by the appellant to the Tribunal) fell within the exception in s 424A(3)(b) of the Act. There is no objection to disclose the thought processes of the Tribunal under s 424A of the Act. I can detect no other 'information' that should have been disclosed to the appellant to ensure procedural fairness and compliance with s 424A of the Act. 14 Finally, the appellant sought before me leave to submit additional evidence to prove his grounds for seeking a protection visa were true and genuine. He also sought time in which to do this, effectively seeking an adjournment of the proceeding. Included in the material that the appellant wished to put before this court to support his application for a protection visa included a list of names of the officials who assisted him in getting his passport, receipts and records of the money he paid them and other documentation in support of the merits of his case. 15 In my view, the evidence sought to be adduced would not be admissible in this proceeding, and in the course of the proceeding I so ruled. In an appropriate case it may well be permissible to tender evidence on review. However, whether it is an appropriate case will depend upon the grounds of review and the circumstances of the case. In principle, albeit with some reluctance (having regard to the additional time and costs taken up with such evidence), I can see no reason why, in an appropriate case, such evidence should not be admitted. If additional evidence is available, in cases reliant upon such grounds, there is no reason in principle why such evidence should not also be admissible where the ground is couched in terms of unreasonableness. Nor is there any basis for a conclusion that it can be admitted as of right. As Sackville J correctly observed, everything depends upon the grounds of review, and the circumstances of the case. Therefore the application for further time must necessarily be refused as any adjournment would serve no purpose. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | judicial review of refugee review tribunal decision whether tribunal failed to carry out its statutory duty under s 424a of the migration act 1958 (cth) whether tribunal's decision based on rational or logical foundation whether tribunal biased against appellant whether additional evidence admissible in judicial review proceedings migration |
Matters of concern addressed in that judgment focussed upon the manner in which the causes of action were sought to be advanced against one or other of those Respondents and the jurisdiction of the Court. The Applicant thereafter filed an Amended Application and a Further Amended Statement of Claim . A further Notice of Motion has also been filed, again seeking orders pursuant to O 8 r 3(2) in respect to the amended documents. Notwithstanding continuing reservation as to the manner in which the Further Amended Statement of Claim is expressed, it is nevertheless not considered that those reservations provide a sufficient basis upon which the discretion conferred by O 8 r 3(2) should be exercised adversely to the Applicant. Such evidential material as is now before the Court, it is concluded, provides an adequate basis upon which the Court can be satisfied that: (i) the Court has jurisdiction in the proceeding; (ii) the proceeding is of a kind mentioned in r 2, being a proceeding of a " kind " falling within Item 1, 2, 3, 6(b), 11 and/or 12; and (iii) the Applicant has a " prima facie case " for the relief claimed. The evidence upon which that state of satisfaction has presently been reached is the Affidavits of Michael Daniel Harmer affirmed on 30 November 2009, 2 December 2009 and 11 December 2009 together with exhibits to his Affidavit of 30 November 2009, being Exhibits MDH 8, 63, 64 and 65. It is thus concluded that leave should be given to the Applicant to serve the Amended Application and the Further Amended Statement of Claim upon the Second, Third and Fourth Respondents overseas. 2. The proceeding be stood over for Mention at 9:30 am on 1 February 2010. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | application for leave to serve originating process outside australia requirement of a prima facie case exercise of discretion practice and procedure |
That decision affirmed the decision of a delegate of the first respondent made on 9 December 1997. 2 The applicant was a member of the Lie class action in the High Court (see Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 76 ALJR 966). Pursuant to orders made in those proceedings, the applicant filed a draft order nisi in the High Court on 13 June 2003 seeking that the Tribunal's decision be quashed. On 23 March 2006 Allsop J determined that the applicant's submissions raised issues which ' may be considered arguable ' and determined that the matter be set down for directions. At directions on 18 April 2006, his Honour declined to make an order under O 51A r 5(2) and accordingly these proceedings will also determine whether any order nisi should be made absolute. 5 This appeal was heard on 27 July 2006 and on that day was adjourned to 17 August 2006 to afford the applicant an opportunity to tender the transcript of the hearing before the Tribunal. He is a Muslim whose parents and siblings (other than one brother) remain in Libya. He was educated at the Garyounis University and graduated in July 1989 with a degree in electrical engineering. After initial employment by an electrical company and by an oil company he joined the Garyounis University Engineering Department as a demonstrator and was ultimately appointed to the staff of the department. 7 The applicant visited Australia for two months in 1995 as a tourist. He visited Australia for a second time on 24 August 1996 and on 31 October 1996 lodged an application for a protection visa with the Department of Immigration and Multicultural Affairs ('the Department'). The application was refused. 8 The applicant claimed that he feared persecution in Libya because of his religion and political opinion. The applicant said that the Libyan government was ' against Islam '. He said that devout Muslims were persecuted by the Government in Libya because of suspicions that they may be involved in anti-government activities undertaken by Islamic fundamentalist groups. The applicant said that he had been detained and questioned on two occasions. He said that he was frequently followed by government agents, that many of his brothers and cousins had been imprisoned by the government, and that several of his co-workers at the university had been arrested. 9 The Tribunal accepted the evidence of the applicant concerning his background and education. The Tribunal also accepted his claim that he had been followed on a number of occasions and that he may have been questioned and detained in 1995. 10 The Tribunal referred to independent country information which stated that the Libyan government continued to act harshly to suppress militant Islamic opposition, and that individuals were arrested and detained if they were suspected of supporting or participating in such activity. The Tribunal also found that it was possible that many ordinary Muslims, unconnected with militant groups, might be arrested and investigated as part of the investigation into the suspected militant activity, and that this may have led to the episodes of questioning which the applicant alleged. 11 However the Tribunal considered that the evidence did not support a finding that the Libyan authorities suspected the applicant of being an Islamic militant. The Tribunal did not believe that the applicant would have been released so quickly on the two occasions when he was arrested, or that he would not have been detained again, if he remained under suspicion of being a militant Islamist. 12 In respect of the applicant's brothers and cousins who had been detained, the Tribunal noted country information which stated that relatives of suspected opponents of the regime could be harassed and detained. However, the Tribunal considered there was insufficient information for it to determine the reasons for the detention of the applicant's relatives. It noted the length of time in between the first time one of his brothers was arrested in 1986 and the limited period and severity of the later detention of the applicant. It was not satisfied that the applicant would face harm on his return to Libya because of his religion on the basis of the experiences of his relatives and friends. 13 In respect of persecution on the basis of his political opinion, the applicant claimed that he is an opponent of the Libyan government. He said he disagreed with the policies of the regime in part because they do not reflect Islam. The Tribunal accepted that the applicant did not support the Libyan regime, but observed that holding political opinions different from the government was not in itself a ground for claiming refugee status. Firstly, he submits that he was denied procedural fairness because he was not made aware of the country information in the possession of the Tribunal. He says that if he had been made aware he would have made further submissions and submitted additional material of his own. 15 Secondly, the applicant submits that he was denied procedural fairness because the Tribunal's decision was published on its website with such particularity that it identified the applicant. The applicant claims that such publication breached s 431 of the Migration Act . 16 Thirdly, the applicant claims that he was denied procedural fairness because he was not provided with a Departmental file note which was before the Tribunal. The note referred to information provided to the Department by the applicant's brother, who is also an applicant for a protection visa. The file note recorded that the information provided by the applicant's brother (also an applicant for a protection visa) was inconsistent with the information the applicant had provided to the Department. The applicant says that had he been provided with this information he could have informed the Tribunal of his close association with some of those persons. The applicant says that he indicated to the Tribunal that one of his work colleagues, Dr Rajab, had been arrested. He says that some of the independent country information before the Tribunal referred to the wave of arrests in which Dr Rajab was arrested (although Dr Rajab was not mentioned specifically by name in the material before the Tribunal), and if the Tribunal had drawn this information to his attention, he could have explained his association with those whose persecution by the Libyan regime was independently documented. 18 The obligations of the Tribunal are to be determined by reference to the Migration Act as it existed on 7 January 1999, the date of its decision. The Migration Act did not then include s 422B , which provides that Div 4 of Pt 7 of the Migration Act (which relates to the conduct of the Tribunal's review) is taken to be an exhaustive statement of the natural justice hearing rule. It is clear that s 422B of the Migration Act now operates to exclude the requirement for decision-makers to abide by common law principles of procedural fairness: see Minister for Immigration and Multicultural Affairs v Lay Lat [2006] FCAFC 61. However, it is equally clear from decisions of the High Court that common law principles of procedural fairness were not excluded from the Migration Act as it existed prior to the enactment of s 422B: see Plaintiff S157/2002 v The Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476 at [37] - [38] per Gleeson CJ; at [83] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ; Re Minister for Immigration and Multicultural Affairs and Anor; Ex parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 at [26] per Gleeson CJ and Hayne J; at [95] per Gaudron J; at [128] per McHugh J; at [188] per Kirby J. Accordingly, it is open to the applicant to raise a breach of common law procedural fairness. 19 The content of procedural fairness requirements will depend upon the circumstances of the exercise of the power: see Wilson J in Kioa and Ors v West and Anor [1985] HCA 81 ; (1985) 159 CLR 550 at 584-5 per Mason J; 601 per Wilson J; 611-2 per Brennan J; 633 per Deane J. However, common law procedural fairness will generally require that an applicant be given the opportunity to comment upon information held by the Tribunal which is adverse to his or her interest. The Tribunal's obligations may be discharged if it provides to the applicant orally the substance of adverse material: see NAVM v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 99 at [31] ---[33]. The important element is that the information provided by the Tribunal enables a person to make a submission concerning its relevance or to adduce competing material. 21 In the present case, it is apparent from the transcript that the Tribunal discussed the independent country information at some length with the applicant. In particular, it raised its concerns that the independent country information did not support the contention that the Libyan government persecuted devout Muslims who were not fundamentalists. In my opinion, the applicant clearly was provided with the substance of the information which was contained in independent country information. 22 The applicant suggests that the Tribunal should have drawn his attention to specific passages in the independent country information. It was submitted that those passages were directly related to the applicant's experiences and, had he been able to explain his relationship with those events, the Tribunal would have assessed his risk of persecution differently. This submission must fail. It is not the function of the Tribunal to establish the applicant's case for him. It is for the applicant to advance whatever evidence or argument she wishes to advance in support of her contention that she has a well-founded fear of persecution for a Convention reason. The Tribunal must then decide whether that claim is made out. That included providing the Tribunal with sufficient details of his personal experiences to allow the Tribunal to make an assessment of his claim. The Tribunal could not have known whether the independent country information referred to arrests of people close to the applicant (such as Dr Rajab) unless the applicant provided specific details of his associates which would enable the Tribunal to recognise circumstances referred to in the country information. The applicant raised the arrests of university colleagues only briefly and vaguely, and did not provide any particular information. If the applicant had additional material which he wished to place before the Tribunal then it was incumbent upon him to place it before the Tribunal. 24 Furthermore, the vast majority of the independent country information which was relied upon by the Tribunal had in fact been provided by the applicant himself, and following the Tribunal hearing, the applicant was offered the opportunity to provide further information. The applicant took up the offer and provided further independent country information to the Tribunal. It is clear that the applicant was not only afforded the opportunity but also exercised his right to comment before the Tribunal. 25 The applicant suggested that the Tribunal and the applicant had been communicating at cross-purposes, because the applicant would, by virtue of his religious practices, be considered a fundamentalist by the regime, despite the fact that he did not consider himself to be a fundamentalist. However, I do not think that this submission truly alleges procedural unfairness, but goes rather to the merits of the Tribunal's decision, which are not reviewable in this Court. In any event, the decision of the Tribunal clearly considered the possibility that innocent civilians could be ' caught up in waves of arrests and in investigations into suspected militant activity '. The Tribunal considered that the applicant's own brief periods of detention may have resulted from such a cause. However, given the brevity of his arrests and the fact that he had not been detained again, the Tribunal considered that the authorities did not continue to suspect him of involvement with Islamic opposition groups. 26 The Tribunal clearly gave the applicant an opportunity to respond to the independent country information and to provide additional information. It then decided that the independent country information did not support the proposition that the Libyan government persecuted individuals solely because they were devout Muslims. It was a factual finding which was open to the Tribunal, and the Tribunal clearly afforded the applicant procedural fairness in relation to this finding. Accordingly, this ground must be rejected. The applicant also says that a Libyan friend mentioned to the applicant that he had seen his information on the internet. The published judgment provides details of the applicant's country of origin; his religion; the year in which he left school; the year in which he gained employment; the fact that he was interrogated twice; the fact that he was required to sign an undertaking that he would not go to a mosque or see certain people, including one person who was imprisoned in 1997; that he returned to Libya in 1997; and that his relatives had been imprisoned. I note that following the request of the applicant, the Tribunal decision was removed from the website. 29 The respondent does not acknowledge that the Tribunal's decision, as published on the internet, contained any statement which might identify the applicant. In view of the findings hereunder, it is not necessary for me to determine whether the applicant could in fact have been identified from these matters. However, I accept that, despite the fact that much of the more detailed material was removed from the Tribunal's reasons before publication of the decision, there is a possibility that the applicant could have been identified from the remaining material. 30 The applicant submits that the failure to comply with s 431 of the Migration Act gives rise to procedural unfairness. He submits that procedural fairness arises at the pre-hearing stage of the Tribunal hearing and continues during and beyond the hearing and until the Tribunal fulfils its statutory functions by the provisions and publication of its decision. He claims the Tribunal's decision was vitiated by its failure to afford him procedural fairness. The applicant relies upon Ainsworth and Anor v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 and Johns v Australian Securities Commission and Ors [1993] HCA 56 ; (1993) 178 CLR 408 as authority for the proposition that procedural fairness may require an opportunity to oppose publication of a decision. 31 I do not accept this submission. The obligations of procedural fairness at common law relate to two 'rules': the bias rule and the hearing rule: see M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action , 3 rd ed, Lawbook Co, 2004 at 370. The bias rule prevents a Tribunal from acting in a way which shows actual or apprehended bias towards an applicant. The hearing rule acts to ensure that an individual is given an opportunity to be heard before a decision is taken and to meet the case which is put against him or her: see the passage in Kioa cited at [19] above. The precise content of the hearing rule is dependent upon the context in which the decision is being made. In any event, if an allegation of procedural fairness is to be made out, the applicant must demonstrate that either the bias rule or the hearing rule has been breached by the Tribunal. 32 The decision of the Tribunal to publish its reasons upon the internet, in the form in which it did so, could not vitiate the decision which had already been made by the Tribunal relating to the applicant's refugee status. No suggestion has been made that the Tribunal's decision to publish its reasons indicated bias on the part of the Tribunal. Nor is there any suggestion that the hearing given by the Tribunal had been in some way deficient. If a breach of neither of these principles is alleged, a claim of procedural unfairness is not made out. 33 The applicant's reliance on Ainsworth is misplaced. In that case, the Criminal Justice Commission published a report which made adverse factual findings against Ainsworth, in circumstances where Ainsworth had never been given the opportunity to be heard upon the basis for those findings. The report attracted a duty of procedural fairness because its contents had the potential to ' destroy, defeat or prejudice a person's rights, interests or legitimate expectations ' (see Annetts and Anor v McCann and Ors [1990] HCA 57 ; (1990) 170 CLR 596 at 598 per Mason CJ, Deane and McHugh JJ). In contrast, in these proceedings the applicant was given an opportunity to be heard upon the findings which were included in the Tribunal's decision. The Tribunal had invited the applicant to a hearing, which he attended. Accordingly the Tribunal's duty of procedural fairness was discharged in respect of the factual and legal findings which it made in that decision, and ultimately its decision that the applicant was not a refugee. 34 Johns concerns a decision by the Australian Securities Commission to allow transcript of interviews it had conducted with the appellant to be released to the public. In that case, the High Court held that the applicant ought to have been given an opportunity to make submissions before that decision was made and accordingly it was invalid. On this basis the applicant says that the Tribunal's decision to publish its reasons was also a decision which is reviewable. 35 I accept that the decision by the Tribunal to publish its reasons on the internet in the form which it did was a decision which might be challenged. Indeed, after a request by the applicant, the Tribunal removed the reasons from the internet. If the Tribunal had refused to remove its reasons from the internet, it may have been open to the applicant to challenge that decision and seek injunctive relief to restrain the continued publication on the basis that it was inappropriate for the Tribunal to have published its reasons without giving the applicant an opportunity to make submissions about the details which should not be published. That is, the applicant might have successfully made an allegation that procedural fairness had been denied in relation to the decision to publish . However, any errors which may have occurred in the Tribunal's decision to publish were incapable of affecting its decision on the applicant's refugee status, which had been concluded before publication and in respect of which fair procedures had been observed. 36 It follows that this ground of challenge must be rejected. The file note referred to inconsistencies between the applicant's application for a protection visa and that of his brother, whose application for a protection visa was also being determined by the Department. 38 The file note contains information which is potentially adverse to the applicant, in that it suggests the account provided by him is inconsistent with the account provided by his brother. It also incorrectly summarises the information contained in the applicant's protection visa application, stating that he claimed only one brother was detained by authorities, when in fact his application states that the Libyan government ' jailed many of my brothers and cousins since 1984 ' and refers specifically to two brothers. 39 It is conceded that the file note was not brought to the applicant's attention by the Tribunal. There is no indication that it was relied upon in the Tribunal's decision, and no clear indication that it was considered at the hearing. TRIBUNAL MEMBER: You haven't mentioned that before? Later [applicant's brother's name] they gaoled him for [period of time]. However, it was suggested by the second respondent that the Tribunal member's original misconception relating to the number of brothers which the applicant claimed had been arrested may have been derived from the incorrect information contained in the file note. 41 The applicant has submitted that the failure by the Tribunal to provide the file note to the applicant was a breach of procedural fairness by the Tribunal. He relies upon the decision of the High Court in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 80 ALJR 228. 42 The decision in VEAL also concerned a decision made by the Refugee Review Tribunal. In that case, the Department had received an unsolicited letter which contained allegations relating to the appellant. The letter was passed on to the Tribunal by the Department, but the Tribunal did not tell the appellant about the letter or about the allegations contained in it. The Tribunal made a decision refusing a protection visa on the basis that the applicant lacked credibility, but explicitly indicated in its reasons that it had given no weight to the letter in arriving at its decision. 43 The High Court held that the Tribunal had failed to afford the applicant procedural fairness. The Court held that information that was credible, relevant and significant must be provided to an affected person and that an opportunity must be given to the person to deal with the information before a decision was reached: see at [17]. It stated that credible, relevant and significant information was information ' that cannot be dismissed from further consideration by the decision-maker before making the decision ' and noted that whether information is credible, relevant and significant does not depend ' upon whatever characterisation of the information the decision-maker may later have chosen to apply to the information when expressing reasons for the decision that has been reached ': see at [17]. It follows that asking whether, despite what was said in its reasons, the Tribunal may have been subconsciously affected by the information distracts attention from the relevant inquiry. 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. In that decision, Bennett J distinguished the decision in VEAL on the basis that although procedural unfairness had been established in respect of one basis of the Tribunal's decision, there was a separate and independent basis for its conclusion which was not affected by procedural unfairness: see at [28], [40]-[41]. 46 I accept that, for the purposes of determining the applicant's credibility, the information contained in the file note was credible, relevant and significant. The information in the file note had the potential to affect findings on the applicant's credibility. That information should have been provided to the applicant, and he should have been given an opportunity to comment upon it. However, in my opinion, had that information been provided to the applicant, it could not have made any difference to the Tribunal's decision. 47 In arriving at this conclusion, I am mindful of the observations of the High Court in Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141. In that case, the Court considered the circumstances in which it was appropriate not to order a new trial because it would inevitably result in the making of the same order as that made at the first trial. However, I am nonetheless satisfied that this is a case in which the provision of the information could have made no difference to the result, because the applicant's credibility was determined in his favour. 49 The Tribunal made no adverse findings on the applicant's credibility, but rather believed his factual account. The applicant submitted that the Tribunal impliedly made adverse credibility findings, because it did not find that he had a well-founded fear of persecution. However, the examples pointed to by the applicant were those in which the Tribunal did not agree with the applicant's assessment of events, not where it disbelieved his account of the facts. The Tribunal accepted that the applicant and his brothers and cousins had been detained by the Libyan government. It accepted his description of what had occurred at his place of work and the details of his education. What it did not agree with was the applicant's explanation for these events. While the applicant believed that they resulted from religious persecution, the Tribunal disagreed. The Tribunal did not believe the applicant was lying about the facts. It just considered that he was wrong in his interpretation of them. In terms of the applicant's credibility, the Tribunal clearly found in the applicant's favour. 50 The material contained in the file note was credible, relevant and significant only in respect of the issue of the applicant's credibility. It could not have been relevant to any of the other findings made by the Tribunal. The Tribunal's decision did not include any adverse findings upon the applicant's credibility, but rather was based upon its assessment of his risk of persecution in Libya, derived from independent country information and from its assessment of his personal circumstances. Giving the applicant an opportunity to comment upon the file note could not possibly have altered the Tribunal's findings in respect of matters unrelated to his credibility. 51 For these reasons, I consider that this ground must also be rejected. Regardless of whether a breach of procedural fairness has in fact occurred, I consider that to order the matter to be remitted to the Tribunal would be futile and if a breach of procedural fairness were in fact established, I would exercise my discretion not to order a re-hearing. Accordingly, this ground must fail. | judicial review decision by tribunal to publish reasons whether breach of s 431 of the migration act 1958 (cth) whether breach could vitiate decision of the tribunal failure to provide country information whether breach of procedural fairness failure to provide appellant with departmental file note whether credible, significant and relevant to the review relevant to credibility no adverse findings in respect of credibility whether provision of the file note could have made any difference to the result migration |
The scheme was not registered as required by s 601ED of the Corporations Act 2001 (Cth). Accordingly, on the application of Australian Securities and Investments Commission (ASIC) the scheme was wound up. So also were several companies involved in the scheme, including The Mews Village Nominees Pty Ltd (The Mews Village Nominees) (which had purchased the Mews land as nominee for those who had invested in the scheme) and GDK Financial Solutions Pty Ltd (GDK) (which had acted as manager for a series of partnerships in which the investors had organised themselves). ASIC now seeks an order that Western Retirement Village Management Pty Ltd (WRVM), another company involved in the scheme, also be wound up. 2 The starting point is to explain WRVM's role in the scheme. The general background is set out in my judgment in Australian Securities & Investments Commission v GDK Financial Solutions Pty Ltd (2006) 60 ACSR 447. The individuals who played a key role in setting up the scheme were Mr Brereton, a solicitor, and Mr McLeod who, through GDK, had established several retirement villages. Mr Brereton and Mr McLeod decided to set up a retirement village in Western Australia. They found the Mews land. In late 1999 or early 2000 a company called Mango Properties Pty Ltd (Mango) (which is controlled by Philip Clements and Luke Atkins) entered into a contract to purchase the Mews land for $2,850,000. Mr Brereton says that Mango entered into the contract as trustee for WRVM which in turn acted on behalf of two joint venturers, GDK and Young Turks Pty Ltd (Young Turks). Mr Clements recalls things differently. He says that Mango entered into the contract on its own account but on the basis that funding would be arranged by Mr Brereton. He also says that Mango gave up its interest in the Mews land in favour of WRVM when Mr Brereton told him that funding was not available. Mr Clements now contends that this advice was false and Mango claims an equitable interest in the Mews land. 3 WRVM paid the purchase price for the Mews land and became registered as the proprietor. Then WRVM entered into a contract to sell the Mews land to The Mews Village Nominees. The contract is dated 18 April 2000. Mr Brereton described the contract as a "turnkey contract for the development over time of [the Mews] [R]etirement [V]illage. " This explains why the contract deals with two discrete transactions: the sale of the Mews land and the construction by WRVM of a retirement village. According to the contract WRVM was to apply to the relevant authority for a planning permit to develop the retirement village and then construct the village. The details of the construction are described in the contract. 4 The "purchase price" payable by The Mews Village Nominees under the sale contract was $93,425,000. It was agreed, however, that "$2,850,000 is attributed as the value of the [Mews] land on the day of sale. " The purchase price was paid in full. Some part of the purchase price (approximately $6 million) came from money subscribed by the investors. The balance was "paid" by a loan from WRVM. The loan was provided under a separate agreement. 5 The sale contract permitted WRVM to borrow up to $74,740,000 on the security of the Mews land. In the event, two mortgages were granted. The first to National Australia Bank, was given to support a guarantee by WRVM of a loan from NAB to Salrest Pty Ltd. NAB claims that $7,819,000 plus interest is due under the guarantee. The second mortgage was in favour of AVS Property Pty Ltd. Under this mortgage AVS claims to be a secured creditor of WRVM in the sum of $4,347,038. Salrest and AVS are related, each being controlled by one Mario Salvo. 6 At or shortly before the time WRVM sold the Mews land to The Mews Village Nominees both WRVM and GDK began marketing the scheme to investors. For that purpose a prospectus was prepared, probably by WRVM. The evidence suggests that the instructions for the prospectus were given by Mr McLeod. At all events, approximately 43 investors put money into the scheme. The investors were grouped into partnerships and each partnership acquired an interest in the Mews land via The Mews Village Nominees, which had agreed to act as "bare nominee" for the partnerships. In aggregate investors contributed over $6 million to the venture. It was these contributions that formed part of the purchase price paid under the sale contract. 7 When the scheme was wound up, Messrs Mark Francis Xavier Mentha and Brian Keith McMaster were appointed receivers to take possession of the Mews land and find a purchaser. The receivers were directed to investigate aspects of the scheme, largely for two purposes: first, to locate scheme assets and calculate scheme liabilities and, second, to identify all investors and the amount each investor had put into the scheme. Messrs Mentha and McMaster were also appointed as the liquidators of The Mews Village Nominees. Their appointment as liquidators facilitated the investigation. 8 It has become clear that it is not possible to complete the winding up of the scheme without there being an investigation into the affairs of WRVM. For one thing, it is possible that The Mews Village Nominees has a claim on WRVM to recover some of the "purchase price" as a result of the failure by WRVM to construct the retirement village. What is not known is whether such a claim is worth pursuing. It will only be worth pursuing if WRVM has assets to meet the claim. At the moment the financial position of WRVM is unknown. Mr Brereton says that WRVM is solvent, but has provided little by way of detail. WRVM's capacity to meet a claim may not depend upon what assets it owns. As I have indicated, WRVM purchased the Mews land on behalf of GDK and Young Turks. If they were the beneficial owners of the Mews land they may be (indeed they probably are) liable to indemnify their trustee (WRVM) for all properly incurred debts in relation to the property. Thus if WRVM is required to repay any part of the "purchase price" it received from The Mews Nominees, GDK and Young Turks may be liable to satisfy that obligation. I suppose only Young Turks is likely to have the funds. 9 It is only with the appointment of a liquidator to WRVM that the capacity to recover the putative debt can be investigated. That is, a liquidator will be best placed to discover what are WRVM's assets and whether Young Turks is under any obligation to meet WRVM's liabilities. 10 This is not the only inquiry that would be carried out by a liquidator of WRVM. Unless Mango's claimed equitable interest has priority over the interests of the investors, the receivers will sell the Mews land. To pass title to a purchaser the mortgages in favour of NAB and AVS must be discharged. Ordinarily a mortgage is discharged upon payment to the mortgagee of the amount thereby secured. This may not be the case here. 11 The receivers have begun to investigate the validity of the NAB mortgage. There is a possibility (it is not put any higher than a possibility) that the NAB mortgage is vulnerable to attack. The issue here is whether the use to which the borrowed money was put conferred a benefit on WRVM. It appears to the receivers that no benefit was received by WRVM. It is not clear whether the joint venturers, GDK and Young Turks, received a benefit. If neither WRVM nor the joint venturers received a benefit and NAB knew that no benefit had been received perhaps the mortgage could be set aside. I note that the bank officer involved in obtaining the security from WRVM was also the officer who dealt with Salrest. 12 If a liquidator were appointed to WRVM he will be able to use his coercive powers to investigate whether the mortgage to NAB is capable of being set aside. This would be no idle investigation. Something in the order of $8 million is at stake. 13 What I have said thus far is sufficient, in my opinion, to order the winding up of WRVM on the just and equitable ground: Corporations Act s 461(1)(k). It is, therefore, not necessary to consider the other grounds upon which ASIC relied. In broad outline they are that: WRVM was guilty of misconduct in the establishment and implementation of the scheme; WRVM was guilty of misconduct by failing to keep proper records and failing to account to investors for the money they have contributed; WRVM was guilty of misconduct in relation to the winding up of the scheme by failing to produce to the receivers documents that related to the scheme; WRVM is insolvent; and it is necessary to discover how much of the investors' funds passed through WRVM and see whether the funds can be recovered. 14 Many of these additional grounds were contested by Mr Brereton during the course of a three day hearing. Resolving the contested issues will not serve any purpose, although it is hard to resist the conclusion that it is appropriate to wind up a company that promoted an illegal scheme and has no commercial or practical reason to continue to exist. 15 The only point that causes me any concern is the identity of the liquidator. It would be convenient for all concerned if I were to appoint Messrs Mentha and McMaster as liquidators. They are on top of the details of the scheme, having done a considerable amount of work in the course of the winding up of the scheme proper. If they were appointed the costs incurred would be significantly lower than would be the case if I appoint a liquidator who is unfamiliar with the territory. 16 There is, however, a difficulty. At some point there will be a contest between WRVM and The Mews Village Nominees concerning their respective rights under the sale contract. The Mews Village Nominees will claim that WRVM has been overpaid under the contract. If there is a claim for overpayment the quantum of the claim will be contested. The same person cannot manage both sides of this dispute. 17 There is a way around the problem. Messrs Mentha and McMaster could be appointed liquidators to take charge of the liquidation generally and a special liquidator could be appointed to deal with the dispute between WRVM and The Mews Village Nominees. There is also an alternative procedure. The alternative is to allow one of the beneficiaries for whom WRVM had acted to run the dispute with The Mews Village Nominees. The respective interests of the joint venturers have been transferred to ZMB Australia Pty Ltd (ZMB), a company controlled by Mr Brereton's wife. Perhaps ZMB would be in a position to run the claim. It sometimes happens that beneficiaries maintain or defend a claim that is more usually maintained by their trustee. This occurs when, for example, the trustee is unable or unwilling to act on the beneficiaries' behalf. If Young Turks or ZMB is willing to take up the cause I would make whatever orders were necessary (although none may be necessary) to permit that to occur. If neither Young Turks or ZMB is willing to act then I would appoint a special liquidator to take charge of the dispute. 18 In the circumstances, I will make orders for the winding up of WRVM. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | unregistered managed investment scheme promoter winding up just and equitable corporations |
2 In Nokia Corporation v Cellular Line Australia Pty Ltd [2006] FCA 726 , delivered on 14 June 2006, the Court held that the first and second respondents had infringed the applicant's trademarks and, as they had failed to establish any arguable defence, the applicant was entitled to summary judgment against them. Further, the third and fourth respondents admitted, in essence, that they had infringed the applicant's trademarks. The Court made orders accordingly. 3 In Nokia Corporation v Cellular Line Australia Pty Ltd (No 2) [2006] FCA 980 , delivered on 11 August 2006, the Court ordered that 60% of the applicant's costs be paid by the first and second respondents, 20% be paid by the third respondent, and 20% be paid by the fourth respondent (less 20% of costs referable to the applicant's costs of preparing evidence of sales of counterfeit products after 24 February 2006). 4 At a directions hearing on 15 December 2006, the Court gave the applicant leave to discontinue against the first respondent, on the basis that the applicant's costs be taxed and paid forthwith. Further, the Court ordered, by consent, that the proceeding be discontinued as against the fourth respondent, and that the fourth respondent pay the applicant costs and damages in the amount of $25,000 forthwith. The proceeding remains alive with respect to the second and third respondents. 5 At the 15 December 2006 directions hearing, the applicant agreed that the proceedings should be discontinued against the third respondent, subject to the resolution of the question of costs. I stated that, in the circumstances, my preferred course was to fix these costs, a course to which the applicant and the third respondent acceded. 6 The third respondent is apparently a person of limited means and education. He has family responsibilities. At the 15 December 2006 directions hearing, he claimed to have suffered some misfortune. Whilst noting these matters, he did not make any specific submissions on costs. The applicant, on that occasion, relied on an affidavit sworn by its solicitor on 23 June 2006 and on oral submissions. Further, on 18 December 2006, with leave, the applicant provided the Court with a short statement of its costs. In this statement, the applicant submitted that the amount of $8,250 was an appropriate quantification of its costs in relation to the third respondent. This figure represented 50% of the applicant's out-of-pocket expenses. 7 By early in 2007, the third respondent had made no written submission in response. My chambers wrote to him on 28 February 2007 informing him that he had an opportunity to make further submissions on the question of costs but, if he did not do so, judgment would be delivered today. 8 Yesterday, my associate telephoned the third respondent, who stated he had received the letter of 28 February 2007 and would attend Court today. The third respondent appeared today and, with the assistance of an interpreter, drew attention to the following matters. First, he is presently in receipt of Centrelink payments. Secondly, his business is not doing well, and he is about to close his shop. He reiterated that he had family responsibilities and that he had already incurred costs in other litigation. 9 The third respondent submitted, in effect, that I should discount the figure of $8,250 proposed by the applicant by a further 50% and that I should make provision for the payment of that sum by way of instalments. The applicant's legal representative indicated in Court that the applicant would be prepared to negotiate some accommodation with respect to the payment of costs by the third respondent. I shall reserve liberty to apply within a month of today in the event that these negotiations prove unsuccessful. 10 Where the Court orders costs to be paid, O 62 r 4(2)(c) of the Federal Court Rules enables the Court to specify a gross sum instead of taxed costs: see also s 43 of the Federal Court of Australia Act 1976 (Cth). I consider it appropriate to fix costs because of the patent undesirability of continuing the litigation between the applicant and the third respondent. The Court may make an order fixing costs, even though earlier costs orders in the proceeding contemplated taxation in the ordinary way: see Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120 per von Doussa J (' Beach Petroleum '). 11 Naturally enough, the Court's discretion to fix costs must be exercised judicially and by reference to principle. In setting a gross fee, the Court must be "confident that the approach taken to estimate costs is logical, fair and reasonable": see Beach Petroleum at 123. For example, in Canvas Graphics Pty Ltd v Kodak (Australasia) Pty Ltd [1998] FCA 23 , O'Loughlin J held that the sum of costs fixed should be proportionate to the nature, including the complexity, of the case; and, that in a case involving a relatively simple cause of action, it was necessary to keep a firm control on costs, which should not be permitted "to explode". 12 I have no doubt that the applicant sought to have regard to matters of this kind when it put forward the figure of $8,250. It should also be borne in mind that the financial inability of an unsuccessful party to meet costs is generally not a sufficient reason to deprive a successful part of a costs award: see Selliah v Minister for Immigration and Multicultural and Indigenous Affairs [1998] FCA 469 and MZXEF v Minister for Immigration and Multicultural Affairs [2006] FCA 709. 13 It follows then that the matters to which the third respondent has referred today are not a sufficient reason to deprive the applicant of a costs award estimated on a logical, fair and reasonable basis. For the reasons I am about to state, however, I would nonetheless discount the figure given by the applicant a little. It must be borne in mind that, as between the applicant and the third respondent, the case was very straightforward. The third respondent essentially admitted his infringing conduct, which was very limited in point of time, value and quantity. The third respondent has, moreover, been substantially compliant with the Court's processes. Costs should be tightly controlled in litigation such as this. Further, as the applicant noted, whilst there is a need to allocate costs amongst the various respondents, the allocation is not without difficulty. Some items in the applicant's estimate may have been taxed off. In all the circumstances, I would fix the applicant's costs in relation to the third respondent at $6,000. The third respondent have liberty to apply within one month of today with respect to the payment of these costs by way of instalments. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Date of Hearing: The applicant filed written submissions on 18 December 2006 and the third respondent made oral submissions on 8 March 2007. | fixed costs discretion to fix costs relevant considerations practice and procedure |
It followed the Report of the Advisory Council on Intellectual Property (ACIP). It would do this by providing Australian businesses with industrial property rights for their lower level inventions. Industrial property rights are not available for these inventions at present, which means competitors may be able to copy them. For this reason, a firm making lower level inventions cannot be certain of capturing the benefits that come from their commercial exploitation. This lowers the incentive to innovate. 2 The term of an innovation patent is eight years rather than 20 years as is the case with a standard patent (s 68). Claims are limited to five (s 40(2)(c)). 3 If a complete application for an innovation patent is made, and if it passes what is described as a formalities check, the Commissioner must accept the patent request and complete specification (s 52). There is a special regime for examination, re-examination and opposition to innovation patents set out in Ch 9A of the Act. The grounds for revocation by the Commissioner on examination are set out in s 101B and, in the case of re-examination, s 101G. The grounds of opposition are set out in s 101M. Revocation of innovation patents, otherwise than in the course of examination, re-examination and opposition, is dealt with by s 138 in the same manner as revocation of a standard patent, the grounds being set out in s 138(3). "Patentable invention" is differently defined for the purposes of a standard patent and for the purposes of an innovation patent in s 18 of the Act --- the principal difference lies in the fact that, for the former, an inventive step is required and, for the latter, an innovative step. There is apparently no overseas equivalent of innovation patents and the researches of counsel have not turned up any relevant decisions dealing with revocation of innovation patents. 4 On 23 June 2003, Australian Provisional Patent Application No 2003903188 was filed by the applicant Delnorth Pty Ltd (Delnorth). The field of the invention was described as "roadside posts for supporting signage or delineating paths, roadways or boundaries". On 10 June 2004, Australian Standard Patent Application No 2004249786 was filed. The field of the invention was described in the same manner. It contained 32 claims. 5 On 25 November 2005, Application for Innovation Patent No 2005100978 (Patent No 1) was filed and was certified on 2 February 2006. On 24 February 2006, this proceeding was commenced by Delnorth against the respondent Dura-Post (Australia) Pty Ltd (Dura-Post) for infringement of Patent No 1 based upon the manufacture and sale of roadside posts under the name Flexi-Steel post. 6 On 18 April 2006, Application for Innovation Patent No 2006100297 (Patent No 2) was filed and it was certified on 6 July 2006. The cross-claim and particulars of invalidity were filed by Dura-Post on 5 May 2006. 7 On 15 August 2006, Application for Innovation Patent No 2006100696 (Patent No 3) was filed and certified on 5 October 2006. By 15 August 2006 Delnorth had manufactured and sold what was known as an "Ezy-Drive Steel Flex" post. The pleadings were amended to allege infringement of Patent No 2 and Patent No 3. Dura-Post denies infringement and claims that Patents No 1, 2 and 3 are each invalid. Each of Patents No 1, 2 and 3 was a divisional of the standard application No 2004249786. 8 The parties have co-operated in preparing a schedule of issues, including the evidence relating to those issues. The submissions have been focused upon those issues. That relieves me of burdening this judgment with a good deal of recitation of background. A knowledge of each of the patent applications and patents to which I have referred will be assumed, together with knowledge of the particulars of invalidity and of the prior publications and prior use that are cited. I will assume familiarity with the Act. In addition, the parties have usefully identified some 25 integers in the claims of Patents Nos 1, 2 and 3 and a table has been prepared identifying integers with claims. I will work on that basis. The issue of infringement largely turns upon construction of the relevant claims. Both parties sought to lead evidence from experts about construction and infringement. The scope for that evidence in the case of a relatively uncomplicated object, such as a roadside post having a conventional use well within the range of judicial notice, is limited, as I made clear in rulings during the course of the evidence. 10 The first issue on Infringement (issue 6) is: does the body of the Flexi-Steel post have a transverse axis transverse to its longitudinal axis? That reflects issue 2 in relation to Construction: what is the proper construction of the phrase "transverse axis transverse to the said longitudinal axis" as used in the claims? [integer 4]. In the context of this specification it is apparent that "transverse" effectively means 'at right angles to the longitudinal axis' --- if the longitudinal axis is vertical, the transverse axis is horizontal. The primary meaning of "axis" is that about which something turns --- in the present case, about which something bends. It is identified in figure 1 of the drawings as a straight line across the length of the post at a particular place but, if used, as it is, in relation to bending, could be theoretically at any point along the longitudinal length of the post. 11 It seems to me that the real question here arises in issue 7: is the body of the Flexi-Steel post "elastically bendable through 90deg. from an unbent state about said transverse axis"? (ii) If so, has Delnorth established it is "elastically bendable" through 90deg. from an unbent state about said transverse axis? Delnorth submitted that the phrase "elastically bendable through 90deg. " in this context means that the body of the post be capable of being bent through an angle of 90deg. about a transverse axis (that is, any axis extending across the body of the post, at right angles to the longitudinal axis of the body) and then fully recovering so that it returns to its original shape without any observable plastic deformation of a permanent kind such as folding, creasing or warping. The Chambers Dictionary of Science and Technology included a definition of "elastic deformation" as "[a]ny change in shape in response to an applied force in which the initial shape is recoverable with no sensible time delay when the applied force is removed" (applicant's submissions on infringement, 51 and following). On the applicant's case, this was proved by Mr Dowling having taken the Flexi-Steel post and manually manipulated it from each end so that one end was at 90deg. to the other and then releasing the force so that it returned to its original position and condition. 13 Dura-Post contended that the manual manipulation by Mr Dowling did not establish the necessary integer. Taken in context, it required a post that was capable of being elastically bendable through 90deg. after a wheel over impact depressing it to an angle of 90deg. from the vertical base of the post embedded in the ground around an axis located at that point (as indicated in the drawings (figure 3)) and then returning to its original position in a reasonable time. It is submitted that Delnorth had simply not proved infringement of an essential integer of each of the claims of each of the patents. It is submitted that there were well-known testing protocols which were available to establish the necessary facts, including bench testing. It was submitted that it could be safely concluded that, if there were a 90deg. wheel over of a post such as that described by a vehicle with no recess in the ground, plastic deformation of some kind would be the result, even if the post did return to its normal position. On the other hand, Dura-Post submits that there is no requirement that there be no visible permanent deformation at all such as folding, creasing or warping. 14 In my opinion, the claims describe the article by reference to its physical features and characteristics as such, not by reference to any particular situation or location. In other words, the material must have the capacity to be elastically bendable in the manner described. The phrase is not a means of limiting the claim by result, rather it deals with the choice of material --- spring steel with the described characteristic of elastic bendability. The choice of that material is, of course, explained by the desire to have a post that will recover after suffering impact from vehicles, including wheel-overs. The objective as stated is to "substantially overcome or at least ameliorate one or more of the disadvantages of the prior art" not to have a perfect result. The alternative construction is, in essence, circular. There would be no infringement unless the article worked perfectly under stringent conditions even if designed to be effective. 15 The necessary degree of flexibility was established by the manipulation by Mr Dowling. In any event, Dura-Post concedes that the Flexi-Post will be effective in returning to its original position within a reasonable time, although it is not said that there would be no observable permanent deformation of some kind after one or more complete wheel-overs. Thus, the answers to each of the questions of item 6 and item 7 are in the affirmative and infringement is established. Are claims incorporating integer 25 (surface coating) fairly based on the matter disclosed in the provisional specification? 19 It is accepted by Delnorth that "surface coating" is clearly wider than "powder coating". 20 The principles involved in "fair basing" between the claim in the question and a provisional specification were outlined by the Full Court in CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168 ; (1994) 51 FCR 260 during discussion of the authorities, particularly at 279-282. The related question arising under s 40(3) of the Act was discussed by the High Court in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 ; (2004) 217 CLR 274. The paraphrase which is used is that there must be a "real and reasonably clear disclosure" of the subject matter of the claim in the provisional specification. That test is quite different from that involved in judging anticipation. If, on the other hand, the additional feature involves a new inventive step or brings something new into the combination which represents a departure from the idea of the invention described in the earlier document, it could not, I think, be properly described as fairly based upon the earlier document. Some generality of expression in the provisional specification is accepted. Each of these statements was cited with approval by the Court in CCOM Pty Ltd 51 FCR at 281. 22 The idea of coating the steel surfaces was expressly flagged in the provisional specification. In my view that is a sufficient disclosure to permit fair basing of a claim to surface coating of the same surfaces, albeit not as limited in type of coating. It is the kind of development that Fox J had in mind. There is no suggestion in the complete specification of Patent No 3 that the coating has any purpose going beyond the prevention of corrosion. Patent No 3 therefore has the earlier priority date. It is submitted for Dura-Post that the patents fail the threshold test described in s 18(1A)(a) of the Act that there be a "patentable invention". It is submitted that the "invention" is, when analysed, the use of sheet spring steel as a material for the construction of roadside posts. It is clear from the body of the specification that sheet spring steel was an existing known material. It is submitted that the specifications did not claim any inventiveness in the features necessary for the assembling of roadside posts once the material was chosen. There was no assertion of inventiveness in the selection of integers to make various combinations in the form of the particular claims as drafted in Patents Nos 1, 2 and 3. 24 It is submitted that the specification effectively contained admissions to the effect that the spring steel roadside post of the claim is no more than an analogous use of a known material for the purpose of making flexible roadside posts with known features. There was therefore a lack of inventive step admitted on the face of specification ( NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd [1995] HCA 15 ; (1995) 183 CLR 655). 25 There would be much to be said for the argument if the invention were a claim for making a roadside post out of sheet spring steel. However, the matter must be judged claim by claim in accordance with the wording of s 18(1A). No claim is as broad as that considered in Microcell [1959] HCA 71 ; 102 CLR 232. Each involves a form of article with features additional to the material of spring sheet steel. It cannot be concluded that there is no "new" manner of manufacture from the face of the specification. This ground of invalidity fails. This applies to claims 1---3 of the Patents Nos 2 and 3 only. 27 It arises from s 138(3), from s 18(1A)(b)(i) and s 7(1). The present support is formed by mechanically securing a plurality of elongate curved metal slats or leaves together to form a laminated structure, with the curvature being about the longitudinal axis of the structure. The assembly is installed preferably with the concave side of the curvature facing the normal direction of traffic. When the device is struck by a vehicle, the multiple laminations of thin metal leaves permit the support to flex to absorb the impact, while the curvature and resistance of the spring metal slats cause the support to resume its normal upright position after the impact force is removed. (Emphasis added. It is seen as a point of difference from a number of them, eg US Patent No 4092081; US Patent No 4245922; US Patent No 4958954; US Patent No 5028166 and US Patent No 5267523. Moreover, the single lamination of the Blau device provides no means for adjusting the friction, and thus the resilience, between the adjacent members, as provided by the present invention. 29 I do not accept Dura-Post's contention that Kennedy discloses a guidepost in the form of a single layer of sheet spring steel. The witness made it clear that that conclusion from a single sentence would be inconsistent with numerous other parts of the document. In my view, as a matter of ordinary English, the sentence does not mean what Dura-Post suggests, whether or not Mr Dowling agreed. In my opinion, it is quite clear that what is disclosed is a flexible support with a plurality of thin sheets of material laminated together and, further, that the multiple laminations played a role in utility going beyond mere dimensions. 31 The real question here is that thrown up by issue 1 under construction: what is the proper construction of the phrase "a roadside post comprising an elongate body formed sheet spring steel" as used in the claims [integers 1, 2]. It is submitted on behalf of Dura-Post that this integer is not limited to a single sheet of spring steel (as compared with claim 1 of Patent No 3) and will include roadside posts made of multiple layers of sheet spring steel. 32 I do not agree with that construction. In my opinion a body "formed of sheet spring steel" indicates a homogeneous body rather than one with multiple layers or laminations. That view is confirmed by the contents of the complete specifications. For example, the summary of the invention says " The sheet spring steel has a thickness of 0.9 mm to 1.5 mm" (emphasis added). The description of the preferred embodiments includes (in dealing with figure 2(a)), "The sheet spring steel from which the body 30 is formed has a thickness of 1.2 mm. ... Other variations of the body will generally have ... sheet thickness of 0.9 to 1.5 mm." In dealing with figure 2(b) it is said "The transverse width and sheet thickness are the same as the embodiment of Fig 2a". Figures 8---10, showing the plurality of longitudinally extending ribs is inconsistent with their being any layers or laminations of the body itself. None of the drawings indicate any plurality of sheets or laminations. There is no reference to any such feature, expressly or impliedly, in any of the descriptions or drawings. 33 In short, in my opinion, no version of the Kennedy patent, if manufactured would contravene any claim of the patents in suit because it is not formed of sheet spring steel in the required sense. There is no anticipation. 34 Issue 11: Is the claimed roadside post novel in the light of US Patent No 4486117 (Blau)? This applies to claims 1 and 2 of Patents Nos 2 and 3 only. The Blau patent was mentioned and distinguished as prior art in Kennedy. The resilient standard assembly is disposed within the hollow cylindrical tube of the anchor support assembly and is secured by means of a pair of compression bolts. A rain boot prevents water from running down into the tube and a rain cap prevents the entry of water through the top of the flexible standard. The tempered spring steel strap which forms the resilient core of the device is reversely folded at its midpoint, to form a pair of upwardly extending resilient arms which are laterally outwardly offset by means of a twist in the spring steel at the midpoint reverse point. Straps are utilized as spacers to maintain the spring steel strap arms in properly spaced apart position with respect to one another so that the resilient tubular cover is snugly fitted about the arms. 35 Consideration of the figures, particularly figure 2, reveals how far apart Blau is from these patents. Figure 2 depicts the general arrangement with the tempered spring steel strap being number 13, the rigid cube number 14 and the resilient tubular cover which encloses the strap and tube being number 15. That assembly is disposed within the hollow cylindrical tube at 11 and secured by means of a pair of compression bolts 16. 36 In my opinion, apart from the use of tempered spring steel, there is no disclosure of any of the claims of any of the patents in suit in Blau. 37 Issue 12: Is the claimed roadside post novel in the light of the use (etc) of the applicant's Steel-Flex post commencing in late 2003? The answer to this question is in the negative, because of the decision made about the priority date. 38 Issue 12A: Is the claimed roadside post novel in the light of US Patent No 3312156 (Pellowski)? This applies to claims 1---3 of the Patents Nos 2 and 3 only. 39 In my opinion, the highway marking device which is disclosed by Pellowski is a device which is attached to, or on, or in the surface of the roadway whereas all claims of the patents in suit relate to a post in the ground adjacent to the roadway. The general purpose is for "signalling the location of traffic lanes, highway center lines, and the like". An object is "to provide ready flexibility upon impact from vehicles travelling along the roadway" (emphasis added). Another object includes an element "adapted for positioning along the center line and shoulders of a roadway to clearly and impressively outline or delineate traffic lines along the highway". Another object includes the provision of an elongated strip element embedded within a recess in a roadway --- for anchoring the strip elements at spaced locations along the roadway. 40 At first sight the reference to "shoulders of the roadway" may indicate to the contrary, particularly as the same description is used in the patents in suit for the location of the roadside post. So far as the former is concerned, figure 4 and the commentary upon it show the marking devices said to be on the shoulders as within the bounds of the roadway and claim 1 is quite explicit in claiming a means for securing and supporting "one end of the strip in the roadway" (emphasis added). 41 By contrast, the patents in suit use "shoulder" in the sense of one of the meanings in The Macquarie Dictionary (3 rd edn, The Macquarie Library Pty Ltd, 1998), namely, "either of two strips of land bordering a road, especially that part on which the vehicles can be parked in an emergency". The description "roadside" posts taken with the examples given is itself sufficient to indicate the posts are not designed for use on the roadway. 42 Applying the reverse infringement test, no disclosure in the Pellowski patent would infringe the claims of the patents in suit because there is no roadside post disclosed. 47 It is submitted for Dura-Post that there is a difference between the invention, on the one hand, and the innovative step, on the other, based upon the language of s 18(1A) and s 7(4) as the invention has to "involve" an innovative step. The requirement is that the invention, so far as claimed in the claims, involved an inventive step. It was not an error to examine the inventive step by reference to the specification and the purposes or object of the invention, a system capable of providing continuous on-line production. The primary judge accepted that the inventive idea as claimed by Gambro lay in part in the conception of the improvement in existing machines to implement on-line production of liquid bicarbonate concentrate solution. (Original emphasis. 48 It is then submitted that it is necessary to ascertain what the inventive step or advance in the art is, which must be involved in the invention as claimed. It is submitted that, when read in the light of common general knowledge, persons skilled in the art would find the advance in the art being the use of sheet spring steel in making roadside posts that possessed the feature of being elastically bendable through 90deg. from an unbent state about the transverse axis. This is represented in the combination of features 1---8 which represent the broadest claim of the patents as claim 1 of Patent No 2 and which is common to all of the claims and in each of the patents. It was submitted that that approach was endorsed by the High Court in Lockwood Security Products Pty Ltd [2004] HCA 58 ; 217 CLR 274 at [36] , [60]---[65]. 49 It was then submitted that all combinations containing additional integers beyond integers 1---8 served only to narrow the scope of monopoly claimed but, in the light of the common general knowledge, did not alter the nature of the advance against which the prior art in s 7(5) must be tested. Put another way, the "working of the invention", is that of the broadest form of the invention consistently with what was said by Dixon CJ in Griffin v Isaacs (1938) 12 ALJR 169 , (1938) 1B IPR 619 at 624. It was submitted that none of the narrowing integers differed from what was already known in a way that is not merely superficial or peripheral to the invention. 50 I do not agree that s 7(4) should be construed in that way. It is fundamentally inconsistent with approaching the issue claim by claim as required by the language of the sections and as well entrenched in relation to judgment of inventive merit ( Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 ; (2007) 235 ALR 202 , (2007) 81 ALJR 1070 , (2007) 72 IPR 447 , at [148]---[149]; Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8 ; (2001) 207 CLR 1 at [18] ---[21]). 51 The inventive step may not be coterminous with the invention as claimed in each claim in the sense that the inventive step is the difference between the invention as claimed and that which it is being compared with. On the other hand, the word "involve" does not necessarily mean that the two are not coterminous. After all, the root of involve is "involvere" --- to roll in or on, enwrap, involve ( The Macquarie Dictionary (3 rd edn, The Macquarie Library Pty Ltd, 1998). 52 There is no need to search for some particular advance in the art to be described as an innovative step which governs the consideration of each claim. The first step is to compare the invention as claimed in each claim with the prior art base and determine the difference or differences. The next step is to look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge as it existed in Australia before the priority date of the relevant claim and ask whether the invention as claimed only varies from the kinds of information set out in s 7(5) in ways that make no substantial contribution to the working of the invention. It may be that there is a feature of each claim which differs from the prior art base and that could be described as the main difference in each case but that need not be so. Section 7(4), in effect, deems a difference between the invention as claimed and the prior art base as an innovative step unless the conclusion which is set out can be reached. If there is no difference between the claimed invention and the prior art base then, of course, the claimed invention is not novel. 53 The phrase "no substantial contribution to the working of the invention" involves quite a different kind of judgment from that involved in determining whether there is an inventive step. Obviousness does not come into the issue. The idea behind it seems to be that a claim which avoids a finding of no novelty because of an integer which makes no substantial contribution to the working of the claimed invention should not receive protection but that, where the point of differentiation does contribute to the working of the invention, then it is entitled to protection, whether or not (even if), it is obvious. Indeed, the proper consideration of s 7(4) is liable to be impeded by traditional thinking about obviousness. 54 There is a question as to the proper construction of "substantial" in this context. In some situations it may mean "great" or "weighty"; elsewhere it may mean "more than insubstantial" or "of substance" (for example, there is debate in the fields of both trade practices and copyright). 55 The provenance of the language is summarised in Dura-Post's submissions. The test for this inventive level should be a modified form of the expanded novelty test set out in Griffin v Isaacs. The test would be worded something along the lines of: an innovation patent should not be granted if the innovation is not novel; if an innovation varies from a previously publicly available article, product or process, only in ways which make no substantial contribution to the effect of the product or working of the article or process, then it cannot be considered to be novel. 56 In its formal response to the ACIP report [Government response to the Recommendations of the Advisory Council on Industrial Property "review of the Petty Patent system"] the government nominally accepted this proposal and agreed "in principle" that the test be a modified form of the novelty test set out in Griffin v Isaacs (1938) 1B IPR 619 , although there were ultimately significant differences between the wording of s 7(4) and that proposed by ACIP. In Griffin, a novelty case, the High Court there found that whilst an item of prior art did not possess all of the integers of the claims of the patent in suit, still the invention was not novel [the so-called "doctrine" in Griffin v Isaacs was the subject of detailed consideration by Waddell J in Windsurfing International inc v Petit [1984] 2 NSWLR 545 at 564 and in the decisions of the Full Court of the Federal Court in RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 25 FCR 565 and Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 16 IPR 545 at 564]. That was an appeal to the High Court from a decision of the Commissioner of Patents in opposition proceedings refusing to accept the applicant's application for the grant of letters patent on the ground of lack of novelty. The application could not be refused on the ground of lack of subject matter or obviousness as the law then stood. The purported invention related to improvements in the means for supporting trousers and skirts by a method which included the use of a band made from elastic and non-elastic material fitted in conjunction with the waist band. The opponent had made public a trouser top which was claimed to be similar to the applicant's trouser top. There were differences between the opponent's trouser top and the trouser top claimed in the patent application. The High Court dismissed the appeal. Latham CJ referred to there not being established "any substantial difference between the two waist bands" ( Griffin 12 ALJR 169 , 1B IPR 619 at 621). The passage from Dixon J has been set out above. 58 That decision has been discussed at some length in later cases in this Court, starting with Dennison Manufacturing Co v Monarch Marking Systems Inc (1983) 66 ALR 265 per Fox J at 274 and Franki J at 284; then in RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565 per Lockhart J at 580---581 and 583, and Gummow J (with whom Jenkinson J agreed) at 589---591 and 601---602; and then in Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 per Lockhart J (indirectly) at 517 and Gummow J (indirectly) at 527---528 in dealing with novelty and workshop improvements. 59 These discussions indicate that a wider view of lack of novelty was taken in the High Court prior to the Patents Act 1952 (Cth) than could properly be taken thereafter, at least in relation to appeals from the Commissioner. Be that as it may, the feature of what Dixon J said was the disjunctive nature of the concepts --- one was "make no substantial contribution to the working of the thing"; the other was "involve no ingenuity or inventive step". The first alternative has been taken by Parliament virtually verbatim from the judgment. The focus is upon working of the invention (as claimed) not to the degree or kind of variation from the kinds of information set out in s 7(5). In other words, the variation from the kinds of information might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step. 60 There may also be difficulties in particular cases of applying the phrase "the working of the invention" but it is not necessary to discuss that in the abstract. 61 In my view the provenance of the phrase "make no substantial contribution to the working of the invention" indicates that "substantial" in this context means "real" or "of substance" as contrasted with distinctions without a real difference. That confirms my impression from construction of the words of the section itself. 62 Issue 14: What is the content of common general knowledge? In this case it is not necessary to endeavour to summarise the whole of relevant common general knowledge in Australia at the priority date. It is best to have regard to that question where necessary, in dealing with the particular issues. I can find, however, that use of sheet spring steel was not known for use in connection with roadside posts or analogous uses and that none of the cited patents was part of common general knowledge in Australia at the time. The description of the start of the art in the specifications of the patents in suit gives a good summary of the position. That included the use of PVC material. 63 Issue 15: Does the claimed roadside post involve an innovative step over the use (etc) of the SupaFlex plastic guide post? In my opinion, the answer to that question must be "yes". Each of the claims involves construction by sheet spring steel. The SupaFlex post is plastic. The materials are quite different, although, no doubt, they each have the same objective. As I have endeavoured to explain, the question is not whether flexible sheet steel is better than flexible PVC --- it is certainly different. It cannot be seriously argued that the material sheet spring steel does not make a substantial contribution to the working of the roadside post claimed in each claim. 64 Issue 16: Does the claimed roadside post involve an innovative step over the SupaFlex brochure? The answer to this question must again be "yes" for the reasons set out in relation to issue 15. 65 Issue 17: Does the claimed roadside post involve an innovative step over information made publicly available in relation to a prototype steel post developed by Mr Dennison and Mr P Turner in Tasmania? Has Dura-Post established what information was made publicly available by the doing of an act for this purpose? 66 The evidence given by Messrs Denison, P Turner and M Turner in their affidavits concerning the disclosures was not seriously challenged. In 1999 my residence in Flowery Gully, Tasmania was approximately ten minutes from the manufacturing premises of Dura-Post in Winkleigh, and from time to time I would visit Peter Turner and amongst other things I would discuss with Peter Turner Dura-Post's products and operations in relation to guide posts. To the best of my current recollection, in or about 1999, while discussing flexible roadside posts with Peter Turner at his premises in Winkleigh, I conceived the idea of constructing a post from flexible steel ("my concept"). At that time, I was aware that Peter Turner had devised posts with flexible joints. I thought that if the post itself was made from steel with sufficient flexibility, a much simpler device could be produced which had no need for joints or moving parts, and which could be installed easily by being driven into the ground. I visualised a post which had the same curved profile as a venetian blind, and which had the same ability as a venetian blind to flex back to its initial position when bent. When forming my concept in 1999 I was aware of the availability of flexible steel material, which I generally referred to as "spring steel", with a 'memory' that allowed it to spring back to an original shape when bent. I was not aware at that time of any other person producing or developing a post constructed from flexible steel of any kind. After discussing the concept with Peter Turner, I searched for a suitable sample of flexible steel. The only steel that I found with the degree of flexibility that I considered necessary was a material referred to as "crinoline strip", which I purchased from Steel Mark in Launceston, which was approximately 0.8 to 1.2mm thick. I have conducted a search for the order form or receipt for this material but it appears that I have disposed of these documents. For approximately a week, Peter Turner and I worked with the material to form a guide post. We used a brake press to form the steel into a curved shape, which gave the post rigidity. We constructed a full sized post which was modelled on and had a width and curved profile which were similar to a PVC post produced by SVP Industries Pty Ltd which was supplied to Dura-Post for sale by Dura Post. Exhibited hereto and marked "JSD1" are true copies of drawings of the post which I have prepared from my recollection of its shape and dimensions. To the extent that it was developed by Peter Turner and I, the post functioned relatively well. We clamped the post and bent it in various directions at differing angles, including right angles, and observed that the post sprung back to its original position. The post did not spring back as quickly as I would have liked, and had we pursued the project I would have liked to trial the use of other flexible steels of different tempering and thickness to perfect the post's performance.. However, I was content with the essential shape, dimensions and functioning of the post we developed. I perceived no urgency to proceed to the final stages of the development of the post, and as Peter Turner and I became involved with other matters we did not proceed any further with it. There were several Dura-Post employees who were working at Peter Turner's manufacturing premises while we were worked on the flexible steel post. There were also a number of people, who I understood to be customers and suppliers, who came and went from the premises while I was there. ... In 1984 I established a business known as Saxon, which employed approximately 50 people and specialised in the production of wood burning heaters. I was primarily involved in research and development for the various components of the heaters. In November 1996 I established a business which traded as 'Dura-Post' and manufactured and supplied roadside guide posts. I conducted its research, development and production activities. I developed a mild steel rigid roadside guide post and. a plastic guide post with a flexible joint. Dura-Post was also involved in the supply of flexible PVC posts which it purchased from SVP Industries Pty Ltd. Although I do not recall the exact dates, in or about 1999 or 2000 and well before I sold the Dura-Post business in 2002, I worked on the development of a roadside guide post constricted of a flexible steel. I engaged in this activity after the concept was suggested to me by Mr John Denison, a farmer and friend of mine living in the same area as I. Mr Denison told me that he had looked at the shape and behaviour of a venetian blind slat and thought that a roadside post could be constructed from a "spring" steel formed to a similar curved shape, which would have the ability to return to its original form when bent. At that time, there was no roadside post on the market which was formed from a "spring steel", and I was not aware of any competitor in the industry that was researching or using that material. After my discussion with Mr Denison, Mr Denison and I sourced a thin flexible steel from a specialty steel supplier and began experimenting with the material to make a roadside guide post. I cannot recall which supplier we used, but it was likely to have been a business located in Tasmania. I cut the steel with a guillotine and shaped it with a brake press to create a prototype post which emulated the curved or 'cap' shape of a venetian blind slat. I modelled the post on the dimensions of existing posts of the time and experimented with dimensions for the post to achieve what I considered to be a suitable combination of rigidity and flexibility. The project reached a stage where the essential shape and structure of the body of the post had been formed. The development of the post was very simple and I do not remember preparing any drawings or specifications in relation to it. I did not complete the post by adding further ... design features, such as a depth marker, barb, removal hole, bracket slot or powder coating. ... I remember testing the flexibility of the post by bending it in the workshop, and possibly also by driving it into the ground to test its performance in use. From what I can recall, the post sprang back to its original position when bent. If I had proceeded with the project, it is likely that I would have experimented with other samples of steel to optimise the performance of the post. I did not consider my development to be confidential or secret. I worked on the prototype over a period of time at Dura-Post's manufacturing warehouse constructed on my farm. in Winkleigh, Tasmania, ... I received numerous visitors at the warehouse ... I considered the development of a flexible steel post to be a side project which. I worked on from time to time. There was no commercial need or urgency for me to proceed further with the prototype given that Dura-Post was experiencing success in the sale of its mild steel and plastic posts, having approximately 250 customers throughout Australia at one point. I also had concerns regarding the safety risk that would be created by a spring steel post, given the potential for the thin steel to injure motorcyclists or other persons if it were to be hit from the side. I do not know where the flexible steel prototype is now. I lost interest in the project and, given that there were many items in my workshop, the post was eventually misplaced. 69 Mr Michael Turner is the Managing Director of a group of companies which includes SVP Industries Pty Ltd, which is involved in the business of injection moulding and extrusion of plastic products and profiles, including roadside guide posts. Those products include the SupaFlex guide post. It manufactures other posts including flexible posts manufactured to customers' specifications. I remember that the visit occurred two to three years before Dura-Post relocated its operations to St Leonards. I was visiting Mr Turner's premises to discuss the injection moulding of a proposed cap to fit the Dura-Post steel post (being the post shown in the annexure marked "MRT10") and whilst there, discussion arose regarding the design of a cap to potentially fit a new form of roadside guide post made of flexible steel that Mr Turner told me he was in the process of developing. Mr Turner showed to me and I handled the flexible steel material which Mr Turner was working with. During that meeting, Mr Turner said to me words to the effect: "I'm designing a post made of spring steel. Can you make up an injection moulded plastic cap to fit it to overcome the problem of sharp edges? " I recall, although I no longer have any documents concerning it, that SVP's engineering department subsequently provided an indicative quote for the cap, but so far as I recall this injection moulding project did not proceed and until recently as referred to in paragraphs 67 and 68 below, I did not see a flexible steel roadside post being used in practice. 70 If the article described by the witnesses had been exhibited at a public exhibition, I would be satisfied that there was no significant difference between that and integers 1 to 8 with the exception that it would not properly be described as a roadside post as development was not complete. However, given the generality of claim 1 in Patents Nos 2 and 3, making it into a roadside post would be a simple task. It is arguable that it also had a substantially arcuate transverse cross-section. I do not accept that there is any satisfactory evidence that there was a marker hole. The substantially arcuate transverse cross-section clearly makes a substantial contribution to the working of the invention in the claims. I accept the view of Mr Dowling that the marker hole makes a real contribution which is of substance to the working of the invention, as the embedding of the post in the ground is a significant aspect of the operation of a roadside post and the marker hole undoubtedly assists in that regard. 71 The second aspect of this matter is --- whether, and, if so, what, information was made publicly available by the doing of an act. The "act" pleaded was "the development and design of a post formed of spring steel by Mr Peter Turner ... which act was made publicly available when disclosed at least to Mr Michael Turner in approximately 1999". The somewhat awkward statutory phrase is "information made publicly available ... through doing [an] act". Construed liberally, this could encompass giving the prototype to Mr Michael Turner. 72 This topic was discussed by the Full Court recently in Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC 139 , the principle being discussed at [121]---[125]. Reference was made to the earlier discussion of the topic by the Full Court in Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90 , (2005) 222 ALR 155 , (2005) 65 IPR 86 and Merck & Co Inc v Arrow Pharmaceuticals Ltd [2006] FCAFC 91 ; (2006) 154 FCR 31 , particularly at [98]---[103]. 73 The present case is not like Jupiters [2005] FCAFC 90 , 222 ALR 155 , 65 IPR 86 , where the system was operating in what amounted to a public place and could be observed. In my view, the evidence does not enable any such finding to be made here. Even if it was left around the factory, nobody was invited to look at it and nobody would have had any occasion to take any notice of it. In any event, the matter was not pleaded in that way. Rather, the case turns on the principle that, if a product is made available to a member of the public without restraint at law or in equity as to the use of that product that is regarded as public disclosure. That principle has been applied for a very long time when various formulations of the statutory test have applied. In the present context, that would be the equivalent of making the information publicly available by an act. It is well-recognised that a duty of confidence in the recipient would negate the public nature of the act. 74 Insta Image [2008] FCAFC 139 illustrates both branches. It was held that there was public disclosure at motocross and jet-ski races open to the public where the article was present. On the other hand, the inventor went to a metal fabricator to have parts welded and that fabricator and his employee were involved and observed the articles. The trial judge had held that the circumstances strongly suggested that the information contained was confidential and could not be imparted by the fabricator to others or used by himself. Mr Soward was the "owner" of Tom Soward Steel Fabrication Pty Ltd which was to undertake the manufacture of the brackets. Mr Forster was an employee. The primary Judge concluded that the circumstances of the collaboration were such that it could not be inferred that they were at liberty to make use of the Original. The circumstances, she said, strongly suggested that the information available from an inspection of the Original was confidential and could not be imparted to others or utilised by Mr Soward or Mr Forster (at [72]). The appellants maintain that they did not rely on Mr Soward and Mr Forster seeing the structure in the course of design and manufacture as an instance of public use. They rely upon evidence not adverted to by the primary Judge concerning the showing of the Original to Mr Soward after his company had fabricated the brackets and Mr McKinnon had taken them away to assemble his canopy. This, the appellants submit, constituted an open disclosure, unaffected by any confidentiality, and a demonstration to Mr Soward of the way in which the canopy worked. We are not satisfied that the evidence establishes that the confidential relationship between Mr McKinnon and Mr Soward, as found by her Honour, did not still exist when Mr McKinnon showed Mr Soward the finished product. We are not satisfied that her Honour was in error in finding that the showing of the canopy to Mr Soward did not constitute a prior use for novelty purposes within the meaning of the Act, whether the demonstration was of the finished product before or after parts were manufactured by Mr Soward. Her Honour specifically concluded that the circumstances of the relationship with Mr McKinnon "suggest strongly that the information ... was confidential and could not be imparted to others" (at [72]). No error is shown in this conclusion or in her Honour's resolution of the issue of disclosure to Mr Soward and Mr Forster. 75 To like effect is the judgment of Kiefel J in Richsell Pty Ltd v Khoury [1994] FCA 1538 ; (1994) 30 IPR 129 at 135---136 dealing with designs in a similar context. See also Lloyd-Jacob J in Re Gallay Ltd's Application [1959] RPC 141 , particularly at 144---145, in circumstances more complex than the present, but similar in substance. 76 In my opinion, Mr Michael Turner was not given or shown the prototype in order that he could use it as he sought fit without restraint. In my opinion, he was under a duty not to use it or disclose it without the consent of Mr Peter Turner. It is also clear enough that there was a duty of confidence between Mr Turner and Mr Denison. Indeed, that case was not made. Thus, in my view, the information represented by the prototype was not made publicly available through doing an act as alleged. 77 Issue 18: Does the claimed roadside post involve an innovative step over AU 526808 and 539998 (Schmanski)? That patent relates to "an impact resistant elongate web structure consisting of fibre reinforced synthetic material". That is a different material from sheet spring steel and, for the reasons referred to in relation to the SupaFlex post, there is an innovative step. 78 Issue 19: Does the claimed roadside post involve an innovative step over US No 6375385 (Kennedy)? This patent specification has been discussed in relation to lack of novelty. The mechanical lamination of a number of flexible members together is different from a flexible support constructed or formed of a sheet of spring steel. As I have indicated earlier, the Kennedy specification draws a clear distinction between the multi-laminated post, on the one hand, and a single sheet, on the other, in dealing with the prior art --- a good example was what was said about the Blau patent. The different material contributes substantially to the manner in which that invention as claimed performs. As I have said earlier, it is not a question as to whether these claims are better than the disclosure by Kennedy, or whether it was obvious to move from Kennedy to this invention. Therefore, there is an innovative step over Kennedy. 79 Issue 20: Does the claimed roadside post involve an innovative step over US No 4486117 (Blau)? This specification has also been dealt with in the context of lack of novelty. The structure of the post, the shape of the tempered spring steel trap, the way it is attached and enclosed bears no relationship with the structure of any of the posts claimed in the patents in suit. The geometry is quite different. It follows that there is an innovative step over Blau. 80 Issue 20A: Does the claimed roadside post involve an innovative step over US No 3312156 (Pellowski)? Again, this specification has been considered in relation to lack of novelty. In my opinion, it is the only specification which requires close examination for the purposes of deciding whether there is an innovative step. 81 Once the issue of roadside post is set aside, I can see no real difference between claim 1 of Patent No 2 (integers 1 to 8) and that which was disclosed by Pellowski. I do not accept that Pellowski was limited in its dimensions, particularly its height, in the way submitted for Delnorth. Scaling off from non-scaled drawings and deductions from statements of particular use would not be sufficient for that purpose. Whilst 90deg. is not specifically mentioned in Pellowski, the description of resilience and flexibility and the description of the use to which the material would be put are consistent with the material having that capacity. Indeed, it seems to me that what is described would also encompass claim 2 of Patent No 2 where the body is elastically bendable to either side of the longitudinal axis. Mr Dowling does not suggest to the contrary. Neither does he suggest that the body does not have a substantially arcuate transverse cross-section. 82 I agree with the contentions of Delnorth, conveniently put through Mr Dowling, that the use of a marker hole, the use of a barb, the use of a taper, longitudinally extended in ribs and the particular dimensions of claim 3 of each of Patents Nos 1, 2 and 3 are not found in Pellowski and that each of them makes a substantial contribution to the working of the roadside posts. 83 I would not regard a surface coating, applied to the body, front and rear faces, as making a substantial contribution to the working of the invention as claimed in claim 1 in Patent No 3. I do not suggest that it has no functional purpose, rather that the contribution is not significant enough. This issue relates to the words "faces transversely extending generally parallel to said transverse axis" [integer 7]. All of the transverse (cross) faces are parallel with --- ie, they follow the form of --- the transverse axis. It does not require the surface to be flat, although the surface would be consistent. In any event, the word "generally" would cater for any departure from the surface being flat if that were required. The issue concerns secondly the words "substantially arcuate transverse cross-section" [integer 9]. Again, in my view, the description is clear enough --- it means curved around the longitudinal axis. I do not see the two concepts as inconsistent. This contention relates to the alleged necessity of a recess which is not an integer of the relevant claims. It is contended for Dura-Post that there is a real and reasonably clear disclosure in the specification of a roadside post that will avoid the adverse consequences of creasing in the event of a wheel over. It is said that this will occur only where the post is used with a recess, but the roadside post claims contain no limitation that reflects the nature of the invention as disclosed and described in the body of the specification. It is submitted that the invention disclosed in the body of the specification is truly a use of a method of using a spring steel post in conjunction with a recess but that the claims are not so limited and are, therefore, not fairly based upon the specification. Reference was made to Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224 , (2005) 225 ALR 416 , (2005) 68 IPR 1 at [268] and following; Atlantis Corp Pty Ltd v Schindler (1997) 39 IPR 29 , discussed by the High Court in Lockwood Security Products Pty Ltd [2004] HCA 58 ; 217 CLR 274 at [87] . 86 I do not agree that the authorities cited lead to the conclusion sought to be drawn. The specification does not suggest that the roadside posts described could only be used if there was a recess. Short of that there is no reason why there should not be separate claims for the articles. If there is a problem it is not lack of fair basis. This, again, turns upon the alleged necessity of a recess. The manner in which this point is pleaded is that the invention is not useful insofar as it claims a flexible post bendable through 90deg. because, in the absence of a recess in the ground immediately adjacent to the body of the roadside guidepost, a post of claim 1 will crease and thereby fail to meet the promise of the specification. This is linked back to the statement in the specification concerning direct wheel overs. The object of the invention was stated to be "to substantially overcome or at least ameliorate one or more of the disadvantages of the prior art". A creasing after a complete wheel over at a tight right angle was one of those disadvantages. A number of other disadvantages of the prior art are set out in the specification. For example, so far as steel posts are concerned, up to that time they were generally not resilient, plastically deforming upon impact, and had to be manually restraightened. Timber posts would fracture on impact. Plastic or plastic/rubber composite posts deteriorated due to UV exposure and repeated impacts over time. There were problems with hinging mechanisms. It cannot be concluded that the invention did not substantially overcome, or at least ameliorate, one or more of those disadvantages. There could be no serious claim that the roadside posts when claimed would not be well adapted as roadside posts with advantages over most, if not all, of the existing posts commonly available. How they might be fixed to the ground is a matter for the installer. In point of fact, both the specification and the claims point to a way of doing so using a recess which would lead to maximum utility. That is no reason to limit the claims for the articles themselves. Claims 1 and 2 of Patent No 3 are invalid. The dependent claims need consideration. Infringement is established. The proceeding will stand over to enable orders to be settled including costs. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | innovation patents patents in suit for "steel flex" roadside post comprised of flexible sheet spring steel application for declaration of infringement of patents in suit by respondent through manufacture and sale of "flexi-steel" roadside post cross-claim for revocation of patents in suit as invalid whether flexi-steel post elastically bendable through 90 degrees about a transverse axis transverse to its longitudinal axis so as to infringe patents in suit whether patents in suit entitled to priority date of provisional specification whether steel flex post a manner of manufacture so as to be a patentable invention whether steel flex post novel in light of prior art whether steel flex post varies from prior art in ways that make a substantial contribution to the working of the invention so as to involve an innovative step requirements for innovative step whether claims of patents in suit clear and succinct whether certain claims of patents in suit fairly based on matters set out in specifications in suit whether claims have utility patents |
The case, regrettably, has had an unduly lengthy and troubled history. At the time of his application to the first respondent for a protection visa, the applicant was 40 years of age. He is from the Hainan Province of China. He claimed that as a middle-aged man he began to suffer a lot because of health problems. His friends, he said, introduced him to Falun Gong, the practice of which he claimed improved his health. This caused him to continue with its practice. He said that after the Chinese government declared Falun Gong as an anti-government organisation, he and his friends attended several activities for Falun Gong groups asking for support and fair treatment for Falun Gong practitioners. In response, according to the appellant, the government placed several members in detention. The appellant claimed that, after "9/11", the Chinese government concluded that Falun Gong was a kind of terrorist organisation. The appellant claimed that he felt that he was in danger and that he had not been able to find employment. Because of this, he said, he fled to Australia. He claimed that if he went back to China, the Government would imprison him because of his association with Falun Gong. 4 A handwritten note, dated 4 November 2002, allegedly signed by the appellant and faxed on that day to the offices of the Tribunal advised it that he "hope(d)" to change his address to (address deleted) Cabramatta West 2166. The Tribunal, by letter also dated 4 November 2002, mailed to the appellant at that address, acknowledged this as a change of address, although this was returned to the Tribunal marked "return to send" on 6 December 2002. Approximately six months later in a letter dated 30 May 2003, the Tribunal wrote to the appellant at this address and invited the appellant to attend a hearing on 9 July 2003 to give oral evidence and present arguments in support of his claims. It notified the appellant that if he did not attend the hearing and a postponement was not granted, then the Tribunal might make a decision on his case without further notice ('the invitation letter'). It was sent in purported discharge of the Tribunal's obligations under ss 425 and 425A of the Act. The appellant did not appear at the hearing on 9 July 2003. The Tribunal proceeded to make a decision pursuant to s 426A of the Migration Act 1958 (Cth) ("the Act ") without taking any further action to enable the appellant to appear. This action was premised on the acceptance by the Tribunal that the conditions set out under s 425A(1) had been met, namely that the applicant (appellant) had been invited under s 425 of the Act to appear before the Tribunal and did not appear before the Tribunal on the day, time and place at which the applicant (appellant) was scheduled to appear. It is the first of these findings which is at the heart of this appeal. Further the Applicant has provided so little information in support of his claims that I am not satisfied, on the evidence before me, that the Applicant has a well-founded fear of persecution within the meaning of the Convention'. The appellant failed to appear at a directions hearing on 13 November 2003 which was stood over to 27 February 2004. However, as the appellant failed to appear on the subsequent date, the application was dismissed by a Registrar of that court. The application made in 2003 was reinstated by consent on 7 December 2006 by orders of Emmett FM. 8 On 31 January 2006, the appellant filed an application dated 27 January 2006 in the Federal Magistrates Court under r 44.05 of the Federal Magistrate Court Rules and sought an extension of time under s 477 of the Act . The appellant was unrepresented at the hearing. 9 On 7 December 2006, an order was made by consent, reinstating the appellant's application filed on 25 August 2003 and granting leave to the appellant to rely upon the amended application filed by him on 31 January 2006. Directions were also made on that occasion for the filing and serving of any affidavit containing any additional evidence by the applicant by 19 January 2007 and directed that the appellant file and serve written submissions 14 days before the hearing. No document has been filed by or on behalf of the appellant since that date. Apparently it is not a registered letter. RRT's grounds for rejection of visa are insufficient as RRT has not considered my evidences that I submitted to the Minister of Immigration for ministerial intervention on 22 April 2004 as per copies submitted herewith. Now Mr (name deleted), he himself has already got his protection visa and becomes an Australian Permanent Resident leaving me and all other Falun Gong practitioners jeopardised and facing persecution if I am forced to return to China. The risks are genuine because these spies and secret agents permeate every level in the Chinese community. Only after a short while he was granted a Protection Visa, he travelled to U.S.A. to give evidence in the U.S. Senate which further exposed their activities to the world. With 5000 years of history in china, it has long taught the Chinese Government that they could be overthrown by peasants, like Falun Gong practitioners, without guns. The application was dismissed for reasons stated that same day. The Federal Magistrate found that the appellant had received the invitation letter: Federal Magistrate's reasons at [19]-[20]. In so finding, her Honour noted that the first respondent had established that the invitation letter had been sent by the Tribunal to "the last address for service provided to the Tribunal by the applicant". Her Honour found that the invitation letter had been sent in accordance with the provision of s 441A of the Act and that therefore the appellant was deemed to have received it seven working days from the date of despatch: s 441C(4) of the Act . [20]-[21] There was no issue before her Honour as to whether the letter concerning a new address for the appellant dated 4 November 2002 was actually from him, whether it was actually his address, or whether it was, in effect, a notice of change of address. The Federal Magistrate also found that the Tribunal had properly exercised its discretion under s 426A of the Act to proceed in the absence of the appellant. The appellant also asserted that the invitation letter was not a registered letter. Her Honour correctly pointed out that the Act does not require that such a letter be sent by registered post [29]. The first ground was accordingly not made out. However, as the material post-dated the Tribunal's decision dated 10 July 2003, the information was not before the Tribunal for its consideration. Thus, as her Honour found, this gave rise to no jurisdictional error on the part of the Tribunal. 15 Her Honour, in dismissing the application, concluded that the Tribunal had conducted its review and made its decision in accordance with the legislative regime and that its decision was not affected by jurisdictional error. Particulars and Grounds: As a matter of fact, the Tribunal has apparently failed to give me the notice of invitation to appear. Based on the green book page 63, 65, 67, the notices regarding to RRT hearing were all sent to (deleted), Cabramatta, NSW, 2166. The reason RRT sent mails to above address is that RRT had received a post address changed notice signed by someone else, but not me on 04 Nov 2002. Please compare with my previous signature in page 58 in my RRT application form and the signature in page 61, it would be very easy to tell the signature in page 61 was not my previous signature. Without checking carefully and properly, RRT then sent all correspondence to wrong address. At same time, my migration agent appointed was also disappeared. In this case, I have never been notified to attend the hearing. As it is RRT and my migration agent to make these errors, so I believe RRT has not complied with Migration Act Section 425A(2). As a result, RRT has not followed the legal procedure when they consider my application. 18 As I have mentioned, the Federal Magistrate found that the letter of invitation had been sent to the appellant in accordance with the provisions of ss 425A , 441A (4) and 441C (4) of the Act . 23 If it was not dispatched to one or more of those addresses, then the deemed receipt of the invitation letter by the appellant provided for under s 441C(4) of the Act could not be established. Consequently, the condition under s 426A(1)(a) , to the exercise of power by the Tribunal could not be fulfilled and the decision, made in the absence of the appellant, would be infected by jurisdictional error. There would not have been compliance with ss 425 and 425A of the Act . There would have been a denial of natural justice as that has effect by virtue of s 422B and Div 4 of Part 7 of the Act : see generally SZFDE v Minister for Immigration & Citizenship [2007] HCA 35 at [31] - [32] and [48]. This is the address on the handwritten letter dated 4 November 2002 to which I earlier referred. It is apparently from the appellant, but not actually from him, according to the appellant. It purported to notify this address to the Tribunal as that to which he hoped to change. 25 The appellant contends, for the first time, that this letter was not signed or sent by him or upon his instructions. This is not to say that he previously had admitted the letter to be his. The appellant said that he was not aware of it at the time of the hearing before the Federal Magistrate. 26 The first respondent submits that this ground was not raised before the Federal Magistrate, nor were the facts now asserted mentioned in the Court below, and that accordingly, the appellant requires leave from this Court before he is permitted to raise this new ground: see H v Minister for Immigration and Multicultural Affairs (2001) 63 ALD 43; VAAC v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 74 ; (2003) 129 FCR 168. 27 However this ground, in substance, is not a new one. In his application for review to the Federal Magistrates Court dated 27 January 2006, the appellant included in the first ground that he had not received any letter (which would include the invitation letter) to attend any hearing of the Tribunal. 28 Before me, he repeats that ground. True, it is, that the allegations of fact in support of that ground upon which he now relies were not before the Federal Magistrate. As I said, he never previously stated that the handwritten letter to the Tribunal dated 4 November 2002 and apparently signed by him, was not his document. This letter was before the Federal Magistrate and, I infer, that the appellant therefore had access to it: Federal Magistrate's Reasons [12]. Its authenticity was not, before, questioned. Now the appellant invites the Court to conduct its own forensic exercise by comparing the signature on this letter with, for example, the signature, said by the appellant to be his signature contained in his application for review to the Tribunal. Further, the fact that his migration agent had "disappeared", was not raised before the Court below. Properly characterised, what the appellant is seeking to do is to move the Court to consider fresh evidence on the appeal. 29 When the matter first came before me on 1 May 2007, I adjourned it and made directions for the filing of affidavits in relation to the appellant's new factual contentions. I intimated to the parties at the same time that a jurisdictional issue which might in the circumstances arise, was whether there had been a breach of s 425(1) having regard to the facts which may emerge concerning the letter dated 4 November 2002 and the provisions of s 441A(4)(c)(i) or (ii) of the Act . 30 At the resumed hearing on 16 August 2007, conducted by video-link between Perth and Sydney, counsel for the first respondent advised that the Minister did not oppose the new evidence proposed to be introduced by the appellant if cross-examination of him were allowed. I acceded to that course and the appellant was indeed cross-examined at some length. I will turn to that shortly. 31 I was otherwise satisfied that it was appropriate to grant leave to adduce fresh evidence on the appeal. The appellant filed an affidavit sworn by him on 8 May 2007 both to explain why the evidence that he now sought to rely upon was not adduced before the Federal Magistrate, as well as to state the new evidence: Federal Court of Australia Act 1976 (Cth) s 27 ; Federal Court Rules Order 52 r 36(4) and (5); Fodare Pty Ltd v Official Trustee in Bankruptcy [2000] FCA 1721. 32 I accept the appellant's evidence that he does not speak, read or write English. It was not put to him that this was not the case. He said that he did not know of the content of the 4 November 2002 letter on the Tribunal's file at the time of the hearing of his appeal before the Federal Magistrate, or even when he was in detention at Villawood Immigration Detention Centre in New South Wales in 2005. It was only, he deposed, after the dismissal of his application for review by the Federal Magistrate, that a friend of his translated some particular pages, which I infer, included the letter of 4 November 2002, that he became aware of the reason as to why he had never received any invitation to attend the Tribunal hearing. He said that the translator, at the hearing before the Federal Magistrate, had not translated all the contents of the papers before the Court, and again, I infer, had not translated the contents of this letter. It was not suggested to him that it had been. Accordingly, through ignorance of the content of the letter, he did not raise these matters before the Federal Magistrate. The appellant alleges that, consequently, although he was aware that he had not received any responses from the Tribunal after he had lodged his application, he had not previously discovered the reason for this. 33 It is reasonably clear that if this issue had been raised before the Federal Magistrate, and the appellant's evidence in respect to it had been accepted in substance, that the appeal would have been successful: Council of the City of Greater Wollongong v Cowan [1955] HCA 16 ; (1955) 93 CLR 435; Florance v Andrew (1985) 58 ALR 377 at 381 per Lockhart J. The appellant's application for review of the decision of the first respondent was lodged on 24 July 2002 through a migration agent. He did not attend the Tribunal hearing because he did not receive the invitation letter, due to it being mailed to the wrong address. 35 He deposed by reference to papers contained in the "green book" that all notices concerning the Tribunal hearing were sent to the Cabramatta address. The reference to the "green book" is, I infer, the book of papers with a green front cover used for the purposes of the review before the Federal Magistrate . Please compare with my previous signature in page 58 in my RRT application form and the signature in page 61, it would be very easy to tell the signature in page 61 was not my previous signature. Without checking carefully and properly, RRT then sent all correspondence to wrong address. At same time, my migration agent appointed was also disappeared. In this case, I have never been notified to attend the hearing. As it is RRT and my migration agent to make these errors, so I believe RRT has not complied with Migration Act Section 425 A (2). As a result, RRT has not followed the legal procedure when they consider my application. She deposes to the following effect, having considered the contents of the Tribunal's file (No 2/43733) ('the RRT File'). Within the RRT File was a letter dated 4 November 2002, which was sent by the Tribunal to the appellant and concerns the appellant's change of address. This letter was marked as sent by registered post number "RP14956540" to "(deleted) Cabramatta, NSW 2166". It was however returned. The RRT File further includes a copy of an envelope marked "Return to send", registered post number "RP14956540". The second respondent received this letter on 6 December 2002. 38 The RRT File also includes a letter dated 30 May 2003 addressed to the appellant at the Cabramatta address which invited the appellant to attend a hearing before the Tribunal on Wednesday 9 July 2003 (this is a copy of the invitation letter). The second page of this letter is marked with the registered post number "RP16999477". The Tribunal's registered post records shows that a letter was sent to the appellant on 30 May 2003, with the registered post number "RP16999477". 39 The RRT File also includes a record of telephone notes which were recorded by the Tribunal in respect of file N02/43733. The entry in the telephone notes dated 16 June 2003 refer to a telephone conversation between the appellant and one R. Wong, presumably a person employed within the Tribunal's offices. Confirmed that his contacts details on CMS are still correct. Applicant said he received the letter recently sent to him by RRT. I checked the log and noticed that the letter should probably be a hearing invitation. Told him that if the letter was a hearing invitation, he should complete the RTHI and return it to RRT as soon as possible before the due date. He was not able to make up his mind. Reminded him that he should observe the due date for returning the RTHI to RRT. He said he would ask for the help of a friend who knows English and would then reply RRT. He was told that if time was running out, he should consider sending the RTHI to RRT by fax. A letter dated 15 July 2003, marked "RP16947057", advised the appellant that the Tribunal would hand down its decision in respect of his application for review on 7 August 2003. The Tribunal's registered post records disclose that a letter with registered post number RP16947057 was sent to the appellant on 15 July 2003. A letter dated 7 August 2003 and marked "RP16949722" advised the appellant of the Tribunal's decision. The Tribunal's registered post records disclose that a letter with registered post number RP16949722 was sent to the appellant on 8 August 2003. No records were found which indicated that any of the letters sent to the appellant dated 30 May 2003, 15 July 2003 and 7 August 2003 were returned to the second respondent unclaimed. 41 The appellant filed an application on 25 August 2003 for judicial review in respect of the Tribunal's decision, which was handed down in the Federal Magistrates Court on 7 August 2003. 42 On 28 April 2004, the first respondent received a letter written on behalf of the appellant dated 22 April 2004, which requested that the first respondent exercise her discretion under s 417 of the Act , to grant the appellant a protection visa. A decision to refuse me a protection visa was made on 21 June 2002. On 24 July 2002 I sought review of that decision with Refugee Review Tribunal. On 7th August 2003, I received news that my decision was refused . 44 The appellant in his affidavit says that the signature in Chinese characters at the foot of this document is not his. He invited the Court to make a comparison between that signature and other signatures of his which were before me, in order to conclude that indeed the signature was not his. That is not a matter upon which I could reach a conclusion unassisted by expert evidence. However, a more fundamental question arises. It is whether this letter, even if it were from the appellant, or had been prepared and faxed by an agent, properly construed, constituted a notice as to his address for service or his residential address, such as to constitute the "last address for service provided to the Tribunal by the recipient in connection with the review", or the "last residential address" provided to the Tribunal by the recipient in connection with the review (s 441A(4)(c)(i) and (ii)). 45 In my opinion it is not. It indicates by the use of the expression "I hope to change my address to ..." no more than the anticipated address of the appellant at some unstated time in the future. Counsel for the Minister submitted that I should read those words against the background of the content of a letter dated 25 July 2002 sent to the appellant at the Granville address, which had been given in his written application for review to the Tribunal dated 23 June 2002, as both his home and mailing address. The letter, written in English, invites the appellant to tell the Tribunal, immediately, if he changes his home address or mailing address amongst other things. I do not accept that submission. Firstly, I have found that the appellant is incapable of reading English. In any event, even if he did have that letter translated such that he understood it, this does not affect the construction to be placed upon the letter of 4 November 2002. 46 In supplementary written submissions, counsel for the first respondent submitted that if the Court was satisfied that the 4 November 2002 fax was sent by a migration agent on behalf of the appellant, it should then conclude that as a matter of probability, that agent's first language was Mandarin and that English was his or her second language. The Court, in those circumstances, it was submitted, should be reluctant to rely upon a precise English dictionary definition of "hope". I am in no position to infer any of the matters upon which this submission is premised. It would be quite unfair to do so. 47 Compliance by the Tribunal with the requirements of Part 7 of the Act is essential. This includes the requirement under ss 425 and 425A of the Act to invite an applicant to appear before it by giving the applicant notice of the day on which and the time and place at which the applicant is scheduled to appear: SZFDE v Minister for Immigration and Citizenship at [31]-[32]. This in turn invokes s 441A of the Act and compliance by the Tribunal with one of the methods there specified, by which such notice must be given to the applicant. The Tribunal, in this case, elected to give notice to the appellant under the provisions of s 441A(4). Relevantly, this necessarily involved dispatch of the notice to the last address for service or the last residential address provided to the Tribunal by the appellant in connection with the review. If notice was not sent to either address then, as I have earlier outlined, the deeming of service provided for in a case such as this under s 441C(4) cannot be established. The letter of 4 November 2002 did not constitute notice to the Tribunal of the address for service or the residential address of the appellant, even if it were from him. The home and mailing address provided by the appellant in his application for review before the Tribunal was the Granville address. 48 Furthermore, the appellant, in cross-examination, denied not only that the letter was from him or authorised by him, but also denied that he had ever lived at the address provided in the letter being the Cabramatta address, or even knew of its existence before the contents of the letter were translated for him. There is no evidence, direct or indirect, to contradict this denial. He said that as at 4 November 2002, he was living at an address in Kempsey. Before me, the appellant was reluctant to disclose the actual address as he was concerned that an illegal person who lived there may get into trouble. Counsel for the first respondent did not press the matter. In written submissions, the first respondent accepted that he was living in Kempsey at that time. The first respondent submitted that from this, I should infer that the appellant did not want anyone to know about the Kempsey address and that is why he provided the Cabramatta address in the 4 November 2002 fax. I am not prepared to draw that inference. It was never suggested in cross-examination of the appellant that such was the case and he emphatically denied any knowledge of that address. I accept his evidence that he was living at an address at Kempsey at the relevant time. For these and other reasons to which I will return later, I am not prepared to find that the letter of 4 November 2002 was from the appellant or authorised by him. 49 The matter does not end there. Section 441A(4)(c)(i) does not identify any particular method by which an applicant may provide an address for service to the Tribunal. It would be sufficient, in my opinion, if this were done orally by an applicant. The first respondent contends that there is evidence that the appellant, during a telephone conversation with an officer in the employ of the first respondent, acknowledged that he lived at the address set out in the letter and that he had also received the letter of invitation. This was denied by the appellant during cross-examination. The evidence tendered in support of this is contained in a document which purports to contain a chronological account of matters pertaining to the appellant's application to the Tribunal including, at least in a summary way, the content of conversations said to have occurred with the appellant. It was an annexure to the affidavit of Ms Minzlaff and I set it out below. 50 The entirety of this document was not before the Federal Magistrate on the review, other than the entry for 16 June 2003. This entry was set out in full at [4] of the affidavit of Felicity Anne Kerr sworn 26 June 2006, which was in evidence before the Federal Magistrate. The Federal Magistrate did not refer to the content of the entry for 16 June 2003 in her reasons. I expect that this was because her Honour, in her reasons [12] concluded that the letter of 4 November 2002 constituted notice to the Tribunal of a change of address by the applicant (appellant). No reasons for so finding were disclosed and, in particular, no consideration was given to the use of the word "hope", to which I have referred. 51 During cross-examination, the appellant stated that he had had the assistance of a migration agent in the preparation and filing of his application for review with the Tribunal. It seems that this was likely the case. To that extent, it is consistent with the entry for 24 May 2002. The application for review to the Tribunal, admittedly signed by the appellant, gave his home and mailing address as Granville address. In it, Section C allows for details of an Authorised Recipient to be provided. This includes the name, organisation, address and telephone numbers of such a person and is required to be signed by the Authorised Recipient. 52 An address, as best as I can tell, "PO Box K63 Haymarket NSW 1240", is contained within Section C in handwriting but then scored through with a large cross. No signature appears. It follows that, for the purposes of the review by the Tribunal, the appellant had no 'Authorised Recipient' and documents from the Tribunal ought to have been despatched to the Granville address provided by the appellant. I note that the address is similar to, and perhaps intended to be the same as, the address of the appellant's "authorised person", one Ray Wen of PO Box K536 Haymarket NSW 2000, contained in a document entitled "Authorisation of person to act and receive communication" forming part of the first respondent's file maintained in relation to the appellant's application for a protection visa. Mr Wen, it appears, was a migration agent to whom the appellant had been introduced by a friend. The appellant knew him only by his Chinese name, not by this anglicised version of his name. This document contains both the appellant's signature and that of the authorised person who signed on 1 May 2002. Correspondence from the Department of Immigration and Multicultural and Indigenous Affairs, as it then was, was sent to the Granville address as well as to the PO Box address of Ray Wen, the appellant's authorised person. However, during cross-examination, the appellant denied speaking to any officer of the Tribunal by telephone. This, on its face, is contradicted by the content of the notes. Updated CMS. Old address: (address deleted), Granville 2142. Sent acknowledgement to applicant. Attached copy to file. Then there is the note dated 16 June 2003, a little over seven months from the time that the Tribunal's letter of 4 November 2002 had been returned, that a conversation apparently occurred in Mandarin between, I take it, a Tribunal officer, RWONG, and the appellant. The note states that the appellant confirmed that his contact details on "CMS" are still correct. I was told by counsel for the Minister that "CMS" was an abbreviation for Case Management System. The note then refers to a statement apparently made by the appellant that he had received "the letter recently sent to him by RRT". The Tribunal officer notes that he or she checked the log and "noticed that the letter should probably be a hearing invitation". This, I take it, assuming that the conversation occurred, although it is denied by the appellant, was a reference to the invitation letter, although it is by no means clear from the note that it was. What follows only adds to the uncertainty. The note states "told him that if the letter was a hearing invitation, he should complete the RTHI and return it to RRT as soon as possible before the due date". It then notes that "he was not able to make up his mind". It then states that the appellant would ask for the help of a friend who knows English and would then reply to the Tribunal. 56 If this conversation took place, and I am not, on the evidence before me, prepared positively to find that it did, then the context of it, as noted, is quite equivocal. The Cabramatta address is not noted on the record. There is no positive identification of what the appellant's contact details on the "CMS" were at that time. It is not clear that the letter that was being discussed was in fact the invitation letter. If the appellant said that he was not able to make up his mind, then that must be taken in the context of a discussion in Mandarin about a letter in written English which may or may not have been the invitation letter. The establishment of such matters should not be left to inference, as counsel for the first respondent submitted. The witnesses who could, and who, in my opinion, should have sworn affidavits concerning the content of the file notes did not do so. Furthermore, the note contains at least one significant error. The first entry is dated "24/5/02". The application for review was not filed until 24/7/2002. The first respondent has submitted that the first date was a typographical error and should have been noted as "24/7/02". That may or may not be the case. There was no evidence concerning this issue and I am not prepared to make any finding in respect of it. It does however point out the problem of reliance upon a note without having the benefit of evidence from its authors. 57 It is regrettable that no evidence was adduced from either the officer noted as C. Bird or that noted as RWONG. In the face of the emphatic denials by the appellant that he never had any such conversations, I am not prepared to find that the notes should be construed in the way contended by the first respondent. The content of the conversations as summarised in the notes, in my opinion, falls a long way short of clearly identifying that the Cabramatta address was the subject of the discussion as to the appellant's then contact details, or that there was any acknowledgement that he had received the invitation letter. 58 The first respondent then pointed to evidence given by the appellant in cross-examination when he said " Later the Department sent the letter. I showed letter to David Deng and ask him to do my case ". This, it was submitted, entitles the Court to infer that the letter referred to was that dated 7 August 2003 containing the Tribunal's decision mailed to the appellant at the Cabramatta address. Do you know an agent by the name of Ray Wen in Haymarket, W-e-n? No, that's the English? But in any case, at the time that this letter that I have taken you to on page 44 --- at the time you got that letter, you had a migration agent acting for you, is that correct? Were you living at (address deleted), Granville - sorry, at the time, as at May 2002? When did you leave that address? I just do not remember when it was, but at that address I still had a home town fellow was living there; that person collected mails on my behalf. And are you saying that he lived with you at (address deleted)? For long we lost contact with each other and that person changed his mobile phones many times. If there was I would get into the train, go there --- I went there and collected them. The appellant had "moved around at that time", and weekly or monthly he would go by train to Granville and collect mail from that address. The letter (at p 44 of the Appeal Book) the subject of cross-examination was one dated 7 May 2002 from the Tribunal addressed to the appellant at the Granville address. I reject this submission as simply not open, and indeed, as contrary to the evidence. 61 The first respondent points to other evidence. On 23 August 2003, the appellant instructed Mr David Deng of YWS & Associates, Migration Consultants, 609/368 Sussex Street, Sydney to act on his behalf in relation to his migration affairs. It was submitted that given that the original application for judicial review before the Federal Magistrate was dated 25 August 2003, two days after Mr Deng was retained by the appellant and within two weeks or so after the date of the Tribunal's decision, this too suggests that the appellant had received a copy of the decision of the Tribunal under cover of its letter dated 7 August 2003. The explanation of the appellant as to why he retained Mr Deng was that he had not heard from his previous migration agent who I find to have been, using his English version name, Mr Ray Wen. I accept this explanation in light of my earlier findings. 62 It was then contended on behalf of the first respondent, that the content of a letter written, it would appear by Mr Deng or someone within his office, on behalf of the appellant to the then Department of Immigration, Multicultural and Indigenous Affairs dated 22 April 2004, gave rise to the inference that the appellant had received a copy of the decision of the Tribunal delivered on 7 August 2003 which was sent to him at the Cabramatta address. 63 The letter of 22 April 2004 under the heading "Personal History" and which is written in the first person from the appellant states by way of background "On 7 August 2003, I received news that my decision was refused. " However, on the evidence before me, that cannot be correct. It is accepted that the appellant did not appear before the Tribunal either at the hearing on 9 July 2003 or when the decision was handed down on 7 August 2003. Furthermore, as is evident from the affidavit of Ms Minzlaff at [10]-[11], the Tribunal's letter dated 7 August 2003, together with a copy of its decision, addressed to the Cabramatta address, was not in fact sent by registered post, until the following day, 8 August 2003. 64 Whilst, because of the unsatisfactory and incomplete evidence before me, I cannot make positive findings one way or the other, it is entirely possible, even probable, upon the appellant instructing Mr Deng as his new migration agent, as to what was occurring in relation to his application for review, that Mr Deng or his office would have contacted the Tribunal to ascertain the then present position. Such inquiry would have elicited the information that the Tribunal had dismissed his application for review on 7 August 2003. That may have given rise to the original application for judicial review dated 25 August 2003. This contains very brief generic grounds of appeal. It is certainly possible, even likely, that Mr Deng would have obtained a copy of the reasons from the Tribunal. The letter of 22 April 2004 was clearly not written by the appellant. It was most likely that it was prepared by Mr Deng or someone within his office under his supervision. It contains very scant details of the personal history of the appellant and it includes the sentence to which I averted earlier, concerning his receipt of news on 7 August 2003, in effect, that his application to the Tribunal had been refused. In my opinion, the 4 November 2004 letter failed to meet the requirements of s 441A(4)(c)(i) and (ii) under the Act . Counsel submitted that the letter dated 4 November 2004 is to be read as a change of address letter. I have found that it was not such a letter. It was not sent to the Granville address, the address provided by the appellant in his application for review. Accordingly, there was no compliance by the Tribunal with ss 425 and 425A of the Act and jurisdictional error arose from its purported exercise of power under s 426A of the Act . There was no valid decision. See generally: SZFOH v Minister for Immigration and Citizenship (2007) 159 FCR 199. 66 The order of the Federal Magistrate of 20 February 2007 dismissing the application of the appellant should be set aside. There should, in lieu, be orders, in the nature of certiorari, that the decision of the Tribunal of 10 July 2003 be quashed, and mandamus, requiring the Tribunal to re-determine the review of the decision of the delegate according to law. 67 Such further determination will include the Tribunal giving the appellant, pursuant to s 425 of the Act , a fresh invitation to appear before it at the hearing of the review. The Tribunal will be required, for that purpose, to ascertain the appellant's current address for service. 68 The appeal should be allowed. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | refugee review tribunal hearing invitation to appear- requirement to send invitation to last address for service or last residential address invitation to appear sent to the purported last address for service or residential address whether purported notice of change of address for service or to residential address was from or authorised by appellant whether notice, even if from or authorised by appellant, constituted a notice of change of address for service or change of residential address whether oral notice of change of address for service or change of residential address given by appellant failure to invite appearance jurisdictional error. migration |
He also has a right of permanent residence in Singapore. He arrived in Australia on 21 October 2008 and applied to the Department of Immigration and Citizenship for a Protection (Class XA) visa on 20 November 2008. A delegate of the Minister refused that application on 13 February 2009 and on 9 March 2009 he applied to the Refugee Review Tribunal seeking review of the delegate's decision. That Tribunal affirmed the delegate's decision on 4 June 2009. On 1 July 2009 the Appellant filed an Application in the Federal Magistrates Court of Australia. The grounds upon which that Application was advanced were expressed as follows (without alteration): The Tribunal denied procedural fairness at the time of the assessment of applicant claim The Refugee Review Tribunal's decision was unjust and was made without taking into account the full gravity of the applicant's circumstances of the decision. In the course of resolving these two grounds, the Federal Magistrate also set forth the Tribunal's analysis of s 36 of the Migration Act 1958 (Cth) (the " Migration Act ") and its application to the now Appellant. A Notice of Appeal was thereafter filed with this Court on 13 October 2009. The Tribunal decision was an improper exercise of the power conferred by the Migration Act or the regulations. The appeal is to be dismissed. If reliance is placed upon the Grounds of Appeal as formulated, the case now sought to be advanced is a case very different to that heard and resolved by the Federal Magistrate. This Court may permit new grounds to be raised on appeal which were not raised before the Federal Magistrates Court. But there are very real reasons why it should not too readily do so, including: the fact that the relevant jurisdiction conferred on this Court is an appellate jurisdiction; the fact that this Court, in exercising that appellate jurisdiction, is entitled to the not inconsiderable benefit of the reasons for decision of a Federal Magistrate in respect to the issues sought to be agitated by a party to the proceeding; the principle that a party who has had a case resolved against him should usually not be permitted on appeal to raise a completely new or different case to that previously advanced; the principle that to permit a whole new case to be run on appeal has the potential to undermine the appellate process by rendering the trial process almost irrelevant; the fact that there is a legitimate public interest in public law matters being resolved in a timely and efficient manner and that the Minister has a legitimate interest in the timely resolution of applications for protection visas; and the fact that the High Court, in the event that an application for special leave to appeal is granted, is entitled to the benefit of a decision at first instance on the arguments sought to be resolved and to this Court's reasons for decision in respect to the same issues on appeal. To pursue any other course is to shift to the High Court the appellate role which it is the responsibility of this Court to discharge. Iyer v Minister for Immigration and Multicultural Affairs [2001] FCA 929 at [62] , [2001] FCA 929 ; 192 ALR 71 at 86 per Gyles J; SZKMS v Minister for Immigration and Citizenship [2008] FCA 499 per Lander J; SZMRD v Minister for Immigration and Citizenship [2009] FCA 598 per Spender J. It must always be recognised, however, that leave to raise a ground of appeal which was not previously relied upon may be granted where " it is expedient in the interests of justice to do so ": VUAX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158 at [46] . On one view, the Ground could be construed as a broadly expressed challenge to: the correct construction and application of s 36 of the Migration Act . It is not considered that the alternative manner of expressing the Grounds of Appeal raises any different issue. Not surprisingly, the unrepresented Appellant was unable to assist in identifying the " jurisdictional error " to which reference is made in his Notice of Appeal . However the Grounds of Appeal are to be construed, it is considered that they seek to advance an argument substantially different to the case as it was advanced for resolution before the Federal Magistrate. Although the Federal Magistrate's reasons for decision recount the Tribunal's analysis of s 36 , those reasons do not disclose any argument that the Tribunal's analysis and application of s 36 was in any way legally erroneous. It is not considered to be in the interests of justice to permit any argument which may be embraced by the Grounds of Appeal to now be entertained. Any such argument is, in any event, without apparent merit. (7) Subsection (6) does not, by implication, affect the interpretation of any other provision of this Act. Those provisions emerged before the Tribunal as relevant because the now Appellant is both a citizen of Bangladesh and a person who may permanently reside in Singapore. He claimed to fear persecution if he returned to Bangladesh by reason of his membership of the Chatra League and the Awami League and his participation in political activities generally in Bangladesh between 1993 and 2005. He claimed he feared returning to Singapore because his Singaporean wife had caused him mental suffering and because his wife's son by a former marriage had assaulted him. The Tribunal relevantly found that: the now Appellant had not taken all possible steps to avail himself of a right to enter and reside in a country other than Australia, namely Singapore, as required by s 36(3) ; there was no information before it which supported a claim that Singapore would withhold protection from him in the event that he returned to Singapore; and that there was no information that the now Appellant would be returned to Bangladesh whilst he remained a permanent resident of Singapore and that Australia did not have protection obligations by reason of s 36(5). The now Appellant's ability to enter Singapore was said by the Tribunal to derive from his right to permanent residence in Singapore. A valid Re-entry Permit enables him/her to return to Singapore as a permanent resident. The holder is authorised to re-enter Singapore for permanent residence so long as this permit is valid. When questioned on this, the applicant acknowledged that he had a right of return to Singapore as he is a permanent resident there. Based on the above, the Tribunal finds that the applicant has a right of entry and residence in Singapore at this time. No error in the construction and application of s 36 was identified by the now Appellant during the course of the hearing. Nor is any error otherwise discernible. Counsel on behalf of the First Respondent accepted that it was relevant for the Tribunal to consider the claims being advanced by the Appellant in respect to both: Bangladesh; and Singapore. The Tribunal thus " assume[d] " that the Appellant would fear persecution should he return to Bangladesh. This may raise some doubt as to the risk the applicant claims he will face there. However, the Tribunal is prepared to assume, for the purposes of this decision, that he faces a real chance of persecution should he return to Bangladesh and thus, is satisfied that the applicant meets the definition of refugee as set out in Article 1A(2) of the Refugee Convention and for the purposes of s.36(2) of the Act. Even though the Tribunal has no other evidence of the degree of harm suffered by the applicant before it, and hence has its doubts as to the seriousness of the harm, it is prepared to accept for the sake of argument that such assaults amounted to serious harm. A number of cases have come before the courts involving claims of domestic violence. In these cases, the primary issue will often be whether the motivation of the aggressor can be attributed to a Convention reason. Why the " friend " used the terms he did was a matter on which the Appellant could shed no light. Nor was the " friend " apparently present in Court to explain the manner in which the Grounds of Appeal had been drafted. The argument the Appellant sought to advance before the Federal Magistrate and this Court, he explained, was intended to be the same: namely, an argument that the Tribunal had not fully appreciated or addressed the danger to which he would be exposed if he returned to Singapore. Whether such an argument could constitute jurisdictional error may for present purposes be left to one side. The argument, it would appear, was much the same as the second basis upon which the Application was unsuccessfully advanced before the Federal Magistrate. As explained, the argument the Appellant sought to advance was that " [i]f I go back to Singapore I will again be in danger ". Given that the Appellant is unrepresented, it is considered appropriate to attempt to give as much content as possible to the argument he seeks to advance. This present argument is, however, without substance, again because the reasons for decision of the Tribunal accept or assume the " danger " asserted by the now Appellant. The Tribunal thus accepted that he would face " serious harm " on his return to Singapore. The difficulty the Appellant cannot overcome, however, is that that danger is not attributable to a Convention reason. These were conclusions open to the Tribunal. Even if leave were granted to re-cast the appeal in the manner articulated by the Appellant during the course of the appeal, the Ground as re-cast is without merit and would have been rejected. It is thus not considered that the Appellant should now be permitted to raise arguments on appeal which were not raised before the Federal Magistrate. In the present case, that would be to permit the Appellant to abandon the case he advanced for resolution before the Federal Magistrate and to run a completely new and different case on appeal. No explanation was advanced by the Appellant as to why such a course should be permitted. Although the various ways in which the Appellant may have sought to advance his case have not been examined in as much detail as they would have been had the new arguments on appeal been permitted, it is not a case which appears to have any evident merit. Nor does the argument articulated by the Appellant during the course of the appeal have any merit. There is no reason why the Appellant should not be ordered to pay the costs of the First Respondent. The First Respondent seeks an order pursuant to O 62 r 4(2)(c) of the Federal Court Rules that costs be paid in a " gross sum " of $3,679. An Affidavit has been filed in support of such an order. There is no reason why such an order should not be made. The Appellant is to pay the costs of the First Respondent fixed in the sum of $3,679. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | citizen of bangladesh right to enter and reside in singapore chance of persecution not for a convention reason refusal of refugee status grounds of appeal different to those advanced before federal magistrate leave to raise new grounds refused migration practice and procedure |
The application became a proceeding in the Federal Court (the Court) on 30 September 1998 by operation of the Native Title Amendment Act 1998 (Cth) (the Amendment Act 1998). The application was amended on 9 September 1999 by further particularisation of the native title claim group. On 24 September 1999 the Native Title Registrar accepted the application for registration under the Native Title Act 1993 (Cth) (the Act) on the basis that it satisfied all of the conditions in ss 190B and 190C. The period of three months following the notification date referred to in ss 66(8) and 66(10)(c) ended on 4 July 2000. On 18 July 2000 the application was referred, by order of the Court, to mediation by the Tribunal under s 86B of the Act. 2 The application is designated by the applicants as the Birriliburu Native Title Claim. It takes that name from Pirilipurru which is a soak in the central north of the claim area. The claim area itself lies in the centre of Western Australia, south east of Newman and north east of Meekatharra. It is crossed from the south west to the central north by the southern portion of the Canning Stock Route. The site of the determination, Good Camp Rockhole, is in the south west corner of the claim area and about 150 kilometres north north east of Wiluna. 3 The application names as applicants Billy Patch and a number of other persons on behalf of the Native Title Claim Group. Annexure 2 to the application sets out a list of some 181 names of persons included in the Native Title Claim Group. 4 The applicants and the State of Western Australia (the State), who are now the only parties, have reached an agreement on the terms of a determination to be made in relation to part of the land and waters covered by the application. They have agreed that no determination should be made over the balance of the land and waters and that the proceeding in relation to that area should remain on foot. The parties have filed with the Court a minute of a proposed consent order. They have done this pursuant to s 87A of the Act. It proposes a determination pursuant to ss 87A and 94A of the Act that native title exists in relation to the determination area. 5 The external boundaries of the proposed determination area are described in Schedule 1 to the Consent Minute. Excluded from that area are three vested reserves, each of which has been the subject of a previous exclusive possession act as a result of which native title has been extinguished. They were not claimed in the application. 6 The parties seek the determination under s 87A of the Act because strictly speaking it relates only to part of the land and waters covered by the application. However, that part covers 99.99% of the area under the application. The balance of the land not affected by the determination comprises two areas in the south west of the claim area amounting to 105.10 square kilometres which were formerly covered by three exploration licences. Those licences were current when the application was made but have since been surrendered. Applicants representing the claimants have made a new native title determination application over that area to which it appears s 47B will apply. Those areas remain the subject of ongoing mediation with the State. For the reasons that follow, I am prepared to make the determination upon which the parties have agreed. The parties, however, submit that it could equally be made under s 87. They say that the agreement they have reached relates both to "an area ... included in the area covered by the application" (s 87A(1)(b)) and "part of the proceedings" (s 87(1)(a)(ii); s 87(3)). In this connection reference is made to Brown (On behalf of the Ngarla People) v State of Western Australia [2007] FCA 1025 at [14] . The parties note that following the repeal of s 87(1)(d) the Court no longer has first to consider whether an order should be made under s 87A rather than under s 87. They submit, however, that where it is possible for an order to be made under both sections it is preferable to use s 87A. This is because the balance of the application is deemed to have been amended to remove the area covered by the proposed determination (s 64(1B)) and is exempt from the reapplication of the registration test (s 190A(1A)). The application would remain registered following the amendment and the Registrar would be obliged to amend the Register of Native Title Claims even though the registration test has not been applied (s 190(3)(a)). This is because an order under section 87A will give rise to other measures which will assist in promoting expeditious resolution of claims, including automatic amendment of the claim and exemption from the registration test being reapplied to the amended claim. 8 I accept that it is preferable for the order proposed in these circumstances to be made under s 87A rather than under s 87. The period specified in the notice given under s 66 of the Act has ended (s 87A(1)(b)). The notification day referred to in ss 66(8) and 66(10)(c) of the Act ended on 4 July 2000. There is an agreement for a proposed determination of native title in relation to an area included in that covered by the application (s 87A(1)(b)). The terms of the agreement are reflected in the consent minute. All necessary persons comprising the applicant, the State and other parties to the proceeding whose interest is relevant to the determination area are parties to the agreement. The applicant and the State are the only parties to the proceeding. Both are parties to the agreement. The terms of the proposed determination are in writing and signed by, or on behalf of, each of the parties (s 87A(1)(d)). The minute of the proposed determination is in writing and is signed on behalf of the State and the applicants. The Registrar of the Federal Court has given notice to other parties to the proceeding that the proposed determination has been filed with the Court (s 87A(3)). The terms of the proposed determination have been filed with the Court. The only parties to the proceeding are also the parties to the determination. There is therefore no need for notification under s 87A(3). The application is valid as having been made under s 61 of the Act as it stood prior to the amendments made by the Amendment Act 1998. 2. There is no pre-existing approved determination in relation to the area the subject of the proposed determination. 3. The form of the proposed determination complies with ss 94A and 225 of the Act. 4. 12 The parties submit that the requirements of s 87A are otherwise satisfied. I accept that the proposed order is within power. 13 The appropriateness of the proposed determination does not require that the Court undertake an inquiry into the merits of the claim made in the application. The State, which has its own competent and well-resourced legal representation, is satisfied as to the cogency of the evidence upon which the applicants rely. A comprehensive anthropological report was prepared by Dr Lee Sackett, at the request of the representative body and submitted to and considered by the State in September 2006. The State was also given audio-visual materials relevant to the connection between the native title claim group and the claim area. A supplementary report entitled "Custodianship in the Claim Group" by Dr Lee Sackett was supplied in July 2007. 14 The connection report was assessed by the Director of Research in the Office of Native Title, Ms Debbie Fletcher. She carried out the assessment during the period September 2006 to May 2007. She conducted a preliminary internal review of the connection material to identify fundamental issues, engaged an independent expert anthropologist to assess the material and obtained legal advice on the merits of the application in light of the connection material. The Office of Native Title was satisfied that the information contained in the connection material met its guidelines and on that basis the Deputy Premier accepted the advice and recommendation of the Executive Director of the Office that the State should enter into negotiations toward an agreed determination of native title. The Office of Native Title was satisfied that the connection material supplied by the applicants supported the existence of a body of traditional laws and customs under which they held rights and interests within the area covered by the application. That is based upon the material contained in the connection reports prepared by Dr Sackett. 16 The members of the native title claim group are said to be members of the broader Western Desert cultural bloc, which is the relevant "society" for the purposes of the determination. There are three Western Desert dialects associated with the determination area, namely: Putijara, Kartutjara and Mantjiltjara. The soak after which the application takes its name is described by the claimants as "mix-up country" where the three dialects overlap. 17 Most of the claimants reside at Wiluna, Jigalong, Patjarr, Warnarn, Warakurna and Parngurr which are close to, but not inside, the proposed determination area. Together with people from other parts of the Western Desert they describe themselves as Martu. They share a body of laws and customs with other Western Desert groups. They acknowledge shared beliefs and rituals and gather for ceremonial purposes. Some of them are recognised native title holders in neighbouring Western Desert areas. It is agreed between the parties, however, that the claimants are identifiable as a subset of the wider Western Desert society, being members of 17 family groups and other individuals recognised as custodians with rights and responsibilities in relation to the proposed determination area in accordance with Western Desert laws and customs. They recognise, in accordance with their traditional laws and customs, that certain individuals and family groups are associated with particular areas of country within the proposed determination area. The final description of the native title holders has been altered between application and determination to define them by reference, inter alia, to descendants. Following an inquiry from the Court, about the change, the State Solicitor's Office wrote a letter dated 17 June 2008. That description wrongly implies, firstly, that the claim was made by the Applicants on behalf of individuals holding individual rights and, secondly, that native title will cease to exist on the death of the last surviving individual. Also, the description of the native title claim group in the amended application does not differentiate between native title holders who hold rights through descent from an apical ancestor, and those 'custodians' who hold rights by reason of being particularly knowledgeable about country... The parties settled on the description of native title holders in the minute having satisfied themselves that the description accurately reflects the position as described in the connection materials (principally the connection report and the genealogies) and captures all native title holders. That process included the Applicants providing the State with a supplementary report by Dr Lee Sackett to address certain issues arising from the proposed description ... The parties identified a slight inconsistency between membership of the native title claim group as described in the amended application and the native title claim group as described in the minute, but those inconsistencies were explained by the Applicants to the State's satisfaction. The position of the parties was that provided the application were valid, the Court could proceed to make a determination in such form as it sees fit based on the evidence. It was not limited to making a determination in the form sought in the application. In any event, it argued that in circumstances in which the group of proposed native title holders is, in substance, the same group as the native title claim group, an amendment is unnecessary. I accept these contentions. 19 A fundamental belief in the Tjukurrpa ("the Dreaming" or "the Law") is the basis of all understanding, according to the traditional laws and customs of the group. It is the source of laws and customs to which the members of the native title holders group adhere. It governs their religious practices, social rules, systems of land tenure and other aspects of their life. 20 The association of individuals and groups with particular areas of country comes about through a variety of mechanisms. These include conception, birth, growing up or initiation on the country, acquisition of knowledge through long residence or descent from a person who has had such a connection. Landholding groups are not patrilineally-patrilocally structured. The members of the groups are landholders through their shared association with and to the land. The groups are open and inclusive so people have potential access to a number of areas through the mechanisms mentioned above. 21 There are still living senior claimants connected to country by one or more of these means. Various of the custodians specifically named in Schedule 3 to the Determination have rights in country because they are recognised as particularly knowledgeable. The movement away from the proposed determination area as a result of European settlement has resulted in group membership and rights being asserted primarily through descent from a parent or grandparents associated with the country. There are now more fixed family group associations with country. 22 The parties are agreed that the narrowing of pathways to group membership and rights in land does not represent an interruption in the acknowledgment and observance of traditional laws and customs. It may represent a change or adaptation of those laws and customs, but it is agreed that the change or adaptation is not of such a kind that the rights or interests now asserted are no longer held under traditional laws and customs. Descent remains the means by which people acquire rights. 23 It is also common ground that although the applicants do not live on the proposed determination area, they continue to assert their rights and carry out their responsibilities in accordance with their laws and customs. I propose therefore to make it in terms of the minute submitted to the Court. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | covering part of the area of the native title determination application formal requirements of s 87a substantive requirements of s 87a whether proposed consent determination within power whether proposed consent determination appropriate difference in description of native title holder group in determination and native title claim group in application list of names in application group defined by descent nevertheless appropriate to make order alteration not constituting amendment to application agreement reflecting membership based, inter alia, on descent proposed determination within power and appropriate native title |
The applicant arrived in Australia on 27 January 1998 on a temporary business visa. He applied for a protection visa pursuant to the Migration Act 1958 (Cth) within a month or so. When that was declined, he made an application to the Refugee Review Tribunal (the Tribunal) for review of that decision on 1 May 1998. For reasons which are not explained, the first hearing which he was offered was on 10 December 1999, more than 18 months after the request for review. The Court, of course, is aware that there was a considerable crush of work to be dealt with at that time. However, the reality was that a great length of time had expired. As the chronology of the matter has been fully set out in the reasons of the Tribunal, I will not repeat it here. Suffice to say that the first scheduled hearing of 10 December 1999 and a second scheduled hearing of 21 March 2000 were not insisted upon by the Tribunal in view of the applicant's psychiatric difficulties which were raised by the applicant's adviser. The Tribunal, when dealing with the inability of the applicant to appear for the second scheduled hearing, refused a request that the matter be effectively stood over for a further period of about three months in order that the applicant's psychiatric position could be better assessed. The Tribunal informed the adviser to the applicant by letter that the member reviewing the case was not minded to agree to that request subject to any submissions that the applicant's adviser may make. That letter then set out a history of the case and dealt with both the request for a further adjournment and with some substantive aspects of the case. The Tribunal invited a response by 18 April 2000. On 17 April 2000, pursuant to a request for additional time, the time for response was extended to 23 May 2000. I have not had a chance to discuss [the applicant's] medical condition with either Dr Samad or Dr Zolfaghari. I understand from [the applicant] that his medicare card had expired and he could not make his last appointment with Dr Samad. Instead he has been given an appointment in the second week of June. I propose to discuss [the applicant's] medical condition with Dr Samad following this consultation. If there is a reasonable prospect of improvement in [the applicant's] condition within the next few months then it would be consistent with the legislation that [the applicant] be given an opportunity to appear at a hearing within such reasonable time. We submit that [the applicant's] mental state and symptoms would corroborate, to some extent, the fact that he has suffered some major torture/trauma before he left Pakistan, given that he had no history of mental illness prior to this onset. That decision was subsequently forwarded to the applicant with a copy to the adviser. In that part of the Tribunal's reasons under the heading 'Findings and Reasons for Decision', the Tribunal first of all dealt with the decision to go ahead without giving the applicant a further opportunity to appear. I note that the Tribunal accepted that the applicant had clearly suffered some trauma in the past, consistently with the diagnoses offered by both a psychologist and a psychiatrist. While the Tribunal is obliged under section 425 of the Migration Act to invite an applicant to appear before the Tribunal to give evidence (as it has done in the present case), I do not consider that the Tribunal is obliged to keep postponing a hearing where, as in the present case, there is clear evidence that the Applicant is mentally unfit to give evidence at a hearing before the Tribunal and where the expert evidence indicates that there is no certainty when, if ever, the Applicant will have recovered sufficient lucidity of mind to be able to attend a hearing before the Tribunal. I do not consider that it is appropriate for the Tribunal to keep granting repeated postponements of the hearing in the absence of evidence that at some time in the reasonably foreseeable future the Applicant will in fact be fit to attend a hearing. In the circumstances of the present case I consider it appropriate to make a decision on the basis of the material already before me. I am not satisfied that this was a breach of s 425 of the Act for the reasons explained by Hely J in Applicant NAHF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (NAHF) [2003] FCA 140 ; (2003) 128 FCR 359, particularly at [25]---[30]. However, I am satisfied, in the particular circumstances of this case, that what occurred was an unreasonable refusal of an opportunity to present a case sufficient to breach the rules of natural justice or procedural fairness, again as generally explained by Hely J in ( NAHF ) at [31]---[39], that reasoning being supported, at least, by the decision of the Full Court in Minister for Immigration and Multicultural and Indigenous Affairs v SCAR [2003] FCAFC 126 ; (2003) 128 FCR 553. I also refer to the passage relied upon by counsel for the applicant from the judgment of Gummow and Gaudron JJ in Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 ; (2002) 209 CLR 597 at [40] . I take that view not because of any general fault in the reasoning of the Tribunal, but because of the wider context in which that decision came to be made. There can be no general disagreement with the proposition that the Tribunal is under a duty to deal with a review in a 'fair, just, economical, informal and quick' manner (s 420). There will be circumstances where the incapacity of an applicant is such that the review by the Tribunal simply must take place without the benefit of oral evidence or oral contribution from that applicant. However, in the present case, the Tribunal member does not appear to have given consideration to the fact that the application for review had been on foot since 1 May 1998. This, when taken together with the fact that the Tribunal member accepted that there were genuine psychiatric problems, led to a situation which, in my respectful submission, required that there be at least another opportunity given to put forward or to seek to put forward material from the applicant in person. After all, the Tribunal member had made it clear enough that he was not proposing to, and could not, find for the applicant on the basis of the written material. Thus, the appearance of the applicant would be essential to change the mind of the Tribunal member. There were, as submitted by counsel for the applicant, some indications in the evidence of fluctuations in the psychiatric condition of the applicant. There is also merit in the submission on his behalf that, given that it was accepted that there had been a trauma earlier in his life, there was a lively issue as to the cause of that trauma, and the effect of that cause upon a claim for a protection visa. I must say that there is, and will be, a great air of unreality in dealing in August 2006 and thereafter with an application for a protection visa first made at the end of February 1998. I am also appreciative that, if the decision is set aside, the matter may be reconsidered in a different statutory setting. Whether that be the case or not, I cannot be troubled by the effect of that as the statute will prevail. I should add that, in my opinion, there was no merit in the alternative point put by counsel for the applicant which was founded upon the acceptance by the Tribunal of the existence of an earlier trauma and sought to set aside the substantive reasoning on that footing. I also note that the Minister has very properly not sought to rely upon delay as a separate and independent ground of refusal of relief in this case. There is no need for me to do more than note that circumstance. The following orders are hereby made absolute: (1) The decision of the Refugee Review Tribunal of 5 June 2000 be quashed. (2) The application for review be remitted to the Tribunal to be determined according to law. (3) The first respondent is to pay the costs of the applicant, including costs in the proceeding in the High Court prior to remittal to this Court. | obligation to invite applicant to appear before tribunal refusal to grant further adjournment for applicant suffering fluctuating psychiatric illness despite substantial delay before offer of hearing dates breach of natural justice decision set aside migration law |
I appointed today as the date for hearing in respect of penalty matters. These reasons for judgment should be read in conjunction with those which I delivered on 14 August 2009: see Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No2) [2009] FCA 887. Pursuant to the directions given on 14 August 2009, the Australian Communications and Media Authority (the Authority), as Applicant, served upon the Respondents, which and whom I have mentioned, written submissions together with affidavits to be relied upon in respect of penalty or otherwise identified affidavits in respect of which reliance was to be placed. For their part none of the named Respondents has chosen to appear today. That, of course, is their perfect right. One of them, Mr Salcedo, did, though, choose to correspond with the Registry of the Court. He did this by a letter dated 28 September 2009 received by the Registry that day. That letter now forms part of exhibit 2. A subsequent exchange of correspondence occurred as between the Registry and Mr Salcedo on the subject of whether it was his intention that the letter stand as his submissions in relation to the penalty hearing. In the letter, which I record expressly I have taken into account, Mr Salcedo makes a number of assertions in relation to his involvement with corporate contraventions. Those assertions, at least on one view, are not consistent with the judgment entered against him by default. He has not applied to set aside the default judgment. It would be subversive of the process of justice to afford such assertions weight. I should also record that another of the Respondents of interest today, Mr Owen, filed with the Court an affidavit pursuant to orders ancillary to injunctive orders of a Mareva nature which it became necessary to make as a sequel to the default judgment entered on 14 August 2009. Mr Owen has not sought to rely upon that affidavit in relation to penalty. While, properly, the Authority has noted the existence of that affidavit, its position is that it does not accept the evidence given in that affidavit in relation to Mr Owen's financial position. Rather, were the affidavit to be relied upon by Mr Owen in relation to any question touching upon penalty, the Authority would seek to cross-examine Mr Owen in respect of that to which he deposes in that affidavit. Mr Owen has not sought to rely upon the affidavit in relation to penalty. In that circumstance I pay no regard to the affidavit. What remains for determination in respect of Mobilegate, Winning Bid, Mr Owen, Mr Salcedo and Mr Maughan is the question of the amount, if any, that ought to be imposed by way of penalty in respect of the contraventions which are the subject of judgment in default. There can be no question that the contraventions require the imposition of a penalty and a very substantial penalty indeed. The conduct concerned constitutes a series of contraventions of s 16 of the Spam Act . That section materially prohibits the sending, or causing to be sent, of commercial electronic messages that have an Australian link and that are, in effect, unsolicited. Provision is made by s 24 of the Spam Act for the imposition of pecuniary penalties by way of civil penalty if this Court is satisfied that a person, ie, a body corporate or an individual, has contravened a provision such as s 16. If so satisfied, the Court may order the person to pay to the Commonwealth such pecuniary penalty in respect of each contravention as the Court determines to be appropriate. Read in isolation, that provision might be thought to provide for unlimited penalisation of contraventions. However, provision is made by s 25 , for what are to be the maximum penalties for contraventions of civil penalty provisions such as s 16. Section 24(2) of the Spam Act sets out, in a non-exhaustive way, a number of matters to which the Court should have regard in determining the pecuniary penalty to fix. I shall return in some detail to the considerations specified in s 24(2) , insofar as they relate to the circumstances of this case, in a moment. For the present, it might be observed that the considerations specified in s 24(2) , save for that in para (e), bear a strong resemblance to those found in s 76 of the Trade Practices Act 1974 (Cth) (Trade Practices Act). Section 24(2)(e) provides that if the Court considers that it is appropriate to do so, whether the person has previously been found by a court in a foreign country to have engaged in any similar conduct, is a relevant consideration. That sub-section articulates overtly a consideration which would, in any event, be relevant. It is further a consideration which, though not expressly articulated in s 76 of the Trade Practices Act , would be relevant to a penalty proceeding under that Act in particular circumstances. As it happens, a court in a foreign country has not found the Respondents concerned to have engaged in any similar conduct. There was, at one stage though, a disposition on the part of the Authority to rely upon findings and penalties in respect of conduct in the United Kingdom by one of the Respondents of concern today. In the end though, that particular disposition did not manifest itself in evidence before me in relation to proceedings abroad, nor had evidence in relation to such proceedings proposed to be relied upon been served upon the Respondent concerned, as the interlocutory directions in respect of the penalty proceeding would have required. At best, it would seem that the conduct concerned was what one might term parallel in time to that the subject of Australian regulatory interest. Had there been evidence of prior findings in respect of prior conduct, ie, conduct prior to the alleged contraventions, those findings would have had a particular relevance in terms of assessing the gravity of the later Australian-related conduct. As things stand, and in the absence of evidence, I expressly do not take into account any matter touching upon any alleged conduct in the United Kingdom. Rather, I approach the matter on the basis that none of the Respondents have been the subject of adverse findings abroad. The Authority put forward that the conduct concerned in itself, insofar as it related to Australia, was of such gravity that, in a relative sense, parallel, as compared with prior, conduct abroad would not materially affect any question as to penalty. It expressly sought the deletion of reference in its written submissions to such conduct. It is not impossible to conceive how parallel conduct might yield a view as to whether one should regard Australian-related conduct as but an isolated geographic aberration. It might also yield a view as to the overall worth of a Respondent. Nonetheless, it is in this case only the Australian-related conduct that I take into account, and I do so, in the end, at the invitation of the Authority. The Authority's stance, in my respectful opinion, reflected a very proper approach for an agency of the Commonwealth to take in circumstances where a particular Respondent had not appeared before the Court. In summary, the contraventions of s 16 which are established are contraventions which involve the sending of unsolicited short message service - SMS messages - to the mobile telephones of users who have been deceived, inveigled even, into providing their mobile telephone numbers to representatives of either Mobilegate or, as the case may be, Winning Bid, under the belief that they were corresponding with individuals seeking to meet them and to form relationships via dating websites. In fact, these users of the mobile telephones were the prey of Mobilegate or, as the case may be, Winning Bid. Those users were targeted via fabricated dating website profiles. That targeting was at the heart of a scheme, the design of which was to cause those mobile telephone users to exchange SMS messages using premium telephone numbers operated on behalf of either Mobilegate or Winning Bid. The users were charged amounts of up to $5 per message. There is some evidence before me as to amounts derived by Mobilegate and Winning Bid through this particular scheme. I shall detail that shortly. What modern times do offer, for those disposed to such a vice, are new means of prey, the internet, and the mobile telephone. That is a particularly vile form of behaviour. The Spam Act provides for the imposition of penalties which, in the application of that Act to the circumstances of this particular case, are substantial indeed as to their maximum. It is necessary to relate in a little detail how that transpires, having regard to s 25. For a corporate entity which has not been found previously to have contravened the Spam Act the maximum penalty as provided for by s 25(3) is 100 penalty units per single contravention, or if the Court finds that the body corporate has on a particular day committed two or more contraventions, 2000 penalty units. For an individual who has not previously been found to have contravened the Spam Act the maximum penalty as provided for by s 25(4) is 20 penalty units per single contravention, or if the Court finds that the person has on a particular day committed two or more contraventions, 400 penalty units. The Spam Act incorporates by reference the meaning given by s 4AA of the Crimes Act 1914 (Cth) to a penalty unit. It is there provided presently that a penalty unit is $110. By a process of mathematics one therefore derives that the maximum applicable penalty per day on which more than one contravention is found to have occurred is $220,000 in the case of a body corporate and $44,000 in the case of an individual. In this particular case, many days are involved in which contravening conduct occurred. That has a corresponding effect on the theoretical maximum penalty applicable in respect of the contraventions. On the evidence to hand, so far as Mobilegate is concerned, it appears - and this is as best an approximation as I can make - that the number of days on which two or more contraventions occurred was 331 days. In all, were one to assess a theoretical maximum in respect of Mobilegate, one would derive a maximum penalty under the Spam Act of something in excess of $72 million. As to Winning Bid, the approximate number of days on the evidence in terms of best estimation on which two or more contraventions occurred was 187 days. Again, in terms of the theoretical maximum in respect of the contraventions, the subject of default judgment, the maximum penalty applicable in respect of Winning Bids conduct would be $40 million. It is a possible but in the end only a theoretical exercise to look to maximums which might be applicable under s 25 in respect of those individuals who have been adjudged to be parties to corporate contravening conduct. I shall make some reference to authority touching upon maximum penalty in a moment. For the present it is instructive to consider both individually and then in their totality the particular individual considerations specified in s 24(2) of the Spam Act save of course for that specified in s 24(20(e) to which I have already made reference. Before so doing it is helpful to reflect upon some general principles which are pertinent, in my opinion, to the imposition of pecuniary penalty. There is but one directly applicable authority in respect of the Spam Act and the imposition of penalties under that Act. That is a judgment delivered by Nicholson J in Australian Communications and Media Authority v Clarity1 Pty Ltd [2006] FCA 1399 ; (2006) 155 FCR 377 (Clarity1). One finds, with respect, in his Honour's judgment in Clarity1 a very helpful collation indeed of relevant principle. It is apparent from Clarity1 that Nicholson J was of the opinion that assistance was to be derived in terms of principle from judgments delivered in respect of civil penalties imposed under the Trade Practices Act . I respectfully agree with this approach. To that end, the following general principles are pertinent: the size of the contravening company; the deliberateness of the contravention and the period over which it occurred; whether the contravention arose out of the conduct of senior management in a corporation or at a lower level; whether the corporation has a culture conducive to compliance with the Act, as, for example, evidenced by educational programs and disciplinary or other corrective measures which are taken institutionally in response to an acknowledged contravention; whether the respondent, be it corporate or individual, has cooperated with the authorities responsible for the enforcement of the Act in relation to the contravention; (and this may be part of the size of the corporation, where it is a corporate respondent), the financial position of the contravener and its, his or her capacity to pay; the deterrent effect, both specific and general, of the proposed penalty; the totality principle; and parity and, I think, also relativity of penalty, with other respondents, having regard to individual circumstances of involvement in a contravention. There are other statements in authorities under the Trade Practices Act which are, in my opinion, germane in relation to the imposition of penalty in respect of Spam Act prosecutions. Thus, under the Trade Practices Act , it is relevant to take into account whether the conduct that contravened the Act was systematic, deliberate or covert: see J McPhee and Son (Australia) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365 ; (2000) 172 ALR 532 at [158] . In other words, it was systematic, it was deliberate and, materially, covert in terms of the ability of those mobile phone users preyed upon to ascertain readily the identity of their predator if they were disposed to seek recourse to the courts to recover moneys lost. I shall elaborate a little further on that aspect in a moment. Again, in terms of Trade Practices Act authorities, there is useful guidance on the role of both specific and general deterrence in the imposition of penalties. This case discloses on the evidence that while it is possible for a regulatory authority, through diligent investigation, to detect not only those corporations but those individuals involved in contraventions, the task is not an easy or an inexpensive one. It consumes public resources which might otherwise usefully be deployed to other ends. That being so, penalties in respect of contraventions must be such as to deter the unscrupulous from taking a calculated business risk. In other words, in my opinion, penalties must be of such an order that having regard to particular gains which might be involved, it is in effect commercial suicide to seek those gains via contraventions of the Spam Act . Sentiments such as these are evident in prior authority. Also of great importance in a case such as this, where daily penalties accumulate, is the totality principle. I shall have a little more to say about that shortly. As I have mentioned, there is but one earlier authority dealing directly with the Spam Act : Clarity1. The utility in that case is for its collation of principle in relation to the imposition of penalty. I have drawn upon that collation in making the statements already given with respect to principle. It is not, though, a case uncritically to apply as a comparative. The circumstances of that case were different to those of the present. The Respondents concerned are to be dealt with by reference to their particular contravening conduct. This is not one of those cases of the kind encountered in the State criminal courts where, by reference to a high volume of analogous criminal conduct, it is possible to set, and then for sentencing judges to have regard to, particular benchmarks derived from guidance given by a Court of Appeal. I have already referred to theoretical maximums that one might derive in respect of the corporate Respondents, and to the ability to make an estimation of theoretical maximums in respect of individuals. Judges need sentencing yardsticks. It is well accepted that the maximum sentence available may in some cases be a matter of great relevance. Obviously enough, these factors are measured against the matters pleaded in the statement of claim, and the evidence upon which the Authority seeks to rely and of which notice has been given to the particular Respondents; in particular, affidavits of Mr Weber, filed on 12 May, 13 May, and 21 May 2009. The Authority submits that the conduct was duplicitous and exploitive. I agree. Between at least January 2006 and December 2008, the conduct involved the following: setting up fake profiles on dating websites and communicating with users of that dating websites to entice them to hand over details of their mobile phone number, as if they were communicating with another user of a dating website; sending SMS messages to those mobile telephone numbers by particular premium number services and engaging the users to engage in an exchange of SMS messages, as if with a potential dating partner; extending the deception of users by pretending premium short codes were being used as a "safe divert" service to enable the sender and receiver to communicate without the other party directly disclosing their mobile telephone number as a matter of caution; and obtaining revenue from the sending or receipt of the SMS messages via those premium numbers as a result of fees charged to the user of each message. The premium short code numbers concerned were changed regularly. They were changed so as to avoid or overcome detection and complaints against the corporate respondents. So far as the Fourth, Fifth and Seventh Respondents, Messrs Owen, Salcedo and Maughan were concerned, their involvement, in terms of the judgment entered by default against them and in terms of the affidavit evidence, is extensive, knowing and persistent. Persistent also is a failure to address complaints. The length of involvement in contravening conduct varies. It was responsible for sending and receipt of SMS messages via particular premium numbers, more particularly described in the statement of claim, from 15 November 2007 through to 29 October 2008. Mobilegate's earnings, as received from the aggregator Sybase, from the operation of the premium short codes, was in excess of $1.1 million between November 2007 and August 2008. Mobilegate received additional revenue from the aggregator Oxygen 8 in relation to another premium short codes operation from October 2008 to January 2009 in excess of $200,000. Those earnings are pertinent, on the subject of penalty, having regard to what I have already stated to be a principle of general deterrence in the imposition of penalties sufficiently high to make it commercial suicide to attempt to obtain such earnings by breaching the Spam Act . It was responsible for the sending and receipt of a number of SMS messages via premium numbers described in the statement of claim from 1 April 2007 until 15 November 2007. On the latter date, Winning Bid assigned its application messaging services agreement with Sybase to Mobilegate. The earnings of Winning Bid from the operation of the premium short codes concerned between April 2007 and November 2007 was in excess of $300,000. The conduct the subject of these proceedings initiated with IMP. IMP received payments from Sybase for the operation of particular short codes in respect of the period 1 January 2006 to 30 April 2007, totalling $690,000. Mr Owen was the director of Winning Bid from August 2006 to April 2008. He was also manager of Mobilegate from August 2007 to November 2008. Of each of the individual Respondents with whom I am concerned today, his involvement was the longest. It follows from this, in terms of the default judgment as well, that he has been involved in the greatest number of contraventions. It is apparent on the evidence that Mr Owen was involved in establishing the premium short code operations initially via IMP in 2006. He is aptly described as the directing mind and will of each of the companies involved between 2006 and 2008. It was his details which appeared on contracts with aggregators for the provision of various short codes and also in correspondence with aggregators in relation to complaints. It is relevant to note that Mr Owen was the sole director of IMP when that company was the subject of an infringement notice issued by the authority pursuant to the Spam Act . It is also relevant to note that Mr Owen was an individual respondent in proceedings in the Federal Magistrates Court against a company, Dancertext, and him: see Wood v Dancertext Pty Ltd [2007] FMCA 1410 (Dancertext). The conduct described in the reasons for judgment of Raphael FM bears particular comparison with the subject of the present proceedings. He was the manager of Winning Bid from April 2007 and the manager of Mobilegate from August 2007 to April 2009. There is also a basis for regarding him, de facto, as a director of Mobilegate even prior to his taking up that position in April 2009. In June 2006, Mr Salcedo corresponded with the Authority on behalf of IMP in relation to complaints which came to form the basis of the infringement notice to which I have referred already. Mr Salcedo was responsible for the day to day management of Mobilegate's business from August 2007. He set up that company. He purportedly relinquished the directorship of the company in favour of Mr Scott Moles, with whom I am not concerned today, on 20 August 2007. It was Mr Salcedo who was responsible for the supervision of Mr Maughan. It was also Mr Salcedo who responded to what can only be described as a large amount of correspondence from aggregators and regulators. At the least, Mr Salcedo might be described as an influential and involved manager. He was engaged as a supervisor of other staff. He sent SMS messages to mobile phone users between the period January 2006 to November 2008, excluding from that period June to October 2006. He was responsible for the instruction of new staff, managing staff on a day to day basis, monitoring the number of SMS messages sent and answering complaints. The nature and extent of any loss or damage suffered as a result of the contraventions. There are at least two categories of loss which one might identify. That suffered by members of the public who were mobile phone users and that suffered by operators of dating websites through which fake profiles were placed. That apart, there is at least inferentially and in some cases necessarily an emotional toll which does not readily admit of quantification but is doubtless real enough in individual cases and readily understandable. The message logs demonstrate that when users queried or complained about premium short code charges being imposed upon them for sending or receiving the SMS messages, the employees of Mobilegate, or as the case may be, Winning Bid, or agents of those companies, informed them that both the sender and the recipient were paying the same charges for the messages and that the communication via the "safe divert" service was a means of concealing the other party's mobile telephone number so they could safely communicate. This was done I find to encourage the users to continue to exchange messages resulting directly in revenue to those with whom I am concerned today either directly or in their capacity as officers or employees of those corporations. Here one sees the covert nature of the deception being undertaken. The loss which the mobile phone users suffered came to them by way of their telephone accounts. There was no need, given the nature of the scheme for Mobilegate and Winning Bid directly to bill them. The nature of the scheme meant that those mobile phone telephone users faced the obstacle of dealing through their mobile telephone service provider to identify what they had been charged, by whom and for what purported service. They were in jeopardy in the event of non-payment of disconnection of their mobile telephone service or at least in an adverse noting being made in respect of them by that mobile telephone service provider and perhaps more widely in terms of credit. The design and operation of the safe divert scheme also deliberately preyed upon vulnerable aspects of the victims of the conduct. I have already made reference to this. It is apparent from the message logs that many users sent a large number of messages and accordingly spent what, for individuals, could only be significant amounts of money before realising that the person with whom they were communicating was not a genuine member or user of a dating website. This is cruel behaviour; cruel and callous. Quite apart from the obstacles that an individual would face in seeking to garner evidence of exactly who had preyed upon them, the Authority submits that there is an inference that embarrassment or shame associated with exposing publicly by litigation having been duped in this exploitive fashion would tend to suppress the individual seeking of financial redress. That type of shame or embarrassment is not unknown in our law in relation to the readiness with which certain kinds of sexual offences are reported. In my opinion there is much to be said in favour of that particular quality attending the readiness with which individuals might care to seek particular redress from their exploiter in this type of conduct as well. That quality only serves to aggravate the conduct. By that I mean that it is of such an intimate exploitive nature that the exploiter by the very conduct gives itself, himself or herself, a degree of insulation at a practical level from suits for financial recovery. I take that aggravating factor into account in the imposition of penalty. Based on the revenue shares agreements and payment schedules which have been set out in the evidence read before me, the total estimated financial loss to individual mobile telephone users, to consumers, by way of telephone charges incurred as a result of conduct by the Respondents with whom I am concerned today, was in excess of some $4 million. Again, that is a factor to take into account in relation to the imposition of penalties. These operators, of course, have a legitimate and lawful role to play in our society. One might describe them, in the language of earlier times, as "matchmakers. " In so doing, a medium apt for modern times is used: the internet. In addition to the losses suffered by mobile phone users, the operators of dating websites, which the respondents Mobilegate and Winning Bid used, were the recipients of fake profiles from those companies. It is possible to identify financial loss, but it is not readily to possible to quantify that loss arising from factors such as: dealing with complaints from users of a dating website who associated the Safe Divert scheme with the operator of the website itself; undermining confidence in that website by users with associated reputational and, hence, goodwill damage via word of mouth. That, in turn, one might apprehend, would translate into a loss of lawful revenue for the website; and monitoring and other policing costs incurred by website operators in an endeavour to identify and remove those who placed fake profiles or sought to place fake profiles. I refer in this regard to Mr Owen. The contraventions occurred in circumstances where, by virtue of Winning Bid and Mobilegate's contracts with aggregators for the providing of premium short codes, the corporate respondents had expressly agreed to comply with the Spam Act . The corporate Respondents, Mobilegate and Winning Bid, had faced regular complaints from mobile telephone service providers and from the Telecommunications Industry Ombudsman, as well as some particular mobile phone users, about their conduct, yet it continued. Requirements to obtain consent to the sending of SMS messages were also brought to the direct attention of the Respondents with which and whom I am concerned today, in the providing of new premium short codes. The communication logs of Sybase, which are in evidence, show that these complaints and the requirements for consent were routinely brushed aside. That, too, is an aggravating factor. The corporate Respondents either themselves engaged or caused others to engage a network of individuals, whose job it was to set up fake profiles on dating websites then invent SMS messages to send via the Mobilegate computer system to the mobile phone users. In this sense, the corporate respondents and the individuals, Messrs Owen, Salcedo and Maughan, might be described as "puppeteers" for earnings by preying upon emotionally vulnerable individuals. The subordinate individuals were instructed on how to avoid detection on dating websites. They were directed to cast messages so as to entice ongoing responses from mobile phone users. As I have already mentioned, Mr Maughan was responsible for the day-to-day oversight of the operations of such individuals. All of this conduct was directed to the maximisation of the income of the corporate Respondents. In evidence before me are printouts of the fake dating profiles, as well as logs of communications from specified profiles. These make depressing reading, when one knows that the profiles concerned are fake. There to be seen are communications under the guise of the profile, which were used as what the Authority aptly describes as a "lure" for the member of the public to provide his or her mobile phone number. Financial exploitation then followed when that lure yielded a strike. There is, overall, a consistent pattern of studied deception. It is not possible to see any mitigating factor in the behaviour. I have also made reference to regulatory action taken by the Authority in the past against IMP at a time when Mr Owen was a director of that company. I have already made reference, though, to the earnings that it derived. It is more particularly delineated in the statement of claim. There is no doubt that the contraventions were deliberate. I have described the involvement of particular individuals in corporate directorship or management already. A factor which is worthy to note in this regard is that the contravening conduct was not an incident of an otherwise lawful business, rather, the very essence of the businesses conducted by Mobilegate and Winning Bid, materially, was conduct designed to contravene section 16 of the Spam Act . That is a factor, in my opinion, which is relevant to general deterrence. The penalties must be of a level which would make it, as I have already said, commercial suicide to set up a business which has, as its aim, the contravention of the Spam Act . To the contrary, the cultures revealed were cultures of studied non-compliance. Legal representation, though, ceased some time ago. There is no evident cooperation with the administration of justice in the behaviours of any of the Respondents with which or whom I am concerned today. At its highest, it would seem to be that they are not concerned, individually, to put particular factors which might stand in their favour before the Court, but rather to let proceedings take their course. There is certainly nothing in the evidence which would suggest that any of the Respondents with which and whom I am concerned today are disposed to engage in education in relation to Spam Act responsibilities or otherwise to conduct themselves in a way that would be compliant. There is simply no evidence at all of attitude in the future other than the inferences which might arise by reference to past behaviours. They are hardly inferences which stand in favour of mitigation. The Authority submits that an approach evident in Nicholson J's judgment in relation to capacity to pay in Clarity1 is apposite in the circumstances of this case. It may be noted that Parliament itself has, in a sense, capped daily maximum penalties so as to avoid what one might regard as exponential and thus unrealistically large penalties for multiple contraventions. That said, Parliament has, nonetheless, provided for penalties which accrue, at least on a daily basis, which are significant penalties. In this case, the Authority seeks penalties which are not particularly large, having regard to theoretical maximums, but are large having regard to totality, but not so large as to offend that principle. The totality principle requires that the total penalty for related offences ought not to exceed what is proper for the entire contravening conduct involved. So far as penalty is concerned, the Authority submits that penalties should fall within the following ranges: The Authority submits that, though these penalty ranges are substantial, they do not violate the totality principle. They represent a relatively small proportion of the theoretical legislatively-derived maximum amounts in the circumstances of these contraventions. So far as the corporate Respondents are concerned, they are in the order of 5% to 7% of theoretical maximums. I agree with this particular submission so far as the application of the totality principle is concerned. This might be highlighted in the following way. As between Mobilegate and Winning Bid, Mobilegate's conduct covered a longer period: 331 days as opposed to 187 days. Next, as between individual Respondents, Messrs Owen and Salcedo had a higher level, and a significantly higher level, of authority in the management and control of the corporations than did Mr Maughan. Nonetheless, each of the individual Respondents was involved for over 800 individual days of contraventions. Mr Maughan's subordination is recognised by the penalty range submitted for him being in the order of 40 % to 50 % of that submitted as apt in respect of Messrs Owen and Salcedo. Next, as between Messrs Owen and Salcedo, there is, on the evidence, a higher level of active involvement by Mr Salcedo, and this occurred notwithstanding that there was in place a disqualification against his managing corporations at the behest of the Australian Securities and Investments Commission at the time. Mr Owen, on the other hand, had been the subject of litigation in respect of analogous behaviour: Dancertext. Further, he was the director of IMP at the time when it was the recipient of a Spam Act infringement notice. Thus, one can see that there are factors which interplay as to whose is the more intimate involvement and whose involvement has occurred against a background of aggravating factors. In the end, such comparisons become too fine to admit of anything other, in my opinion, than regarding each of them as equally culpable. It is by no means impossible to conceive of a slightly higher --- perhaps even more than slightly higher --- maximum for the range that would be apt having regard to the totality principle. However, the range which has been the subject of submissions is also that which was put to each of the Respondents today as the range that the Authority would seek, in its submissions, to submit as appropriate. In those circumstances, in my opinion, unless I were of the view that that range, in its maximum, was so inappropriate as not to be germane to a just imposition of penalty, I ought not to depart from that range so far as maximum is concerned. Reasonable minds might reasonably differ in relation to maximum. The minimum, having regard to the aggravating factors, is, indeed, a minimum in the circumstances of this case. The range submitted by the Authority is, subject to the observations that I have made, one which I regard as an appropriate range for the imposition of penalties. I have already, though, used particular adjectives to describe the conduct concerned, both corporate and, by involvement as a party to corporate conduct, individual. I have deliberately used strong adjectives to express, on behalf of the community, disapproval, and strong disapproval, of the conduct concerned. The aggravating factors that I have mentioned and the need to ensure, insofar as general deterrence can ever, that this type of conduct is not repeated, in my opinion calls for the imposition of the maximum penalty in each case in the ranges proposed. The penalties, therefore, that I impose in this matter are as follows. In respect of Mobilegate I impose one penalty. That penalty will be a civil penalty of $5 million. In respect of Winning Bid I again impose one penalty in respect of the contravening conduct, and that penalty is $3.5 million. In respect of Mr Owen I again impose one penalty in respect of the contravening conduct, and that civil penalty is $3 million. In respect of Mr Salcedo, I again impose one penalty, and that civil penalty is $3 million. In respect of Mr Maughan I again impose one penalty in respect of the contravening conduct, and that civil penalty is $1.25 million. The Respondents ought to be allowed some time to digest the reasons for judgment and, further, to make such inquiries as they can with their bankers or to make such checks as they can of their own finances in relation to ability to pay. Some time, therefore, in my opinion, ought to be allowed. I therefore allow twenty-eight (28) days for payment in each instance. In each instance the civil penalty which I have imposed is to be paid to the Commonwealth of Australia. In respect of the civil penalty hearing today I order that the First, Second, Fourth, Fifth and Seventh Respondents pay the Authority's costs, of and incidental to the penalty hearing, to be taxed. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | unsolicited sms messages (spam) use of fake dating profiles contraventions established considerations applicable to imposition of pecuniary penalties communications law |
That Act has been replaced by the Designs Act 2003 (Cth), but by reason of the transitional provisions (s 156) continues to apply to this dispute. The design is for a vandal resistant fluorescent luminare, commonly referred to in the lighting industry as a batten light. The design was registered with effect from 9 May 1989 by Andrew Thomas in respect of the shape and/or configuration of the luminare as depicted in a series of photographs. The applicant contends that the respondent's vandal resistant batten light, which is referred to as "the Centurion", infringes the design. It seeks relief by way of damages. The respondent contends that the registered design was neither new nor original at the date of registration and consequently that the registration is invalid. By a counter-claim it seeks the rectification of the register. If the registration be valid, the respondent says that the applicant, who sues as assignee, has not taken a valid assignment of the registered design. If that defence does not succeed, the respondent admits that the Centurion was manufactured and sold by it but denies that the Centurion is an obvious or fraudulent imitation of the registered design. 2 The facts, for the most part, are simple. During 1987 to 1989 Mr Thomas worked in his own time to develop the design of the luminare. On 30 October 1990, the design was registered in Mr Thomas' name. The luminare is a longitudinal light fitting that houses fluorescent tubes. It is of continuous cross-section. In the photographs it appears to be approximately eight times its width with a height of approximately two-thirds its width. It has flat closed ends with a cap that covers the top front and rear surfaces and the whole of the end surface. The end caps are slightly stepped and have closed ends that are kept in place by screws in their top surface. One cap has a single screw centrally located on the longitudinal axis. The other has two screws spread apart about the longitudinal axis. Each cap has a length equal approximately to its height. A diffuser is mounted onto the base extending between the two end caps. 3 In order to exploit the design, Mr Thomas purchased a shelf company (which had been incorporated on 18 June 1990) and changed its name to Cellite Lighting & Electrical Pty Ltd (Cellite Lighting). Cellite Lighting did not have its own manufacturing facilities so it contracted other companies to manufacture the luminare in accordance with the design on a "free issue" basis. By free issue Mr Thomas meant that he would issue the manufacturing companies with the components for the manufacture of the luminare to fulfil his specific orders. The effect of the orders being free issued was that "Mr Thomas and his Cellite Company could control how many items were manufactured and to whom they got sold". The luminare was called "the Cellite". It was considered to be the best vandal resistant batten light on the Australian market. 4 In October 1994, Mr Thomas incorporated a new company called Cellite (Sales) Pty Ltd (Cellite Sales). Mr Thomas and Neville Shead became the shareholders in and directors of Cellite Sales. As proprietor of the design Mr Thomas gave permission to Cellite Sales to exploit the Cellite. Mr Shead was also a director of Australume, a company that had a factory and a manufacturing plant. Cellite Sales and Australume joined forces on the basis that Cellite Sales would market the Cellite together and Australume would manufacture them. 5 In late 1996 Mr Shead contacted Simon Whiting with a proposition that would see the expansion of Australume's business. In January 1997 Mr Whiting incorporated Carrera Lighting Pty Ltd to market commercial and industrial light fittings manufactured by Australume. In June 2002, the company name was changed to Carrera Manufacturing Pty Ltd to emphasise its manufacturing role. Initially only Mr Whiting was a sole director of Carrera Lighting. In September 1997 Mr Shead and Darryl Joubert were also appointed as directors. 6 Around this time Carrera Lighting acquired all of the shares in Cellite Sales. Following this acquisition Cellite Sales continued to use Australume to manufacture the Cellite. But this did not continue for long. Carrera Lighting acquired a factory and its own manufacturing plant and in late 1997 thereafter began to manufacture the Cellite itself. 7 In mid 1998 Mr Thomas resigned as a director of Cellite Sales. By deed of assignment dated 28 September 1998 Mr Thomas transferred his interest in the design to Cellite Sales. 8 In early 2000 Mr Shead and Mr Whiting decided to transfer the assets of Cellite Sales, including the registered design, to Carrera Lighting. By reason of oversight the design was not transferred to Carrera Lighting, although the other assets were. The fact the design had not been transferred became apparent in 2002, when Carrera Lighting sold all its assets to the applicant (then known as Moonlighting Australasia Pty Ltd) a company also operating in the lighting industry. 9 By the sale agreement (which was dated 18 April 2002) the applicant purchased from Carrera Lighting its business which was defined as "wholesaling and distributing commercial and industrial light fittings. " Clause 3.2(a) of the agreement provided that Carrera Lighting would deliver to the applicant "in a form previously approved by [the applicant] and duly executed an effective transfer of each item of the Intellectual Property and the certificate of registration or other title document (if any) of each other item of the Intellectual Property". Clause 1.1 of the agreement defined "Intellectual Property" to include "the Business Name and any trademarks, designs, logos, copyrights, inventions and any other intellectual property rights owned by the Vendor [Carrera Lighting]...". 10 By a deed dated 16 May 2002 the registered design was transferred by Cellite Sales to the applicant (Cellite Sales was then still the registered proprietor). The deed was signed by a director, Constantine Scrinis, on behalf of the applicant and by Mr Whiting on behalf of Cellite Sales. Somewhat curiously the assignment was not registered in the Register of Designs until 23 March 2004 --- almost two years after the date of the assignment and only three days before a letter of demand was sent by the applicant to the respondent in relation to its alleged infringement of the registered design. 11 Counsel for the respondent said that I should find the assignment was executed in 2004 and backdated. Mr Scrinis, who was called by the applicant, denied that there had been any backdating and I am inclined to accept his evidence. I am satisfied that the failure to lodge the assignment for registration was simply a mistake. 12 I also reject the attack on the validity of the assignment. It was put that Mr Whiting although a director of Cellite Sales did not have authority to execute the assignment on its behalf. There are several reasons why I will not accept this contention. For one thing, the articles of association (or constitution) of the company would tell me what authority each director has, but the articles were not tendered. Therefore, I do not know on what basis I should assume that a director cannot bind the company in a transaction of the kind under consideration. Secondly, even if there be any lack of express authority, I would apply the indoor management rule for there is no reason to think that Mr Scrinis, who dealt with Mr Whiting as the person who had carriage of the sale transaction, had any reason to doubt the latter's authority to bind the company: Northside Developments Pty Ltd v Registrar-General [1990] HCA 32 ; (1990) 170 CLR 146. 13 At the time Carrera Lighting sold its lighting business to the applicant, the respondent was no longer manufacturing the Cellite; it had not manufactured the light for some years. However, and perhaps prompted by the sale, it decided to resume manufacture. Phil Carney, a director of the respondent, got in touch with Mr Shead and asked him whether there was any reason why the respondent could not make and sell the Cellite. According to Mr Shead, he told Mr Carney: "You can't sell the product as a Cellite and you can't use the same diffuser that's being used on the Cellite fitting. " Mr Carney was not called to give his account of this discussion. 14 At all events, shortly after the conversation the respondent manufactured and sold to Pulvin Lighting Wholesalers approximately 415 Centurions. The sale was part of a tender for work at the Kempsey Gaol. The applicant had itself tendered for the supply of lights for the Kempsey Gaol, but lost the tender to the respondent, a fact which it only discovered some time later. 15 This brings me to the two principal questions before the court viz (1) Is the design of the Cellite new or original; (2) If it is, does the Centurion infringe the registered design? 16 As to the first question, s 17(1) of the 1906 Act provides a design may be registered if "it is a new or original design". When deciding whether a design is new or original the issue is one of fact, to be determined through the eye of the judge. For that purpose the judge may be instructed by expert evidence. Such evidence is plainly admissible, but ultimately it is for the court to rule on the meaning of a design. On the other hand, the understanding and interpretation of prior art may call for expert assistance to be provided to the court... These were examined by Peter Bayly, who has extensive experience, spanning almost 50 years, in industrial design. In the end, of course, it is my own impression that will determine whether the registered design is new or original. But I have been assisted by Mr Bayly's evidence in performing my task. 18 The evidence indicates that there was a prolific product range of batten lights around 1989. Of the many products then in existence the product most visually similar to the registered design is the "AVS Series" vandal resistant luminare (the AVS Light) sold by Macwil Lighting & Electrical Co Pty Ltd. During the course of the hearing, it became apparent that if the registered design is new or original when compared with the AVS Light, its newness or originality will not be brought down by the other products I have seen. 19 For convenience the parties undertook an extensive comparison between the AVS Light and an embodiment of the registered design. This product was a sample or prototype light with a red diffuser. The sample certainly resembles the design, but there are obvious differences. Hence I propose to consider originality by a comparison between the AVS Light and the depiction of the design as appears in the photographs forming part of the Certificate of Registration. 20 Section 17(1)(a) provides that a design shall not be registered in respect of an article if the design "differs only in immaterial details or in features commonly used in the relevant trade from a design that, before the priority date in respect of the application for registration, was registered ...". Where, as is this case, the prior art is prolific it will often be that small differences will be regarded as "substantial", rather than "immaterial" differences. See generally Ricketson & Creswell, The Law of Intellectual Property: Copyright, Designs & Confidential Information , vol 2 [21.80]. Put another way, it is important not to allow the existence of prolific prior art to rob a design of its value. As Jacobs J said in D Sebel & Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224 at 227, the differences in designs can be "a subtle thing". 21 In a case such as this it is important to keep in mind that a design will not be new or original where the difference between the design and the prior art results from the introduction of common trade variants into an old design. For example, changing the width of the base depending upon the number of fluorescent tubes to be accommodated is a common trade variant. So also is a change in length to accommodate a longer (and therefore stronger wattage) fluorescent tube. 22 There are some similarities in the configuration of the AVS Light and the registered design, namely, both are of continuous rectangular cross-section with a base and diffuser portion extending the whole length of the luminare, and both have two end caps with at least one screw in their top surface that cover the ends of the base and the diffuser. However, the AVS Light and the registered design have a number of differences in their configurations. They also vary in their form and overall shape. The principal areas of difference in configuration between the AVS Light and the registered design are the differing heights of the continuous cross-sections; the base of the AVS Light is approximately half the overall height whereas the base of the registered design is approximately a third the overall height; the height of the diffuser of the AVS Light is approximately half the overall height whereas the height of the diffuser of the registered design is approximately two-thirds the overall height; the length of the AVS Light end caps are approximately two-thirds the overall height while the registered design has end caps approximately equal in length to the overall height. The AVS Light and the registered design also differ in form and shape: the front face of the end caps of the AVS Light are flat whereas each end cap of the registered design has a raised lower portion or step on its front face; the radius on the top edges of the end caps of the AVS Light are approximately one-fifth of its width, compared to radius on the top edges of the end caps of the registered design which are approximately one-tenth of the width of the registered design. 23 These differences in configuration, form and shape are "sufficient to impart the character of novelty and originality to the whole" ( Walker & Co v AG Scott (1892) 9 RPC 482 at 485) to distinguish the registered design from the AVS Light. 24 I used the same approach I detailed above to compare the configuration (that is the length versus width and height versus width of the overall light and individual components such as the end caps) and form and shape (focussing on the radius of the edges of the end caps, the positioning of the screws and the presence or absence of a step) of the registered design with the other prior art including in particular the Gayline, the Loira Weather Proof fluorescent, the Minilux and the Regency Series light. The differences in configuration, form and shape between the registered design and these luminaries are more pronounced than the differences I observed between the registered design and the AVS Light. The differences leave me with the impression that the registered design is sufficiently new or original to distinguish it from that prior art referred to. 25 This brings me to the case on infringement. Here, by reason of s 30 of the 1906 Act, there are two issues to be determined. First, is the Centurion an obvious imitation of the registered design (does it appear to be a copy although there are some differences) and, second, is it a fraudulent imitation (with differences made to disguise copying)? 26 On this aspect I propose to apply what was said by Gummow J in Wanem Pty Ltd v John Tekiela (1990) 19 IPR 435 at 440. 29 On the question whether the Centurion is an obvious imitation of the registered design, there is at least one important difference; the registered design has a step in the end caps, the Centurion does not. I consider the presence of the step in the end caps to be a significant feature of the form and shape of the registered design which, together with other configuration features, distinguishes it from the prior art. The absence of the step in the Centurion may be described as a small difference from the registered design but in my opinion it is a sufficient difference to defeat the allegation that the Centurion is an obvious imitation of the registered design. 30 The position is not so simple when I come to consider whether the Centurion is a fraudulent imitation of the registered design. In this connection it is clear that the respondent intended to copy the registered design (or at least copy what it thought was an embodiment of the design). It is also clear that it made a number of small changes to the registered design, one can only presume, for the purpose of disguising what had been done. I have already mentioned the conversation between Mr Shead and Mr Carney concerning the respondent's ability to copy the luminare. No doubt Mr Carney approached Mr Shead for advice because he thought he could not simply copy the registered design. That view was confirmed, although the method suggested to overcome the problem may not achieve the objective. 31 The differences between the registered design and the Centurion are as follows: each end cap on the Centurion has a single centrally aligned screw on the top surface and these screws are recessed; the design has a pair of recessed screws spaced apart on one end cap and a centrally aligned single screw which stands proud of the top surface of the other end cap; the Centurion has an overall length eleven times its width whereas the registered design has a length eight times its width; and the Centurion end cap has no step. I have already described the difference between the finish of the end caps on the Centurion and the registered design (the Centurion is not a smooth finish) and that the diffuser on the Centurion is prismatic rather than the longitudinal lines of the registered design. These differences are not sufficient to avoid a finding of fraudulent imitation. 32 Turning to damages, the applicant claims the sum of $36,353.79. It says this is the gross profit it would have earned had it been awarded the contract to supply the lights for the Kempsey Gaol. While it may be accepted that the profit the applicant would have earned had it been awarded the contract is in the sum claimed, it does not follow that this is the quantum of its loss. 33 The claimed loss is based on two hypotheses. The first hypothesis is that if the respondent had not been awarded the Kempsey Gaol contract, it would have gone to the applicant. The second hypothesis is that the applicant would have supplied the lighting at its tender price of $80,786.20 (inclusive of GST), which incorporated a gross profit of 45 per cent. But unless the chance is so low as to be regarded as speculative --- say less than 1 per cent --- or so high as to be practically certain --- say over 99 per cent --- the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring; but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. 35 The only evidence I have to go on in assessing the probability of the applicant's tender being accepted at the tender price is that the respondent was the successful tenderer with an almost identical product. I do not, however, know the tender price paid to the respondent. Nor do I have the prices tendered by other tenderers. This evidence could have been, but was not, made available. This makes my task difficult indeed. Doing the best I can I am prepared to assume that if the respondent had not lodged a tender then it is more likely than not the applicant's tender would have been accepted. But it is hard to say at what price the tender would have been accepted. Doing the best I can I will discount the applicant's claim by about 35 per cent, and then round off the damages at $25,000. There will be judgment against the respondent for that amount. The cross-claim will be dismissed. The applicant will have its costs. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | validity novelty infringement obvious imitation fraudulent imitation principles in determining infringement design |
I assessed damages at $3684.20. The questions of interest under s 51A of the Federal Court of Australia Act 1976 (Cth) and costs were adjourned. The parties have now filed written submissions. 2 The trial before the learned Magistrate took place on 12 and 13 November 2006. Earlier that year the respondents had made a number of Calderbank offers (see Calderbank v Calderbank [1975] 3 All ER 333) which are detailed in my judgment at [62]. The last of those was on 2 June 2006. It involved an undertaking to cease selling products with the offending packaging, $4331 for costs and $9000 for damages. By a letter from its solicitors dated 7 June 2006 the appellant rejected that offer and "in order to reach a commercial resolution to this dispute" made a counter offer of $17,500 including costs and the undertaking. The offer was to remain open for seven days. The appellant repeated its offer on 21 July and 7 August. In the last mentioned letter it declined mediation. 3 In its costs submissions the appellant calculated its costs of the trial on the scale under Federal Magistrates Court Regulations 2000 (Cth), sch 1, at $22,078. However, the great bulk of those were for "preparation for final hearing for a 2 day matter for solicitor" ($6,770) and "counsel's fees, including preparation" ($10,000). 5 In arguing against giving any costs consequence to the Calderbank offer the appellant says that a term of the undertaking was that the proceeding would be settled on a confidential basis and the respondents were not willing to admit liability. It says that one of its main concerns was that the respondents had been former customers of the appellant. On the contrary, it said it was looking for a "commercial resolution". 7 In any case, the claim on which the appellant finally succeeded was not an action in rem . It is not as though the appellant succeeded in establishing some public right, as for example as to the validity of a patent. As against the respondents, the proposed undertaking would have been readily enforceable. The loss of the potential use of a judgment or settlement in terrorem against third parties engaging in similar conduct seems theoretical (there is no evidence of any such conduct, whether existing or threatened) and remote from the practicalities of settling the instant litigation. 8 There remains the issue as to what significance is to be given to the fact that the rejection of the Calderbank offer was followed by a successful appeal by the offeree, albeit one which produced an outcome less favourable than the offer. This situation has been considered by a number of decisions of the New South Wales Court of Appeal. Some of these were reviewed in by a five member bench of that Court in Fotheringham v Fotheringham (No2) [1999] NSWCA 21 ; (1999) 46 NSWLR 194. The general effect of that decision is that while an offer of compromise continues to have cost consequences for an appeal ( Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404 at 410), the appellate court retains its own discretion. The present case arises under the general discretionary power of this Court over costs and not under any rule of Court. Nevertheless, the New South Wales cases provide an important analogy. 9 The point has arisen in a number of subsequent New South Wales Court of Appeal cases, the most recent being Estate of Virgona v De Lautour (No 2) [2007] NSWCA 323. Ultimately of course the issue remains one for discretionary judgement dependent on the particular circumstances of the case. 10 Here the rejection of the respondents' Calderbank offer was imprudent. I am inclined to think the appellant's approach was affected by unreasonable expectations of success on its copyright claim. On the appeal (and presumably at first instance also) the appellant argued strongly for an award of additional damages under s 115(4) of the Copyright Act 1968 (Cth). It was submitted that additional damages against both respondents should total no less than $50,000 (submissions par 50). At best, the copyright claim was at the very limit of the law. If copyright infringement was not made out, recovery was always going to be for a modest sum. In final submissions on the appeal the appellant did not seek (apart from additional damages) more than the sum awarded, $3,684.20. 11 On the other hand, it is true to say that the appellant had to invoke the appeal process to remedy an erroneous judgment against it. It would not be fair to make an award of costs of the appeal against this successful appellant, still less on an indemnity basis. 12 I will order that the respondents pay the appellant's costs at first instance up to 7 June 2006 (the last rejection of the respondents' offers) on a party and party basis and thereafter the appellant pay the respondents' costs at first instance on an indemnity basis. There will be no order for the costs of the appeal. 13 As to interest, the appellant should have an award of interest at 10.5 per cent under s 51A of the Federal Court of Australia Act 1976 (Cth). The period should be, as claimed by the appellant, from the accrual of the cause of action (30 March 2006) until the judgment of the Federal Magistrates Court (17 May 2007). The amount is $386.84. No interest is claimed up until the appeal judgment since the conduct complained of had ceased. 14 There will be a certificate under s 6(1) of the Federal Proceedings (Costs) Act 1981 (Cth). The certificate will be to the effect that it would be appropriate for the Attorney-General to authorize payment under that Act in respect of the costs incurred by the respondents in relation to the appeal. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | appeal against dismissal by federal magistrate of copyright and trade practices claims appellant rejected calderbank offer prior to trial in federal magistrates court appellant successful on trade practices claims on appeal appellant's recovery less favourable than respondents' offer costs |
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